Awilco Drilling PLC

AGM Information • May 30, 2022

Company number: 07114196

NOTICE OF ANNUAL GENERAL MEETING

AWILCO DRILLING PLC (the "Company")

NOTICE HAS BEEN GIVEN that an ANNUAL GENERAL MEETING of the Company will be held at the Company's offices of 2 Kingshill Park, Venture Drive, Westhill, Aberdeen AB32 6FL on 22 June 2022 at 12:00 noon (UK time) for the purpose of considering and, if thought fit, passing the following resolutions:

ORDINARY RESOLUTIONS

• 1. To receive and adopt the Company's annual accounts for the financial year ended 31 December 2021, together with the directors' report and auditor's report on those accounts and including the balance sheet for the Company which has been prepared by the Company's directors and accountants dated 25 May 2022 (the "Balance Sheet").
• 1. To re-appoint:
  2. (a) Mr Henrik A. Christensen as member of the Company's Nomination Committee. Mr Henrik A. Christensen is a partner with the Norwegian Law Firm Ro Sommernes Advokatfirma DA. He has more than 25 years of experience within real estate law, liquidation and debt settlement negotiations, corporate mergers and acquisitions, and securities & stock exchange rules and regulations.
  3. (b) Mr Tom Furulund as member of the Company's Nomination Committee. Mr Tom Furulund is the General Counsel in the Awilhelmsen Group of companies. He has more than 30 years of experience from the Shipping, Offshore, and Investment industry. Mr. Furulund holds a law degree from the University of Oslo
• 1. To approve the Directors' Remuneration Report, other than the part containing the Directors' Remuneration Policy, for the financial year ended 31 December 2021.
• 1. To approve the Directors' Remuneration Policy as set out in Attachment 2.
• 1. To approve the non-executive directors' remuneration up to an aggregate amount of £200,000 for the calendar year ended 31 December 2021, in line with the recommendation from the Nomination Committee.
• 1. To approve the proposition for remuneration for the Nomination Committee up to an aggregate amount of £6,500 for the calendar year ended 31 December 2021.
• 1. To re-appoint Ernst & Young, of 4th Floor, 2 Marischal Square, Broad Street, Aberdeen, AB10, United Kingdom, as the Company's auditors to hold office from the conclusion of this meeting until the conclusion of the next meeting at which accounts are laid before the Company.
• 1. To authorise the directors to agree the remuneration of the auditors.
• 1. To approve, in accordance with section 551 of the Companies Act 2006, that the directors be generally and unconditionally authorised to allot shares in the Company up to an aggregate nominal amount of £35,478 provided that this authority shall, unless renewed, varied or revoked by the Company, expire on the earlier of the date of the Company's next annual general meeting or 30 June 2023, save that the Company may, before such expiry, make an offer or agreement which would or might require shares to be allotted and the directors may allot shares in pursuance of such offer or agreement notwithstanding that the authority conferred by this resolution has expired.
• 1. Conditional upon the passing of resolution 9 above, the directors of the Company be and they are hereby empowered to allot equity securities (as defined in section 560(1) of the Companies Act 2006) of the Company for cash pursuant to the authority conferred by resolution 8 above in accordance with section 551 of the Companies Act 2006, as if section 561(1) of the Companies Act 2006 did not apply to any such allotment, provided that this power shall expire on at the conclusion of the Company's next Annual General Meeting or 15 months after the date of the passing of this resolution.

SPECIAL RESOLUTIONS

1. To authorise a general meeting of the Company, other than an annual general meeting, to be called on not less than 14 clear days' notice.

Note 1: The Company is not contemplating making any political donations of any sort in the coming year and hence no resolution is proposed regarding political donations.

By Order of the Board 25 May 2022

Registered Office

Awilco Drilling PLC c/o VISTRA (UK) LTD 3rd Floor, 11-12 St James's Square London, SW1Y 4LB United Kingdom

Attachment 1:	Awilco Drilling PLC Annual Report 2021
Attachment 2:	Directors' Remuneration Policy

NOTES TO THE NOTICE OF GENERAL MEETING

Euronext Securities Oslo (ESO) Shareholders

1. As your beneficial entitlement to shares of the Company is registered with Euronext Securities Oslo (the "ESO") and such shares are registered in the name of DNB Bank ASA ("DNB") (on behalf of the ESO Register) in Company's register of members located in the United Kingdom; attending, voting and speaking at the above-mentioned General Meeting (the "Meeting") of the shareholders of the Company, to be held on 22 June 2022, will have to be executed through DNB.

Important notice:

Note 1. Above does not constitute any recommendations or advice on behalf of, or from DNB Bank ASA. You are recommended to seek legal and/or financial advice from your preferred advisor should you have any questions related to note 1. And/or to the information contained in documents to which this notice is attached. You or your advisor may contact the issuer of the documents for guidance; this is including, but not limited to, any exercise of (indirect) shareholder rights you may have and/or should want to exercise. DNB Bank ASA may on direct request give technical guidance on how to retire your interest in the issuer of the documents to which this notice is attached from the Euronext Securities Oslo register (the "ESO") for the purpose of you being entered into the Register of Members, i.e. the primary register of the issuer referred to, in order for you to exercise any shareholder rights, as applicable, directly against the issuer, or any other third parties, including, but not limited to, any compulsory buy-out ("squeeze out") proceedings or any other legal or litigation proceedings.

Voting Instructions

• 1. You may either:
  2. a. instruct DNB to appoint someone of your choosing as proxy to exercise rights to attend, speak and vote at the Meeting on your behalf and in accordance with your instructions; or
  3. b. authorise DNB appoint a proxy of their choosing to exercise rights to attend, speak and vote at the Meeting on your behalf and in accordance with your instructions.
• 1. You should have received a Voting Instruction Form with this notification of the Meeting. You can only issue Voting Instructions in accordance with note 2 above using the procedures set out in these notes and the notes to the Voting Instruction Form.
• 1. To provide instructions using the Voting Instruction Form, the form must be:
  2. completed and signed;
  3. and delivered to DNB at as a PDF file by email sent to vote@dnb.no (or alternatively by mail to address: DNB Bank ASA, Registrars Section, P.O. Box: 1600 Sentrum, 0021 Oslo, Norway); and
  4. received by DNB no later than 12:00 noon Central European Time on 20 June 2022.
• 1. If you do not give an indication of how to vote on any resolution, the proxy will vote your shares in favour. The proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the Meeting. If you do not return a Voting Instruction Form within the deadline set out in note 4 above, neither DNB nor a proxy will exercise any rights to attend, speak and vote at the Meeting on your behalf in respect of the shares to which you are beneficially entitled.
• 1. In the case of a beneficial owner which is a company, the Voting Instruction Form must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company.
• 1. Any power of attorney or any other authority under which the Voting Instruction Form is signed (or a duly certified copy of such power or authority) must be included with the Voting Instruction Form.

