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Marine Log

May 15, 2006

Petrojack to acquire newbuild contract

Petrojack ASA has entered into an agreement with Network Drilling Limited (a company owned 32% by Berge Gerdt Larsen) to acquire JackInvest I Pte Ltd which has a construction contract with Jurong Shipyard in Singapore for a premium jack-up drilling rig.

The rig has similar specifications as the three existing Petrojack rigs under construction at Jurong shipyard.

The purchase price is about $180 million, which includes both the acqusition of the shares in JackInvest I Pte Ltd and yard payments for the rig, as well as approx. $5 million for project management.

Delivery is expected no later than December 2008. The price and time of delivery are considered favorable. The last construction contract for a similar jackup, with delivery 1Q09 is in excess of $180 milliom.

Petrojack ASA has given Pareto Securities ASA a mandate as arranger of two new bond issues. In addition to financing of the shares in JackInvest I Pte Ltd and yard payments for the above mentioned fourth jack-up rig, proceeds from the bond loans will also finance payments under the construction contract of Petrojack II.

One bond loan will be issued in USD, is expected to generate gross proceeds of $ 200 million and will carry a coupon of 6 month libor + 4,90%. The second bond loan will be issued in NOK, is expected to generate gross proceeds of NOK 500 million and will carry a coupon of 3 month nibor + 6,25%. Settlement date for both bond loans is expected to end of May 2006. Both loans will mature in 2012, and will thus secure long term financing.

After the above mentioned acquisition, Petrojack has a total of four modern jack-up rigs under construction at Jurong, with scheduled delivery in March 2007, January 2008, June 2008 and December 2008 respectivel

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