Seadrill Limited — Capital/Financing Update 2014

Jul 8, 2014

SDRL - Seadrill launches US$1 billion 2019 convertible bond concurrently with a voluntary incentive payment offer to convert the existing US$650 million 3.375% 2017 convertible bond

SDRL - Seadrill launches US$1 billion 2019 convertible bond concurrently with a voluntary incentive payment offer to convert the existing US$650 million 3.375% 2017 convertible bond

New Convertible Bond Offering:

Hamilton, Bermuda, July 8, 2014 - Seadrill Limited ("Seadrill" or the "Company")

announces today that it intends to issue US$1 billion in principal amount of

convertible bonds with a five-year tenor (the "2019 Bonds").

The senior, unsecured bonds will be convertible into common shares of the

Company. The bonds are expected to have an annual coupon in the range of 2.00% -

2.50% payable semi-annually in arrear and have a conversion premium of 30% -

35% over the reference share price that will be based on the volume weighted

average price of the Company's shares on the Oslo Stock Exchange (converted into

US$ at the prevailing US$-NOK spot rate) and on the New York Stock Exchange

between opening and closing of the market on July 8, 2014.

The convertible bonds will be issued and redeemed at 100% of their principal

amount and will, unless previously redeemed, converted or purchased and

cancelled, mature on July 16, 2019.  Seadrill will have the right to call the

bonds after three years plus 21 days if the value of the Seadrill shares

underlying one bond, for a specified period of time, exceeds 130% of the

principal amount of the bond.

The bonds are expected to be issued on or around July 16, 2014. Seadrill may

decide to list the bonds on an exchange at a later stage.

The proceeds from the issuance will be used to fund the newbuild program and for

general corporate purposes.

ABG Sundal Collier, BNP Paribas and Deutsche Bank are acting as joint

bookrunners.

Seadrill expects to announce the final terms and conditions related to the 2019

Bonds on July 8, 2014.

Voluntary Incentive Payment Offer:

Concurrently with the offering of the 2019 Bonds, Seadrill is launching a

voluntary incentive payment offer to convert any and all of the US$650 million

principal amount of 3.375% Seadrill convertible bonds due 2017 (the "2017

Bonds").

Seadrill hereby makes an offer of a cash incentive payment to the 2017

Bondholders who elect to exercise their conversion rights from this public

announcement until July 10, 2014 at 5pm CET (the "Acceptance Period"). Seadrill

may at its sole discretion extend the Acceptance Period (one or more times).

Bondholders exercising their conversion rights during the Acceptance Period will

receive (i) 3,612 Seadrill ordinary shares per US$100,000 principal amount of

the 2017 Bonds, (ii) a cash consideration of approximately US$10,465 per

US$100,000 principal amount of the 2017 Bonds and (iii) accrued interest on the

2017 Bonds from April 27, 2014 (excluded) to July 16, 2014 (included).

The incentive payment will not impact the rights of 2017 Bondholders who do not

wish to exercise their conversion rights during the Acceptance Period.

Seadrill expects to announce the results of the voluntary incentive payment

offer on July 10, 2014.

ABG Sundal Collier, BNP Paribas and Deutsche Bank are managing the voluntary

incentive payment offer.

Questions should be directed to:

Rune Magnus Lundetræ:  Chief Financial Officer

IMPORTANT NOTE

NOT FOR DISTRIBUTION OR RELEASE IN OR INTO THE UNITED STATES OF AMERICA OR TO US

PERSONS, AUSTRALIA, CANADA OR JAPAN, OR IN ANY OTHER JURISDICTION IN WHICH

OFFERS OR SALES WOULD BE PROHIBITED BY APPLICABLE LAW

This press release is for information purposes only and does not constitute or

form part of, and should not be construed as an offer or an invitation to sell

or issue, or the solicitation of any offer to buy or subscribe for, any

securities.  In connection with this transaction there has not been, nor will

there be, any public offering of the Bonds.  No prospectus will be prepared in

connection with the offering of the Bonds.  The Bonds may not be offered to the

public in any jurisdiction in circumstances which would require Seadrill to

prepare or register any prospectus or offering document relating to the Bonds in

such jurisdiction.  The distribution of this press release and the offer and

sale of the Bonds in certain jurisdictions may be restricted by law. Any persons

reading this press release should inform themselves of and observe any such

restrictions.

This press release does not constitute an offer to sell or a solicitation of an

offer to purchase any securities in the United States.  The securities referred

to herein (including the Bonds and the shares of Seadrill) have not been and

will not be registered under the U.S. Securities Act of 1933, as amended (the

"Securities Act") or the laws of any state within the U.S., and may not be

offered or sold in the United States, except in a transaction not subject to, or

pursuant to an applicable exemption from, the registration requirements of the

Securities Act or any state securities laws. This press release and the

information contained herein may not be distributed or sent into the United

States, or in any other jurisdiction in which offers or sales of the securities

described herein would be prohibited by applicable laws and should not be

distributed to United States persons or publications with a general circulation

in the United States.  No offering of the Bonds is being made in the United

States.

This press release is only being distributed to and is only directed at (i)

persons who have professional experience in matters relating to investments

falling within Article 19(1) of the Financial Services and Markets Act 2000

(Financial Promotion) Order 2005 (the "Order") and (ii) high net worth entities

falling within Article 49(2) of the Order and (iii) persons to whom it would

otherwise be lawful to distribute it (all such persons together being referred

to as "relevant persons").  The Bonds are only available to, and any invitation,

offer or agreement to subscribe, purchase or otherwise acquire such Bonds will

be engaged in only with, relevant persons.  Any person who is not a relevant

person should not act or rely on this press release or any of its contents.

This information is subject of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#1817470]