SDRL - SapuraKencana Petroleum Berhad and Seadrill Limited

SDRL - SapuraKencana Petroleum Berhad and Seadrill Limited Jointly
Announce the Integration of Tender Rig Businesses 
SapuraKencana Petroleum Berhad and Seadrill Limited Jointly Announce
the Integration of Tender Rig Businesses 
HAMILTON, BERMUDA -- (Marketwire) -- 11/05/12 --  
-         Proposed transformative  transaction provides  a
strategic platform to create  the first highly  diversified and
leading  offshore services provider in Asia 
-         Enhanced business to comprise 16 wholly-owned operating
units and five units currently under construction 
-         Further strengthens the long-standing partnership of
SapuraKencana and Seadrill 
SapuraKencana  Petroleum Berhad  ("SapuraKencana") (KLSE: SKPETRO)
and Seadrill
Limited  ("Seadrill") (NYSE: SDRL) (OSE: SDRL) are
pleased to announce that they
have  entered into a non-binding
memorandum  of understanding ("MOU") to combine
and integrate both
companies' tender rig businesses. The two companies including
predecessor companies have operated part  of their tender rigs
together  successfully in  the joint  venture Varia 
Perdana Sdn  Bhd and Tioman
Drilling  Company  Sdn  Bhd  since  1991.
The  new  and  restructured tender rig business  will mark a  new
phase of  cooperation between the  two companies. The enlarged 
tender rig business under  SapuraKencana will comprise, 16 tender
in  operation (including  the KM1  rig currently  owned by 
SapuraKencana), 5 of which  are already 51%-owned and managed through
its existing joint-venture with
Seadrill  in Varia Perdana Sdn  Bhd
and Tioman Drilling  Company Sdn Bhd, and an additional  5 units
currently  under construction,  3 of which  will be acquired
this transaction and are expected to be delivered in 2013
In  addition SapuraKencana will also be offered  the
right to be the manager for three  further tender rigs  which are not
 part of the  transaction. These rigs,
West  Vencedor, T-15 and T-16,
are today either owned  or planned to be owned by Seadrill Partners
LLC and are therefore not included in the transaction. 
The  operating rigs and  the Newbuilds are  all currently contracted
under long-term  fixed price  contracts with  companies such  as
Chevron, Shell, PTTEP, and Petronas  Carigali.  The tota
l  order
backlog amounts  to USD 1.55 billion as of end  of October 2012. The
majority of  the operating rigs are currently deployed
in  Southeast
Asian  waters. Of  the 15 operating  rigs, 9 are  barges and 6 are
semi-tenders,  which are capable  of operating in  water depths of 
up to 6,500
SapuraKencana will take over the rigs including the full tender rig
for  an enterprise value  of USD 2.9 billion.  The
organization will continue to operate  from the  existing premises 
in Singapore.  The total  enterprise value
includes  USD  363 million
 in  remaining  capital  expenditures  linked to the newbuilds
program and all the debt in the tender rig business including
bank  facilities that  are expected  to be  approximately
USD  800 million as of December  31(st) 2012. One  of  the  main 
objectives  of  the transaction is to develop  a  strong  leading 
player  in  the  Far East market. Seadrill will, to support  this
position, receive  a minimum of  USD 350 million in  new shares of
SapuraKencana.  This comes in addition to the 6.4% stake that
Seadrill presently
owns  in SapuraKencana.  Seadrill will  further
have  the right  to nominate two members  to  the  SapuraKencana 
board  of directors (including one alternate).
Seadrill's  chairman
John Fredriksen is expected to be one of those members. The remaining
 consideration  will  be  funded  by  SapuraKencana   through a mix
of external  borrowings,  a  seller's  note  of  up  to USD 187
million, internally
generated funds and equity. 
The  MOU  further  stipulates  that  the  parties  will seek to grow
their joint
venture  activities  in  Brazil  where  they  were 
awarded  3 PLSV contracts by Petrobras  in 2011. The parties also
agree  to establish a joint venture between
Seadrill's  40 % owned
subsidiary Archer Limited and SapuraKencana. The scope of such 
venture  will  be  to  focus  on developing and expanding Archer
wireline services in the Far East Asian markets. 
In  order to complete the restructuring  and consummate the
transaction Seadrill
will  need acceptance  from their  tender rig 
organization as  well as from the existing  customers.  The 
transaction  is  further  subject  to  customary due
procedures, closing adjustments,  regulatory approvals, and
between  the parties on the  terms of the sale  and
purchase agreement and other
ancillary transaction documents. 
