SFL - $850 million acquisition of an ultra-deepwater drillship and intention to increase quarterly dividend

Press release from Ship Finance International Limited, May 19, 2008

Ship Finance International Limited (NYSE: SFL) ("Ship Finance" or the "Company"), today announced that it has entered into an agreement to acquire the newbuilding ultra-deepwater drillship West Polaris, from a subsidiary of Seadrill Limited ("Seadrill").

With a total acquisition cost of approximately $850 million, this is a record-breaking sale/leaseback transaction in the maritime industry. The vessel is expected to be delivered end of June 2008 from Samsung Heavy Industries in South Korea, and will be chartered back to the seller for 15 years on a bareboat basis, fully guaranteed by Seadrill.

The Company has received commitments for a $700 million loan facility from a syndicate of leading international banks, and the remaining $150 million will be funded from the Company's available liquidity.

West Polaris will be employed initially by Seadrill on a 4 year contract to Esso Exploration Inc., a subsidiary of Exxon Mobil Corporation. This contract has a value of approximately $815 million, and start-up of operations under the contract is expected to be three months after delivery from the shipyard.

The aggregate charter payments from Seadrill over the first 51 months will be approximately $491 million (including $10 million in the first three-month mobilization period). For the remaining lease period, the aggregate lease payments will be approximately $631 million.

Seadrill has been granted several fixed price purchase options, first time after 51 months at $548 million and last time after 15 years at $177.5 million.

The $700 million loan facility will have a 5 year term and the average annual repayment of debt will be approximately $65 million per year in this period. The average annual net cash contribution, after estimated interest expense and debt repayment, will be approximately $23 million, or $0.32 per share.

Based on this highly accretive transaction, the Company intends to increase the quarterly dividend by two cents per share in the third quarter, when the new drillship is delivered and has commenced its operation.

Lars Solbakken, Chief Executive Officer in Ship Finance Management AS, said in a comment: "We are very pleased to announce our first acquisition of an ultra-deepwater drillship. Seadrill is among the world's leading offshore drilling contractors with a market capitalisation in excess of USD 13.5 billion. They have a fleet of state-of-the-art ultra-deepwater drilling units and an impressive fixed contract backlog, currently in excess of $12 billion. Furthermore, this investment in the oil exploration sector confirms our strategy to continue diversifying the asset base and grow our long-term charter business. The strong fundamentals of the offshore industry combined with long term charter coverage and high quality credit counterparts makes this a very attractive industry for us to invest in. We see a large potential in providing further flexible solutions to Seadrill as well as assisting other major offshore companies to optimize their capital structure and create flexibility for further growth.

Over the last 12 months, Ship Finance has announced new investments of approximately $1.5 billion, and our fixed-rate charter backlog, excluding profit share, is currently in excess of $6.6 billion."

About Ship Finance
Ship Finance is a major ship owning company listed on the New York Stock Exchange (NYSE: SFL). Including newbuildings and announced acquisitions, the Company has a fleet of 73 vessels, including 35 crude oil tankers (VLCC and Suezmax), 2 chemical tankers, 8 oil/bulk/ore vessels, 13 container vessels, 3 dry bulk carriers, 6 offshore supply vessels, 3 seismic vessels, 2 jack-up drilling rigs and one ultra-deepwater drillship. The fleet is one of the largest in the world and most of the vessels are employed on long term charters.

More information can be found on the Company's website: www.shipfinance.org