Northern Offshore, Ltd to Acquire Two North Sea Semisubmersible Drilling Rigs

Northern Offshore, Ltd told the press that the company has entered into agreements with affiliates of Transocean, Inc. (NYSE: RIG ) to acquire the semisubmersible drilling rigs GSF Arctic II and GSF Arctic IV currently operating in the U.K. North Sea (collectively the “Rigs”). The total acquisition price for the two rigs is approximately US$750 million. The purchase of the GSF Arctic IV is expected to close in the third quarter of 2008 and the purchase of the GSF Arctic II is expected to close in the fourth quarter of 2008, following completion of existing contract commitments.

CEO Marion M. Woolie said: “We are very pleased to announce the planned acquisition of these strategic assets. This transaction will greatly improve the Company’s earnings visibility and will be accretive to shareholders. The acquisition is an important next step in the Company’s growth strategy and builds on the North Sea jackup acquisitions in 2007. The Rigs are well-maintained, high quality assets that will complement our existing fleet. They provide significant additional scale to our North Sea operations and facilitate a more cost efficient organization. The senior management of Northern Offshore, having been formerly employed by GlobalSantaFe, is well acquainted with the Rigs and their crews, which should ensure a safe and smooth integration process”.

Under the purchase and sale agreements, the Rigs will be owned by subsidiaries of Northern Offshore. Transocean will provide $745 million in seller financing through December 31, 2010 at an interest rate of 10% per annum. The financing will be secured by the Rigs, but non-recourse to Northern Offshore and its other affiliates. Closing is subject to customary consent of the Company’s lenders.

Northern Offshore, Ltd. is a Bermuda holding company which operates offshore oil and gas production and drilling vessels deployed around the world. The Company’s current fleet consists of one floating production facility, and five drilling units (a drillship, a semisubmersible and three jackup drilling rigs). The vessels operate in various markets including the North Sea, the Indian Ocean, offshore Russia and Southeast Asia