SAPURAKENCANA PETROLEUM BERHAD (FORMERLY KNOWN …ir.chartnexus.com/sapurakencana/website_HTML/... · middle rate as quoted by Bloomberg as at 5.00 p.m. on 7 February 2013, is used

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SAPURAKENCANA PETROLEUM BERHAD (FORMERLY KNOWN AS SAPURA-KENCANA PETROLEUM BERHAD) (“SKPB” OR “COMPANY”) (I) PROPOSED COMBINATION AND INTEGRATION OF THE RESPECTIVE TENDER RIG

BUSINESSES OF SKPB AND SEADRILL LIMITED (“SEADRILL” OR “SELLER”) BY WAY OF THE ACQUISITION BY SAPURAKENCANA DRILLING PTE. LTD. (“PURCHASER”), A WHOLLY-OWNED SUBSIDIARY OF SKPB, OF:

(A) THE ENTIRE ISSUED SHARE CAPITAL OF SEADRILL TENDER RIG LTD (”STRL”)

(“STRL SHARES”); AND (B) 99% OF THE ISSUED SHARE CAPITAL OF PT NORDRILL INDONESIA (“PTNI”)

(“PTNI SHARES”);

(COLLECTIVELY REFERRED TO AS “PROPOSED TRANSACTION”)

(II) PROPOSED BASE PLACEMENT OF NEW ORDINARY SHARES OF RM1.00 EACH IN SKPB (“SKPB SHARES”) TO RAISE GROSS PROCEEDS OF USD250.0 MILLION (“PROPOSED BASE PLACEMENT”); AND

(III) PROPOSED ADDITIONAL PLACEMENT OF UP TO 300.0 MILLION NEW SKPB SHARES (“PROPOSED ADDITIONAL PLACEMENT”)

(COLLECTIVELY REFERRED TO AS “PROPOSALS”)

Unless otherwise stated, the exchange rate of United States Dollar (“USD”) 1.0000:RM3.0918, being the middle rate as quoted by Bloomberg as at 5.00 p.m. on 7 February 2013, is used throughout this Announcement. 1. INTRODUCTION

We refer to the Company’s announcement on 5 November 2012 in relation to the memorandum of understanding which was entered into between the Company and Seadrill on 5 November 2012 (“MOU”) and the Company’s announcement on 21 January 2013 in relation to the extension of the validity period of the MOU from 21 January 2013 to 8 February 2013.

On behalf of the Board of Directors of the Company (“Board”), CIMB Investment Bank Berhad (“CIMB”) and Maybank Investment Bank Berhad (“Maybank IB”) wish to announce that the Company, Purchaser and Seadrill have today entered into a conditional sale and purchase agreement (“SPA”) and a separation and transitional services agreement (“STSA”) in relation to the Proposed Transaction.

In conjunction with the Proposed Transaction, the Company is also proposing to implement the Proposed Base Placement and Proposed Additional Placement.

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2. DETAILS OF THE PROPOSALS 2.1 Details of the Proposed Transaction

2.1.1 Background information on the Proposed Transaction

The Proposed Transaction involves the acquisition by the Purchaser of the tender rig business of Seadrill through the acquisition of the STRL Shares and PTNI Shares (STRL Shares and PTNI Shares shall be collectively referred to as “Shares”). Seadrill is currently undertaking an internal reorganisation to streamline and reorganise the various entities in relation to its tender rig business to be acquired by the Purchaser pursuant to the Proposed Transaction (“Reorganisation”). The tender rig business to be acquired by the Purchaser will comprise STRL and its entities after the Reorganisation, which includes STRL’s 49% joint-venture interests with the Company in Varia Perdana Sdn Bhd (“VPSB”) and Tioman Drilling Company Sdn Bhd (“TDCSB”), and Crest Tender Rigs Pte Ltd (“CTR”), being a wholly-owned subsidiary of VPSB (“JV Interests”) (“STRL Group”), and PTNI, details of which are further set out in Appendix I of this Announcement. The remaining 51% joint-venture interests in VPSB and TDCSB are held by the Company. Throughout this Announcement, the following definitions shall apply: (i) STRL Group, excluding the JV Interests shall be referred to as “Target

Company(ies)”; and

(ii) STRL Group and PTNI shall collectively be referred to as “Acquiree Companies”.

Upon completion of the Reorganisation, the Acquiree Companies will collectively own six (6) semi-tenders, four (4) tender barges in addition to the five (5) existing tender barges jointly-owned under the JV Interests. These rigs are deployed across Malaysia, Brunei, Thailand, Indonesia, Angola and Trinidad & Tobago. In addition, the Acquiree Companies will own three (3) new builds currently under construction i.e. the T-17, T-18 and West Esperanza tender rigs (“New Builds”).

2.1.2 Price and settlement of the Shares

2.1.2.1 Price and settlement of the STRL Shares

Initial price for the STRL Shares

The price payable for the STRL Shares as at the completion of the acquisition of STRL Shares (“STRL Closing”) (“Initial STRL Price”) shall be an amount which is equivalent to the debt free/cash free price or enterprise value of USD2,900.0 million (RM8,966.2 million) (“Debt Free/Cash Free Price”) after: (i) deducting the aggregate of the following:

(a) estimated External Debt;

(b) estimated Capex Commitments;

(c) estimated Inter-Company Payables;

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(d) a price adjustment amounting to USD75.0 million (RM231.9 million) (“Price Adjustment”); and

(e) the price for the PTNI Shares (“PTNI Price”) amounting to USD2.4

million (RM7.4 million); and (iii) adding the aggregate of the following:

(a) estimated Cash; and

(b) estimated Inter-Company Receivables.

The Initial STRL Price will only be determined at a date not later than ten (10) business days prior to the STRL Closing. Settlement of the Initial STRL Price The Initial STRL Price will be settled at the STRL Closing in the following manner: (i) USD350.0 million (RM1,082.1 million) via the allotment and issuance of 400.79

million new SKPB Shares by SKPB to the Seller at an issue price of RM2.70 per SKPB Share (“Consideration Shares”) which will be listed on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Securities”);

(ii) up to USD238.0 million (RM735.8 million) via the allotment and issuance by the

Purchaser to the Seller of three (3)-year redeemable exchangeable preference shares in the Purchaser (“REPS”) at an issue price of RM2.70 per REPS, the salient terms of which are set out in Appendix III of this Announcement. The REPS will not be listed and quoted on the Main Market of Bursa Securities. However, the REPS will be exchangeable into new SKPB Shares which will be listed on the Main Market of Bursa Securities;

(iii) USD187.0 million (RM578.2 million), being the deferred consideration whereby

the salient terms are set out in Appendix IV of this Announcement (“Deferred Consideration”); and

(iv) the balance by way of cash payment to the Seller. The estimated cash payment in item (iv) above will be funded by proceeds raised from the Proposed Base Placement and external borrowings. Adjustment to the Initial STRL Price After the STRL Closing, the Initial STRL Price will be adjusted based on the basis set out in the SPA in arriving at the final price for the STRL Shares (“Adjustments”) (“Final STRL Price”). The Final STRL Price will be lower than the Initial STRL Price in the event there is an increase in the External Debt, Inter-Company Payables and Capex Commitments or a reduction in the Cash, Inter-Company Receivables and the Net Current Assets (as defined below). Similarly, the Final STRL Price will be higher than the Initial STRL Price in the event there is a decrease in the External Debt, Inter-Company Payables and Capex Commitment or an increase in the Cash, Inter-Company Receivables and Net Current Assets.

