Good day and welcome to the second quarter 2012 earnings release conference call. Today’s conference is being recorded and at this time, I would like to turn the call over to your host today Mr. Ragnvald Kavli. Please go ahead sir.

Thank you and welcome to our second quarter 2012 earnings conference call. Please note that this conference call also includes comments on the second quarter 2012 accounts for our majority owned OTC listed subsidiary North Atlantic Drilling Limited. The quarterly reports and other supporting materials are available on SEDAR.com and (indiscernible). Together with me on this call, I have our CEO and President, Mr. Alf Thorkildsen and our CFO and Senior Vice President, Mr. Rune Magnus Lundetræ and Robert Hingley-Wilson, our Senior Vice President and Chief Accounting Officer. But before I give the words to Alf to give us an update and the status of our business, I’d like to remind everyone that during the course of this call, we may make certain forward looking statements regarding matters related to our business and company that are not based on historical facts. Please note that such statements in addition to other information discussed are given within the safe harbor provisions provided by the federal securities regulations. For future and more detailed description of other risks associated with our company and industry, please see our most recent annual reports on Form 20-F and other filings with the SEC. That concludes the preliminary details. Now I will turn the call over to Alf. Please go ahead.

Thank you, Ragnvald. Good morning and good afternoon to all of you and welcome to our second quarter 2012 conference call. I would like to start this presentation by going through the highlights in the second quarter. Thereafter I will proceed to discuss our view of the market outlook for each of our business segment before updating you on the contract status for our fleet, and I would end with some summarizing comments. Rune Magnus, our CFO will afterwards take you through our financial accounts and results in the first quarter which will also include comments to the results posted by North Atlantic Drilling to date. We will thereafter do a combined Q&A session for both the Seadrill and North Atlantic. Highlights for the second quarter 2012. I am pleased to share with you another solid quarter with an EBITDA of some $634 million and net income of $554 million. The corresponding earnings per share was $1.12, positively impacted by an accounting gain of $169 million reported under all of our financial items related to the merger between SapuraCrest and Kencana Petroleum in Malaysia. Our operational performance continues to be strong and our floaters achieved a marginally higher utilization of 95% compared to 94% in the preceding quarter. We have so far in the third quarter had approximately 90 days downtime in connection with equipment parts needed to be replaced on subsea BOPs. This issue has been addressed and resolved. For our jack-ups that were in operation we achieved the economic utilization of 79% in the quarter. Our jack-up utilizations were adversely impacted by several rigs currently mobilizing and the mobilization has taken somewhat longer than anticipated. Our tender rigs continued to perform excellent with an economic utilization of 97% in the second quarter. We have since our first-quarter report…

Operator, we are now ready for question and answer session.

(Operator Instructions) And we’ll move to our first question today from Lukas Daul from Enskilda.

I was wondering, Alf, you mentioned in the report your continuous sort of eagerness for more newbuilds, and I wanted to ask, when you look at industry today, the newbuild economics have never been more attractive. So what is your take that on the fact that there has been quite a substantial break in newbuild orders over the past few months? What would you say out of my concerns for people in the industry?

I think the key impacting the lack of new orders, rigs being ordered is financing and the global uncertainty when it comes to the macroeconomics. We have for some time been in the forefront than at the front of the wave when it comes to newbuilds. We did that in 2006, we did that a year ago, we did that in previous period as well. We are – we still believe that there is a significant market, there are attractive newbuild prices and good deliveries which makes it interesting for us to look at. And as you know, we have – our growth has mainly gone through organic growth and not so much with M&A. We have had a couple of small M&A activities but that’s all and that’s been our growth story and gives us a very attractive economics if you hit the cycle right. So we have done so and we are looking at it again so to speak. But it just reflects our view of the market we are, I have been optimistic about this market for 10 years. So it’s kind of hard for me to change but we are still optimistic about that market. So kind of, yes it is cyclical, you have to hit the cycle with the yard and you have to hit the cycle when you enter the market. And that is it. And when we are looking in our crystal ball for 2015, it doesn’t look too bad.

That sounds good. And then in your cash flow statement, I wanted to ask it seems like that maintenance CapEx was roughly $100 million in the second quarter, which is almost three times more than in Q1. Was there any particular project that this relates to or is this a one-off or a level that we can expect going forward?

I need to come back on the details of that. I don’t have it in front of me here. So I need to come back with some comments to that specifically. We have had some rigs with some yard stays and five year classing. And that is couple of the jack-ups, we have had for five-year classing in some Scorpion rigs which we had to take some when we bought them, I guess they were not in the stages of where we are. We had also five-year classing of Hercules and to some extent Aquarius. But I can’t give you exactly the breakdown here but we are into some five year classing and we are seeing that. The costs are in line with what we have said. They will differ from the rigs. The only thing I would say with Scorpion rigs, we are getting them up to Seadrill standards. I would say that when we bought them, they were not up to the same standard as we used to have and we are doing that during either between contracts or during the five year classing.