Changes to Voting Instruction Form

1. To change your Voting Instructions simply submit a new Voting Instruction Form using the methods set out above. Note that the latest time for receipt of Voting Instruction Forms (see above) also apply in relation to amended instructions; any amended Voting Instruction Form received after such time will be disregarded.

2. If you submit more than one valid Voting Instruction Form, the appointment received last before the latest time for the receipt will take precedence.

Termination of Voting Instruction Form

• 1. In order to revoke a Voting Instruction Form you will need to inform DNB by sending a signed hard copy notice clearly stating your intention to revoke your Voting Instruction Form.
• 1. The revocation notice must be received by DNB no later than 12:00 noon Central European Time on 20 June 2022. If you attempt to revoke your Voting Instruction Form but the revocation is received after the time specified then your Voting Instruction Form will remain valid.

GENERAL MEETING VOTING INSTRUCTION FORM

AWILCO DRILLING PLC (the "Company")

Before completing this form, please read the explanatory notes.

(*Please complete in BLOCK CAPITALS)

I/We	_____________		(insert	name)*	of
________ (insert address)* being beneficially
entitled to ___ (insert number)* ordinary shares ("Voting Shares") of the
Company hereby instruct DNB Bank ASA in accordance with:

	Please indicate selected o with an 'X'
Voting Option A
Voting Option B

VOTING OPTION A

I/We instruct DNB ASA to appoint the following proxy:

Name:	____________(insert
name)*
Address:	____________(insert address)*

to vote in respect of the Voting Shares on the resolutions to be proposed at the General Meeting of the Company to be held on 22 June 2022 and at any adjournment thereof (the "Meeting") as I/we have indicated in the Voting Instructions below.

VOTING OPTION B

I/We instruct DNB Bank ASA to appoint a proxy of their choosing to vote, in respect of the Voting Shares on the resolutions to be proposed at the Meeting as I/we have indicated in the Voting Instructions below.

VOTING INSTRUCTIONS

I/We direct that any proxy appointed by DNB Bank ASA in respect of the Voting Shares vote on the following resolutions as I/we have indicated by marking the appropriate box with an 'X'. If no indication is given, such proxy will vote your shares in favour.

	ORDINARY RESOLUTIONS	For	Against	Vote Withheld
1.	To receive and adopt the Company's annual accounts for the financial year ended 31st December 2021, together with the directors' report and auditor's report on those accounts and including the balance sheet for the Company which has been prepared by the Company's directors and accountants dated 25 May 2022 (the "Balance Sheet"); and
2.	a. To re-appoint Mr Henrik A. Christensen as member of the Company's Nomination Committee.
	b. To re-appoint Mr Tom Furulund as member of the Company's Nomination Committee
3.	To approve the Directors' Remuneration Report, other than the part containing the Directors' Remuneration Policy, for the year ended 31 December 2021.
4.	To approve the Directors' Remuneration Policy as set out in Attachment 2.
5.	To approve the directors' remuneration up to an aggregate amount of £200,000 for the calendar year ended 31 December 2021.
6.	To approve the directors' proposition for remuneration for the Nomination Committee up to an aggregate amount of £6,500 for the calendar year ended 31 December 2021
7.	To re-appoint Ernst & Young, of Blenheim House, Fountainhall Road, Aberdeen, AB15 4DT, United Kingdom as the Company's auditors to hold office from the conclusion of this meeting until the conclusion of the next meeting at which accounts are laid before the Company.
8.	To authorise the directors to agree the remuneration of the auditors.
9.	To approve, in accordance with section 551 of the Companies Act 2006, that the directors be generally and unconditionally authorised to allot shares in the Company up to an aggregate nominal amount of £35,478 provided that this authority shall, unless renewed, varied or revoked by the Company, expire on the earlier of the date of the Company's next annual general meeting or 30 June 2023, save that the Company may, before such expiry, make an offer or agreement which would or might require shares to be allotted and the directors may allot shares in pursuance of such offer or agreement notwithstanding that the authority conferred by this resolution has expired.
10.	Conditional upon the passing of resolution 9 above, the directors of the Company be and they are hereby empowered to allot equity securities (as defined in section 560(1) of the Companies Act 2006) of the Company for cash pursuant to the authority conferred by resolution 10 above in accordance with section 551 of the Companies Act 2006, as if section 561(1) of the Companies Act 2006 did not apply to any such allotment, provided that this power shall expire on at the conclusion of the Company's next Annual General Meeting or 15 months after the date of the passing of this resolution.
SPECIAL RESOLUTIONS			Against	Vote Withheld
11.	To authorise a general meeting of the Company, other than an annual general meeting, to be called on not less than 14 clear days' notice.

Signature Date

……………………………………………………….. …………………………

Awilco Drilling PLC

Report and Financial Statements

31 December 2021

Directors

Sigurd Thorvildsen Henrik Fougner Daniel Gold John Simpson Synne Syrrist

Secretary

Burness Paull LLP, 50 Lothian Road Festival Square Edinburgh EH3 9WJ

Auditors

Ernst & Young LLP 4 th Floor 2 Marischal Square Broad Street Aberdeen AB10 1BL

Bankers

DNB Bank ASA 8 th Floor The Walbrook Building 25 Walbrook London EC4N 8AF

Registered Office

3 rd Floor 11 -12 St James's Square London SW1Y 4LB

Strategic report

Corporate Strategy and business model

Awilco Drilling PLC ('the Company')'s strategy is to create value through the provision of a quality, reliable and customer focused service to the mobile drilling rig market. The management team shall safely, efficiently and effectively deliver a high-quality service to customers, with a view to securing the most lucrative day rate contracts in conjunction with the highest achievable rig utilisation. The Company shall continue to evaluate opportunities which best complement its financial and operational aspirations.

