PROS - Announces an Agreement for the Financing for the Company's First Rig

PROS - Announces an Agreement for the Financing for the Company's First Rig

Luxembourg, 12 November 2012: Prospector Offshore Drilling S.A. (the "Company" or "PROS") announced today that one of its subsidiaries, Prospector Finance Rig 1 S.à r.l. (the "Borrower") has entered into  a non-binding terms and conditions agreement with the China Development Bank Corporation (the "Lender") for a senior secured credit facility (the "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 (the "Loan"), 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.

The Facility is subject to the completion of the Lender's necessary due diligence, final credit approval of the Lender and the execution of all of the Facility documents. The Company anticipates that the Facility will close in December 2012.

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."

About PROS:

PROS is a high specification jack-up drilling contractor. PROS currently has contracts in place for the design, construction and delivery of six F&G JU2000E high specification, harsh environment (HS/HE) jack-up drilling rigs. The Company's first rigs are scheduled for delivery commencing in the first quarter of 2013. PROS also has option agreements for the construction of six additional rigs of the same design. Upon deployment of its rigs, PROS, under its proven management team, will have the newest fleet of HS/HE jack-up rigs in the world, operating with the most advanced drilling systems available in the industry. Reference is made to the stock exchange notice issued on 23 October 2012 regarding the potential sale of one of the Company's six rigs and the option for the sale of another of the Company's rigs.

This press release contains forward-looking statements that involve risks and uncertainties. You are cautioned not to put undue reliance on forward-looking statements because actual events and results may differ materially from the expected results described by such forward-looking statements. Prospector Offshore Drilling S.A. disclaims any obligation to update and revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:

Steven A. Manz

Chief Financial Officer

Prospector Offshore Drilling S.A.

Tel: +1 281 560 8010