John Roche – Director-Investor Relations Per Wullf – Chief Executive Officer and President David Sneddon – Chief Accounting Officer and Senior Vice President Anton Dibowitz – Chief Commercial Officer and Senior Vice President

JB Lowe – Cowen and Company Mukhtar Garadaghi – Citi Amy Wong – UBS Andreas Stubsrud – Pareto Securities Lukas Daul – ABG Gregory Lewis – Credit Suisse Mark Brown – Global Hunter Securities

Good day, and welcome to the Seadrill Limited Second Quarter 2015 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask questions. Please note this event is being recorded. I would now like turn the conference over to John Roche, Director of Investor Relations. Please go ahead.

Thank you and good afternoon everyone and welcome to Seadrill Limited’s second quarter earnings conference call. With us today, we have Per Wullf, our Chief Executive Officer; Anton Dibowitz, our Chief Commercial Officer; and David Sneddon, our Chief Accounting Officer. Before we get started, I’d like to remind everyone that much of the discussion today will not be based on historical facts, but rather consist of forward-looking statements and are subject to uncertainties. We articulate some of the key items on Page 2 of the presentation. And for additional information and to view our SEC filings, please visit our website at www.seadrill.com. To begin the discussion today, Per will take us through our second quarter highlights and go through some key updates on our progress thus far and certain key action items as we work through this challenging market. Dave will then address our financial highlights and outlook. And lastly, Anton will offer some color on the overall market. And with that, I would like to turn over the call to our CEO, Per Wullf.

Good afternoon everybody. In the second quarter we have continued our focus on the safe, efficient operation on our fleets. We have seen excellent progress in our cost management program. And I’m pleased to announce that we expect to achieve twice the amount of cost savings that we accomplished in 2014. Importantly, the efforts to drive efficiencies have not and will not be undertaking the expense of operational excellence. I’m pleased with our ability to balance efficiency and performance and our focus will continue to be as sharp as ever. At the group level we achieved 94% economic utilization. As a reminder, this figure excludes bonuses achieved. Including bonuses earned the group achieved 96% economic utilization. A big thank you to all our employees on-shore and offshore for this solid performance. In addition to a sound operation, we delivered on the on a number of items that we have mentioned in previous quarters. And I’m pleased to now report progress. Firstly, we have deferred delivery of two drillships into 2017, and eight jack-ups into 2016 and 2017. Second, we have finalized an agreement with our banking group for more headroom, on our leverage ratio, covenants to the end of 2016. And finally, we have reached a number of commercial agreements with our customers to extend the terms and contracts in exchange for dayrate relief that provides us the opportunity to reprice these units into stronger markets. As we progress through the rest of the year, we will continue discussions with the remaining shipyards to ensure our delivery schedule is aligned with the demand in the drilling market. Although, we have made progress internally, the challenges on the broader market continue during the quarter. Following the recovery in oil prices during the first quarter, commodity prices have again moved lower and are now approaching the lows we show in the beginning of 2015. This continued low commodity prices environment’s reductions in oil companies spending plans and an increased over supply of drilling units, continues to have a negative impact on utilization and pricing. Subsequently dayrates remain at or below breakeven levels for both the floater and jack-up markets. We believe this challenging market will continue through 2016 and the visibility for 2017 and beyond is depended upon commodity prices stability, oil companies realizing the benefits of the capital spending rationalization programs and continued fleet attrition. Regardless of the platform downturn to recovery, I again stress that due to taking the decisive actions early in the downturn we are well equipped to manage through this journey and take advantage of the upturn when it materializes. Now we will move on to some of the financial highlights for the second quarter. Seadrill reported EBITDA of $651 million in the second quarter. The sequential decline was driven mostly by the ideal time on West Taurus, West Eclipse and a full quarter of deconsolidation of SeaMex. Year-on-year underlying EBITDA improved by roughly 8%. As I mentioned in my early remarks Seadrill have a solid quarter operationally. Economic utilization for Seadrill Limited was 93%, including bonuses figure increased to 95%, safe and efficient operations continue to be a core discipline for the company. Backlog for Seadrill Limited is $7.5 billion and $14 billion for the Seadrill Group, although we have reached conclusion on some of our customer renegotiation discussions so far have resulted in a net increase to backlog of roughly $300 million. Although I’m pleased with the result for the second quarter in a very challenging environment. We manage to deliver on a number of key counterparty discussions and drive efficiencies by keeping utilization steady, we will continue to execute as the year progresses. Now David will take us through financial items. So, David?

