DEEPWATER UPGRADE OF BLACKFORD DOLPHIN

The Board of Directors of Fred. Olsen Energy ASA has today
resolved upon a full deepwater upgrade of the semi
submersible drilling rig Blackford Dolphin (formerly Ocean
Liberator). The drilling unit will be able to operate in up
to 7000 ft. of water and will feature a new high capacity
drilling package and innovative deck layout resulting in a
state of the art deepwater specification. Completion of the
upgrade project is estimated to spring 2007. The Company
sees a number of interesting opportunities in this
deepwater segment, particularly with reference to planned
field development programmes. The Company believes that
early completion of this project will result in a unit that
is favorably positioned in the current market both from the
perspective of timing and technical specification. The cost
for the upgrade is estimated to USD 300 million.