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The abovementioned defined terms shall have the following meanings: Capex Commitments : Capital expenditure and project management costs and total

preparation costs that are associated with the New Builds in relation to each Target Company excluding any T-18 personnel cost and first time mobilisation costs to the extent such Target Company has not received the corresponding mobilisation revenues, expected to be incurred between the STRL Closing and the handover of the New Builds and for the purposes of calculating the Adjustments, excluding the liabilities and accruals for work done in relation to the New Builds to the extent they have not been paid prior to the STRL Closing

Cash : Cash and cash equivalents of each Target Company at the STRL

Closing excluding the following: (i) all prepayments in relation to insurance;

(ii) any Inter-Company Receivables (as defined below); (iii) any ‘trapped cash’, being cash which is not capable of

being lawfully spent, paid, distributed, loaned or released by a Target Company and is not readily accessible (such as cash reserved for securing rent deposits or held as collateral); and

(iv) all items to be treated as debtors in the net current assets

of each Target Company External Debt : External debt owed by each Target Company as at the STRL

Closing and any early repayment, prepayment or break costs, fees or penalties in respect of the same and any legal costs and expenses in connection with the release of security in relation to the same (“External Financial Debt”) and other payables in each

Target Company outstanding as at the STRL Closing Inter-Company Payables : Any amount owed by each Target Company at the STRL Closing to

any member of Seadrill group of companies, excluding the STRL Group and PTNI (“Seadrill Group” or “Seller Group”)

Inter-Company Receivables

: Any amount owed by the Seadrill Group to each Target Company at the STRL Closing

Net Current Assets : Current assets less current liabilities, excluding inventory other

than USD5.0 million (RM15.46 million) of onshore spares, related party receivables/payables, inter-company receivables and inter-company payables, deferred mobilisation costs, deferred financing costs, cash, accrued interest, corporate income tax, the contingent liabilities for the tax audit in relation to the affairs of Seadrill Asia Limited (Thai Branch) for the tax year 2001 only, the provision in respect of disputed receivables under the drilling contract of the West Jaya rig, deferred tax, costs or value-added tax for which the Purchaser is liable pursuant to the SPA, deferred mobilisation revenue, short term portion of long term debt, short term portion of pension liabilities, prepaid insurance and any working capital related to entities that are not Target Companies and, for the avoidance of doubt, excludes all Cash, Inter-Company Receivables, Inter-Company Payables and External Debt

PTNI Price : Price for the PTNI Shares amounting to USD2.4 million (RM7.4

million)

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2.1.2.2 Price and settlement of the PTNI Shares The PTNI Price shall be USD2.4 million (RM7.4 million) and will be satisfied in cash and funded by external borrowings.

2.1.3 Basis and justification for the Debt Free/Cash Free Price The Debt Free/Cash Free Price was arrived at on a “willing-buyer willing-seller” basis after taking into consideration, amongst others, the following: (i) the expected cash flow of the Acquiree Companies after taking into consideration

the contracted day rates, utilisation rates and operating margins of Seadrill’s tender rig business, the age of the tender rigs as well as the existing contracts of the Acquiree Companies; and

(ii) the prospects of the oil and gas (“O&G”) sector as well as the prospects and earnings potential of the Acquiree Companies as detailed in Section 5 of this Announcement.

In justifying the Debt Free/Cash Free Price, the Company had taken into consideration, amongst others, the following: (i) strategic rationale for the Proposed Transaction for SKPB to further grow its

drilling business and enhance its position as a highly diversified and leading offshore O&G services provider; and

(ii) expected future earnings potential of the Acquiree Companies to be derived from

existing customer contracts of the Acquiree Companies and their potential contribution to the SKPB group of companies (“SKPB Group”).

2.1.4 Basis and justification for the issue price of the Consideration Shares, and issue

and exchange price of the REPS 2.1.4.1 Consideration Shares

The issue price of RM2.70 per Consideration Share was arrived at after taking into consideration the 5-day volume weighted average market price (“VWAMP”) of SKPB Shares up to and including 2 November 2012, being the last trading day prior to the announcement of the MOU, of RM2.60. The issue price represents the following: Share price Premium/(Discount)

RM RM % Announcement of MOU (i) Last traded price of SKPB Shares on 2

November 2012 2.71 (0.01) (0.37)

(ii) 5-day VWAMP of SKPB Shares up to and

including 2 November 2012 2.60 0.10 3.85

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Share price Premium/(Discount)

RM RM %

Announcement of the Proposals (i) Last traded price of SKPB Shares on 7

February 2013, being the last trading day prior to the date of this Announcement

2.85 (0.15) (5.26)

(ii) 5-day VWAMP of SKPB Shares up to and

including 7 February 2013, being the last trading day prior to the date of this Announcement

2.91 (0.21) (7.22)

(Source: Bloomberg)

2.1.4.2 Issue and exchange price of the REPS

As each REPS is exchangeable by the Seller into one (1) new SKPB Share, the issue and exchange price of the REPS of RM2.70 was arrived at on the same basis as the Consideration Shares.

2.1.5 Salient terms of the SPA

2.1.5.1 Conditions to the STRL Closing (“STRL Conditions”)

(i) the STRL Closing shall be conditional on the following STRL Conditions,

amongst others, having been fulfilled or waived in writing in accordance with the terms of the SPA:

(a) Seller Conditions

(aa) the consent of the Controller of Foreign Exchange of the Bermuda

Monetary Authority to the transfer of the STRL Shares and of the change in the beneficial ownership of the Target Companies that are incorporated in Bermuda;

(bb) each of the key employees of the seller as set out in the SPA (or such

lesser number as the Seller, Purchaser and SKPB, collectively, referred to as the “Parties” may agree) having accepted an offer of employment with the SKPB Group in accordance with the SPA, with such employment to commence with effect from the STRL Closing;

(cc) no more than 15% of the employees in any Target Company

(individually) having resigned or ceased to work for such Target Company (for whatever reason) since the date of the SPA;

(dd) none of the rig managers of any of the tender rigs as set out in the SPA

having resigned or ceased to be the rig manager of any of the said tender rigs where they have not been replaced;

(ee) certain steps of the Reorganisation having been completed in

accordance with the terms of the SPA;

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(ff) the Seller having delivered to the Purchaser the Combined and Carved-out Financial Statements (as defined in Section 2.1.7.3 of this Announcement) for the financial year ended (“FYE”) 31 December 2012 by 29 March 2013 and the earnings before interest, taxation, depreciation and amortisation (“EBITDA”) (excluding EBITDA attributable to the JV Interests and T-15, T-16 and West Vencedor tender rigs) not being less than USD297.0 million (RM918.3 million) by an amount greater than USD5.0 million (RM15.5 million); and

(gg) PricewaterhouseCoopers LLP having confirmed that pursuant to the

terms of the STSA, the Seller has made arrangements for an IT System to be available to the Target Companies from the STRL Closing in accordance with the terms of the SPA;

(The STRL Conditions set out in sub-paragraphs (aa) to (gg) above are referred to as “Seller Conditions”)

(b) Purchaser Conditions (aa) the Purchaser having obtained committed third party financing of at least

USD1,850,000,000 to partially finance the Proposed Transaction (on terms reasonably satisfactory to the Purchaser) and such financing being available for drawdown, subject only to the STRL Closing;

(bb) the Board having approved the circular to shareholders of SKPB relating

to transactions contemplated in the SPA (“Circular”); (cc) the approval from Bursa Securities being obtained in relation to the

despatch of the Circular and to convene the extraordinary general meeting (“EGM”) in relation to the Proposed Transaction;

(dd) the shareholders of SKPB approving the necessary transactions

contemplated in the SPA; (ee) the approval of Bursa Securities being obtained for the listing of the

Consideration Shares and new SKPB Shares that will arise from the exchange of the REPS (“Exchanged Shares”) on the Main Market of Bursa Securities;

(ff) the approval of Bank Negara Malaysia (“BNM”) being obtained for the

Proposed Transaction; (gg) the approval of Bursa Securities being obtained for the listing of the new

SKPB Shares arising from the Proposed Base Placement on the Main Market of Bursa Securities;

(hh) all approvals required from the financial institutions that have provided

financing to any member of the SKPB Group being obtained for the Proposed Transaction; and

(The STRL Conditions set out in sub-paragraphs (aa) to (hh) above are referred to as “Purchaser Conditions”)

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(c) no material adverse change, being any event which causes material adverse effect, being, losses, damages, liabilities, costs and expenses to the Target Companies of USD50 million (RM154.6 million) or more has occurred and is continuing (“MAC Condition”).

(ii) the SPA shall automatically terminate on the day following the date on which the

approval of the shareholders of the Company was not obtained at the EGM, except in respect of any rights and liabilities which have accrued before termination or under any of the surviving provisions in accordance with the SPA

. (iii) the Purchaser shall be entitled to terminate the SPA within one (1) week of the

earlier to occur of (i) the Seller failing to deliver the Combined and Carved-out Financial Statements for the FYE 31 December 2012 to the Purchaser on or before 29 March 2013, and (ii) the Seller delivering the Combined and Carved-out Financial Statements for the FYE 31 December 2012 to the Purchaser on or before 29 March 2013 and such Combined and Carved-out Financial Statements for the FYE 31 December 2012 evidencing a material deviation, except in respect of any rights and liabilities which have accrued before termination or under any of the surviving provisions in accordance with the SPA;

(iv) if on the first business day after which all the conditions have been fulfilled

(“Unconditional Date”) has not occurred on or before 15 May 2013 (or such other date as the Purchaser and the Seller may agree in writing) (“STRL Longstop Date”), the Seller and the Purchaser (acting jointly) may, at any time up to five (5) business days after the STRL Longstop Date, elect to extend the STRL Longstop Date by a period of up to twenty (20) business days (such new date being “Extended STRL Longstop Date”), provided that in no circumstances, notwithstanding any other provision of the SPA, shall the STRL Longstop Date be later than 14 June 2013.