Thank you, Per. So revenues for the second quarter of 2015 were $1.15 billion compared to $1.24 billion in the first quarter of 2015. Net operating income for the quarter was $384 million compared to $703 million in the preceding quarter. The decrease was primarily due to the gain on deconsolidation of SeaMex during the first quarter, and a loss on the sale of the West Polaris to Seadrill Partners during the second quarter. Excluding these non-recurring items, operating income declined 11% sequentially. On a like for like basis, the decline in operating income can be primarily attributed to the deconsolidation of SeaMex and increased idle time across the fleet. The loss on disposal is related to the dropdown of the West Polaris to Seadrill Partners. Seadrill’s accounting policy does not recognized contingent forms of consideration before they are realized. This has resulted in an initial loss on disposal, despite an expectation of additional contingent consideration to be received in the future in excess of this loss. As Per has already mentioned, EBITDA for the second quarter of $651 million was $60 million lower than the previous quarter, an increase by roughly 8% on a year-for-year and like for like basis. EBITDA margins on the same basis increased by 5% driven by our cost savings initiative and this is after adjusting for any disposals between the two comparative periods. Net financial and other items for the quarter showed a gain of $84 million compared to a loss of $197 million in the previous quarter. The change in financial items was largely impacted by a sequential change in derivative financial instruments, which accounted for $225 million of the quarter-over-quarter change in the financial items. The movement was also driven by Seadrill’s share in results of associated companies, which includes the share of Seadrill Partners’ net income. This increase in Seadrill Partners net income was primarily related to favorable unrealized mark to market revaluations of derivatives within that company. Income taxes for the second quarter were $45 million, a decrease of $13 million from the previous quarter. The change was primarily due to a net tax benefit recognized during the quarter in respect of return-to-provision adjustments. So moving on to discuss the balance sheet. As of 30th of June 2015, total assets were $25.1 billion, a decrease of $0.5 billion compared to the previous quarter. Total current assets increased to $3.2 billion from $3 billion over the course of the quarter, primarily driven by the transfer of deferred consideration relating to the sale of the tender rig business from non-current to current. Total non-current assets decreased to $22 billion from $22.7 billion, additionally due to the disposal of the West Polaris. Total net interest bearing debt decreased to $10.3 billion from $11.2 billion as of March 2015. The decrease was primarily due to the transfer of the West Polaris loan to Seadrill Partners and debt repayments on our $950 million credit facility. Total equity increased to $11.2 billion as at June 30, 2015 from $10.7 billion as at March 2015, primarily driven by $0.4 billion of course of net income during the quarter. Turning to the next slide on delivering on expectations, the Seadrill Group has now successfully completed $2.15 billion in new funding year-to-date in 2015. Seadrill continues to benefit from a strong relationship with its core banking group towards support of the company’s ability to operate in challenging market environment. This is clearly demonstrated by a successful completion of the leverage ratio covenant amendment and Seadrill now has a leverage ratio covenant of six times through September 2016 declining to 5.5 through the year end of 2016. For the remainder of 2015 the company will be looking to finance the delivery of the West Mira and has $350 million unsecured bond maturing in the third quarter. In light to strong liquidity position, it’s expected that this bond will be repaid with excess cash. We also expect to have adequate cash balances to fund all 2016 debt maturities comprised of approximately $460 million in loan maturities in addition to all scheduled amortizations. Should an attractive offer materialize to refinance, it will be assessed accordingly based on the terms offered. Now I’d like to turn over to Anton to comment on the market.