During the year, the Company owned and operated two semi-submersible drilling rigs, the WilPhoenix and WilHunter, both standardised rigs used in the drilling of oil and gas wells and P&A work in the UK sector of the North Sea. The WilHunter has not worked since July 2015 and has been cold stacked in Invergordon since October 2016. The WilPhoenix completed a contract in October 2021 and has since been warm stacked in Invergordon prior to the sale of the rig.

Going Concern

Following the contractual arrangements to sell both rigs during Q2 2022, the Company is currently no longer performing operational activities. As a result of this, the financial statements have been prepared on a basis other than going concern. Cost saving measures have been initiated including reduction in headcount.

Principal activity

The principal activity of the Company and its subsidiaries ('the Group') prior to year-end was to operate the drilling rigs. During the year, the WilPhoenix was in drilling operations for its clients, Serica Energy and Ithaca Oil and Gas Energy. As noted above, since contractual arrangement to sell both rigs during Q2 2022, the principal activity of the Group is to continue the arbitration processes with Keppel FELS shipyard.

Business review and future developments

Following the disposal of both of the Company's drilling rigs, the Company is currently no longer performing operational activities. Although the main focus in the short term will be on the arbitration processes, minimising costs and thereby maximising returns to the shareholders, the Company shall also continue to evaluate new investment opportunities. If an attractive opportunity arises, which complements the Company's financial and operational aspirations, operations will resume once again.

Performance

The Group's financial performance during the year was as follows:

	2021	2020
	US\$000	US\$000
Revenue	33,077	25,602
Operating loss	(61,264)	(167,916)
Loss for the year attributable to equity shareholders	(72,229)	(167,857)
Operating loss margin %	(185%)	(656%)
Number of employees and contractors at year end	107	137

The total revenue for the year relates to contract income received from drilling operations. The increase is due to higher utilisation for the WilPhoenix compared with the prior year. The Group had rig operating expenses of US\$ 27.6 million (2020: US\$ 23.3 million) relating to rig operating costs included in cost of sales, which includes an impairment of onboard inventory of US\$ 3.0 million. General and administration expenses were US\$ 12.2 million (2020: US\$ 14.9 million). There was an impairment expense of US\$ 48.1 million (2020: US\$ 145.2 million). US\$ 47.3 million was rig impairment (including fleet capital spares), and US\$ 0.8 million in respect of right of use assets.

During the year, the key performance indicators (KPIs) set out below were reviewed on a regular basis by management and performance against them subsequently reported to the Board of Directors. Targets for the KPIs are set and, if performance falls short, the appropriate corrective action was implemented by management.

Business review and future developments (continued)

The Company's main financial KPIs were:

Revenue efficiency

Revenue efficiency is actual contract revenue earned in the period that active rigs are working, compared with the maximum daily contract revenue available, multiplied by the number of days worked in the contracted period. For the year ended 31 December 2021, the revenue efficiency was 92.9% (2020: 80.6%).

Operating margin

Operating margin is total revenue less operating costs. For the year ended 31 December 2021, operating margin was 185% loss. (2020: 656% loss). The improvement in margin is due to the increase in revenue during the year, decrease in general and administration expenses and the prior year included an impairment of new build assets.

The Company also has a number of operational KPIs that were used to manage the business on a day to day basis, some of which are detailed below:

Quality, Health, Safety and Environment (QHSE)

Total recordable incident rate (TRIR)	Number of incidents (lost time incident, restricted work case, medical treatment only) x 200,000 / Total number of man hours in the review period. Measured on a rolling 12-month basis.
Unplanned discharges	Items that have been discharged to sea not covered under PON 15 which relate to allowable items. Some examples are Blow out Preventor (BOP) control fluid and hydraulic oil that are reportable under PON 1.
	(PON - Petroleum Operations Notices)
Operations
Uptime	Total hours the rigs are working i.e. not on unplanned downtime / on contract time for the period.
Human Resources (HR)
Personnel turnover	Employee initiated leavers in the period as a percentage of total headcount (onshore and offshore) on a rolling 12-month basis.

Following the disposal of both of the Company's drilling rigs, the Company is currently no longer performing operational activities. In future, the principal KPIs will be in respect of maintaining an adequate cash buffer to meet the ongoing obligations of the Company. Should the Company enter into new business such that operating activities recommence, KPIs will be set appropriate to that activity.

Principal risks and uncertainties

The Company's primary risks during the year were those that impact utilisation rates for each of the rigs, QHSE issues associated with operations and exposure to liquidity, credit, and legal risk. Subsequent to year end, following the disposal of the rigs and no ongoing rig operations, the principal risks are now in respect of liquidity and legal risks.

QHSE(Quality, Health, Safety, Environment)

To mitigate any risk with regards to QHSE, the Group has in place a QHSE management plan which seeks to ensure that all operations are conducted within normal industry standards and procedures. The Group also seeks to ensure safe and efficient operations, with no accidents, injuries, environmental incidents or damage to assets. During the current Covid-19 outbreak, the Group is following industry guidelines to ensure the safety of the workforce.

Principal risks and uncertainties (continued)

QHSE(Quality, Health, Safety, Environment) (continued)

The Group achieved a high level of safety with no injuries or fatalities. There has been continued low frequency of dropped object and high potential incidents. The Corporate Annual QHSE objectives are implemented in departmental action plans. The zero total recordable incident rate (TRIR) reported in 2020 has been successfully maintained throughout 2021. There were no LTI incidents in 2021 and only a single first aid case. Our commitment to safe and reliable operations has seen this improvement and we continue to learn and improve. Post transfer of the rigs and termination of offshore personnel, this risk, in relation to operational activity, will no longer be considered relevant.

