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ONS 2014: NADL acquires 150 land rigs in major Rosneft equipment deal

26th August 2014

North Atlantic Drilling (NADL) has announced at ONS that it will purchase a significant portion of Rosneft’s land drilling fleet in Russia

NADL acquires 150 land rigs in major equipment deal with Rosneft
Currently one of NADL’s semi-submersible rigs - West Alpha is involved in project of drilling at Universitetskaya-1 Russia’s northernmost well

The deal encompasses around 150 rigs and as part of the purchase Rosneft has awarded new five-year contracts on all the units.

“We are very pleased with the execution of this important transaction and welcome Rosneft as an equity partner and to our board,” said Alf Ragnar, North Atlantic chief executive.

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 semi-submersibles, a drillship, and three jack-up rigs.

Seadrill Limited currently owns 70 per cent of the outstanding shares and the company is listed on the NYSE and Norwegian OTC with a market capitalization of approximately USD 2.4bn.

This follows the preliminary investment and cooperation announcement in May and the completion of the binding offshore contracts in July.

Rosneft will receive as consideration an approximate 30 per cent stake in NADL by receiving primary shares at the price agreed upon in May of USD 9.25 per share, with the balance being paid to NADL in cash.

“Rosneft, Seadrill and NADL are creating a unique international partnership which will allow Rosneft to secure its drilling program," said Rosneft head, Igor Sechin. "This deal will allow Rosneft to acquire new capabilities in the sphere of oilfield services, by engaging the best professionals, with unique expertise in operations in harsh climate conditions."

Following the transaction Seadrill Limited will continue to own more than 50 per cent of NADL.

The transaction is expected to close during the fourth quarter of this year. According to the agreement, any break rights expire after 77 days. Upon closing Rosneft will be entitled to appoint two of seven board seats on NADL's board of directors.

This binding agreement is consistent with the provisions of the investment and cooperation agreement between Seadrill, NADL and Rosneft announced on May 24, 2014.

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