And the last one, you say that in terms of funding the new projects, you pretty much rely on raising that amount in new debt. I noticed in the report that for a second-quarter in a row you said you got a shareholder loan from your main shareholder. Now it’s $350 million. So is that sort of additional leg that gives you the extra flexibility to make a quick moves as you need to or –

It gives us the flexibility, and don’t forget that since Christmas, we have ordered 60 floater units, and to get the right thrust and the right timing for those deliveries, we cannot look around for funding. We order and then we have that flexibility with one of the shareholders, that gives us tremendous opportunity to enter into deals with no one else can do with the offs (ph).

And we’ll move to our next question from Andreas Stubsrud from Pareto Securities. Andreas Stubsrud – Pareto Securities: Thank you. I have two quick jack-up questions first. On page 9 of your report today, you seem very optimistic about the jack-up market. And I was wondering about your options back to October 18, 2010 for those harsh environment jack-ups, not for Norway, but for the rest of the world. Are those options still there and what are you thinking about actually exercising those options?

I think by today including our six – five rigs under construction, our jack-ups under construction, we will have some 21 units – 21 jack-ups, we are comfortable with that number. So I think you can assume that we will not exercise our option as such. In addition, we own three Asian offshore drilling units which we have a management of as well. So we have some flexibility to our structure in that respect as well. We are – we have compared to deepwater floaters, we are more keen to develop that sector than the jack-up sector as such. Andreas Stubsrud – Pareto Securities: And the two rigs you have under construction at Dalian and two at Jurong, where do you expect those to go in the world today? Can you just give us the guidance on that?

From the Middle East to Southeast Asia. Somewhere in between those areas. Andreas Stubsrud – Pareto Securities: And the last question is for the CFO, in terms of North Atlantic Drilling, the $170 million short term loan granted to a related party with Seagal, I assume you’ve not included that in the net interest bearing debt but you received that back in July. Is that correct? Rune Magnus Lundetræ: Yes, that is correct. Andreas Stubsrud – Pareto Securities: So the cash has increased with $170 million in the third quarter in addition to the normal operation, I assume that net debt is actually a little bit better than the kind of the reported – how you write in the report – Rune Magnus Lundetræ: That is correct.

We’ll move to our next question from Robert Jensen from Platou Markets.

Hey guys. Good afternoon. Just touching a bit upon the cost side, Alf, you've indicated that you believe that you can reduce costs going forward. Can you talk a bit about where you are today in terms of average costs per day for the ultra-deepwater side and sort of what's your target going forward? And just curious are these savings mainly from newbuilds getting through the shakedown period post-delivery, or are there other form of cost savings you're looking at?

Where we see significant cost saving is related to operation preparation. We see that when we have eight newbuilds under construction at the same time, we take advantage of size. Take, for example, drill pipe, we order it and we have some up to 40% reduction in costs compared to buying it individually per rig. These are the things we are seeing very, very clearly now and which will, of course, be reduction in our capitalized costs for those units. When it comes to rigs in operation which have 80% of the costs is personnel, we see a – we have a shift – for two reasons, by the way, we have a shift from experts to locals, mainly because we need the experts on new rigs. So our experts are not being unemployed, it's just that we desperately need them on our newbuilds. And therefore we have a stronger incentive to nationalize our crews where we are in operation. By doing so, we see significant cost savings. These cost savings are at parts, sometimes offset by significant local increases in areas like Brazil, to some extent then Angola and in Nigeria. So, there are offsets in Brazil, we see something of a reduction when you measure the cost in dollars in Brazil mainly because of the Brazilian currency deflation against the dollar. But we see that doesn't matter so much for our current context, because they are partly in Brazilian currency and dollars but it matters when we go in there in the future. So, that's the thing. In addition, of course, we are getting bigger sites and take advantage of that throughout the fleet. But it's particularly again -- particularly, when we have 8 deepwater units under construction, we see the benefit in operation preparation, and in Singapore where you have 10 jack-ups and tender rigs under construction at the same time as well where we see the benefit of getting them ready to drill which is the key savings in this respect.

And would you care to touch a bit upon sort of the direct operating costs per day and what level you are at?

You ask a question which is impossible to answer, because it all depends on the various -- what countries you are in, that’s why I am saying. We have been able – when others have increased this, we’ve been able to be relatively stable on it. But there is -- take for example in Brazil, our 13%, the unit agreement had an increase of 13%, just to give you an example. Then it’s offset a bit by the currency fluctuations. So, I can’t give you because it varies depending on the countries, but we are able to contain it more or less within the offsets we have from our escalation provisions these days.