Liquidity

As described in Note 26 to the financial statements, the Group's objective is to maintain sufficient liquidity in order to support the needs of the business and meet liabilities as they fall due. The Group currently has no debt obligations and has obtained a shareholder loan facility to ensure an appropriate level of cash is available in the short to medium term. Further funding may be required in order to support the ongoing arbitration process.

Tax risks

The Company is committed to operating in a manner consistent with good industry practice and in accordance with all legislative requirements that are applicable in the different areas of jurisdiction in which it conducts business.

The Company has subsidiaries in other countries. Tax laws and regulations are highly complex and subject to interpretation. Consequently, the Company is subject to changing tax laws, treaties and regulations in and between countries in which it operates. The Company's tax expense is based upon its interpretation of the tax laws in effect in these countries at the time that the expense was incurred. A change in these tax laws, treaties or regulations or in the interpretation thereof, which is beyond the Company's control, could result in a materially higher tax expense or a higher effective tax rate on the Company's earnings.

For 2021, the effective tax rate ("ETR") for the Company was negative 14.7% (2020: 0.1% negative). The current and prior year are negative figure due to the loss before tax. There was a tax charge in the year as a result of the current year movement in unrecognised deferred tax asset, reversal of a prior deferred tax asset and recognition of a tax liability of the subsidiary, WilHunter (UK) Ltd of US\$ 9.2 million. This was following an unsuccessful tax tribunal appeal. WilHunter (UK) Ltd does not have sufficient funds to meet this liability and the subsidiary company is currently undergoing a creditors voluntary liquidation. Going forward, with limited anticipated revenue, the tax risk will be significantly reduced.

Legal risks

The Group values its reputation and aims to carry out business in a fair and open manner. Despite this the Group may become subject to claims during the course of its business. In the previous year, the vessel construction contracts for two semi-submersible drilling rigs being built in Singapore, were terminated, see Note 23. The Group's subsidiary companies have entered into arbitration with the rig construction company. The rig construction contracts were entered into on a non-recourse basis to the parent company or wider group. In order to mitigate any possible risk of cash outflow, the Group has established a dedicated team and has engaged specialist legal advisors to support the actions taken.

Corporate Social Responsibility

The Company recognises its duty to stakeholders to operate the business in an ethical and responsible manner. It is committed to developing its Corporate Social Responsibility (CSR) agenda, recognising that it can play a major part in its operations. This report does not contain information about any policies of the Company in relation to social community and human rights issues since it is not considered necessary for an understanding of the development, performance or position of the Company's business activities. During the year, when operational activities were being performed, the following core values were applicable:

Core Values

Simple is Best – Our systems and procedures shall be clear, concise and effective, ensuring we deliver on our promises.

Engagement – We will be a company of choice, valuing our work force, listening and responding to employees, clients and partners.

Efficiency – We will consistently meet our clients' expectations by providing competent people, reliable equipment and smart systems.

Flexibility – We will encourage challenge and creativity in order to deliver optimised performance and continuous improvement.

Performance – We will get it right first time; consistently delivering success.

Anti-bribery and corruption

The Company requires its employees to observe the highest standards of business and personal ethics in the conduct of their duties and responsibilities. The Company has a specific Anti-Bribery and Corruption policy to ensure compliance with all applicable anti-bribery and corruption regulations and to ensure the Company's business is conducted in a socially responsible manner. A risk assessment is undertaken by the senior members of the Company as part of the quarterly review of the Company's risk register.

Policy

The Company's employment policies and procedures are described in detail in the Staff Handbook, which is available to all employees via the Business Management System (BMS). The Company's Code of Conduct – Values and Ethics document sets out the basic principles to guide all employees and officers of the Company on how they must conduct themselves to seek to avoid even the appearance of improper behaviour. To help ensure compliance, the Company requires that employees, officers and directors review the policy and acknowledge their understanding and adherence in writing on an annual basis.

Equal opportunities and diversity

The Company is committed to equal opportunities and treats all employees with respect and dignity and ensures that decisions are taken without reference to irrelevant or discriminatory criteria. The Company does not tolerate any form of unlawful discrimination and is committed to promoting equality of opportunity and diversity for all personnel and will address any unlawful discrimination in every aspect of its operations.

As at 31 December 2021, the number of directors and employees was as follows:

	Male	Female
Directors	4	1
Senior Managers	3	-
Other staff – onshore	10	8
Other staff – offshore	86	-

Health and Wellbeing

It is important to the Company that it supports its employees in their health and wellbeing. The Company operates a flexible benefit scheme that is available to all members of staff and includes benefits such as leisure club membership, private medical and dental insurance, a health screening service and an Employee Assistance Programme. The Company has also achieved the Silver Healthy Working Lives Award. During the Covid-19 pandemic, where possible, all onshore employees were required to work from home in accordance with government guidance. Employees were encouraged to ensure they had adequate resources available, and support was offered where necessary.

Absence Management

The Group has an established absence management procedure, to support employees during periods of sickness absence whilst ensuring the efficient and effective running of the organisation.

	2021	2020
Group sick leave (as a percentage of total hours worked)	2.0%	1.7%

Health, Safety and Environment

The Company recognises that it is has a corporate responsibility to carry out its operations in an ethical and responsible manner whilst minimising its impact on the environment. The Company upholds the relevant standards and retains its ISO14001 certification. ISO14001 is an internationally recognised environmental management system (EMS) standard, providing a model for companies to follow to create and achieve their policy. Focusing on the issues that really matter, it is designed to help companies achieve consistent environmental regulatory compliance whilst embedding the concept of continuous improvements in environmental performance. ISO14001 is a widespread benchmark for thousands of organisations around the world that want to communicate to the public and stakeholders that they are environmentally responsible. Additionally, the Company has achieved ISO 45001 certification following on from its previous BS OHSAS 18001 certification. This is an internationally applied Standard for occupational health and safety management systems. It exists to help organisations put in place demonstrably sound best practices by providing a framework for procedures and controls needed by the Company to achieve the best possible working conditions and workplace health and safety by eliminating hazards and minimize health and safety risks.

Section 172

The Board of Directors have taken account of stakeholder views when making key decisions that impact the company and its stakeholders. The following matrix provides some examples of how, during the year, consideration was given to key stakeholders, being employees, investors, customers, suppliers, regulators and society in general. In the future, if activity is not increased again, many of these issues may no longer be relevant.