Thanks, David. Good morning and afternoon, everybody. As expected the offshore drilling market continues to face challenges from both the supply and demand standpoint and has continued to deteriorate until last earnings call in May. As Per mentioned in his opening comments, despite this incredibly challenging market, we remain active in our discussions with customers and as a result have concluded a number of new contracts this quarter. First, we signed a provisional commitment for a two-year extension with Pemex for the semi-submersible West Pegasus. Second, North Atlantic drilling secured a contract extension for the semisubmersible West Phoenix with Totale securing work through the unit through the end of August 2016. And finally, we secured an 18 month extension with ENI for the jack-up West Ariel in Congo. These contracts were facilitated by having an existing relationship with those customers and while each involved some period of dayrate relief under the existing contracts together and on a net basis we added more than $300 million of net backlog. As noted in our quarterly release, we have tentatively agreed with Husky to reduce the dayrates on the West Mira due to the late delivery of the unit from the yard. We are still in discussion with the yard over the impact of this delay. Moving to the broader market. The low oil price environments has resulted in significant reductions in NOC and IOC spending plans, which continues to have a negative impact on utilization and pricing in oil market segments. We believe that this challenging market will continue at least through 2016. The market improvement remains dependent on commodity price improvement and stability, utilization of benefits by oil companies with cost reduction initiatives, and continued drilling fleet attrition. What is true to say to say is that the market continues to prefer newer and more capable units, demonstrated by the utilization rates of different classes. At a Seadrill Group level, we have average contract duration of 26 months in our floaters and 15 months in our jack-ups. Scrapping activity has continued in the second quarter, bringing the total to 40 since the end of 2013. Currently, there are roughly 30 cold stack units. Together this scrapping and cold stacking represents a 20% reduction in marketed supply. And based on current activity levels, we expect stacking and scrapping activity to continue through 2015 and well into 2016. In light of the likely continued cold scrapping, stacking and new build delays, they remain at the high likelihood that there will be limited or no growth in the marketed fleet between now and 2018. On the other hand in the jack-up segment, we have not seen the level of stacking and scrapping required to help balance supply with demand, but roughly one-third of the global fleet is more than 30 years-old and it’s either already idle or rolling up contract before the end of 2016. Consequently, as this cycle progresses, it is highly likely that we will see acceleration in scrapping activity in the jack-up market. In summary, the market remains challenging, but we have a premium young fleet, strong contracts and backlogs, a solid customer base, and a demonstrated history of operational performance and are well prepared to manage through this downturn. Per?

Yes, I am here just to finalize it. The second quarter of 2015 represents a period of delivering on expectations. We are set for our stakeholders in terms of operations, cost management, and growing with our key counter parties. Although I believe we have delivered and have taken early proactive action, the work has not yet done. We will continue to have an intense focus on driving efficiencies in our business and we will work hard to time our delivery schedules and demand in the marketplace. Our priority will be of managing our balance sheet in order to bridge through the upturn and position the company for opportunities when the time is right. I look forward to continuing to report developments as the year progresses. Thanks.

And with that operator, we would like to open up the line for Q&A.

Thank you. We’ll now begin the question-and-answer session. [Operator Instruction] Our first question comes from JB Lowe of Cowen and Company. Please go ahead.

Hi, good morning guys. My question revolves around the guidance you guys have given for the third quarter with EBITDA coming down by about $160 million. And I noted on the last call you mentioned that some of your costs on surveys or maintenance have been – were going to be deferred. Are some of those that you had mentioned last time popping up here in the third quarter and is that why your guidance for EBITDA is down by that much?