That sounds good. Then moving on to North Atlantic Drilling, you stated in report that you see a potential for increased dividends as Linus and Rigel commence operations. Should we read into that as you don’t believe there’s scope for higher dividends with the current fleet and sort of the respective contracts that they are on?

I think I was not such a bad analysis. So I’ll give you a plus for that. I think that was a fair statement.

All right. And just finally on the tender fleets, you said you’re looking to rationalize the fleet. Can you be a bit more specific on what you are looking to do? Does it only include sort of the T4 and the T7 and then if you may, can you give us some color on the upgrade costs to keep them beyond the current contract?

Those two units, I think you know the company well and it was a good remark you made. I think the T4 and T7 are 30 years old, but a bit more than 30 years old and they are getting mature. And what we're seeing is our customer would like to see modern equipment, more challenging drilling, more efficiency out of modern units, then we can get out of the old ones. I think our alternative for T4 and T7 is either just to keep them going maybe for another one, two years after they finish this contract into other areas and then retire them. I think in your analysis you should assume as we retire them.

We’ll now move to our next question from Ryan Kauppila from Citigroup.

On the new tender rig facility, I think earlier you had suggested that you were seeing strong interest out of Asian banks. I was just wondering if you did see a geographic diversification with where that funding came from. Rune Magnus Lundetræ: The funding came mainly from European and Nordic banks.

And then secondly, in your deepwater outlook, you've mentioned Brazil and then maybe suggesting that incremental supply to meet their production targets will be required. I’m just wondering relative to the two international rigs that Petrobras seems to suggest that they need still to contract, where do you see that market going forward?

So Petrobras have indicated couple of more rigs there in the short-term, and I think what we are seeing, we are part of building rigs in Brazil. I guess it's fair to say, we think it's going to take somewhat longer than the most optimistic people in Petrobras.

We’ll now move to our next question from Monroe Helm from Barrow Hanley.

Congratulations on the continued effort. You’ve done a great strategy. Just one question, can you just give us a little bit more color on the issues with the BOPs and who were the builders in the BPOs and were the issues surfaced by you or by the operators of the rigs?

I have to draw my breath here because it’s at times somewhat frustrating, some of the things we are experiencing, but we have seen it on – the two issues we have had lately was some SPM valves, some small valves which are in the BOP and the supplier are using the wrong metal in some of the springs in those valves. It’s just very simple thing really when you see it, but it gets us down for 20 to 30 days because of that. And I cannot give you the name of the supplier, but the rigs are Sirius and Capricorn and to some extent Pegasus, but these are the thing, which are simple things. Should they have been picked up brand new coming out, not been tested with the pressure and the water depth we are having in which they are certified for and of course are getting us extremely frustrated of the quality of that equipment. We are rectifying it. We are getting back some other well tested equipment. And we will be back, I would say, we see it temporarily, and it is solvable and that’s just extremely irritating.

A follow-up, if I might. Can you give us a better sense of when you think if you’ve had any comments back from the SEC on MLP and that would you expect to install (indiscernible) launch before the end of the year?

I give the word to Rob here.

Hi, yeah, we -- as everyone knows we announced, we made the first filing. Everything is following what we would all understand to be a regular schedule with the SEC. We are in dialogue and I think our previous announcements about timing certainly hold true.

We’ll move to our next question from Julien Laurent from Natixis.

You've mentioned in the past that you would take a very cautious assumption regarding your commercial activity with Petrobras. So could you elaborate a bit regarding what term improvements you get from them?

I didn't understand that question. Can you just repeat? I was on the bad line here.

Yes, so given that you've decided at the end of the day to build a local rig – in the local yard in Brazil, what has been the change in the terms coming from Petrobras, what did decide you?

I think what we have been able to do is to share the risk with the yard and with Petrobras when it comes to both delivery and liabilities and the future. Secondly and more importantly, our share this is 30%, there are 80% debt financing in place for those units and our exposure for the three units are approximately $130 million, could maybe go to $150 million. But that's kind of the exposure and we limit that to that exposure. That is the reason, we think it is something we are keen to see developed. We want to be part of it. We want to have a share which we think is acceptable given the uncertainty of building rigs in new yards in Brazil.

Thank you. As we have no further questions at this time, I'd like to turn the call back over to you gentlemen for any additional or closing remarks. Thank you.

Yeah, we're now finished.

I think we are then concluding our Q&A session, and we thank all the listeners for listening patient to our story. Thank you so much and see you in the quarter.

Thank you, sir. That will conclude today's conference call. Thanks for your participation, ladies and gentlemen. You may now disconnect.