SFL – Sale of the ultra-deepwater drillship “West Polaris”

Press release from Ship Finance International Limited, December 30, 2014

Ship Finance International Limited (NYSE:SFL) (“Ship Finance” or the “Company”), today announced that Seadrill Limited (“Seadrill”) has exercised a purchase option for an ultra-deepwater drilling unit.

Ship Finance acquired the West Polaris in 2008 and it was chartered to a subsidiary of Seadrill on a long-term bareboat charter where Seadrill was granted certain purchase options, first time in 2012. The purchase option price is $456 million and the transaction will be effected as a sale of the shares in the asset-owning subsidiary.

Ship Finance will receive approximately $108 million in net cash proceeds from the sale, and we do not expect a material book impact from the transaction. The cash proceeds are expected to be reinvested in new assets, and the sale of West Polaris is not expected to impact the dividend capacity going forward.

Following this transaction, we will have two ultra-deepwater drilling rigs on charter to Seadrill, and next purchase options will be in November 2016 and February 2017 for the West Hercules and the West Taurus, respectively.

The Board of Directors

Ship Finance International Limited

Hamilton, Bermuda

Questions can be directed to Ship Finance Management AS:

Ole B. Hjertaker, Chief Executive Officer: +47 23114011
André Reppen, Senior Vice President: +47 23114055

About Ship Finance

Ship Finance is a major ship owning company listed on the New York Stock Exchange (NYSE: SFL). Including newbuildings and adjusted for the sale of assets, the Company will have a fleet of 69 vessels, including 19 crude oil tankers (VLCC and Suezmax), two chemical tankers, 14 drybulk carriers (including one acquisition), 24 container vessels (including four newbuildings), two car carriers, six offshore supply vessels, two jack-up drilling rigs 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.