Yes, that’s – probably, we have a couple of classics coming in the quarter, so that is part of it. But it is also the effect of that – number of units is actually now having a full quarter being idle and that is also effect of it. So we are quite a bit into through the quarter and we will be down with the amount I mentioned before, yes. But we have a couple of classics, we have deferred as far as we could.

Okay, great. And my other question is on the two idle rigs that you have in Spain: the Eminence and the Taurus, any recent conversations you’ve had with customers regarding those rigs?

We are in discussions in tenders regarding potential workflow on a number of rigs, given how challenging the market is, I don’t think we want to get into discussions on specifics and tip our hand on any of those, though.

All right, thanks so much.

Our next question comes from Mukhtar Garadaghi of Citi. Please go ahead.

Good evening gentlemen and thanks for taking my question. I’d just like you to comment on your thoughts and – share your thoughts on M&A at this point in the cycle, I mean, there’s some report of you potentially looking at Brazil. And without commenting on that specific situation, do you see valid [ph] consolidation, and how do you expect this down-cycle to play out in that sense? Thank you very much.

That’s a tough one. Well, there will be M&As and there will be distressed assets and what have you. I don’t see it come right now, it will come and, I think, well we will talk again in the quarter, and nothing will happen now in the quarter. But the worse this is getting, and we are actually drawing a pretty dark picture of what is happening, then that will go on force distressed assets, it will go on forced M&As. And like I’ve said before and I’ve said last quarter, well we cannot comment on it, there is a little bit of dialogue going on as we speak, but definitely when opportunities arises and they fit into our fleet then we want and we will be part of this acquisition of units or KVAR or what should we call it, but it got to be at the right time, it got to fit into our fleet. And we also want to be behind and we want to be in the driving seat when it happens. That’s what I call say so far.

Sure. And just two short follow-ups if I may. Would you consider it even if some of your units are without contract or are awaiting delivery? And secondly, would you consider doing that using new equity? Thank you.

Yes, two things we need to have in place. First of all, we got to have our own house in good order, and we have that. I think we have demonstrated through the quarters by deferring our deliverables from the shipyards. And that is – that would have been idle rigs if we had not deferred them into 2017 and I hope the fourth quarter I can tell you even more I’ll be doing with the remaining couple of yards, because we don’t intend to take delivery on them either. That gives opportunities but that need to be in place before we would add any units to our fleet, that’s number one. Number two is the units in as idle, well there are many ways of doing that but if we have a control and we have demonstrated that once we have control on our shipyard deliveries then there will be room to take delivery but it’s got to make sense obviously but obviously it could be a blend of mix in operation and not in operation obviously. And then we need equity obviously.

Okay thank you.

Our next question comes from Amy Wong of UBS. Please go ahead.

Hi good afternoon. Just a couple of questions on the units that are under construction. I see you’ve been successful in deferring two of them, the deepwater units. Could you give an update on the negotiations for the remaining deepwater units that are so slated for delivery in 2015? And then could you also give the same discussion in terms of your options on the jack-ups that are due over the next couple of years? Thank you.

Yes, let’s start with the easy one. Let’s talk about the jack-ups we have. We will go and a just them going forward. We have set now that they will be into 2016 and 2017 and that is a fact and if it is tough when we have to take delivery then we work together with the shipyard in question, adjust that delivery going forward, as well. So this – the eight units there we can adjust going forward so it fits into the market. So in other words, you could say whenever they have a good contract we will take delivery. When we talk about our offloading or our units we have coming out we have a couple of drillships coming out from one yard and we are in a good dialogue with that shipyard and I hope I can come back next quarter or I will come back whenever I can do it. So I cannot say anything right now. All I can say is we have a good sound dialogue but we had a couple of units being delivered here right now actually and that’s the one we have to refer to 70 but we are a bit busy on first. Now for the two drillships we have in place as well as a semi ship we delivered here in this year and obviously semi that when we are also in a good dialogue with that yard, and we see how we can defer that unit and we will disclose it whenever we have that agreement in place. And then obviously the last unit Anton, he spoke about that this the West Mira where there is a contract on – the five year contract on right now, it’s coming late and we are – obviously we have been challenged by Husky on that and we are in dialogue with Husky on that one and we are obviously as a consequence of that we are also in dialogue with the shipyard. So we will make sure we will have a contract on that one signed and agreed on and all of the stuff we have that, but we will have agreed with come late with Husky before we will take delivery of that unit.

