Bw Offshore Ltd. — M&A Activity 2010

Sep 13, 2010

BW Offshore and Prosafe Production to combine

NOT FOR PUBLIC DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED

STATES OF AMERICA, SOUTH AFRICA, CANADA, AUSTRALIA OR JAPAN

Reference is made to the offer document dated 27 July 2010 (the "Offer

Document") from BW Offshore Limited ("BW Offshore") regarding the voluntary

exchange offer (the "Offer") for all of the issued and outstanding shares of

Prosafe Production Public Limited ("Prosafe Production") not currently owned,

directly or indirectly, by BW Offshore.

13 September 2010 - BW Offshore and Prosafe Production intend to combine the two

companies, creating an FPSO industry leader with a strong platform for future

growth.

Following negotiations during the weekend, BW Offshore and Prosafe Production

seek to combine the two companies. The Board of Prosafe Production intends to

enter into a transaction agreement and recommend its shareholders to accept the

Offer, following a Board meeting in Cyprus on 15 September 2010. BW Offshore is

therefore extending the current Offer Period until 15 September 2010 at 17.30

CET. Subject to the Board of Prosafe Production resolving to approve the

transaction agreement and to recommend the Offer, and the Board of Prosafe SE

giving their pre acceptance to the Offer, BW Offshore will adjust the Offer by

increasing the cash consideration to NOK 3.00. The Offer will then be a total

consideration of 1.2 BWO shares and NOK 3.00 in cash per Prosafe Production

share. Subject to such adjustment of the Offer, the Offer Period will be

extended until 30 September 2010.

A combined company will become the second largest FPSO lease operator in the

world with a diversified portfolio of 15 FPSOs with solid contract coverage and

four major FPSO projects currently being executed. The joint resources in

engineering, operations, business development and client relationships are

expected to create a highly effective combination in a growing market.

"We are creating an FPSO industry leader with a global footprint that is well

positioned to capture the attractive growth opportunities we now see in the

market. The FPSO sector needs larger entities that can meet steadily increasing

requirements from clients and regulators. The combined entity will have the

sufficient diversification, presence, financial scale and competence to play a

more significant role in the FPSO space going forward and we are very

enthusiastic about what our two companies can become together," say Ronny Johan

Langeland and Andreas Sohmen-Pao, Chairman and Board member of the Board of

Directors of Prosafe Production and BW Offshore respectively, in a joint

statement.

As is further detailed in a separate announcement made by BW Offshore today, BW

Offshore has also entered into an agreement to sell all of its shares in its

subsidiary APL (Advanced Production & Loading) Plc ("APL") to National Oilwell

Varco. The total consideration for the sale of USD 500 million will

significantly strengthen the combined entity's balance sheet and improve

strategic flexibility going forward, which will enable even further profitable

growth in the present market.

"Following the recent strong contract awards in BW Offshore and the agreement

with National Oilwell Varco this weekend regarding a sale of APL, it is clear to

us that BW Offshore's currency has a significantly higher value than what was

apparent at the time of announcement of the Offer" says Ronny Johan Langeland,

Chairman of the Board of Directors of Prosafe Production.

As a consequence of this intention to combine, Prosafe Production and its

advisors will not pursue other alternatives.

If all Prosafe Production shareholders accept the Offer, then Prosafe

Production's shareholders will hold approximately 34 percent and BW Offshore's

shareholders will hold approximately 66 percent of the combined company and at

the same time BW Group Limited will be diluted to approximately 47% ownership.

The combined company will aim to have a Board of Directors representing both

shareholder groups.

As a result of the APL transaction and the adjustment of the Offer, BW Offshore

will publish a combined information memorandum and supplemental offer document

(the "Supplemental Offer Document") to the Offer Document dated 27 July 2010. BW

Offshore expects the Supplemental Offer Document to be published later this week

following review by the Oslo Stock Exchange and the Norwegian Financial

Supervisory Authority.

Investors that have accepted the Offer before the publishing of the Supplemental

Offer Document have the right to withdraw their acceptance within two days after

the date of the publishing of the Supplemental Offer Document. In order to

exercise such right, Carnegie ASA must be contacted by mail, fax or delivered by

hand to Carnegie ASA within the said deadline to: Carnegie ASA, Stranden 1, Aker

Brygge, P.O.Box 684 Sentrum, 0106 Oslo, Norway (fax number +47 22 00 99 60).

For further information, please contact:

Carl K. Arnet, CEO BW Offshore, +65 9630 3290

Knut R. Sæthre, CFO BW Offshore, +47 9111 7876

Bjørn Henriksen, CEO Prosafe Production, +31610532543

Sven Børre Larsen, CFO Prosafe Production, +31651565186

About BW Offshore

BW Offshore is one of the world's leading FPSO contractors and a market leader

within advanced offshore loading and production systems to the oil and gas

industry. BW Offshore has more than 25 years' experience and has successfully

delivered 14 FPSO projects and 50 turrets and offshore terminals. BW Offshore's

technology division APL has delivered solutions for production vessels, storage

vessels and tankers in a wide range of field developments. Adapting through

competence, in-house technology, solid project execution and operational

excellence, BW Offshore ensures that customer needs are met through versatile

solutions for offshore oil and gas projects. BW Offshore has a global network

with offices in Europe, Asia Pacific, West Africa and the Americas. BW Offshore

has 1,100 employees and is listed on the Oslo Stock Exchange. For more

information, please visit www.bwoffshore.com and www.apl.no.

About Prosafe Production

Prosafe Production is a leading owner and operator of Floating Production,

Storage and Offloading vessels (FPSOs). Prosafe Production has 25 years of

operational experience from several of the world's largest oil and gas

provinces. Prosafe Production operates globally and employs approximately 1,000

employees from more than 40 countries. Headquartered in Limassol, Cyprus,

Prosafe Production is listed on the Oslo Stock Exchange with ticker code PROD.

This information is subject to the disclosure requirements pursuant to Section

5-12 of the Norwegian Securities Trading Act.

This announcement is not an offer for sale of any securities in the United

States. Securities may not be offered or sold in the United States absent

registration or an exemption from registration under the U.S. Securities Act. BW

Offshore has not registered and does not intend to register any portion of any

offering of shares in the United States or to conduct a public offering of any

securities in the United States.

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