SDRL - Seadrill launches US$1 billion 2019 convertible bond concurrently with a voluntary incentive payment offer to convert the existing US$650 million 3.375% 2017 convertible bond

New Convertible Bond Offering:

Hamilton, Bermuda, July 8, 2014 - Seadrill Limited ("Seadrill" or the "Company") announces today that it intends to issue US$1 billion in principal amount of convertible bonds with a five-year tenor (the "2019 Bonds").

The senior, unsecured bonds will be convertible into common shares of the Company. The bonds are expected to have an annual coupon in the range of 2.00% - 2.50% payable semi-annually in arrear and have a conversion premium of 30% - 35% over the reference share price that will be based on the volume weighted average price of the Company's shares on the Oslo Stock Exchange (converted into US$ at the prevailing US$-NOK spot rate) and on the New York Stock Exchange between opening and closing of the market on July 8, 2014.

The convertible bonds will be issued and redeemed at 100% of their principal amount and will, unless previously redeemed, converted or purchased and cancelled, mature on July 16, 2019.  Seadrill will have the right to call the bonds after three years plus 21 days if the value of the Seadrill shares underlying one bond, for a specified period of time, exceeds 130% of the principal amount of the bond.

The bonds are expected to be issued on or around July 16, 2014. Seadrill may decide to list the bonds on an exchange at a later stage.

The proceeds from the issuance will be used to fund the newbuild program and for general corporate purposes.

ABG Sundal Collier, BNP Paribas and Deutsche Bank are acting as joint bookrunners.

Seadrill expects to announce the final terms and conditions related to the 2019 Bonds on July 8, 2014.

Voluntary Incentive Payment Offer:

Concurrently with the offering of the 2019 Bonds, Seadrill is launching a voluntary incentive payment offer to convert any and all of the US$650 million principal amount of 3.375% Seadrill convertible bonds due 2017 (the "2017 Bonds").

Seadrill hereby makes an offer of a cash incentive payment to the 2017 Bondholders who elect to exercise their conversion rights from this public announcement until July 10, 2014 at 5pm CET (the "Acceptance Period"). Seadrill may at its sole discretion extend the Acceptance Period (one or more times).

Bondholders exercising their conversion rights during the Acceptance Period will receive (i) 3,612 Seadrill ordinary shares per US$100,000 principal amount of the 2017 Bonds, (ii) a cash consideration of approximately US$10,465 per US$100,000 principal amount of the 2017 Bonds and (iii) accrued interest on the 2017 Bonds from April 27, 2014 (excluded) to July 16, 2014 (included).