(v) if the Unconditional Date has not occurred on or before the STRL Longstop Date

and:

(a) the Seller and the Purchaser (acting jointly) do not elect to extend the STRL Longstop Date, the SPA shall automatically terminate (other than the surviving provisions in accordance with the SPA) on the date immediately following the fifth (5

th) business day after the STRL Longstop

Date; or

(b) the Seller and the Purchaser (acting jointly) do elect to extend the STRL Longstop Date in accordance with the SPA, but the Unconditional Date does not occur before the Extended STRL Longstop Date, the SPA shall automatically terminate (other than the surviving provisions in accordance with the SPA) on the business day immediately following the Extended STRL Longstop Date.

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2.1.5.2 Conditions to the closing of the acquisition of PTNI Shares (“PTNI Closing”)

(i) PTNI Closing shall be conditional on the following conditions to PTNI Closing (“PTNI Conditions”) having been fulfilled in accordance with the terms of the SPA: (a) an announcement, respectively, in a newspaper and to the employees of

PTNI having been given by PTNI in respect of the sale and purchase of the PTNI Shares in accordance with Indonesian law, and all issues arising as a result of the announcements of the proposed transfer of shares having been fully settled in accordance with Indonesian law;

(b) a duly executed resolution of a general meeting of the shareholders of

PTNI or a duly executed circular resolution of the shareholders of PTNI approving, amongst other things: (aa) the transfer of the PTNI Shares to a nominee of the Purchaser; (bb) the waiver by the other shareholder of PTNI of all pre-emption

rights granted to it in respect of the PTNI Shares, pursuant to the constitutional documents of PTNI or otherwise; and

(cc) the amendment of the PTNI’s Articles of Association to reflect

the change in PTNI's shareholding composition;

(c) the approval of Badan Koordinasi Penanaman Modal (“BKPM”) being obtained for the change of shareholding of PTNI contemplated by the SPA;

(The PTNI Conditions set out in sub-paragraphs (a) to (c) above are referred to as “PTNI Conditions”)

(ii) the Seller shall ensure that the PTNI Conditions are fulfilled as soon as

reasonably practicable after the date of the SPA and the Purchaser shall provide all information and assistance as the Seller may reasonably require to enable it to satisfy such PTNI Conditions;

(iii) the Seller shall keep the Purchaser regularly informed on the progress of the fulfillment of the PTNI Conditions;

(iv) the Seller shall not, in the period prior to PTNI Closing, make any filing with any governmental entity in relation to the transfer of the PTNI Shares without obtaining the prior written consent of the Purchaser to all references in such filing to the Purchaser, the Purchaser group of companies (“Purchaser Group”) and, after the STRL Closing, the Target Companies; and

(v) The Seller shall notify the Purchaser promptly (but in any event within three (3)

Business Days) upon becoming aware that any of the PTNI Conditions have been or have not been (and will not be) fulfilled.

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2.1.5.3 Break Fee

(i) If the SPA is terminated (i) automatically in accordance with the SPA and, at such time, any of the Purchaser Conditions have not been, provided that at such time all of the Seller Conditions have not been fulfilled or waived and the MAC Condition continues to be true; (ii) where such termination is a result of default by the Purchaser, provided that at such time the Seller has complied with all of its material obligations in accordance with the SPA; or (iii) automatically in accordance with the SPA, the Purchaser agrees to pay to the Seller by way of compensation for any loss suffered an amount (which shall be exclusive of value added tax (“VAT”), if applicable) equal to USD5 million (RM15.5 million) (the “Purchaser Break Payment”), provided always that the Purchaser Break Payment shall not be payable in any of the circumstances above if the Seller is in material breach of any of the provision(s) of the SPA or the STSA.

(ii) If the SPA is terminated (i) automatically in accordance with the SPA and, at such time, any of the Seller Conditions have not been fulfilled or waived, provided that at such time all of the Purchaser Conditions have been fulfilled (save for the Antitrust Condition); (ii) where such termination is a result of default by the Seller, provided that at such time the Purchaser has complied with all of its material obligations in accordance with the SPA; or (iii) automatically in accordance with the SPA, the Seller agrees to pay to the Purchaser by way of compensation for any loss suffered an amount (which shall be exclusive of VAT, if applicable) equal to USD5 million (RM15.5 million) (the “Seller Break Payment”), provided always that the Seller Break Payment shall not be payable in any of the circumstances above if the Purchaser is in material breach of any of the provision(s) of the SPA or the STSA.

2.1.5.4 Joint-venture with Archer Limited (“Archer”)

Prior to the STRL Closing, Archer, the Seller's 40%-owned subsidiary, and the Purchaser shall use their respective reasonable efforts to enter into a joint-venture on mutually acceptable terms to be agreed. The primary purpose of the joint-venture will be to introduce Archer's wireline services in the Asian markets, as well as to explore the potential in extending the cooperation to other areas of mutual benefit to the parties. In addition, both the Seller and the Purchaser will use their respective reasonable efforts to agree on terms and enter into an agreement for the acquisition and/or use and/or management by Archer of the T-4 and T-7 tender rigs subject to any other arrangements that the Purchaser may have with industry participants. The Purchaser shall use its reasonable efforts to grant, subject to any arrangements the Purchaser may have with industry participants, Archer a first right of refusal to acquire the T-4 and T-7 tender rigs for use as service facilities should it decide to sell or dispose of such tender rigs within the five (5) year period after the date of the SPA.

2.1.5.5 Management agreements The Purchaser and the Seller shall procure that the following agreements will be executed by them or their affiliates and delivered upon the STRL Closing: (i) management agreements in relation to West Setia, West Jaya and West

Esperanza tender rigs (“Rig Management Agreements”); and

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(iii) project management agreements for the New Builds (“New Builds Project Management Agreements”).

(collectively referred to as “Management Agreements”)

2.1.5.6 Appointment of John Fredriksen to the Board At the STRL Closing, SKPB shall hold a Board meeting where a written resolution of the Board to be passed, for the appointment of John Fredriksen as a director of SKPB (who shall be entitled to nominate an alternate director to represent him), subject to the allotment and issuance of the Consideration Shares in accordance with the provisions of the SPA.

2.1.5.7 Consideration Shares The Consideration Shares will be subject to a moratorium on transfer until twelve (12) months after the date of the STRL Closing (“STRL Closing Date”).

2.1.5.8 Seller non-compete covenant

Subject to certain exceptions, the Seller undertakes to the Purchaser (acting for itself and as agent and trustee for each other member of the Purchaser Group) that it shall ensure that neither it nor any other member of the Seller Group shall, directly or indirectly, either alone or jointly with, through or as adviser to, or agent of, manager for, or sub-contractor of any person (including any member of the Seller Group):

(i) for a period of five (5) years after the STRL Closing, carry on or be engaged,

concerned or interested in any competing business; (ii) for a period of five (5) years after the STRL Closing, directly or indirectly, manage

or enter into any management, sub-management or sub-contracting arrangement in relation to any tender rig owned or acquired by Seadrill Partners LLC or any other affiliate of the Seller after the date of the SPA; and

(iii) for a period of one (1) year following the date of the SPA, do or say anything

which is harmful to a Target Company’s goodwill (as subsisting at the date of the SPA) or which may lead a person who has dealt with a Target Company at any time during the twelve (12) months prior to the STRL Closing to cease to deal with that Target Company on substantially equivalent terms to those previously offered or at all.

2.1.6 Details of the separation and transitional services arrangement

The Company, Purchaser and Seadrill have also entered into the STSA in which the Purchaser and Seadrill agree to work together to achieve a timely and efficient separation of the businesses conducted by the Target Companies from the rest of the Seadrill Group. In addition, as part of the Proposed Transaction, the Purchaser and Seadrill have agreed to provide, or procure the provision of certain transitional services to each other on the terms as set out in the STSA from the STRL Closing Date.

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In consideration of the Seller entering into the STSA, SKPB unconditionally and irrevocably guarantees to the Seller and its affiliates as a continuing obligation that the Purchaser and each of the Purchaser’s affiliates will comply properly and punctually with their obligations under the STSA and promises to pay on demand each sum which the Purchaser and each of the Purchaser’s affiliates is liable to pay the Seller under the STSA. The STSA starts on the STRL Closing Date and, subject to earlier termination as specified in the STSA, terminates automatically on the later of the (i) ending of the last transitional service term, (ii) ending of the last licence period ending, (iii) ending of the Singapore sublease/licence and (iv) second anniversary of the STRL Closing Date.

2.1.7 Background information on the Acquiree Companies

2.1.7.1 STRL Group

STRL was incorporated in Bermuda under the Companies Act of Bermuda, 1981 (“Bermuda Act”) on 8 June 2006 as an exempted limited liability company. As at 25 January 2013, the authorised share capital of STRL is USD12,000 comprising 120 shares of USD100 each, all of which have been issued and credited as fully paid-up. The details and principal activities of the STRL Group are set out in Appendix I of this Announcement.

