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October 28, 2008

Norther Offshore cancels deal to acquire two Transocean rigs

Northern Offshore, Ltd. (Oslo Bors: NOF.OL) has advised Transocean, Inc. (NYSE: RIG) that two wholly owned subsidiaries are terminating their previously announced agreements to acquire two North Sea semisubmersible drilling rigs from affiliates of Transocean, Inc.

The acquisitions are contingent upon obtaining lender consents to the acquisition and related financing. Northern Offshore says it has been unable to obtain the consent of its lenders on terms acceptable to Northern Offshore and has advised Transocean of this development.

While Northern Offshore and Transocean continue to discuss alternative structures which could result in Northern Offshore's acquisition of one or both of these rigs, there is no assurance that these discussions will lead to an agreement which will permit Northern Offshore to acquire these rigs on acceptable terms.

Marion Woolie, Northern Offshore President and CEO, said "We are extremely disappointed that Northern Offshore affiliates will not be able to conclude this acquisition given the recent uncertainties in the global credit markets and the addition of the related financial obligations for these two semisubmersible rigs."

Transocean Inc. agreed to sell the rigs, the GSF Arctic II and GSF Arctic IV back in July for total proceeds of approximately $750 million. It said then that the divestitures would complete its undertakings to the Office of Fair Trading in the United Kingdom (OFT) related to the merger with GlobalSantaFe Corporation.

The GSF Arctic II and GSF Arctic IV are third-generation Friede & Goldman Enhanced Pacesetter design semisubmersible rigs, capable of operating in up to 1,200 feet of water and 1,500 feet of water, respectively.


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