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August 5, 2002

More Bingo blues for Ocean Rig
Ocean Rig has run into more delays and expenses. It issued a statement today saying that, following a change in the project management team at the Irving Shipyard in Halifax, Nova Scotia and an in depth analysis of the scope of work remaining on its second Bingo rig Eirik Raude, the date of the rig's commencement of operation is now scheduled for early October. Back in July, prior to the rig commencing sea trials, the estimated start of drilling operations was September 1.
 
Ocean Rig also says it faces an increased estimated cost of US $40 million to complete the rig, compared to previous plans. And the delayed delivery will add a postponement of revenue of about US $5 million.
 
Ocean Rig says the cash short fall will be financed as follows:
 
1.  Shareholders representing about 56% of the total number of shares in issue have been offered and have pre-committed US $18.8 million in a new issue of a three year mandatory convertible bond (New Bonds).  The convertibles, having zero coupon with no interest or installments, may be converted by the holders at any time during a three year period and by the company on maturity, at a price of NOK 3.50 per share.
 
2.  A subsequent issue expected to be of maximum US $10 million will be offered to shareholders as of 21st August not yet invited to participate.  The terms and conditions will be the same as in 1 above.
 
3.  The yard in Halifax, Canada has with certain subjects offered the company a short term credit facility in the amount of US $10 million.             
 
Further strengthening of the company's cash and financial position:
 
4.  Holders representing about US $41.7 million of the US $52.9 million short term financing issued in May/June 2002 that have been offered and pre-committed their participation in the new issue of New Bonds as per 1 above, have agreed to convert their bonds into the New Bonds.  As in 1 above there will be no interest or installments on bonds converted. Holders not yet invited to convert their bonds will be offered to do so, but subject to their participation in the new issue of New Bonds. The maximum amount to be converted will equal 3 times the investors' subscription in 1 above.
 
5.      Holders representing about NOK 100 million of the aggregate of NOK 200 million and NOK 300 million convertible bonds issued year 2000 that have been offered and pre-committed their participation in the new issue of New Bonds as per 1 above, have agreed to convert whole or part of their convertible bonds into the new bonds.  Holders not yet invited to convert their bonds will be offered to do so, but subject to their participation in the issue of New Bonds.  The maximum amount to be converted will equal 3 times the investors' subscription in 1 above. The conversion of the bonds will be at 85 % of par value for the 11 % bonds and 90 % of par value for the 13 % bonds. The total amount to be converted can not exceed bonds with a par value of NOK 200 million.
 
Any increase in the amount committed under 4 and 5 can result in increase in the amount of the private placement in 1, but limited to a total increase of USD 6.2 million.
 
Investors who wish to convert bonds as mentioned in 4 and 5 above for more than NOK 1.5 million will have to notify Pareto Securities prior to Thursday August 8th at 10.00. The offer to convert the bonds will not be distributed. Smaller investors can participate in the subsequent offering.
 
Shareholders who subscribe for the New Bonds under 1, 2, 4 and 5 above will also receive one warrant for every two shares that may be issued upon conversion of the New Bond. One warrant gives the holder a right to subscribe for one new share at NOK 2.00 per share, in a situation where the Company need more financing as a result of further unforeseen delays for the start of operation for Eirik Raude, or further cost increases related to the completion of the rig. The warrants may be exercised in the period 15th - 31st October 2002, however at the earliest 2 days after and at the latest 10 days after the company informs about an event that will trigger an additional issue.
 
The Board will call an extraordinary general meeting, expected to be held on Tuesday 20th August, 2002, for the purposes of obtaining the necessary approvals from the shareholders. The detailed terms of the offerings will be announced in the notice to the EGM.

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