Aker — Capital/Financing Update 2011

Jan 19, 2011

Aker Drilling to increase operations in growth markets

Aker Drilling intensifies its operations in strong growth markets, enters into

Letter of Intent for the building of two drillships with options for additional

two ships, aims to secure new capital and applies for listing on Oslo Stock

Exchange - with Aker as minority shareholder in an independent drilling company

with an offensive strategy.

- Aker Drilling expands its activities in deep water operations. These are

growing offshore markets characterised by an increasing demand for drilling

units with well-known, advanced technology.  Aker Drilling ASA aims to secure up

to USD 600 million in equity through an initial public offering (IPO). The

company has applied for listing on Oslo Stock Exchange, says president and CEO

Øyvind Eriksen in Aker ASA.

A Letter of Intent (LOI) has been signed with Daewoo Shipbuilding & Marine

Engineering Co. Ltd (DSME) for the delivery of two advanced ultra-deepwater

drillships, and the option for delivery of two additional drillships. The price

per ship, including spare parts, drilling equipment, construction follow up, and

activities up to "ready to drill" is estimated at USD 600 million.

- Aker Drilling has a first class operational organisation and two harsh

environment rigs equipped for deepwater drilling with stable operations on the

Norwegian Continental Shelf. The LOI for the two drillships provides us with the

opportunity to participate in interesting growth areas for drilling operations

in ultra-deep waters in areas such as Brazil, the Gulf of Mexico and Western

Africa. The company has already commenced the work to establish an experienced

construction follow-up team at the yard and an international, competent

operational organisation, says Eriksen.

Strong growth in demand

Aker Drilling currently has 440 employees, and the company has a position in the

market for drilling operations in areas with deep water and harsh environments.

The deepwater market is the fastest growing of all offshore markets, but due to

technological, operational and experience issues, it also has the highest

barriers to entry for new competitors.

Half of the global oil and gas discoveries are made in ultradeep waters,

according to Infield. In 2015, 13 per cent of the offshore production will come

from ultradeep oil fields, compared to 3.5 per cent in 2010. The rig market

participants agree that future exploration will increase in deep waters and

harsh environments. In the coming years, this will lead to an increase in demand

for advanced drilling units with well-known technologies.

Aker Drilling will focus its activities in deep water and harsh environments.

The drillships will be valuable additions to the company's fleet, and the

technology used in ultra-deep areas is known and efficient. DSME has built - and

will build - several ships of this type. The project execution risk for delivery

on schedule and budget is deemed low.

Efficient operations and solid order backlog

The company's two rigs, Aker Barents and Aker Spitsbergen, currently generate a

significant cash flow from stable operations. In operation, the two rigs have an

EBITDA margin of approximately 60 per cent. The rigs are on long term leases,

and their total order backlog at the end of 2010 was approximately USD 1.2

billion.

- Aker Drilling has a solid cash flow and a strong dividend capacity, states

Eriksen.

The two rigs have delivered a positive development with stable and safe

operations throughout 2010 and the beginning of 2011. In the fourth quarter of

2010, Aker Barents and Aker Spitsbergen had a total paid uptime of more than 95

per cent.

Letter of Intent with DSME

Aker Drilling Offshore Services Public Ltd in Cyprus, a wholly owned subsidiary

of Aker Drilling ASA, has signed the LOI with DSME in South Korea for the

delivery of the two drillships in the fourth quarter of 2013. 25 per cent of the

contract value is due at the signing of the final contract agreement at the end

of February 2011, and 75 per cent will be paid on delivery.

The options with DSME give Aker Drilling the right to have the third and fourth

drillships delivered in the second quarter of 2014 and the first quarter of

2015 respectively.

The ships can drill wells up to 12000 metres deep, at water depths of up to

3600 metres.

- With our two existing rigs and the new drillships we will have state-of-the-

art units for safe, efficient and environmentally sound operations. Aker

Drilling has a very competent operational organisation for the Norwegian

Continental Shelf. This team will continue its work with focus on first class,

safe operations for our Norwegian clients, while we are about to establish an

equally professional organisation for international markets, built on the

capabilities of our Norwegian operations team. This provides us with a solid

foundation for further profitable growth, says CEO Geir Sjøberg in Aker

Drilling.

Share issue of up to USD 600 million

Aker Drilling intends to carry out a share issue of up to USD 600 million in

February 2011 through an IPO. The planned subscription period is expected to

commence on 7 February 2011, and close on 18 February 2011.

Institutional and private investors will be invited to invest in the drilling

company. Aker will retain a strong position, but will reduce its ownership to

less than 50 per cent, in order to enable the new Aker Drilling to develop as an

independent company listed on Oslo Stock Exchange with a liquid trade of the

shares. Aker will thus become a minority shareholder, and this will also be

reflected in the new board, which will have a majority of members elected by the

shareholders who are independent from Aker.

In connection with the financing of the new drillships and the IPO, Aker

Drilling will carry out refinancing of the company. Aker Drilling is currently

in discussions with a bank syndicate in order to  increase the drilling

company's bank loans from USD 605 million to USD 900 million. The increase of

USD 295 million will be used to repay debt to Aker ASA. Furthermore, the company

aims to replace its 3 year NOK 1.5 billion bond loan with a longer-term bond

loan at the same value, but without the guarantee from Aker ASA. The refinancing

is in accordance with previously announced plans to further develop Aker's role

as equity investor and make Aker Drilling an independent company without any

other financial commitments to its largest owner.

For further information, please contact:

Trond Brandsrud, CFO, Aker ASA, e-mail trond.brandsrud@akerasa.com,  tel.

+47 90 11 46 63.

Geir Sjøberg, CEO, Aker Drilling, e-mailgsjoberg@akerdrill.com, tel.

+47 90 78 30 83.

This information is subject of the disclosure requirements acc. to §5-12 vphl

(Norwegian Securities Trading Act)

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