2.1.7.2 PTNI PTNI was incorporated in Indonesia under the Deed of Establishment on 5 June 2002 as a private limited company. As at 25 January 2013, the authorised share capital of PTNI is USD480,000 comprising 4,800 shares of USD100 each, of which 2,400 PTNI Shares have been issued and credited as fully paid-up. Based on the latest audited financial statements of PTNI for the FYE 31 December 2011, PTNI registered a net loss of approximately USD235,000 (RM715,575) and a deficit in shareholders’ funds of USD295,000 (RM898,275).

2.1.7.3 Financial information of the Acquiree Companies

Seadrill is undertaking the Reorganisation to consolidate all its tender rigs and their respective operations that will be acquired by the Purchaser into STRL and transferring out operations that will not be acquired by the Purchaser. The historical financial information of the STRL Group and PTNI, collectively, are presently being prepared and audited in the form of a combined consolidated carve-out financial statements of the STRL Group and PTNI (“Combined and Carved-out Financial Statements”). Upon availability of the audited Combined and Carved-out Financial Statements for the three (3) FYE 31 December 2010, 2011 and 2012, SKPB will announce the relevant historical financial information. Certain unaudited historical financial information of the STRL Group prepared on the same basis as the Combined and Carved-out Financial Statements have been included in Appendix II of this Announcement. However, as this information is not audited, actual audited financial information that SKPB will announce upon the completion of the audit may differ from those set out in Appendix II of this Announcement.

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2.1.8 Background information on the Seller

Seadrill, a public listed company on the New York Stock Exchange and Oslo Stock Exchange, was incorporated in Bermuda under the Bermuda Act on 10 May 2005. As at 25 January 2013, the authorised share capital of Seadrill is USD1,600,000,000 comprising 800,000,000 ordinary shares of USD2.00 in Seadrill (“Seadrill Shares”) of which USD938,501,866 comprising 469,250,933 Seadrill Shares have been issued and credited as fully paid-up. The principal activities of the Seadrill Group are contracting and providing offshore drilling services to the O&G industry worldwide. As at 25 January 2013, Seadrill has a fleet of 68 offshore drilling rigs, including new builds, which consists of drillships, jack-up rigs, semi-submersible rigs and tender rigs for operations in shallow, deepwater and ultra-deepwater areas, as well as in benign and harsh environments. The Directors of Seadrill and their respective shareholdings in Seadrill as at 25 January 2013 are as follows:

Direct Indirect

Name No. of Seadrill

Shares % No. of Seadrill

Shares %

John Fredriksen - -

(a) 115,097,583 24.5

Tor Olav Trøim 35,000 *

(b)600,000 0.1

Kate Blankenship 41,000 * - - Carl Erik Steen - - - - Kathrine Fredriksen - - - -

Notes: (a) The Seadrill Shares are held in trust by Hemen Holding Limited (“Hemen”), a Cyprus holding

company established by John Fredriksen for the benefit of his immediate family. (b) The Seadrill Shares are held by Drew Investment Limited, a company controlled by Tor Olav Trøim,

which is a party to separate total return swap agreement relating to 600,000 Seadrill Shares. * Insignificant

The substantial shareholders of Seadrill and their respective shareholdings in Seadrill as at 25 January 2013 are as follows:

Direct Indirect

Name No. of Seadrill

Shares % No. of Seadrill

Shares %

Hemen - -

(a)115,097,583 24.5

Folketrygdfondet

(b) 23, 416,067 5.0 - -

Notes: (a) The Seadrill Shares are held in trust by Hemen, established by John Fredriksen for the benefit of his

immediate family.

14

(b) Folketrygdfondet manages the Government Pension Fund of Norway on behalf of the Norwegian

Ministry of Finance.

As the investments in the Acquiree Companies by Seadrill were gradually undertaken over a long period of time, records in relation to the original cost of Seadrill’s investments in the Acquiree Companies incorporated in Bermuda were previously owned under different entities.

2.1.9 Ranking of the Consideration Shares and the Exchanged Shares

The Consideration Shares shall rank pari passu with the existing SKPB Shares upon issuance (save and except for any dividends, rights, benefits and/or other distributions, the entitlement date of which is prior to the date of issue and allotment of the Consideration Shares). The Exchanged Shares shall rank pari passu with the existing SKPB Shares (save and except for any dividends, rights, allotment and/or other distributions the entitlement date of which is prior to the date of issue and allotment of the Exchanged Shares).

2.1.10 Liabilities to be assumed

Save for the provision of corporate guarantees by SKPB in relation to the tender rig business of the Target Companies and related customers’ contracts (where required) and customary liabilities in the ordinary course of business (if required), SKPB will not assume directly any liabilities (including contingent liabilities and corporate guarantees), of any of the Acquiree Companies pursuant to the Proposed Transaction..

2.1.11 Additional financial commitment

Save for the Capex Commitments, SKPB does not expect to incur additional financial commitments to ensure that the Acquiree Companies can continue to operate their business as a going concern with effect from the STRL Closing and PTNI Closing.

2.2 Details of the Proposed Base Placement

2.2.1 Background information on the Proposed Base Placement

The Proposed Base Placement involves the placement of new SKPB Shares to investors to be identified prior to the completion of the Proposed Transaction to raise gross proceeds of USD250.0 million to part finance the STRL Price and PTNI Price. For illustrative purposes, assuming an issue price of RM2.70 which represents a discount of RM0.21 or 7.22% to the 5-day VWAMP of SKPB Shares up to and including 7 February 2013 of RM2.91, being the last trading day prior to the date of this Announcement and based on the USD-RM exchange rate as at 7 February 2013, the Proposed Base Placement will involve the issuance of 286.3 million new SKPB Shares which represents 5.72% of the issued and paid-up share capital of SKPB as at 7 February 2013 (“Base Placement Shares”). The Base Placement Shares will be listed on the Main Market of Bursa Securities.

2.2.2 Basis and justification for the issue price of the Base Placement Shares

The issue price of the Base Placement Shares shall be fixed at a date to be determined and announced at a later date following the receipt of all requisite approvals for the Proposed Base Placement (“Base Placement Price-Fixing Date”).

15

In any event, the issue price of the Base Placement Shares will not be at a discount of more than 10% to the 5-day VWAMP of SKPB Shares up to and including the Base Placement Price-Fixing Date.

2.2.3 Ranking of the Base Placement Shares

The Base Placement Shares shall rank pari passu with the existing SKPB Shares upon issuance (save and except for any dividends, rights, benefits and/or other distributions, the entitlement date of which is prior to the date of issue and allotment of the Base Placement Shares).

2.2.4 Utilisation of proceeds

Assuming the issue price of the Base Placement Shares is RM2.70, the Proposed Base Placement is expected to raise gross proceeds of USD250.0 million (RM773.0 million) to part finance the Initial STRL Price and PTNI Price within three (3) months from the date of receipt of the proceeds.

2.3 Details of the Proposed Additional Placement

2.3.1 Background information on the Proposed Additional Placement

The Proposed Additional Placement involves the placement of up to 300.0 million new SKPB Shares (“Additional Placement Shares”) which may be implemented in tranches to investors to be identified after the completion of the Proposed Transaction. For illustrative purposes, assuming an issue price of RM2.70 which represents a discount of RM0.21 or 7.22% to the 5-day VWAMP of SKPB Shares up to and including 7 February 2013 of RM2.91, being the last trading day prior to the date of this Announcement and based on the USD-RM exchange rate as at 7 February 2013, the Proposed Additional Placement will raise gross proceeds of up to USD262.0 million (RM810.1 million). The Additional Placement Shares will be listed on the Main Market of Bursa Securities.

2.3.2 Basis and justification for the issue price of the Additional Placement Shares

The issue price of the Additional Placement Shares shall be fixed at a date to be determined and announced at a later date following the receipt of all requisite approvals for the Proposed Additional Placement (“Additional Placement Price-Fixing Date”). In any event, the issue price of the Additional Placement Shares will not be at a discount of more than 10% to the 5-day VWAMP of SKPB Shares up to and including the Additional Placement Price-Fixing Date.

2.3.3 Ranking of the Additional Placement Shares The Additional Placement Shares shall rank pari passu with the existing SKPB Shares upon issuance (save and except for any dividends, rights, benefits and/or other distributions, the entitlement date of which is prior to the date of issue and allotment of the Additional Placement Shares).

16

2.3.4 Utilisation of proceeds Assuming the issue price of the Additional Placement Shares is RM2.70, the Proposed Additional Placement is intended to raise gross proceeds of up to USD262.0 million (RM810.1 million) to redeem any outstanding REPS within three (3) months from the date of receipt of the proceeds.

