NorAm Drilling AS

Investor Presentation • May 24, 2023

Q1 2023 Presentation

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Disclaimer

This presentation contains forward looking statements. These statements are based upon various assumptions, many of which are based, in turn, upon further assumptions, including NorAm management's examination of historical operating trends, data contained in the Company's records and other data available from third parties. Although NorAm believes that these assumptions were reasonable when made, because assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond its control, NorAm cannot give assurance that it will achieve or accomplish these expectations, beliefs or intentions. The Company has not taken any steps to verify any of the information contained herein. No representation or warranty (express or implied) is made as to any information contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements. The Company does not accept any liability whatsoever arising directly or indirectly from the use of the materials.

The Presentation may contain certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words "believes", "expects", "predicts", "intends", "projects", "plans", "estimates", "aims", "foresees", "anticipates", "targets", and similar expressions. Any such forward-looking statements are solely opinions and forecasts reflecting views as of the date set out on the cover of these materials, which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. No liability for such statements, or any obligation to update any such statements or to conform such statements to actual results, is assumed. Furthermore, information about past performance given in this Presentation is given for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance.

This presentation and related materials speaks only as of the date set out on the cover, and the views expressed are subject to change based on a number of factors. The Company does not undertake any obligation to amend, correct or update the materials or to provide any additional information about any matters described herein, but reserves the right to amend, correct or update the materials and provide additional information.

Q1 2023 Highlights

Revenue

Utilization

EBITDA

• \$32.7 million including reimbursables
• Clean day rate(1) of \$30,846
• 99.3% utilization
• Excludes 11 days of rig upgrades related to contracts
• Adj. EBITDA of \$15.0 million including \$1.4 million ERTC refund • Operating and maintenance expenses in line with expectations
• \$9.6 million
• EPS of \$0.22

Net income

Backlog • Backlog of \$25.1 million as of May 23, 2023

Recent Events and Outlook

Dividends • Six consecutive monthly distributions, totaling USD27.2m or NOK 6.48 per share

Slowing day rate momentum

• US rig count recently declining in response to lower nat gas prices
• Recent renewal discussions somewhat lower than Q1 levels

Stable Permian rig count

• Permian rig count stable despite a few transitory rig arriving from gas basins:
  • Dec 31, 2022: US total 762 / Permian basin 353
  • Mar 31, 2023: US total 739 / Permian basin 353
  • May 19, 2023: US total 697 / Permian basin 349

Growing oil production

• Permian oil production grew 12% y/y to 5.7mbpd in Q1 2023
• Continued flat rig count and declining DUCs question future production growth

Outperforming In Strong Market Fundamentals

Drilled, Uncompleted Well Inventory To Lowest Level Since 2014(1) NorAm continues to outperform in 2023(2)

Permian, # of wells drilled per rig per month

Key Operational Figures

Selected operational and financial data

(All amounts in USD 1000s per day) unless noted	1Q 2023	4Q 2022	3Q 2022	2Q 2022
Rig operating days	990	1,005	1,001	949
Rig utilization	99.3%	99.3%	98.9%	94.8%
Rig metrics per day:
Dayrate (1)	30,846	28,006	25,201	21,477
Operating costs (2)	15,067	14,366	14,794	13,925
Direct margin	15,779	13,640	10,407	7,552
Operation and SG&A allocation (3)	1,812	1,936	1,920	2,072
Maintenance cap ex allocation (3)	103	203	430	81
Net cash flow	13,864	11,501	8,058	5,399
Reimbursements of "out-of-pocket" expenses	2,286	1,252	1,189	1,719

(1) Per rig operating day and excludes reimbursements for "out-of-pocket" expenses.

(2) Per active rig available and excludes reimbursements for "out-of-pocket" expenses. Excludes operating costs of rigs not active. (3) Per available days

• Full utilization and efficient operating structure generating record contributions
• Maintenance capex comprises of spares, trucks, drill pipe etc.

Income statement

(All amounts in USD 1000s)	1Q 2023	4Q 2022	3Q 2022	2Q 2022
Total Operating Income	32,684	29,541	26,535	22,274
• Full utilization and efficient operating structure Payroll Expenses	6,897	8,496	7,007	6,838
Depreciation of Tangible and Intangible Assets	4,759	4,771	4,769	4,700
generating record contributions Rig Mobilization, Service and Supplies	6,972	6,276	7,205	6,791
Insurance Rigs and Employees	1,644	1,617	1,750	1,579
• Maintenance capex comprises of spares, trucks, Other Operating Expenses	2,391	1,721	2,101	2,917
drill pipe etc. Total Operating Expenses	22,663	22,881	22,833	22,825
Operating Profit (+)/ Loss (-)	10,022	6,660	3,703	-551
Net Financial Items	-49	1,544	-1,759	-1,855
Profit (+)/Loss(-) before Income Tax	9,972	8,204	1,944	-2,406
Income Tax Expense	393	-1,097	408	1,148
Net Profit (+)/Loss (-)	9,579	9,301	1,536	-3,554

• Stable operating expenses in line with expectations
• ERTC refund of \$1.4m reducing payroll expenses in Q1

Balance Sheet And Cash Flow Statement

(All amounts in USD 1000s)	1Q 2023	4Q 2022	3Q 2022	2Q 2022
Non current assets
Rigs and Accessories	83,521	86,312	90,132	94,375
Vehicles and Office Equipment	434	258	282	312
Current assets
Accounts Receivable	14,402	14,802	10,636	9,395
Other Receivable	855	1,336	1,686	1,748
Bank Deposits/Cash	12,696	13,098	19,138	10,449
Total Assets	111,908	115,806	121,873	116,279
Equity
Issued Capital	12,547	12,547	8,839	8,839
Share Premium	136,701	136,472	94,860	94,860
Other Shareholder Contribution	369	369	369	369
Other Equity	-57,877	-67,456	-76,663	-78,199
Total Equity	91,740	81,932	27,405	25,869
Non current liabilities
Deferred Tax	2,139	1,746	3,093	2,685
Current Liabilities
Bond Loan			80,000	80,000
Accounts Payable	4,138	4,607	3,807	2,509
Tax Payable	224	250
Public Duties Payable	245	267	30	149
Other Current Liabilities	13,421	27,004	7,537	5,066
Total Liabilities	20,168	32,128	94,468	90,410
Total Equity & Liabilities	111,908	115,806	121,873	116,279

Balance sheet Cash flow statement

(All amounts in USD 1000s)	1Q 2023	4Q 2022	3Q 2022	2Q 2022
Net Profit (+)/Loss (-)	9,972	8,204	1,944	-2,406
Tax paid for the period	-26
Depreciation of fixed assets	4,759	4,771	4,769	4,700
Change in accounts receivable	400	-4,166	-1,241	-1,910
Change in accounts payable	-469	800	1,298	46
Change in other current balance sheet items	257	-2,350	2,415	-852
Net cash flow from operational activities	14,894	7,258	9,185	-421
Purchase of tangible fixed assets	-2,144	-926	-496	-726
Net cash flow from investing activities	-2,144	-926	-496	-726
Repayment of long term debt		-80,000
Issued capital		72,004
Dividends	-13,152	-4,375
Net cash flow from financing activities	-13,152	-12,371	0	0
Net change in cash and cash equivalent	-402	-6,040	8,689	-1,148
Cash and cash equivalents opening balance	13,098	19,138	10,449	11,596
Cash and cash equivalents closing balance	12,696	13,098	19,138	10,449

Q&A