The combination of SapuraKencana's and Seadrill's tender rig
businesses provides
a  strategic platform for SapuraKencana's and
Seadrill's shareholders to enhance
their  position as  part of  a
highly  diversified and leading offshore services
provider  globally
with multiple growth  opportunities and strong value
potential. The transaction further fortifies SapuraKencana's
business profile as it  provides  more  exposure  to  a  higher 
margin  drilling  segment, expands
SapuraKencana's   reach   across  
the   value  chain,  provides  cross selling
opportunities, and
complements SapuraKencana's presence in key markets globally. 
Commenting  on  the  transaction,  Dato'  Seri Shahril Shamsuddin,
President and Group  Chief Executive Officer of SapuraKencana said:
"Seadrill has been a great
strategic partner for SapuraKencana for
many years and this proposed transaction
underpins this commitment
and significantly strengthens SapuraKencana's business
profile  and
ability  to deliver  long-term value  for our shareholders. After a
period  of transformation and  consolidation, I am  truly excited
about entering
the  next phase  of growth  in partnership  with
Seadrill  to together create an undisputed  Asian offshore services 
champion with a  strong Malaysian identity.
The  combination of
Seadrill's deep  operational expertise, world-class customer
and ongoing transfer of knowledge  is expected to propel
competitive  position and  enable it  to take 
advantage of  the positive growth
dynamics within the industry." 
John  Fredriksen, Chairman, President and Director of Seadrill was
quoted to say "Seadrill believes in the potential of SapuraKencana's
expansion, as well as its capability to mesh its existing services
with Seadrill's tender rig business and crystallize  value. As such, 
we are very  supportive of the  integration of our tender  rig
business with that  of our long term  partner, SapuraKencana and are
excited  to continue the very profitable and successful venture we
have had with
Sapura since 1991. The possibility to further build our
JV venture in Brazil and also  get a solid partner  for Archer
Limited in  Far East Asian markets further
highlights  the benefit of
the transaction.   The net proceeds received from the transaction 
will be  redeployed as  equity to  aggressively grow our deep
fleet  and also open up for significant new  investment in the
Jack Up sector, a sector which recently has shown strong signs of
Dato'  Mokhzani Mahathir, Executive Vice-Chairman  of SapuraKencana
added: "This
is  a  truly  transformational  transaction  and  we look
forward to reaping the operational and strategic benefits from the
integration. We are also honoured to be  partnering  with  Seadrill 
through  th
is  initiative, and will welcome John
Fredriksen  to our
board after the completion of this transaction. We expect him to add
tremendous value to our company." 
CIMB  Investment Bank, Goldman Sachs and Maybank Investment Bank are
advisors to SapuraKencana on the transaction. 
About SapuraKencana 
SapuraKencana  Petroleum Berhad is one of the world's largest
integrated oil and gas  services  and  solutions  provider  based  in 
Malaysia. SapuraKencana's
business  include providing  end-to-end
solutions  and services  to the upstream
petroleum  industry,  and 
covers  activities  such  as installation of offshore
pipelines  and
structures, fabrication of offshore structures, accommodation and
support   vessels,   drilling   vessels,   hook-up  and 
commissioning, topside
maintenance services, underwater services,
offshore geotechnical and geophysical
services,  project  management,
 diving  services,  offshore  support services,
infrastructure  and
specialized  steel fabrication  works.  With  a workforce of over 
9,000 people,  the  Group's  global  presence  can  be  seen  in over
20 countries.  Learn more at 
About Seadrill 
Seadrill  is a leading offshore deepwater drilling company operating
a versatile
fleet  that can operate in shallow to ultra-deepwater
areas in harsh environment
and benign environments.  Seadrill's fleet
includes semi-submersibles, deepwater
drillships,  jack-ups, 
semi-tender  rigs,  and  tender rigs.  Seadrill has some
skilled  and highly competent employees  operating in 15 countries on
continents.  Learn more at 
About Archer Limited 
Archer Limited is a global oilfield service company and an affiliate
of Seadrill
that specializes in drilling services and well services 
This announcement is dated 5 November 2012 
This information is subject of the disclosure requirements pursuant
to section
5-12 of the Norwegian Securities Trading Act. 
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants
(i) the releases contained herein are protected by copyright and    
other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and     
originality of the information contained therein. 
Source: Seadrill Limited via Thomson Reuters ONE 
+47 51 30 99 00
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