STAVANGER, Norway, July 30, 2003 (PRIMEZONE) -- The Stavanger District Court reached today its decision in the dispute between Smedvig (NYSE:SMVa) (NYSE:SMVb) and Esso with regard to the completion of the Balder production vessel. The court concluded that Esso had the right to terminate the sales and purchase contract and the operating contract. On the other hand, the court has concluded that all contractual limitations of responsibility are applicable. Furthermore, the court has rejected Esso's claim of gross negligence on Smedvig's part. Smedvig has to pay NOK 509 million to Esso as compensation for completion and guarantee work and USD 3.5 million as part refund of the purchase price. In addition to these amounts, a preliminary estimated net interest of NOK 150 million will apply.
Esso has to pay Smedvig NOK 23.5 million as compensation for extra work, undisputed change orders and income earned under the operations agreement.
The court concluded that each party is responsible for their own litigation costs.
Smedvig's contract with Esso is, on most issues, "back-to-back" with the building contract with the construction yard in Singapore. Any claims for damages Smedvig is instructed to pay Esso in a final ruling, will be claimed from the yard and under relevant insurance coverage. The results of the ruling will be reflected in the Company's result for the second quarter this year.
"We are disappointed with the court's decision, and must conclude that we did not succeed in convincing the Stavanger District Court of our view. On the other hand, it should be pointed out that Esso has only succeeded with less than 20 percent of its total claim. We will now use the next four weeks to assess whether or not we will appeal the ruling. Should the ruling be final, Smedvig has the financial strength to cover this loss from its own cashflow and existing loan arrangements," says CEO Kjell E. Jacobsen in Smedvig asa.
Media Contact: Kjell E Jacobsen, Chief Executive Officer +47 51 50 99 19 Analyst Contact: Alf C Thorkildsen, Chief Financial Officer +47 51 50 99 19 Jim Datland, Investor Relations Manager + 47 51 50 99 19
A press conference regarding the Balder court decision will be arranged at July 30 at 4:15 p.m. Norwegian time, at Finnestadvn. 28, Stavanger.
In addition, a telephone conference will be arranged July 30, at 12:00 a.m. New York time, 6:00 p.m. Norwegian time. Call-in numbers are from Norway and Europe: + 1 706 679 7077, from the USA: 800 938 1019. Replays are available from 03:00 p.m. (NY) 7 July, until 11:59 p.m. (NY) 8 August, at + 1 706 645 9291 (Int.), 800 642 1687 (US), access code 1759139.
Please note that this news release and the statements included therein are based on the court's short summary of the rulings. Smedvig makes reservation with regard to the complete content of the rulings, as this has not yet been examined in detail.
Smedvig asa is an offshore drilling contractor headquartered in Stavanger, Norway. The company provides drilling and well services in the North Atlantic and Southeast Asia. Smedvig's main activities are divided into mobile units, tender rigs and platform drilling. Smedvig has a fleet of three modern drilling rigs, one drillship and nine tender rigs and has one tender rig under construction. The company holds contracts for production drilling, well services and maintenance on fixed installations.
This news release includes forward-looking statements. These forward-looking statements reflect current views with respect to future events and are, by their nature, subject to significant risks and uncertainties, because they relate to events and depend on circumstances that will occur in the future. Many factors could influence actual developments and performance and could cause them differ materially from those described by these forward-looking statements. For a discussion of these factors please see "Risk Factors" in our Annual Report on Form 20-F for the year 2002 filed with the U.S. Securities and Exchange Commission and available on our website at www.smedvig.no.
Smedvig asa
P.O. Box 110, 4001 Stavanger Phone: +47 51 50 99 00 Fax: +47 51 50 96 88 Web site: www.smedvig.no E-mail: smedvig@smedvig.no
ATTACHMENTS TO THE NEWS RELEASE:
Attachment 1
Copy of Stavanger District Court's summary of the ruling
Attachment 2
Overview of the Balder dispute