NorAm Drilling AS

Investor Presentation • Nov 22, 2022

Q3 2022 Presentation

N o v e m b e r 2 2 , 2 0 2 2

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.

Q3 2022 Highlights

Revenue

Utilization

Net income

• \$26.5 million including reimbursables
• Clean day rate(1) of \$25,200
• 98.9% utilization
• One rig transitioned from one client to another during the quarter without downtime
• EBITDA(2) EBITDA of \$8.5 million, up 104% from Q2
  • \$1.5 million
  • Tax expense of \$400k offset against carry loss forwards

Backlog

• Backlog stands at \$49.0 million at the end of Q3
• Five contracts at an average day rate of \$31,300 per day signed subsequent to Q3

1) Clean day rate excludes add on revenue from additional services, manning and other reimbursables

2) Earning Before Interest, Tax, Depreciation and Amortization

Recent Events and Outlook

Euronext listing

• \$75 million private placement
• Shareholder base grown from 125 to >1000 as of November 19

• \$83.2 million paid down including accrued interest paid November 14

Repayment of bond

New RCF

Customer consolidation

• \$4.5 million RCF signed with a US bank
• Reducing liquidity need
• Diamondback acquisition of Firebird Energy scheduled to close November 2022
• Four rigs currently on contract to the combined entity
• Two rigs subsequently contracted to transition to another client
• Dividends First dividend announcement expected in December 2022

Strong Operational Performance and DUCs Continue to Decline

Key Operational Figures

(All amounts in USD 1000s per day) unless noted	3Q 2022	2Q 2022	1Q 2022	4Q 2021
Rig operating days	1,001	949	785	731
Rig utilization	98.9%	94.8%	79.3%	72.2%
Rig metrics per day -
Dayrate (1)	25,201	21,477	19,805	18,511
Operating costs (2)	14,794	13,925 13,443		12,931
Direct margin	10,407 7,552		6,362	5,580
Operation and SG&A allocation (3)	1,920 2,072		1,618	1,711
Maintenance cap ex allocation (3)	430 81		513	117
Net cash flow	8,058	5,399	4,231	3,752
Reimbursements of "out-of-pocket" expenses	1,189	1,719	1,462	1,463

(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)	3Q 2022	2Q 2022	1Q 2022	4Q 2021
Total Operating Income	26,535	22,274	17,096	14,564
Payroll Expenses	7,007	6,838	7,108	6,170
Depreciation of Tangible and Intangible Assets	4,769	4,700	4,639	4,614
Rig Mobilization, Service and Supplies	7,205	6,791	5,824	4,953
Insurance Rigs and Employees	1,750	1,579	887	1,431
Other Operating Expenses	2,101	2,917	1,566	444
Total Operating Expenses	22,833	22,825	20,024	17,612
Operating Profit (+)/ Loss (-)	3,703	-551	-2,927	-3,048
Net Financial Items	-1,759 -1,855		-1,803	-1,803
Profit (+)/Loss(-) before Income Tax	1,944	-2,406	-4,730	-4,852
Income Tax Expense	408	1,148	-425	598
Net Profit (+)/Loss (-)	1,536	-3,554	-4,305	-5,450

• Net profit after tax of \$1.5m
• CARES Act credit of \$1.6m in Q3 offset by transaction fees and various expense accruals
• Tax expense of \$400k offset against carry loss forwards

Balance Sheet

(All amounts in USD 1000s)	3Q 2022	2Q 2022	1Q 2022	4Q 2021
Non current assets
Rigs and Accessories	90,132	94,375	98,420	101,918
Vehicles and Office Equipment	282	312	241	170
Current assets
Accounts Receivable	10,636	9,395	7,486	6,143
Other Receivable	1,686	1,748	694	1,060
Bank Deposits/Cash	19,138	10,449	11,596	12,782
Total Assets	121,873	116,279	118,436	122,073
Equity
Issued Capital	8,839	8,839	8,839	8,839
Share Premium	94,860	94,860	94,860	94,860
Other Shareholder Contribution	369	369	369	369
Other Equity	-76,663	-78,199	-74,647	-70,339
Total Equity	27,405	25,869	29,421	33,729
Non current liabilities
Deferred Tax	3,093	2,685	1,962	1,962
Bond Loan			80,000	80,000
Current Liabilities
Bond Loan	80,000	80,000
Accounts Payable	3,807	2,509	2,463	2,996
Public Duties Payable	30	149	146	151
Other Current Liabilities	7,537	5,066	4,867	3,236
Total Liabilities	94,468	90,410	89,015	88,344
Total Equity & Liabilities	121,873	116,279	118,436	122,073

• Increase in receivables due to higher rig rates
• AR averages 30-35 days
• Capital expenditures primarily related to upgrades
• \$75 million of equity raised after quarter end
• Bond and accrued interest of \$83.2 million paid down on November 14, 2022

Q&A

NorAm – pure play operator of Ultra Super Spec rigs in Permian basin

NorAm Drilling in brief

11	Modernized Ultra Super Spec rigs Fully upgraded with state-of-the-art walking systems and racking capacity, with a track record of drilling the longest wells in the Permian
100%	Permian focus Strategically positioned to unlock untapped oil reserves by employing the latest horizontal drilling technology
15+	Years of operations Knowledgeable management team and low employee turnover leads to optimized costs and operations
20+	Different longstanding customer relationships Consistent repeat business from customers ranging from large supermajors to independents
8	Years with strong ownership support from the Seatankers Group Extensive track record of successful investments in the energy sector with deep insights of drilling operations

Selected customers

Permian basin has the largest energy reserves in the U.S

What Is A Ultra Super Spec Rig?

NorAm Drilling has a fleet of fully upgraded rigs with a track record of drilling the longest wells (25,000+ feet) in the Permian