SFL - Acquisition of drilling rig

SFL - Acquisition of drilling rig 
HAMILTON, BERMUDA -- (Marketwired) -- 07/01/13 --  Press release from
Ship Finance International Limited, July 1, 2013 
Ship Finance International Limited (NYSE: SFL) ("Ship Finance" or the
"Company") today  announced that  the Company  has agreed  to acquire
the harsh-environment jack-up  drilling rig  West Linus  from a 
subsidiary of North Atlantic Drilling Limited  ("NADL"). West Linus
is currently under construction at Jurong Shipyard in Singapore with
scheduled delivery in December 2013. 
The  total acquisition cost  will be $600  million and the  drilling
rig will be chartered  back to  NADL on  a bareboat  contract for  a
period in excess of 15 years.  NADL has been granted four purchase
options, first time after five years and  the last at the end  of the
charter period. Ship Finance will also have an option  to sell the
rig back to NADL at  the end of the charter period. NADL has
sub-chartered  the rig to ConocoPhillips Skandinavia AS
("ConocoPhillips") for a period  of five  years with  two extension 
options of  two years each. Expected delivery  to ConocoPhillips is
April 2014 and the  rig will be at a mobilization rate from the
delivery from the shipyard until commencement of the sub-charter. 
$195 million of the purchase price was paid in June 2013, and the
remaining $405 million  will  be  paid  on  delivery  from  the 
shipyard in December 2013. The financing  package will be $475
million in  total, of which $70 million has been funded  now, and
$405 million will be  funded at delivery from the shipyard. The $125 
million equity investment has been funded from the Company's recent
equity offering. 
The  bareboat charter rate over the  first five years (excluding the
four-month mobilization  period) will be  approximately US$220,000
per  day and the average rate for the remaining 10-year lease period
will be approximately US$115,000 per day. The transaction will add
more than $800 million to our the charter backlog, and  the average
yearly net cash flow, after interest and loan amortization, is
estimated  to be approximately $19 million, or $0.20 per share,
during the first five years. 
NADL  is an offshore harsh environment drilling  company with focus
on the North Atlantic basin. The company has nine drilling units in
the fleet, including five se
mi-submersible,   a  drillship,  and 
three  jack-up rigs.  Seadrill  Limited currently  owns 74% of the
outstanding  shares and the company  is listed on the Oslo OTC
exchange with a market capitalization of approximately $2 billion. 
The  bareboat charter includes an interest compensation clause
whereby NADL will compensate  us for volatility in  the interest rate
environment,  and due to the frontloaded  nature of the contract,  we
will be able  to repay the loan amounts quickly.  We expect the
rig-owning subsidiary to be accounted for as 'Investment in 
associate' under US  GAAP, similar to  our three deepwater  drilling
rigs on charter to Seadrill. 
Ole  B. Hjertaker, CEO of  Ship Finance Management AS,  said in a
comment: "Ship Finance  has in the recent months invested nearly $1
billion in new assets which is  a firm commitment to  our continued
growth strategy.  We are very pleased to increase  our exposure to 
the strong offshore industry with a state-of-the-art harsh 
environment jack-up  drilling rig which will  be employed on a
long-term drilling   contract   to ConocoPhillips.  Our  charter 
backlog  and  long-term distribution capacity is  building in  an
accretive  manner, and there is still good capacity for more
July 1, 2013 
The Board of Directors 
Ship Finance International Limited 
Hamilton, Bermuda 
About Ship Finance 
Ship  Finance  is  a  major  ship  owning  company  listed on the New
York Stock Exchange  (NYSE: SFL).  Including newbuildings,  the
Company  has a fleet of 70 vessels,  including  24 crude  oil 
tankers  (VLCC  and Suezmax),  two chemical tankers,    12 drybulk  
carriers,   19 container vessels   (including   eight newbuildings), 
two  car  carriers,  six offshore  supply  vessels, two jack-up
drilling  rigs (including one newbuilding), two ultra-deepwater
semi-submersible drilling rigs and one ultra-deepwater drillship. The
fleet is one of the largest in  the world and most  of the vessels
are  employed on long-term charters. More information can be found on
the Company's website: www.shipfinance.org 
Cautionary Statement Regarding Forward Looking Statements 
This  press release may contain forward looking statements. These
statements are based  upon various assumptions, many of which  are
based, in turn, upon further assumptions,  including  Ship  Finance 
management's examination  of historical operating  trends. Although 
Ship Finance believes that  these assumptions were reasonable  when
made, because assumptions are inherently subject to significant
uncertainties and contingencies which are difficult or impossible to
predict and are  beyond its control, Ship Finance cannot give
assurance that it will achieve or accomplish these expectations,
beliefs or intentions. 
Important  factors that,  in the  Company's view,  could cause actual
results to differ materially from those discussed in this
presentation include the strength of   world   economies  and 
currencies,  general market  conditions  including fluctuations  in
charter hire rates and vessel  values, changes in demand in the
tanker  market as a result of changes  in OPEC's petroleum production
levels and worldwide  oil consumption  and  storage,  changes  in 
the Company's operating expenses including bunker prices, 
dry-docking and insurance  costs, changes in governmental  rules and
regulations or  actions taken by regulatory authorities, potential 
liability  from  pending  or  future litigation, general domestic and
international  political conditions, potential disruption of shipping
routes due to  accidents or  political events,  and other  important
factors described from time  to  time  in  the  reports filed  by 
the  Company with the United States Securities and Exchange
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: Ship Finance International Limited via Thomson Reuters ONE 
Investor and Analyst Contacts:
Harald Gurvin
Chief Financial Officer
Ship Finance Management AS
+47 23114009 
Magnus T. Valeberg
Senior Vice President
Ship Finance Management AS
+47 23114012 
Media Contact:
Ole B. Hjertaker
Chief Executive Officer
Ship Finance Management AS
+47 23114011
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