SeaDrill Limited -- Option Program


HAMILTON, Norway, May 12, 2006 (PRIMEZONE) -- In May 2005, SeaDrill Limited (Other OTC:SDRLF) (Oslo:SDRL) established an Employee Share Ownership Plan (ESOP) and authorized the Board to grant and allocate five million shares at a subscription price of USD 2.23 per share pursuant to the ESOP. The subscription price was set to 10 % premium to underlying stock price at the time the authorisation was given. The option program is meant to recruit and secure long term employment of key individuals and align the interests of management, the Board and the shareholders.

In connection with the final takeover of Smedvig and the establishment of the new SeaDrill Management organisation, the initial grant of options has been allocated to certain individuals. A total of 800,000 options in line with the terms established in the original grant have been awarded to individuals who have worked for the Group since its start up in 2005. A further 670,000 options have been allocated to employees who since that time have been recruited directly in SeaDrill or employed through the takeover with Smedvig. The option strike price for these latter options has, as allowed under the ESOP, been adversely increased from USD 2.23 to a weighted average of NOK 99.85 per share to represent the share price at the time their employment contract with SeaDrill came into effect. The Board intends currently to allocate a further 2,780,000 shares of the program to cover second and third level managers. The strike price for this allocation will be set at the time of allocation. The remaining part of the option program estimated to 750,000 shares will for the time being remain unallocated to meet new recruitments. Total outstanding options are thereby 4,250,000 shares or 1.17 % of the total outstanding share capital.

The ESOP is, as stated above, intended to stimulate long term employment. The major part of the options have thereby been given five years validity from the date of an individuals effective date of employment. The options generally become exercisable 1/3 annually with the first callable date for any options to be at least one year after the option holders' effective date of employment.

The following Primary Insiders have received share options:



 John Fredriksen          350,000
 Tor Olav Troeim          275,000
 Kate Blankenship          30,000
 Pal Nordgren              30,000
 Kjell E. Jacobsen        350,000
 Alf C. Thorkildsen       275,000

New total holding for Primary Insiders including controlled companies are:



                            Shares:   Share options
 John Fredriksen        124,441,916         350,000
 Tor Olav Troeim            250,000         275,000
 Kate Blankenship             8,000          30,000
 Pal Nordgren                77,000          30,000
 Kjell E. Jacobsen                0         350,000
 Alf C. Thorkildsen               0         275,000

 SeaDrill Limited 
 May 12, 2006 
 Hamilton, Bermuda


            

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