Okay. Could you just let us know if there were any fees associated with the delay of the rigs?

No…

To get the shipyard delivery, the delay delivery?

Well, the two rigs – the two drillships [indiscernible] they are already delayed compared to when we first made the contract. So if – on a good day, they would come next summer sometime, May and June. And when we look at the deepwater on the North Sea semi on a good day, it will come early next year.

Great, thank you very much Per.

Our next question comes from Andreas Stubsrud of Pareto Securities. Please go ahead.

Thank you. It looks like you actually did an extra payment on the facilities for Korean and Eclipse. If that’s correct, is that related to the market outlook of Eclipse or any discussions with the bank?

So I think you’re talking about Andreas both the 950 facility, which we have referenced in our press release, and yes we did take the opportunity to pay down some of the revolving credit facility within that particular facility obviously having spare cash at that stage have made sense to reduce our interest costs. So, yes, we did do that, but we have the ability of course to redraw that when we required.

Okay, and could you give a little bit color on the $450 million facility over the bank – potential bank debt you will get for the jackups, I guess the backlog is around 150 EBITDA, backlog is around 150. How the discussion is to get this $75 million financing for jackup?

Well that that facility is basically down, so we closed that in fact yesterday and it obviously covers those that [indiscernible] jackup rigs within that, secured against the – against the rigs themselves. So nothing particularly special about that one, but it was clearly a demonstration that we’re able to go out into the bank market and refinance our facility like that.

Okay, great. So the question was actually like, it’s a 75 per jackup a fair assumption going forward in this market?

Yes, yes, yes.

Okay, great. Thank you.

Our next question comes from Lukas Daul of ABG. Please go ahead.

Thank you. Good evening guys. Just following-up on that question, if $75 million is the leverage on a jackup, what you think is realistic to obtain on the floater, given that it seems like a leading hedge dayrates are hovering around $300,000 a day?

Well, we’re apparently of course looking at options here to finance the West Mira, and we’re in the progress of doing that. And we’re working at the moment with a rough number of around about $450 million.

Okay, so that hasn’t really changed compared to what you have been able to secure previously, but would you sort of throw out the number for a still tranche of an uncontracted rig as well?

Well, this one here as we’ve got secured a five year contracts. So, yes, 450 is definitely is possible.

Okay, I’m just switching over to West Mira. You agreed to a dayrate reduction with Husky. But are you going to get compensated for the differentials from the shipyard because of the delay?

What I tried to say before, we are in the middle of [indiscernible] and it’s so hard to say whereas we are in the middle of the talk with Husky and with the yard. What I tried to say is, we will not go and take a delivery of this unit and we don’t have to do if we don’t have a satisfactory contract – five year contract with Husky. And I cannot really go close of there, but that is situation as we speak.

All right.

So, I cannot really comment on dayrate levers and cost of the unit and all that, but…

No, I wasn’t really asking about that. I was asking about whether you have any back to back against the shipyard, but I understand if you don’t want to get into the details, so…

I can do that. I’ll just say quickly if we don’t have a back to back with Husky, we will not go to take that rig onto our balance sheet.

All right, thank you.

[Operator Instruction] Our next question comes from Gregory Lewis of Credit Suisse. Please go ahead.

Yes, thank you and good afternoon gentlemen. My first question is regarding, you mentioned briefly in the press release about the ability to change your covenant in terms of your capital. Is there any way you can provide us any color in terms of what the actual change was?

