Heads of Agreement re. sale of Procon Engineering AS

Procon Engineering provides process equipment and control systems to the offshore and onshore industries, and has its main office located in Asker outside Oslo and also a subsidiary located in the UK. The company holds a leading position as a provider of systems for mixing, treatment and re-injection of drilling mud to the Norwegian Continental Shelf, systems which are being used on both fixed and floating installations. Automation and control systems are provided as integrated parts of the drilling mud systems.

The acquisition of Procon Engineering represents to Hydralift a supplementation of its drilling equipment product range. Hydralift foresees synergies by increased sales of Procon’s products internationally through Hydralift’s well established market position and also by the fact that Procon Engineering often supplies products to projects where Hydralift already is involved.

To ProSafe the sale represents a realisation of non-core business, contributing to a streamlining of ProSafe in line with company strategies, and also to cash being released for the benefit of further expansion of its core business. ProSafe is of the opinion that Procon Engineering better can be further developed and internationalised as an integrated part of Hydralift’s core business.

The final agreement is subject to due diligence and approval by both the Hydralift and the ProSafe Board of Directors. It is expected that the subjects will be lifted by the end of February 2001, and that the transaction will take place early March. Hydralift is planning to finance the acquisition by use of available liquidity.

Hydralift has used Pareto Securities ASA as advisor in this process, while First Securities ASA has been the advisor of ProSafe.

ProSafe is the world’s leading owner and operator of semi-submersible service rigs. The company is also the largest platform drilling contractor on the Norwegian Continental Shelf. In 2000 ProSafe made a turnover of MNOK 2,305 and an operating profit of MNOK 609. The company employs approx. 1,300 people.

The company is listed on the Oslo Stock Exchange with ticker code PRS.