3. INTER-CONDITIONALITY OF THE PROPOSALS The Proposed Transaction is conditional upon completion of the Proposed Base Placement. The Proposed Base Placement and Proposed Additional Placement are conditional upon the Company’s shareholders’ approval for the Proposals and is expected to be implemented prior to the completion of the Proposed Transaction. The Proposed Additional Placement is conditional upon the Proposed Transaction and Proposed Base Placement but not vice versa.

4. RATIONALE AND BENEFITS OF THE PROPOSALS

4.1 Proposed Transaction

The Proposed Transaction provides a strategic platform for SKPB to further grow its drilling business and enhance its position as a diversified and leading offshore services provider globally with multiple growth opportunities and strong value creation potential.

Following the completion of the Proposed Transaction, the number of operating tender rigs owned by the SKPB Group will increase to sixteen (16) with the number of new builds increasing to five (5). The enlarged SKPB Group will emerge as a significant player in the tender rig market globally. Further, the Company expects its overall profitability to be enhanced following an increased exposure to the higher margin drilling segment.

In addition, the Company expects the Proposed Transaction to facilitate expansion of its presence in West Africa, South and Central America, and to provide potential cross-selling opportunities across the SKPB Group.

The issuance of the Consideration Shares and REPS will reduce the cash outlay by the Company while strengthening its capital base and managing the SKPB Group’s gearing level. The Proposed Transaction is expected to be earnings-accretive.

4.2 Proposed Base Placement and Proposed Additional Placement

After due consideration of the various methods of fund raising and after taking into account the additional borrowings to be incurred for the Proposed Transaction, the Board is of the view that the Proposed Base Placement is the most appropriate method of raising funds to part finance the Initial STRL Price and PTNI Price as it would also allow the Company to further strengthen its capital base and manage the SKPB Group’s gearing level. The Proposed Additional Placement is for the redemption of the REPS from Seadrill.

17

5. OVERVIEW AND PROSPECTS 5.1 Overview and Prospects of the O&G sector

Oil price is expected to remain resilient around USD120 per barrel on average. A solid oil price is supported by non-OECD demand growth and decline in oil production at existing fields, which ensures a continued tight supply demand balance. Costs of new supply are also expected to increase long term, which provide support for prices.

(Source: Research report, January 2013 by Pareto Securities AS (“Pareto”))

Even in the face of uncertainties about future oil demand, member countries of the Organisation of the Petroleum Exporting Countries (“OPEC”) continue to invest heavily in exploration, development, refining and transport in order to maintain and expand supply capacities. According to the latest list of upstream projects in the OPEC Secretariat’s database, member countries are undertaking or planning around 116 development projects during the five-year period from 2012 to 2016. This corresponds to an estimated investment of approximately USD270 billion, and demonstrates the scale of OPEC’s portfolio of projects.

(Source: World Oil Outlook, 2012 by Organization of the Petroleum Exporting Countries)

5.2 Overview and Prospects of the Acquiree Companies 5.2.1 Overview of the tender rigs market

The size of the tender rig fleet has remained relatively stable over the past years with limited newbuilds and/or removals. The utilisation rate has also remained resilient around 85% to 95% due to the generally longer term contracts undertaken. Additionally, tender rigs only drill development wells which typically are the last projects to get cancelled during market downturns.

(Source: Research report, January 2013 by Pareto)

5.2.2 Prospects of the tender rigs market and the Acquiree Companies

In the nearer term, demand for tender rigs will be resilient as a result of new and existing projects that may replace the completion of older projects. The majority of tender rig activities are concentrated in South East Asia (“SEA”) region, occupying 23 of the 31 contracted rigs available globally and in SEA being the region with the highest level of tendering activity. The resilient demand in the nearer term for tender rigs activities in SEA is driven by the following potential major projects: (i) pre-tendering works in Kalimantan area and Natuna Sea in Indonesia

commencing in 2013 by Chevron Corporation and ConocoPhilips Company; (ii) pre-tendering works in Damar, Malaysia by Exxon Mobil Corporation; and (iii) additional rig tendered by PTT Exploration & Production Pcl in Myanmar,

amongst others.

18

SEA has also driven the demand growth over the past decade, with operating units increasing from 15 tender rigs in 2000 to 23 tender rigs at present whereas the demand in the other important region, being West Africa, remained stable between 5 and 7 operating units. The tender fleet is mainly stationed in SEA and West Africa as waters at these areas are more benign.

In the longer term, demand for tender rigs is expected to stabilise in SEA, as the construction of newer tender rigs are required to replace ageing tender barge fleet whereas other regions may expect incremental demand. In West Africa, there has been acceleration of exploration drilling activities over the last decade and most of the deepwater areas where semi tenders are well suited are still undeveloped. Thus, demand is expected to increase in this region after a stable decade. New regions are expected to develop further, such as Brazil and Trinidad & Tobago, driving the demand for tender rigs.

(Source: Research report, January 2013 by Pareto)

In view of the above, the Acquiree Companies are expected to benefit from the resilient tender rigs market.

6. RISK FACTORS

Similar to the Acquiree Companies, the SKPB Group is also involved in, amongst others, the provision of services in the offshore O&G sector. Accordingly, the Board does not foresee any material change to the risk profile of the SKPB Group’s businesses as the SKPB Group is already exposed to the following risks in the offshore O&G sector: (i) the demand for tender rig services are affected by the level of activities in the O&G

exploration, development and production in offshore areas worldwide;

(ii) early termination of the Acquiree Companies’ existing contracts;

(iii) ability to renew the Acquiree Companies’ existing contracts or secure new contracts at similar or favourable rates;

(iv) operating hazards; and (v) dependence on skilled personnel.

As the SKPB Group is also currently exposed to the abovementioned risk factors, the Company will continue to take reasonable steps to mitigate such risks based on its track record, experience and expertise in the offshore O&G sector.

19

Notwithstanding the above, the following are additional risk factors which are peculiar to the Proposed Transaction and the Acquiree Companies, which are by no means exhaustive:

(i) Ability to obtain and/or renew the necessary operational permits;

The operations of the Seadrill Tender Rigs and New Builds are subject to certain governmental approvals, permits/licenses required for the tender rigs to conduct its business. The permitting rules in most jurisdictions, and the interpretations of those rules, are complex, subject to change, including their interpretations by regulators, all of which may make compliance more difficult or impractical, and may increase the length of time it takes to receive regulatory approval for offshore drilling operations. In many jurisdictions, substantive requirements under environmental laws are implemented through permits/licenses and permit/licenses renewals. Failure to secure the necessary approvals or permits/licenses on a timely basis may result in the Acquiree Companies’ customers exercising their right to terminate or seek to renegotiate their drilling contracts which in turn could have a material adverse effect on its business, operating results or financial condition of the Acquiree Companies.

(ii) The operations of the Acquiree Companies are highly regulated

The operations of the Acquiree Companies are subject to international laws and local laws, regulations and policies in jurisdictions where the Acquiree Companies operate. These laws, regulations and policies govern, amongst others, workers’ health and safety, immigration (visa and work permits for personnel), good practices and governance of business, security, employment, construction and environmental standards. In addition, the Acquiree Companies are also required to comply with prevailing standards, and the costs of complying with these standards may increase from time to time. These laws may limit the Acquiree Companies drilling activity or increase their operating costs.

(iii) Future impairment of assets and goodwill/intangibles

The SKPB Group expects to recognise goodwill arising from the Proposed Transaction, the amount of which will depend on the market price of the SKPB Shares and fair value of the Acquiree Companies as at the completion of the Proposed Transaction. Any fair value adjustment to the assets and liabilities arising, and the effect of the amortisation of intangible assets identified, if any, from the Proposed Transaction, may materially and adversely affect the SKPB Group’s financial position. Further, any impairment in the carrying amount of intangible assets (including any goodwill arising from the Proposed Transaction) pursuant to impairment test will also affect the SKPB Group’s financial position.

(iv) Foreign exchange translation risk The functional currency of the Acquiree Companies is in USD. As the Company will consolidate the results of the Acquiree Companies after the completion of the Proposed Transaction, any adverse fluctuation between the USD against the RM is expected to have a material effect on the revenue and eventually, the financial results of the enlarged SKPB Group as a result of the consolidation since the financial results of the enlarged SKPB Group will be reported in RM.

20

(v) Policies on foreign investment and repatriation of profits

The SKPB Group will be subject to the policies governing the foreign investments, taxation and exchange control as well as repatriation of capital and profits from Bermuda, Brunei, Hong Kong, Indonesia, Panama, Singapore, Thailand and Trinidad & Tobago. There can be no assurance that there will not be any change to these policies or laws in the future. Any change to these policies or laws in the future to the detriment of the SKPB Group may have a material or adverse impact on the SKPB Group.