Stakeholder	Strategic Issue	Engagement	Outcome	Key Decision
Employees	Fair compensation and benefits package for employees	Market analysis is performed to ensure compensation levels are competitive in prevailing market. See also commitment expressed by the Board in respect of "Health and Wellbeing" of employees on this page.	Pay levels for existing and new employees were considered to be fair and competitive within the industry.	Changes in compensation levels are proposed by the Remuneration Committee to the Board.

Section 172 (continued)

Stakeholder	Strategic Issue	Engagement	Outcome	Key Decision
Investors	Continue to seek growth opportunities that offer attractive returns to investors	Information is shared with investors in the form of quarterly and annual financial reports and press release disclosures are required. Additionally, quarterly presentations held and available on the Company website. Regular one to one investor meetings are also held.	No new outcomes in respect of investment opportunities at this time.	Quarterly and annual financial reports are reviewed and approved by the Board. Termination of new build programme and cost savings initiated in respect of Norwegian shorebase. WilPhoenix rig was warm stacked in Invergordon whilst future options for the rig were considered. This resulted in headcount cost reduction. WilHunter recycling process was commenced.
Customers	Customer Satisfaction	As part of the company's procedures to ensure customers are satisfied with performance and delivery of services contracted, the customers are requested to provide feedback on a variety of areas to ensure the company is performing in accordance with, or better than, customer expectations.	Customer surveys feedback is part of the company KPIs and scoring in this area has been more than satisfactory during the course of the year.	Directors agree key performance indicators with Management and monitor performance against KPIs during the course of the year. Results impact employee bonus awards at year end.

Stakeholder	Strategic Issue	Engagement	Outcome	Key Decision
Suppliers	Selection of key suppliers and high-level purchases. Ensure that vendors are paid on a timely manner.	Suppliers invited to tender and purchasing procedures require fair and transparent selection of vendors. Refer also paragraph on Investment Appraisal" on page 19 of the annual report.	Policies, procedures and scrutiny by the Board ensures vendor selection criteria is a robust process.	Board involved in selection of key vendors and Board approve the approval matrix on a regular basis. Any approvals above the matrix levels require Board approval. A Board member and chair of the Audit Committee approves the published payment practices report filed every six months.
Regulators	Accreditation and compliance with regulatory standards.	Details of standards achieved are detailed under "Health, Safety and Environment" on page 6 of the annual report.	Achievement and continued certification of compliance through external HSE audits ensures company operates at, or above, the standards required by the regulatory bodies that govern the industry.	The Board approves the direction followed by the CEO and management in pursuit of necessary accreditation and standards.
Society	Minimising harm to the environment in operational performance of the fleet.	KPIs are established to measure if any adverse consequence to the environment within the control of the company.	Achievement and compliance with environmental sustainability.	Operational KPIs are also reviewed on a regular basis by the Board.

Directors' report

Registered No. 7114196

The Directors present their report and financial statements for the year ended 31 December 2021. These financial statements have been prepared under UK-adopted International Accounting Standards (UKadopted IAS) and International Financial Reporting Standards as adopted by the European Union (EU adopted IFRS) as it applies to annual periods beginning 1 January 2021.

Results and dividends

The loss after taxation for the year amounted to US\$ 72.2 million (2020: US\$ 167.9 million loss). There were no dividends paid during the year. (2020: nil)

Future developments

See Strategic Report pages 2-8.

Directors

The directors who served the Company during the year were as follows:

Sigurd Thorvildsen Henrik Fougner Daniel Gold John Simpson Synne Syrrist

Financial instruments

The Group's financial risk management objectives and policies are discussed further in Note 26 on pages 71-73 of the financial statements.

Directors' liability

The Company insures its directors and officers against liability in respect of proceedings brought by third parties, subject to the conditions set out in the UK Companies Act 2006.

Directors and their interests

None of the directors listed above had any direct interest in the Company's shares.

Major interest in shares

The Company has been notified of the following interests representing 3% or more of the issued ordinary share capital of the Company as at 25 May 2022.

	No of shares	Percentage holding
Awilhelmsen Offshore AS	20,240,814	37.1%
Pershing LLC	11,089,012	20.3%
Akastor AS	3,049,673	5.6%
Euroclear Bank S.A. / N.V.	2,141,616	3.9%
Skandinaviska Enskilda Banken	2,000,000	3.7%
Citibank N.A.	1,834,536	3.4%

QVT Financial LP with affiliated and related parties owned 5,369,401 shares at 25 May 2022, a total of 9.8% of the Company's share capital.

FVP Master Fund LP with affiliated and related parties owned 10,817,527 shares at 25 May 2022 a total of 19.8% of the Company's share capital and has not notified the Company of any changes of ownership up to the date of signing the report and financial statements.

Directors' report (continued)

Corporate governance

The information given in the corporate governance statement is set out on pages 14-20.

Going concern

As noted in the Strategic report, the Group is currently no longer performing operational activities. Accordingly, the financial statements have been prepared on a basis other than going concern.

Asset impairment consideration

Management has performed an impairment test which resulted in an impairment of US\$ 47.3 million at year end. The valuation of the rig is based upon the fair value less cost to sell, and the final agreed selling price between both parties.

Greenhouse gas emissions

The Company's greenhouse gas emissions are categorised between two categories: direct emissions (from rig power generation and loss of refrigerants) and indirect emissions (from purchased electricity for onshore offices). All figures reported are in relation to energy consumed in the United Kingdom and offshore area.

All emissions from the facilities over which the Company has direct operational control were included. The Companies Act 2006 requires reporting on the following greenhouse gases:

• Carbon dioxide ("CO2");
• Methane ("CH4");
• Nitrous Oxide ("N2O");
• Hydrofluorocarbons ("HFCs");
• Perfluorocarbons ("PFCs"); and
• Sulphur Hexafluoride ("SF6").

PFCs and SF6 are not emitted, and therefore not considered in this report.

