Northern Offshore Purchases Energy Searcher

Northern Offshore Ltd announces a private placement of 9.5 million shares issued to private and financial institutions at a price of NOK 16.80 per share.

This equity issue is made for the purpose of acquiring the drill ship Energy Searcher at a price of USD $37 million, and is subject to approval on the Annual General Meeting of Shareholders on June 21, 2001. The majority shareholder Hemen Holding (54 %) has committed to vote in favor of the increased share capital. The Equity Issue is placed by Fearnley Fonds AS and Karl Johan Fonds AS.

Energy Searcher is a conventionally moored drill ship. The rig is able to operate in water depth up to 2,500 ft. Energy Searcher is in excellent condition with modern drilling equipment, and is presently working for Cairn Energy in India on a 2 firm plus 3 optional wells contract. The rig is further contracted or in the process of completing contracts through the first half of 2002 at revenue day rates from USD $50,000 - $70,000 per day.

As part of the acquisition Northern Offshore is also taking over the management company Jet Drilling (S) Pte Ltd who is presently managing the Energy Searcher. Jet Drilling with their first class track record and quality operation will form the basis for Northern Offshore's future drilling operations in South East Asia.