(vi) Completion risk

The completion of the Proposed Transaction is subject to the fulfillment of the conditions precedent to the SPA as set out in Sections 2.1.5.1(i) and 2.1.5.2(i) of this Announcement, which may be beyond the control of the Purchaser. In the event any of these conditions precedent are not fulfilled or waived, the SPA may be terminated and hence, the Purchaser will not be able to complete the Proposed Transaction.

(vii) Borrowings

The indebtedness of SKPB will increase pursuant to the Proposed Transaction. Although the Acquiree Companies are already income generating, there can be no assurance that the enlarged SKPB Group will be able to generate sufficient cashflow in the future to fulfil its debt obligations.

7 POLICIES ON FOREIGN INVESTMENT AND REPATRIATION OF PROFITS 7.1 Bermuda

The Bermuda Companies Act, 1981 distinguishes between those companies and partnerships which are owned predominantly by Bermudians (“Local Entities”) and those which are owned predominantly by non-Bermudians (“Exempted” Entities). Only Local Entities are permitted to carry on and compete for business which is in Bermuda. A Local Entity must have at least 60% Bermudian ownership and be under Bermudian control. Exempted Entities may be resident in Bermuda and carry on business from Bermuda in connection with transactions and activities which are external to Bermuda or with other Exempted Entities. An Exempted Entity is not required to have local participation.

In certain circumstances it is possible for a foreign entity to obtain a permit to conduct business outside Bermuda from a principal office in Bermuda. For companies incorporated by non-Bermudians for the purpose of conducting business outside Bermuda (“Exempted Companies”), transfers of ownership/securities to non-residents are not restricted. However, the beneficial ownership of the Exempted Company must be revealed to the government of Bermuda. Bermuda generally does not have withholding tax on remittances or non-residents who receive dividends from companies located in Bermuda (including other payments such as royalties and interest income).

The Exempt Entities and permit partnerships are considered as non-residents for exchange control purposes. This allows these entities to make dividend payments, distribute capital, open and maintain foreign bank accounts, maintain bank accounts in any currency, and purchase securities.

21

Repatriation of income can be transferred in the form of a dividend in foreign currency between Bermuda and foreign countries. However, there is a foreign currency purchase tax imposed at the rate of 1% on foreign currency purchased by a resident in Bermuda from a local bank.

7.2 Brunei

Brunei does not have any policy that restricts foreign investment and repatriation of profits although exchanges and movements of currency are monitored. Brunei also does not impose withholding tax on dividends that have been assessed to tax, regardless of whether paid to a resident or a non-resident.

7.3 Hong Kong

In general, Hong Kong does not impose any restriction to foreign investors to make investments in Hong Kong. Hong Kong does not impose withholding tax on dividends and interest to overseas recipients. Withholding tax is only charged in respect of royalties or similar payments to a non-resident.

Hong Kong does not have any foreign exchange control. There is no restriction on entry or repatriation of capital or remittance of profits from Hong Kong. Funds can be freely remitted to persons outside Hong Kong by various means such as dividends, interest, royalties, service fees, and branch profits, etc.

7.4 Indonesia

Under Indonesia's investment law, non-residents can establish wholly-owned companies, except for sectors on the government's "negative list of investment". There are four (4) broad categories of business restrictions in Indonesia as below: (i) business closed to all investors including local investors (e.g. harmful chemical

production);

(ii) business open only to domestic investors (e.g. natural forest concessions and radio/television broadcasting services);

(iii) business where a foreign investor may be a joint-venture party (e.g. shipping, electricity production, transmission and distribution); and

(iv) business open to all investors, but subject to certain restrictions (e.g. aquaculture and wood pulp industries).

A foreign investor may own 100% of the shares in an Indonesian company where there is no foreign ownership restriction in such a company’s business. However, such companies must be owned by two (2) or more shareholders. In the case of 100% foreign ownership, divestment to Indonesian party may be required in certain business sector depending on the specific regulation governing the business sector.

22

In particular, for the O&G drilling services, foreign investors are required to establish an Indonesian subsidiary to be able to provide drilling services in Indonesia. Foreign investor can own 100% shares if the Indonesian company engaged in offshore drilling services specifically in east part of Indonesia. For those operating outside the east part of Indonesia, the foreign ownership is limited to 95%.

Withholding tax system is widely applied in collecting income tax in Indonesia. Where a particular income item is subject to withholding tax, the payer is generally held responsible for withholding or collecting the tax.

Indonesia generally does not apply foreign exchange control. Companies are free to transfer and exchange foreign currency.

7.5 Panama

Panama maintains a liberal regime for foreign investment. There are generally no restrictions on the foreign ownership of Panamanian businesses, except in respect to retail, radio and finance companies, which can only be owned by Panamanian nationals or corporations. Dividends paid to a non-resident on nominal shares are subject to a 10% or 5% withholding tax depending on the source of dividends. If the company’s shares are issued to bearer, they will be subject to a withholding tax at a rate of 20%. Panama does not have currency exchange or transfer of funds controls. However, tax law claim for dividend tax at 5%, 10% or 20% rates (general 10%). No approval is required for the repatriation of dividends, interest, royalties, other profits or capital. Companies are permitted to repatriate all profits, dividends and management charges.

7.6 Singapore Generally, Singapore does not have restriction on foreign ownership of businesses. However, certain industries that are of national interest are not generally open to private enterprise. Singapore does not have exchange control rules on repatriation of investment capital and profits from Singapore. Besides dividends, profits could also be repatriated to the home country by other means including the payment of royalties, interest, technical or management fees. These payments may be subject to withholding tax and where a relevant double tax treaty applies, the tax rate may be reduced.

7.7 Thailand

The Foreign Business Act B.E. 2542 (1999) (“FBA”) is the main governing law regarding the extent of foreign business activities in Thailand, limiting the rights of non-Thais to engage in certain business activities.

In general, a non-Thai is permitted to wholly own a business in Thailand, unless the specific activity of that business is restricted under the FBA or another law. Restrictions are placed on certain key businesses, businesses concerning national safety and economy stability, and businesses where Thais are deemed as not ready to face foreign competition. In addition to the FBA, several statutes impose conditions on foreign participation in certain specific business sectors, requiring majority ownership and management by Thai nationals. For certain businesses such as hotels and pharmaceuticals, the individual holder of the operating licence must be a Thai national.

23

O&G exploration and production do not fall under the FBA. These activities are governed by a number of Petroleum Acts (“PA”). The PA apply a concession system which is administered by the Department of Mineral Fuels. The most significant PA are Petroleum Act B.E. 2514 (1971) and Petroleum Act B.E. 2532 (1989). The majority of concessions were granted under either one of these acts. Repatriation payments normally may not be made in Thai Baht (“THB”) but can be made in any other currency. If a payment is intended to be in THB, the amount is to be converted into the foreign currency at the point of repatriation as generally required by the Bank of Thailand.

Profits from Thailand can be repatriated in the form of dividends, royalties, interests or service fees, but each of these is subject to various limitations in terms of withholding tax and/or transfer pricing regime.

7.8 Trinidad & Tobago

In general, Trinidad & Tobago does not impose any restriction to foreign investors to make investments in Trinidad & Tobago. Foreign investors are allowed to incorporate wholly-owned foreign companies in Trinidad & Tobago.

A foreign investor is permitted to own 100% of the share capital in a private company, but the Minister of Finance must be notified prior to the investment. Foreign investors are permitted to own up to 30% of the share capital of a local public company without a licence. A licence is required to permit foreign investors to own more than 30% of the share capital of a public company. A licence is also required for a foreign investor to own more than a prescribed acreage of real estate. Such investments must be made in an internationally traded currency. Trinidad & Tobago imposes withholding tax at the standard rate of 15%, on payments made to non residents. Payment is defined to include interest, rentals, royalties, management charges or charges for the provision of personal services and technical and managerial skills and premiums. Dividends paid to a non-resident are subject to a 10% withholding tax (5% where the distribution is made to a parent company).

Trinidad & Tobago does not have exchange controls. There are no restrictions on repatriation of capital, profits, dividends, interest, distributions or gains on investment.

