Seadrill Increases Ownership in Scorpion Offshore

 Seadrill announced the acquisition of a further 9,071,948 shares in Scorpion Offshore on Friday, May 28, 2010 taking its total holding to 45,010,851 shares, representing 50.11 percent of the issued shares in Scorpion. The acquisition of the additional shares was made through Pareto Securities ASA at a price of NOK40.50 per share.

As a consequence of the above, Seadrill will make a new mandatory offer for all of the remaining shares in Scorpion as required by the Norwegian Securities Trading Act at a price per share of NOK40.50. This offer is intended to be made during the course of this week. The offer will have an acceptance period of 6 weeks.

Seadrill expects the current directors to tender their resignations from the board in advance of this so as to enable the extraordinary general meeting to elect a board reflecting the fact that Scorpion now is majority owned by Seadrill.

Alf C Thorkildsen, Chief Executive Officer in Seadrill Management AS said, "We decided to increase the offer price after a thorough evaluation of the situation. Special emphasize was given to the strengthening of the US$ against NOK since the original offer was launched and the significant contract backlog in Scorpion limiting the risk associated with the transaction. The acquisition of Scorpion, when completed, creates the largest modern jack-up rig fleet in the world with a total of 14 units built after 2006. It will increase our earnings and strengthen our position as the leading operator of modern high quality drilling equipment."