SFL – Acquisition of jack-up drilling rig and seven-year bareboat charter

Press release from Ship Finance International Limited, January 24, 2010


Ship Finance International Limited (NYSE:SFL) (“Ship Finance” or the “Company”), today announced that it has entered into an agreement to acquire a modern jack-up drilling rig from Apexindo Offshore Pte. Ltd. (“Apexindo Offshore” or the “Charterer”) in combination with a seven year bareboat charter back to the Charterer.


Apexindo Offshore is a Singapore-based subsidiary of P.T. Apexindo Pratama Duta Tbk. (“Apexindo”), which is Indonesia’s largest independent drilling contractor.


The drilling rig Soehanah is a 375ft Baker Marine Jack-up built 2007 at PPL Shipyard in Singapore. The rig has been chartered to Total E&P Indonesie (“Total”) since it was delivered from the shipyard, and the current charter runs until March 2012 with option for Total to extend until March 2013.


The agreed purchase price is approximately $151.5 million, including a $5 million seller’s credit to be paid if Total extends the current sub-charter until 2013. The rig is expected to be delivered to Ship Finance in February 2011 and the bareboat charter rate will be approximately $72,500 per day initially, increasing to $75,000 per day if Total extends the charter to 2013.


At the end of the bareboat charter period, Apexindo will have a purchase option at $70 million plus an amount equal to 25% of the charter-free market value in excess of the option price. Ship Finance has received a commitment for up to $95 million senior secured bank financing, and the remaining amount will be funded from our available liquidity.


The new charter will add approximately $190 million to our extensive charter backlog, and the average net cash flow per year from this transaction is estimated to be in excess of $13 million or $0.16 per share after interest and debt amortization.


Ole B. Hjertaker, Chief Executive Officer in Ship Finance Management AS said in a comment: “We are very pleased to announce this transaction with Indonesia’s largest independent drilling contractor. We increase our presence in the offshore industry and add yet another customer to our already diversified portfolio of long-term fixed charters. This accretive transaction is expected to have a positive impact on our dividend capacity going forward.”


January 24, 2010


The Board of Directors
Ship Finance International Limited
Hamilton, Bermuda



Contact Persons:
Ole B. Hjertaker: Chief Executive Officer, Ship Finance Management AS
+47 23114011 / +47 90141243


Eirik Eide: Chief Financial Officer, Ship Finance Management AS
+47 23114006 / +47 95008921



About Ship Finance


Ship Finance is a major ship owning company listed on the New York Stock Exchange (NYSE: SFL). Including newbuildings, the Company has a fleet of 71 vessels, including 30 crude oil tankers (VLCC and Suezmax), two chemical tankers, eight oil/bulk/ore vessels, 12 drybulk carriers including nine newbuildings, nine container vessels, six offshore supply vessels, one jack-up drilling rig, one ultra-deepwater drillship and two ultra-deepwater semi-submersible drilling rigs. The fleet is one of the largest in the world and most of the vessels are employed on long-term charters.


More information can be found on the Company’s website: www.shipfinance.org


Cautionary Statement Regarding Forward Looking Statements


This press release may contain forward looking statements. These statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including Ship Finance management’s examination of historical operating trends. Although Ship Finance believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control, Ship Finance cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions.


Important factors that, in the Company’s view, could cause actual results to differ materially from those discussed in this presentation include the strength of world economies and currencies, general market conditions including fluctuations in charter hire rates and vessel values, changes in demand in the tanker market as a result of changes in OPEC’s petroleum production levels and worldwide oil consumption and storage, changes in the Company’s operating expenses including bunker prices, dry-docking and insurance costs, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, and other important factors described from time to time in the reports filed by the Company with the United States Securities and Exchange Commission.