Greenhouse gas emissions are reported in tonnes (t) carbon dioxide equivalents ("CO2e"). Calculations are performed using the emission factors and global warming potential for each chemical compound, which are in accordance with the current guidance from the UK Government GHG Conversion Factors for Company Reporting 2021. The 2021 annual CO2e emitted from operations was 6,977 t.

For the year ended 31 December 2021, the estimated carbon dioxide equivalent ("CO2e") gas emissions were 6,489 tonnes as compared to 5,651 tonnes for the year ended 31 December 2020. When expressed as an intensity measure of tonnes of CO2e gas emissions per days of contract from operations, the intensity measure for 31 December 2021 was 18.5 tonnes, changes in the previous year's disclosures is due to the changes of the operational context of the unit. Reduction in indirect emissions is largely due to reduced occupancy of the office due to the global pandemic.

There were 35kg of accumulated refrigerant losses during 2021 equivalent to 102.0 tonnes of CO2e.

Directors' report (continued)

Greenhouse gas emissions (continued)

Greenhouse Gas Emissions	2021	2020
Direct emissions (owned rigs)	6,849	5,651
Indirect emissions (onshore offices)	26	31
Refrigerant emissions (offshore only)	102.0	230.5
Total emissions (CO2c)	6,977	5,912.5
Direct CH4 emissions (owned rigs)	1.7	1.4
Direct N2O emissions (owned rigs)	91.2	76.1

The Company's aim is to work on improving environmental sustainability by reducing the carbon footprint, eliminating waste, recycling and using alternative energy sources where possible. As the Company holds an ISO 14001 accredited Environmental Managements System (EMS) this has already identified the risks to biodiversity the Company's activities may pose. The disposal of drill cutting was identified as the most significant risk to biodiversity. During 2021, zero drill cuttings were disposed to the environment from operations.

Assessment of Climate Change Impact

As a result of rig disposals, the Company is currently no longer performing operational activities so has no significant climate change impact to consider. The responsibility for minimising environmental impact in relation to the disposal of rigs has passed to the buyer.

Stakeholder relationships

The Directors recognise that business relationships with all stakeholders is beneficial to the well-being of the organisation. Feedback in terms of relationships with suppliers, customers, investors is discussed with management at board meetings.

Disclosure of information to the auditors

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information, being information needed by the auditor in connection with preparing its report, of which the auditor is unaware. Having made enquiries of fellow directors and the Company's auditor, each director has taken all the steps that they are obliged to take as a director in order to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

Responsibility statement

The directors confirm, to the best of their knowledge:

• That the consolidated financial statements, prepared under UK-adopted International Accounting Standards (UK-adopted IAS) and International Financial Reporting Standards as adopted by the European Union (EU adopted IFRS) as it applies to annual periods beginning 1 January 2021, give a true and fair view of the assets, liabilities, financial position, and profit of the parent company and undertaking included in the consolidation taken as a whole;
• That the annual report, including the strategic report, includes a fair review of the development and performance of the business, and the position of the company and undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face: and.
• That they consider the annual report, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the company's position, performance, business model and strategy.

Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statement in accordance with applicable United Kingdom law and regulation.

Company Law requires the directors to prepare financial statements for each financial year. Under that law, the directors have prepared the Group financial statements in accordance with UK adopted international accounting standards (UK-adopted IAS) and International Financial Reporting Standards (IFRS) as adopted by the European Union and have prepared the Company financial statements in accordance with UKadopted IAS, as applied in accordance with section 408 of the Companies Act 2006.

Under Company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of the group and the company for that period.

In preparing these financial statements, the directors are required to:

• select suitable accounting policies in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
• present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
• provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the group's financial position and financial performance;
• in respect of the group financial statements, state whether UK adopted international accounting standards (UK-adopted IAS) and International Financial Reporting Standards (IFRS) as adopted by the European Union have been followed, subject to any material departures disclosed and explained in the financial statements;
• in respect of the parent company financial statements, UK-adopted IAS, as applied in accordance with section 408 of the Companies Act 2006 have been followed, subject to any material departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company and / or the group will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's and group's transactions and disclose with reasonable accuracy at any time the financial position of the group and the company and enable them to ensure that its financial statements comply with the Companies Act 2006.

They are also responsible for safeguarding the assets of the group and parent company and group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the directors are also responsible for preparing a strategic report, directors' report, directors' remuneration report and corporate governance statement that comply with that law and those regulations. The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website.

Corporate governance

Awilco Drilling PLC is committed to maintaining high standards of corporate governance.

The Company is listed on the Oslo Bors stock exchange. The Company has adopted the Norwegian Code of Practice for Corporate Governance of 14 October 2021 ('the Code'). A copy of the code can be found at www.nues.no

Adherence to the Code is based on a "comply or explain" principle, whereby companies are expected to comply with the recommendations or explain why they have chosen an alternative approach. Below is a summary of the departures from the Code with an explanation of how the Company's actual practices contribute to good corporate governance.

Code of Practice Compliance

The Company is required to state how it has applied the principles set out in Section 1 of the Code and which relate to its directors, remuneration, accountability and audit and relations with shareholders.

As of the date of this report, the Company is in compliance with the Code, except in relation to the following matters:

• Business the Company's Articles of Association do not specifically define the Company's business. The Company is incorporated in England & Wales and this is in line with standard practice for a UK registered company. An overview of the Company's business can be found in this report.
• Equity and dividends the authorisation given to undertake share capital increases has not been restricted to defined purposes, due to the scope of the Company's business. This is normal practice for a UK registered company.
• Auditor the Auditor is not present during the Board meeting that considers the annual accounts; but the Auditor attends all Audit Committee meetings including discussions related to the Annual Report and financial statements.
• Corporate Assembly the Company does not have a Corporate Assembly.

Business

During the year, the Company's principal business was to own offshore drilling rigs for use in offshore drilling operations, and to provide drilling services for oil and gas companies using these rigs. This was an intricate business which involved complex assets and high value equipment, and which required specialised and trained personnel to operate them efficiently and safely.

Further information about the Company's vision, mission and strategy statements is available in the Strategic Report.

Equity and dividends

Full details of the shares issued are detailed in Note 24. The Company considers its equity to be at a level appropriate to the Company's objectives, strategies, cash flow projections and risk profile.