8. EFFECTS OF THE PROPOSALS

The effects of the Proposals on the share capital of the Company, shareholdings of the Company’s substantial shareholders, net assets attributable to the equity holders of the Company (“NA”), NA per SKPB Share and gearing of the SKPB Group have been shown based on the following scenarios: Scenario I : Assuming that the issue price of the Proposed Base Placement and Proposed

Additional Placement is RM2.70, being the issue of the Consideration Shares and REPS

Scenario II : Assuming that the issue price of the Proposed Base Placement and Proposed

Additional Placement is RM2.91, being the 5-day VWAMP of SKPB Shares up to and including 7 February 2013, being the last trading day prior to the date of this Announcement

24

8.1 Share capital

The proforma effects of the Proposals on the share capital of the Company are as follows: Scenario I Scenario II

No. of SKPB Shares No. of SKPB Shares

‘000 ‘000

As at 25 January 2013 5,004,366 5,004,366 Upon issuance of the Base Placement Shares 286,278 265,619 5,290,644 5,269,985 Upon issuance of the Consideration Shares 400,789 400,789 5,691,433 5,670,774 Upon issuance of the Additional Placement Shares

272,536 272,536

Enlarged issued and paid-up share capital 5,963,969 5,943,310

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25

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26

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0.1

7

(c) 7

95,3

20,3

13

13.9

7

9,4

94,1

21

0.1

6

(c) 7

95,3

20,3

13

13.3

4

Seadrill

7

20,3

29,6

91

12.6

6

- -

720,3

29,6

91

12.0

8

- -

EPF

598,4

90,9

51

10.5

2

- -

598,4

90,9

51

10.0

4

- -

Note

s:

(a)

Deemed interests by virtue of it being a substantial shareholder of STSB, Indera Perm

ai Sdn Bhd, Sapura C

apital Sdn Bhd and Sapura R

esources

Berhad pursuant to Section 6A of the Companies Act, 1965 (“A

ct”).

(b)

Deemed interests by virtue of it/him being a substantial shareholder of SHSB pursuant to Section 6A of the Act.

(c)

Deemed interests by virtue of his shareholding in Khasera pursuant to Section 6A of the Act.

(d)

Assuming no Base Placement Shares and Additional Placement Shares are issued and allocated to any of the substantial shareholders of the Company

and that none of the new placees individually hold m

ore than 5% of the enlarged issued and paid-up share capital of the Company after each of the

Proposed Base Placement and Proposed Additional Placement.

27

(i)

Scenario II

(I)

A

s a

t 25 J

anuary

2013

(d) A

fter th

e P

roposed B

ase P

lacem

ent

D

irect

Indirect

Direct

Indirect

Nam

e

No. of

SK

PB

Share

s

%

No. of

SK

PB

Share

s

%

No. of

SK

PB

Share

s

%

No. of

SK

PB

Share

s

%

STSB

953,0

04,4

74

19.0

4

- -

953,0

04,4

74

18.0

8

- -

SH

SB

- -

(a) 1

,001,0

22,7

18

20.0

0

- -

(a) 1

,001,0

22,7

18

18.9

9

BC

SB

- -

(b) 1

,001,0

22,7

18

20.0

0

- -

(b) 1

,001,0

22,7

18

18.9

9

D

atu

k S

eri S

hahril bin

Sham

suddin

7,8

76,0

92

0.1

6

(b) 1

,001,0

22,7

18

20.0

0

7,8

76,0

92

0.1

5

(b) 1

,001,0

22,7

18

18.9

9

D

ato

’ Shahrim

an b

in

Sham

suddin

506,3

85

0.0

1

(b) 1

,001,0

22,7

18

20.0

0

506,3

85

0.0

1

(b) 1

,001,0

22,7

18

18.9

9

Khasera

795,3

20,3

13

15.8

9

- -

795,3

20,3

13

15.0

9

- -

D

ato

’ M

okhzani bin

Mahath

ir

9,4

94,1

21

0.1

9

(c) 7

95,3

20,3

13

15.8

9

9,4

94,1

21

0.1

8

(c) 7

95,3

20,3

13

15.0

9

Seadrill

319,5

40,8

02

6.3

9

- -

3

19,5

40,8

02

6.0

6

- -

EPF

598,4

90,9

51

11.9

6

- -

598,4

90,9

51

11.3

6

- -

28

(i)

Scenario II (C

ont’d)

(II)

A

fter (I) and the P

roposed T

ransaction

After (II) a

nd the P

roposed A

dditio

nal Pla

cem

ent

D

irect

Indirect

Direct

Indirect

Nam

e

No. of

SK

PB

Share

s

%

No. of

SK

PB

Share

s

%

No. of

SK

PB

Share

s

%

No. of

SK

PB

Share

s

%

STSB

953,0

04,4

74

16.8

1

- -

953,0

04,4

74

16.0

3

- -

SH

SB

- -

(a) 1

,001,0

22,7

18

17.6

5

- -

(a) 1

,001,0

22,7

18

16.8

4

BC

SB

- -

(b) 1

,001,0

22,7

18

17.6

5

- -

(b) 1

,001,0

22,7

18

16.8

4

D

atu

k S

eri S

hahril bin

Sham

suddin

7,8

76,0

92

0.1

4

(b) 1

,001,0

22,7

18

17.6

5

7,8

76,0

92

0.1

3

(b) 1

,001,0

22,7

18

16.8

4

D

ato

’ Shahrim

an b

in

Sham

suddin

506,3

85

0.0

1

(b) 1

,001,0

22,7

18

17.6

5

506,3

85

0.0

1

(b) 1

,001,0

22,7

18

16.8

4

Khasera

795,3

20,3

13

14.0

2

- -

795,3

20,3

13

13.3

8

- -

D

ato

’ M

okhzani bin

Mahath

ir

9,4

94,1

21

0.1

7

(c) 7

95,3

20,3

13

14.0

2

9,4

94,1

21

0.1

6

(c) 7

95,3

20,3

13

13.3

8

Seadrill

7

20,3

29,6

91

12.7

0

- -

720,3

29,6

91

12.1

2

- -

EPF

598,4

90,9

51

10.5

5

- -

598,4

90,9

51

10.0

7

- -

Note

s:

(d)

Deemed interests by virtue of it being a substantial shareholder of STSB, Indera Perm

ai Sdn Bhd, Sapura C

apital Sdn Bhd and Sapura R

esources

Berhad pursuant to Section 6A of the Act.

(e)

Deemed interests by virtue of it/him being a substantial shareholder of SHSB pursuant to Section 6A of the Act.

(f)

Deemed interests by virtue of his shareholding in Khasera pursuant to Section 6A of the Act.

(d)

Assuming no Base Placement Shares and Additional Placement Shares are issued and allocated to any of the substantial shareholders of the Company

and that none of the new placees individually hold m

ore than 5% of the enlarged issued and paid-up share capital of the Company after each of the

Proposed Base Placement and Proposed Additional Placement.

29

8.3 NA, NA per SKPB Share and gearing

For illustrative purposes only, based on the unaudited proforma consolidated statement of financial position of SKPB as at 31 January 2012

(a) and on the

assumption that the Proposals had been effected on 31 January 2012, the proforma effects of the Proposals

(b) on the NA, NA per SKPB Share and gearing

of the SKPB Group are as follows: (i) Scenario I

(I) (II)

Unaudited as at

31 January 2012

After the Proposed

Base Placement

After (I) and the

Proposed Transaction

After (II) and the Proposed

Additional Placement

RM’000 RM’000 RM’000 RM’000

Share capital 5,004,366 5,290,644 5,691,433 5,963,969 REPS

(c) - - 735,848 -

Reserves(d)

(145,734) 340,938 1,022,279 1,485,591 Retained profits 262,494 262,494

(e)107,904 107,904

Shareholders’ funds/NA 5,121,126 5,894,076 7,557,464 7,557,464

No. of SKPB Shares in issue (‘000)

5,004,366 5,290,644 5,691,433 5,963,969

NA per SKPB Share (RM) 1.02 1.11 1.33 1.27 Total borrowings (RM’000) 4,498,939 4,498,939 9,136,639 9,136,639 Gearing (times)

(f) 0.88 0.76 1.21 1.21

Notes: (a) The unaudited proforma consolidated statement of financial position of SKPB which was

included in the prospectus dated 16 May 2012 issued in conjunction with the Company’s listing on the Main Market of Bursa Securities had been prepared for illustrative purposes based on the financial information from: (aa) the audited financial statements of SKPB, for the FYE 31 January 2012;

(bb) the audited financial statements of SapuraCrest Petroleum Berhad

(“SapuraCrest”) and its group of companies (collectively referred to as “SapuraCrest Group”) for the FYE 31 January 2012; and

(cc) the audited financial statements of Kencana Petroleum Berhad (“Kencana

Petroleum”) and its group of companies (collectively referred to as “Kencana Petroleum Group”) for the FYE 31 July 2011,

using the bases and accounting principles consistent with those adopted by the SapuraCrest Group and Kencana Petroleum Group, which policies are those to be adopted by the SKPB Group, after giving effect to the pro forma adjustments which are considered appropriate.

