Prospector Offshore Drilling Secures Loan to Finance Rig Construction

Prospector Offshore Drilling Secures Loan to Finance Rig Construction

Prospector Offshore Drilling S.A. has entered into a non-binding terms and conditions agreement with the China Development Bank Corporation for a senior secured credit facility to finance the final installment of the shipyard construction contract with Dalian Shipbuilding Industry Offshore Co., Ltd.

The Facility is considered to be on prevailing market terms for this kind of borrowing and provides for a six-year loan of up to USD 139.0 million , and will be secured by a first mortgage on the Company’s first rig (PROSPECTOR 1) and will be insured by the China Export & Credit Insurance Corporation (“Sinosure”).

The Facility will be guaranteed by the Company, Prospector Rig 1 Owning Company S.à r.l. (the subsidiary that owns PROSPECTOR 1) and Prospector Rig 1 Contracting Company S.à r.l., the subsidiary that has entered into a drilling contract with Total E&P UK Limited and Elf Exploration UK Limited for PROSPECTOR 1. The Borrower will also be permitted to arrange a second lien facility of up to USD 35 million subject to an acceptable inter-creditor agreement between the Lender and the potential second lien lenders. The Company has no intention to secure second lien financing at this time.

Robert W. Rose, the PROS President and CEO, commented today: “The agreement with China Development Bank and Sinosure is a significant milestone for the Company. The proceeds from the Facility, with our existing cash balances, will allow the Company can take the delivery of PROSPECTOR 1, which is expected in early 2013. We are very proud of our relationships with the China Development Bank and Sinosure, which will be very important as we continue our efforts to arrange financing for the rest of fleet under construction in China, and work to further develop our company.”

November 12, 2012

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