Seadrill Limited — Earnings Release 2014

May 28, 2014

SDRL - Seadrill Announces First Quarter 2014 Results

SDRL - Seadrill Announces First Quarter 2014 Results

Highlights

* From the effect of January 2, 2014, the financial results of Seadrill

Partners LLC has been deconsolidated from the financial results of

Seadrill.  All figures presented in this report reflect deconsolidation

unless otherwise stated.  Please refer to note 4 for a more detailed

description.

* Seadrill reports first quarter 2014 EBITDA* of US$624 million excluding the

gain on sale for the West Auriga

* Seadrill reports pro forma consolidated EBITDA of US$788 million

* Seadrill reports first quarter 2014 net income of US$3,094 million and

earnings per share of $6.54

* Seadrill increases the ordinary quarterly cash dividend by 2 cents to

US$1.00 per share

* Orderbacklog of US$18.8 billion on a consolidated basis

* North Atlantic Drilling completes private placement of US$600 million

unsecured bond issue maturing 2019

* North Atlantic Drilling completes its initial public offering of 13,513,514

common shares and began trading on January 29, 2014 on the New York Stock

Exchange under the symbol "NADL".

* Seadrill Partners completes US$1.8 billion Term Loan B and US$100 million

senior secured revolving loan

* Seadrill completes placement of SEK 1.5 billion unsecured bond issue

* Seadrill executes contracts for four Jack-up units with Pemex in Mexico and

establishes SeaMex, a 50/50 Joint Venture with Fintech Advisory Inc.

* Seadrill sells part of the ultra-deepwater drillship West Auriga to Seadrill

Partners for US$1.24 billion, financed with a US$416 million equity offering

and related party loans

Subsequent events

* Seadrill secures contracts for the jack-up units West Tucana, West Telesto,

West Ariel, and West Prospero and extends contract for the West Mischief.

The total revenue potential for the new contracts is approximately US$433

million.

* Seadrill sells 230 million shares of SapuraKencana raising approximately

US$300 million in proceeds.  Seadrill continues to own approximately 490

million shares, representing an approximate 8% ownership stake in

SapuraKencana.

* North Atlantic Drilling announces extensive Investment and Co-operation

Agreement with Rosneft to partner in the Russian market.

* EBITDA is defined as earnings before interest, depreciation and amortization

equal to operating profit plus depreciation and amortization.

Financial information

First quarter 2014 results

Revenues for the first quarter of 2014 were US$1,221 million compared to $1,469

million in the fourth quarter of 2014.  The decrease is primarily due to the

deconsolidation of the Seadrill Partners and downtime on the West Alpha, West

Phoenix, West Pegasus, and West Polaris.  Offsetting these items was the

inclusion of the West Auriga, West Tellus, West Vela, West Castor, and West

Telesto for a full quarter.  On a consolidated basis revenues for the first

quarter were US$1,436 million.

Operating profit for the quarter was US$890 million compared to US$568 million

in the preceding quarter. The increase is primarily a result of the gain on sale

for the West Auriga and new rigs entering service.  On a consolidated basis

operating profit for the quarter was US$574 million.

Net financial and other items for the quarter showed a gain of US$2,239 million

compared to a loss of US$286 million in the previous quarter. The gain is

primarily related to the gain recognized with the deconsolidation of Seadrill

Partners, income received from Seadrill Partners of US$39 million and from

Archer of US$5 million.

Income taxes for the first quarter were US$35 million, an increase of US$34

million from the previous quarter.

Net income for the quarter was US$3,094 million representing basic and diluted

earnings per share of $6.54 and $6.23, respectively.

Balance sheet

As of March 31, 2014, total assets were US$27,491 million, an increase of

US$1,191 million compared to December 31, 2013.

Total current assets increased to US$4,031 million from US$2,834 million over

the course of the quarter, primarily driven by an increase in related party

receivables and marketable securities resulting from the deconsolidation of

Seadrill Partners.

Total non-current assets decreased to US$23,460 million from US$23,466 million

primarily due to changes related to the deconsolidation of Seadrill Partners in

investment in associated companies, non-current related party receivables,

drilling units, and newbuilds.

Total current liabilities increased to US$4,394 million from US$3,825 million

largely due to an increase in short-term debt to related party.

Long-term interest bearing debt decreased to US$10,728 million from US$11,900

million over the course of the quarter and total net interest bearing debt

decreased to US$12,449 million from US$13,874 million.  The decrease is

primarily due to the deconsolidation of Seadrill Partners.

Total equity increased to US$10,673 million from US$8,202 million as of

March 31, 2014, primarily driven by net income for the quarter and proceeds from

Seadrill Partners and NADL equity offerings, offset by a mark-to-market loss on

our SapuraKencana and Seadrill Partner investments, and by dividends paid.

Cash flow

As of March 31, 2014, cash and cash equivalents were US$912 million, an increase

of US$168 million compared to the previous quarter.

Net cash from operating activities for the three month period ended March 31,

2014 was US$656 and net cash used in investing activities for the same period

was US$968 million.  Net cash provided by financing activities was US$1,456

million.

This information is subject of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#1789049]