(b) The assumptions in illustrating the proforma effects of the Proposals on the NA, NA per

SKPB Share and gearing of the SKPB Group are as follows: (aa) the Final STRL Price is the same as the Initial STRL Price; and (bb) the potential effects from the STSA, Management Agreements and the joint-

venture with Archer have not been taken into consideration.

30

Assuming the issue price for the REPS of RM2.70 per REPS. Assuming the full exchange of the REPS on the maturity at an exchange ratio of one (1) SKPB Share for each REPS, the share premium for the new SKPB Shares will then be reclassified as reserves.

(c) Assuming that purchase consideration for the acquisition of the non-controlling interests of

49% each in VPSB and TDCSB is the same as the NA of the said non-controlling interests.

(d) The total borrowings arising from the Proposed Transaction relate to mainly the

consideration for the Acquiree Companies, the refinancing of the External Debt and expenses for the Proposals of approximately USD50.0 million (RM154.6 million),but excludes the funding for the estimated Capex Commitments of USD350.0 million (RM1,082.1 million) as at 30 November 2012 on the assumption that they will only be incurred after the Proposed Transaction. The actual breakdown of the total borrowings for the Proposed Transaction can only be determined after completion of the Proposed Transaction. The interest-bearing borrowings are assumed to be at market rate.

(e) Calculated as total borrowings over shareholders’ funds/NA.

(ii) Scenario II

(I) (II)

Unaudited as at

31 January 2012

After the Proposed

Base Placement

After (I) and the

Proposed Transaction

After (II) and the Proposed

Additional Placement

RM’000 RM’000 RM’000 RM’000

Share capital 5,004,366 5,269,985 5,670,773 5,943,310 REPS

(c) - - 735,848 -

Reserves(d)

(145,734) 361,597 1,042,939 1,506,251 Retained profits 262,494 262,494

(e)107,904 107,904

Shareholders’ funds/NA 5,121,126 5,894,076 7,557,464 7,557,464

No. of SKPB Shares in issue (‘000)

5,004,366 5,269,985 5,670,773 5,943,310

NA per SKPB Share (RM) 1.02 1.12 1.33 1.27 Total borrowings (RM’000) 4,498,939 4,498,939 9,136,639 9,136,639 Gearing (times)

(f) 0.88 0.76 1.21 1.21

Notes: (a) The unaudited proforma consolidated statement of financial position of SKPB which was

included in the prospectus dated 16 May 2012 issued in conjunction with the Company’s listing on the Main Market of Bursa Securities had been prepared for illustrative purposes based on the financial information from: (aa) the audited financial statements of SKPB, for the FYE 31 January 2012;

(bb) the audited financial statements of the SapuraCrest Group for the FYE 31 January

2012; and (cc) the audited financial statements of the Kencana Petroleum Group for the FYE 31

July 2011, using the bases and accounting principles consistent with those adopted by the SapuraCrest Group and Kencana Petroleum Group, which policies are those to be adopted by the SKPB Group, after giving effect to the pro forma adjustments which are considered appropriate.

31

(b) The assumptions in illustrating the proforma effects of the Proposals on the NA, NA per

SKPB Share and gearing of the SKPB Group are as follows: (aa) Final STRL Price is the same as the Initial STRL Price; and (bb) the potential effects from the STSA, Management Agreements and the joint-

venture with Archer have not been taken into consideration. Assuming the issue price for the REPS of RM2.70 per REPS. Assuming the full exchange of the REPS on the maturity at an exchange ratio of one (1) SKPB Share for each REPS, the share premium for the new SKPB Shares will then be reclassified as reserves.

(c) Assuming that purchase consideration for the acquisition of the non-controlling interests of

49% each in VPSB and TDCSB is the same as the NA of the said non-controlling interests.

(d) The total borrowings arising from for the Proposed Transaction relate to mainly the

consideration for the Acquiree Companies, the refinancing of the External Debt and expenses of approximately USD50.0 million (RM154.6 million) for the Proposals, but excludes the funding for the estimated Capex Commitments of USD350.0 million (RM1,082.1 million) as at 30 November 2012 on the assumption that they will only be incurred after the Proposed Transaction. The actual breakdown of the total borrowings for the Proposed Transaction can only be determined after completion of the Proposed Transaction. The interest-bearing borrowings are assumed to be at market rate.

(e) Calculated as total borrowings over shareholders’ funds/NA.

8.4 Earnings and earnings per SKPB Share (“EPS”)

The Proposals will not have any effect on the earnings and EPS of the SKPB Group for the FYE 31 January 2013 as the Proposals are only expected to be completed in the 2

nd

quarter of 2013. Barring unforeseen circumstances, the Proposed Transaction is expected to contribute positively to the future earnings of the SKPB Group as SKPB will consolidate the results of the Acquiree Companies which are already income-generating following the completion of the Proposed Transaction. In consequence thereof, the EPS of the SKPB Group is expected to improve after taking into consideration the earnings potential of the Acquiree Companies, notwithstanding the issuance of the Consideration Shares, Base Placement Shares, Additional Placement Shares and Exchanged Shares, if any, which will increase the total number of SKPB Shares in issue.

8.5 Convertible securities

As at the date of this Announcement, the Company does not have any convertible securities in issue.

32

9. APPROVALS REQUIRED

9.1 Proposed Transaction The Proposed Transaction is subject to the following being obtained: (i) approval of Bursa Securities for the listing of the Consideration Shares and

Exchanged Shares on the Main Market of Bursa Securities; (ii) approval of the Foreign Exchange Administration of BNM.

BNM had vide its letter dated 7 January 2013 granted an approval-in-principle for the following:

(a) proposed investment abroad of up to USD2.9 billion (RM8.8 billion) for

the acquisition of the Acquiree Companies; (b) proposed credit facilities of up to USD1.8 billion (RM5.6 billion) from

resident or non-resident financial institutions; and

(c) proposed deferred consideration of up to USD187.0 million (RM587.2 million),

subject to the completion of the relevant online application forms upon finalisation of the terms for the proposed credit facilities in relation to the Proposed Transaction;

(iii) approval of the shareholders of the Company at an EGM to be convened; (iv) consent of the Controller of Foreign Exchange of the Bermuda Monetary

Authority for the Company to become the shareholder of STRL pursuant to the Proposed Transaction;

(v) the approval of BKPM being obtained for the change of shareholding of PTNI

pursuant to the Proposed Transaction;

(vi) consent from the lenders and creditors of the SKPB Group and Seadrill, if required; and

(vii) approval of any other relevant authorities/parties, if required.

9.2 Proposed Base Placement and Proposed Additional Placement

The Proposed Base Placement and Proposed Additional Placement are subject to the following being obtained: (i) approval of Bursa Securities for the listing of the Base Placement Shares and

Additional Placement Shares on the Main Market of Bursa Securities; and (ii) approval of the shareholders of the Company at an EGM to be convened. The Proposals are not conditional upon any other corporate exercise/scheme.

33

10. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM

As Seadrill was a major shareholder of SKPB in the six-(6) months period preceding the date of the MOU, Seadrill is deemed interested in the Proposed Transaction by virtue of it being the Seller to the Proposed Transaction. In addition, as the proceeds from the Proposed Base Placement and Proposed Additional Placement will be utilised to, amongst others, part finance the Initial STRL Price and PTNI Price and for the redemption of the REPS, Seadrill is also deemed interested in the Proposed Base Placement and Proposed Additional Placement. As at 25 January 2013, Seadrill has direct shareholding of 6.39% in the Company. Seadrill will abstain and has undertaken to ensure that persons connected with it will abstain from voting in respect of their direct and/or indirect shareholdings, if any, in the Company on the resolutions pertaining to the Proposed Transaction, Proposed Base Placement and Proposed Additional Placement at the EGM of the Company to be convened for the Proposals. Save for Seadrill, none of the Directors, major shareholders and/or persons connected with them has any interest, direct and/or indirect, in the Proposals.

11. DIRECTORS’ STATEMENT

The Board, having considered all aspects of the Proposals including, amongst others, the rationale and benefits of the Proposals, salient terms of the SPA, basis and justification for the Debt Free/Cash Free Price and issue price for the Consideration Shares and REPS, the effects of the Proposals and the prospects of the Acquiree Companies, is of the opinion that the Proposals are in the best interest of the Company.

12. AUDIT COMMITTEE’S STATEMENT

The Audit Committee, after taking into consideration the advice of ING Corporate Advisory (Malaysia) Sdn Bhd (“ING”), is of the opinion that the Proposals are: (i) in the best interest of the Company;

(ii) fair, reasonable and on normal commercial terms; and

(iii) not detrimental to the interests of the non-interested shareholders.

In forming its view, the Audit Committee has taken into consideration, amongst others, the

following:

(i) the rationale and benefits of the Proposals;