Hamilton, Bermuda (November 25, 2012)

Market conditions in North America continued to decline in the third quarter, with significant pressure on pricing and lower than expected utilization.

Consequently, Archer will breach its covenants at the end of the third quarter under its syndicated loan facility, and has entered into negotiations with its lenders to find a solution.

To support Archer with the necessary interim financing, Seadrill Limited, Archer’s largest shareholder, has provided a subordinated loan amounting to $ 55 million. This subordinated loan matures on December 10, 2012. The Company believes that it will be able to conclude the negotiations with its lenders before year end, allowing it ultimately to unfreeze its remaining credit lines and repay this subordinated debt. Such a solution with the banks will be totally dependent on financial support from the major shareholders.

In accordance with U.S. generally accepted accounting principles, the Board of Archer is reviewing the carrying value of its Goodwill and assets. Although the financial statements for the third quarter are not yet finalized, the Company expects its third quarter 2012 results to include a non-cash impairment charge of around $338 million out of which $207 million pertains to goodwill and $131 million to several other assets. 

The Company expects its revenue to decline approximately 3% compared to the second quarter. EBITDA for the third quarter is estimated at around $53 million, including provisions of $9 million related to long standing labor disputes and other items arising predominantly from Allis-Chalmers, one of the predecessor companies of Archer.

The before mentioned impairment charge, as well as the revenue and EBITDA stated above are based on current estimates and are subject to change.

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.