As the Company is currently no longer performing operational activities, there will be no dividends distributed arising from operational activity.

Equal treatment of shareholders

All issued shares of the Company are vested with equal shareholder rights in all respects. There is only one class of shares. The Articles of Association place no restrictions on voting rights. Each share represents one vote at the Company's General Meetings.

Equal opportunities and diversity

The Company is committed to ensuring that all employees are treated with respect and dignity and to ensure that decisions are taken without reference to irrelevant or discriminatory criteria. The Company will not tolerate any form of unlawful discrimination and is committed to promoting equality of opportunity and address unlawful discrimination in every aspect of its operations. The Company takes every possible step to ensure that decisions on recruitment, selection, training, conditions of work, pay and benefits, promotion, career, management, and every other aspect of employment are justifiable and based solely on objective criteria. During the year, there have been no incidents of non-compliance with this policy.

Transactions with close associates

The Company has entered into the agreements listed below with the following parties:

• A management agreement with Awilhelmsen Management AS (AWM) for corporate services;
• Management-for-hire contracts for personnel from the Awilhelmsen Group.

Awilhelmsen Offshore AS owns 37.1% of the ordinary shares in Awilco Drilling PLC.

Freely negotiable shares

The shares of the Company are freely negotiable.

Going concern

The Board regularly review the Company's financial projections to ensure resources are available to meet operational requirements and takes appropriate action if judged necessary. The Board shall continue to consider future opportunities and take the necessary action as required. However, at this current time, following the cessation of operational activity, these financial statements have been prepared on a basis other than going concern.

General Meetings

All shareholders of the Company are entitled to attend the general meetings of the Company. The Annual General Meeting (AGM) is to be held no later than 30 June each year. Notification for meetings are sent out at least 21 days in advance. The notice includes a reference to the Company's website where the notice for the General Meeting and other supporting documents required to allow shareholders to form a view on all matters to be considered at the meeting are made available. The deadline for registration is normally set two working days before the General Meeting, to ensure shareholders have as much time as possible to register. If a shareholder cannot attend a meeting in person it is possible to vote through proxy.

The minutes from the General Meetings are published on the Company's website www.awilcodrilling.com

The next AGM is scheduled for 22 June 2022.

The Board of Directors

The Board considers that it is vital to ensure that there is an appropriate range of skills, knowledge and experience among its members, and that the objectivity and integrity of members should be exemplary. The Board currently consists of five non-executive Directors including the Chairman. The Board believes that the structure and size of the Board is appropriate and that no single individual or group dominates the decision making process. The names, skills, experience and expertise of each Director are shown in the Board of Directors section of the Company's website at www.awilcodrilling.com

The main responsibilities of the Board include but are not limited to:

• providing strategic direction for the Company;
• overseeing the Company's systems of internal control, governance and risk management;
• evaluating the performance of executive management; and
• monitoring and facilitating the activities of the Audit and Remuneration Committees.

Management is delegated the task of the detailed planning and implementation of the Company's strategy.

Directors receive timely, regular and appropriate management information to enable them to fulfil their duties and have access to the advice of the Company Secretary. The Board has agreed guidelines for Directors to obtain independent professional advice, if they seek it, at the Company's expense.

The Company has in place directors' and officers' liability insurance.

The Board includes two independent non-executive directors (John Simpson and Synne Syrrist) and three non-independent non-executive directors (Sigurd Thorvildsen, Henrik Fougner and Daniel Gold). All the non-executive Board members are viewed as being free from any relationship with the executive management which could result in any conflict or affect their judgement. None of the non-executive directors participates in the share option schemes or long-term incentive plan operated by the Company, and none are dependent on the fees received from the Company as their primary source of income.

Board Performance

The Board completes an annual process to evaluate the effectiveness of Board Committees and individual directors and has confirmed that it is satisfied that it and its Committees are operating effectively.

The performance of the Chief Executive Officer ("CEO") is reviewed annually by the Remuneration Committee in conjunction with his annual pay review and the payment of bonuses.

Directors are elected by shareholders at the first annual general meeting after their appointment and, after that, offer themselves for re-election by a vote of shareholders at least once every two years.

The Board of Directors (continued)

Meetings and attendance

Board meetings are scheduled to be held at least five times a year, linked to key events in the Company's corporate reporting calendar. Additional ad-hoc meetings are held when deemed necessary.

It is expected that all directors attend Board and relevant committee meetings, unless they are prevented from doing so by prior commitments or travel restrictions. If directors are unable to attend meetings, they are given the opportunity to be consulted and comment in advance of the meeting.

Board Committees

The Board has established an Audit Committee, Remuneration Committee and a Nomination Committee. The Audit Committee and Nomination Committee have formal terms of reference governing their method of operation which reflect the provisions of the Code and which have been approved by the Board.

Audit Committee

The Audit Committee was chaired during the year by John Simpson and the other member of the Committee is Henrik Fougner. Only John Simpson is considered to be independent by the Board, which is acknowledged in the terms of reference of the Audit Committee. The Board is satisfied that John Simpson has recent and relevant financial experience, as the former CEO of Den norske Bank (now DNB Bank) in London and Regional Director for DNB's Asia-Pacific operations. Mr. Simpson is currently a director of Marine Capital Limited, as UK asset manager and classed as an approved person by the UK FCA. He has chaired audit committees of UK listed companies and public bodies since 1996.

The role of the Audit Committee is to ensure the integrity of the financial statements of the Company, including its annual and quarterly reports, preliminary results' announcements and any other formal announcements relating to its financial performance. It is responsible for reviewing the Company's internal financial control and risk management systems, advising the Board on the appointment of external auditors, overseeing the relationship with external auditors, reviewing the Company's whistleblowing procedures and considering the need for an internal audit function.

The Audit Committee monitors the relationship with the Company's external auditors relating to the provision of non-audit services to ensure auditor objectivity and independence is safeguarded. The Company will award non-audit work to the firm which provides the best commercial solution for the work in question taking into account the skills and experience of the firm involved and the fees payable for the work. In considering whether to award such work to the external auditors, attention is paid to the level of fees for non-audit services relative to the amounts of the audit fee and whether there are safeguards in place to mitigate to an acceptable level any threat to objectivity and independence in the conduct of the audit resulting from the provision of such services.