Yes, I think Greg it’s worth saying first of all that our objective here was clearly to provide flexibility for the business in the deteriorating market and particularly allow us to take the right commercial decisions at this difficult time and we’re very pleased with the support that we got from the banking group during that stage. I think in the press release you will see, we’ve given some details of the various head rooms that we’ve got at various different periods, up to six by September 16. And of course there are within those agreements different rates that apply. If we utilize those particular headrooms, otherwise I don’t think there’s too much more to say about that one.

And I mean, at this point, I mean, clearly from Per’s comments that there’s – the outlook is pretty challenging let’s just say over the next couple of years. Is and I realize it’s a very fluid market but generally speaking is management comfortable where all of their covenants need to be with the banking group at this point or do you think there is the potential for more discussions over the next 12-plus months?

Yes, I think, we will continue to robustly manage liquidity through the cycle and very key to that as well is making sure that we don’t take delivery of those new builds unless we have an acceptable growing contract in place and also financing to go with that, so that’s the key thing. We feel comfortable with our debt maturities through to the end of 2016 and we’ll continue to manage liquidity in robust way.

Okay, great. And then just one bigger question. You mentioned comments earlier about the jack-up fleet, your expectation that we’re going to see a lot of rigs go idle and I mean, clearly you are in a position to say that given the quality of your jack-up fleet. I guess, what I would just ask clearly there is a difference between what’s happened in the floater fleet over the last call at five to ten years in terms of a step-up in technology and larger assets. Should we really be thinking that a lot of the older jack-ups will be removed from the fleet or just given the fact that there really hasn’t been a real step change in the type of – what is – in the technological change between the jack-up is that may be the jack-ups we won’t see as much fleet removable? Is that part of why we haven’t seen that happen thus far?

No, I think they’re easier and cheaper to stack so people haven’t made the hard decisions but the mere fact of it is out of the fleet more than 50% of it is more than 30 years old. So overtime although it hasn’t reached the level and hasn’t had kind of the discipline that drilling contractors with all of the fleets have shown on the floater space, it will come as the cycle progresses because it just doesn’t make sense to keep operating and keep putting money into those assets. So I think it will take a longer time to play out but it will be there. Show of production is still part of the overall picture. But our customers continue to favor newer more capable assets. So those assets will continue to have a utilization advantage in the market. And eventually the older ones will fade away.

Okay guys, thank you very much for the time.

And our last question will come from Mark Brown of Global Hunter Securities. Please go ahead.

Just wanted to ask about the Sevan Developer rig and I apologize if you’ve already mention this but is this coming up for discussion in October that will determine whether or not you terminate the contract with Costco?

Yes, it is coming up in October for the Sevan Developer. As you maybe know, we made an agreement last year that we can run it a year but we will market it and after a year if we don’t find any work for it, then we have an opportunity to come out of that contract. That’s still the same situation and we haven’t found any work so far. And if you come out of that or if we and it’s all – and it’s our call to come out of that contract, the Sevan’s quarter point out of that contract. And if that’s decided on because there’s no work then the installment will be paid back and by the way that installment is guaranteed.

Okay, great. And I just wanted to see if you had any comments on Seadrill Partners what are your plans or what are your – the options that you are considering in terms of either further dropdowns or perhaps cutting the distribution for that entity.

The distribution you have to discuss in the Seadrill Partners we think that would be fair to say in that way. We overweight of course and see through the operations of Seadrill Partners, right. And then so we – it’s all the same way we overweight the units. It’s a vehicle that we have enjoyed having for the past years or whether we can use or not use that can be discussed in the Seadrill Partners meeting but it’s definitely a vehicle that’s sitting there and whether we drop down, not drop down, well time will show. I cannot really comment on it.

Okay, I understood. Thank you very much.

This concludes our question-and-answer session. I would like to turn the conference back over to John Roche for any closing remarks.

I’d thank everyone for joining us today. And this concludes Seadrill Limited second quarter conference call. Thanks everyone.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect. Have a great day.