OFFER TO AMEND ONE OF THE TERMS OF THE FOE 02

As part of the restructuring of the Company`s
loan portfolio Fred. Olsen Energy ASA has
decided to submit an offer to the holders of the
subordinated convertible bond loan FOE 02 4.5%
2004/09 to amend one of the terms of the loan.
The initial loan amount was NOK 435 million and
outstanding amount at 30.3.3006 is approximately
NOK 363 million. The number of bondholders at
30.3.2006 is 50. Assuming all bonds are
converted into shares, the total number of
shares of the Company will increase by
approximately 5.34 million shares.

The bondholders will be offered to participate
in a private placement of up to 5.34 million
shares at NOK 68, - per share, equal to the
conversion price, in exchange for a termination
of the conversion right. Except for the
termination of the conversion right, the loan
will continue at unchanged terms until maturity
date on 30 March 2009.

Subject to acceptance of the offer the
bondholders will release the equity element from
the convertible bonds and at the same time
maintain the right to receive the annual coupon
of 4.5% to maturity. Fred. Olsen Energy ASA will
on its part secure a three years subordinated
loan at satisfactory terms.

A formal offer as outlined is subject to a
resolution in the ordinary general meeting of
Fred. Olsen Energy ASA on 29 May 2006.