Ship Finance Sells Supply Vessel to Deep Sea for $29 Million

Ship Finance International Limited has agreed to sell the offshore supply vessel Sea Trout to Deep Sea Supply for U.S. $29 million.

Reference is made to press releases of August 10, 2007 and November 7, 2007 regarding the acquisition of 5 plus 2 offshore supply vessels from Deep Sea in combination with long-term charters back. As part of the agreement, Deep Sea was given the option to re-purchase one of the vessels prior to the first agreed purchase option date.

Deep Sea has now decided to exercise this option, in combination with a sale of the vessel to a third party, and the vessel is expected to be delivered to the new owner in January 2008.

The agreed sales price to Deep Sea is approximately $29.0 million, including approximately $2.4 million outstanding under a seller credit from Deep Sea. There is currently approximately $21.8 million in loans outstanding against the vessel, and the net cash effect to Ship Finance from the transactions is estimated to be approximately $4.8 million. We expect to book a small book profit on the transaction, which will be recognized in 1Q 2008.

The remaining offshore supply vessels will continue their long-term charters to Deep Sea. Two of the vessels previously expected to be delivered to Ship Finance in December 2007 are now scheduled to be delivered in January 2008.