Aker Spitsbergen enters operations

During the weekend, Aker Spitsbergen left Norway's Klosterfjorden in
Sunnhordland community, for field deployment in the Norwegian Sea. The advanced
drilling rig arrived on site Monday morning, ready for drilling and well
operations at the Halten Nordland region, where Statoil is the operator.
 
Construction and completion of the rig have taken longer than anticipated. Under
the original contract, the rig was to be delivered and ready for operations in
February 2008. One year ago, it was announced that the rig would be ready for
operations in the summer of 2009. However, deployment is taking place in January
2010.
 
In August 2009, the rig formally began its contract with Statoil, following
protracted negotiations between Statoil and Aker Drilling regarding practical
and financial consequences of the delays, including liquidated damages for late
delivery, additional equipment costs, and day rates.
 
"Naturally, the delays and cost increases were disappointments. Now, however, we
at Aker Drilling are extremely pleased that Aker Spitsbergen has also commenced
operations. Finally, the rig's highly qualified crew can demonstrate their
skills at sea and prove just how safely and efficiently this sophisticated rig
will operate," says Geir Sjøberg, Aker Drilling's President and CEO.
 
Three and a half years to go
Once operations begin, about three and a half years remain of the five-year
contract confirmed by Statoil in April 2008. The oil company has exercised its
right to shorten the contractual period because of the delays. Statoil holds
options to extend the contract five times, each for a period of two years. The
agreed day rate during the option periods is higher than in the first five-year
period.
 
"Although the postponements and shorter charter period will reduce our fixed
drilling charter revenues, our goal, of course, is to make Statoil so satisfied
with the rig and its crew that the company will want to extend the drilling
contract. As we see it, demand will increase for deepwater rigs with our
specifications," says Mr. Sjøberg.
 
Upgrades
As early as in May this year, Aker Spitsbergen will again be wharfside. As part
of the August 2009 negotiations with Statoil, the parties agreed to upgrade the
rig in the second quarter of 2010. The upgrades will make the rig even more
efficient at subsea well completion work and other operations.
 
While the exact duration of the layover has yet to be determined, it will
presumably last between 6 and 10 weeks. During that period, various minor rig
improvements will also be made. No day-rate revenues will accrue during the
shipyard layover.
 
"We greatly appreciate the close cooperation we have had with Statoil during
construction and completion of the rig. Statoil could have opted to cancel the
contract, but instead chose to continue working with us. Our efforts are now
focused on operational excellence and making our rig the best on the Norwegian
continental shelf," says Geir Sjøberg.
 
This information is subject of the disclosure requirements acc. to §5-12 vphl
(Norwegian Securities Trading Act)
 
[HUG#1376873]