There is an opportunity at each meeting for the Audit Committee to discuss matters privately with the external auditors without any members of the executive management team present. In addition, the Chairman of the Committee is in regular contact with the external audit partner to discuss matters relevant to the Company.

The Audit Committee have also been extensively involved in ensuring the appropriate disclosures regarding Going Concern have been included in the financial statements.

Remuneration Committee

The Remuneration Committee was chaired during the year by Sigurd Thorvildsen and the other members of the Committee are Daniel Gold and Henrik Fougner.

The role of the Remuneration Committee is to establish and develop the remuneration policy for the Company's executives and key management and to determine a specific remuneration package for the CEO. No director or employee is involved in deciding their own remuneration. The Committee also approves all employee pay review proposals.

Details of the Company's policy on remuneration, service contracts and compensation payments are set out in the Director's remuneration report.

The Board of Directors (continued)

Nomination Committee

The members of the Nomination Committee are Henrik Christensen and Tom Furulund.

The role of the Nomination Committee is to present a recommendation to the general meetings concerning directors to be elected by shareholders and the level of directors' fees. The Nomination Committee shall also present recommendations to the general meetings regarding nomination of members to the Nomination Committee and concerning fees for the members of the Nomination Committee.

The table below shows the frequency and attendance of directors and other members at Board and Committee meetings during 2021.

	Board Meetings	Remuneration Committee	Audit Committee	Nomination Committee
No of meetings in year
Sigurd Thorvildsen	9		-	-
Henrik Fougner	10		3	-
Daniel Gold	9		-	-
John Simpson	10	-	3	-
Synne Syrrist	10	-	-	-
Henrik Christensen (1)	-	-	-	4
Tom Furulund (1)	-	-	-	4

(1) Not members of the Board but members of the Nomination Committee only

Internal controls and risk management

The Board acknowledges its responsibility for establishing and maintaining adequate internal controls and risk management systems to safeguard shareholders' investments and the Company's assets and performs an annual review of these areas. Such systems can only be designed to manage, and not to eliminate, the risk of failure to achieve business objectives. They can provide reasonable, but not absolute, assurance that the Company's assets are safeguarded and that the financial information used within the business for external reporting is reliable.

Operational and business activity risks

The Company's operational and business activity risks are controlled and mitigated by the implementation and use of its Business Management System (BMS). The Company's offshore activity risk is further controlled by the implementation and use of its Safety and Environmental Management System which is incorporated in the BMS.

Information and financial reporting systems

The Company's comprehensive planning and financial reporting procedures include annual detailed operational budgets which are reviewed and approved by the Board. Performance against budget is monitored throughout the year, through monthly reporting of management accounts and key performance indicators. The Board receives updated cash flow statements on a monthly basis and at each Board meeting and has close follow-up discussions with the management between meetings as required.

Internal controls and risk management (continued)

With a centralised financial reporting system, transactions and balances are recognised and measured in accordance with prescribed accounting policies, and all relevant information is appropriately reviewed and reconciled as part of the reporting process.

Investment appraisal

There are clearly defined evaluation and approval processes for acquisitions and disposals, capital items and major expenditure. These include escalating levels of authority and post-completion reviews of all major projects to compare the actual outcome with the original plan. Certain transactions are reserved for approval by the Board and limits of delegated responsibility and areas of authority have been identified for employees.

External audit

The Audit Committee reports to the Board on matters discussed with the auditors during the course of the statutory audit.

Takeovers

The Company has adopted guidelines in relation to takeover bids. The guiding principles of the Board in a take-over situation will be to seek the best value for and the equal treatment of all shareholders. The Board recognises that the decision whether to accept or reject an offer lies with the shareholders and will refrain from any actions which may deny shareholders this choice. The Board will seek to provide shareholders with a recommendation as to whether shareholders should or should not accept an offer. This includes seeking external advice on valuation when appropriate. Any transaction that is in effect a disposal of the Company's activities will be submitted to a General Meeting for its approval. As the Company is incorporated in England and Wales and listed in Norway, any takeover bid for the Company would be governed by aspects of both English law and Norwegian law and regulations in accordance with the EU Takeover Directive.

Communication with shareholders

The Company is committed to maintain the highest of standards of disclosure ensuring that all investors and potential investors have the same access to high quality, relevant information in an accessible and timely manner to assist them in making informed decisions. The Investor Relations Department manages the flow of information to all investors and potential investors and regular presentations take place at the time of the quarterly results as well as during the rest of the year.

Any concerns raised by a shareholder in relation to the Company and its affairs are communicated to the Board.

The Company maintains a website which provides up-to-date, detailed information on the Company's operations, which includes a dedicated investor relations section. All Company announcements are available on the website, as are copies of slides used for presentations to investment analysts.

Shareholders will have the opportunity at the forthcoming AGM to put questions to the Board, including the Chairmen of the various Committees.

Remuneration of the Board of Directors

The Company operates in a highly competitive market and must attract, motivate and retain high quality directors capable of achieving the Company's objectives and thereby enhancing shareholder value.

The non-executive Board members receive annual remuneration, based on the Board's responsibilities, expertise, time invested and the complexity of the business. Their remuneration is not linked to the Company's performance.

The remuneration of the Board is disclosed in the Director's Remuneration Report on pages 21-34 of this report. None of the Board members have had any additional assignments for the Company and none of the non-executives participate in any incentive or share option programme.

Introduction

The Company's CEO is not an Executive Director of the Company but under UK company law, there is a requirement for quoted companies to treat the Chief Executive Officer, for the purposes of certain remuneration-related requirements, as if that person were a director of that quoted company. The current CEO was appointed following a proposal from the Board of Directors after the resignation of the previous CEO, acting on an interim basis. His services are provided to the Company under a management on hire agreement from a related party. The rates are per the management on hire agreement, which is currently NOK 2,751 per hour, and billing is based on an hours worked basis. This rate was not subject to review by the renumeration committee or approval by shareholders. The following remuneration report sets out the policy in respect of the components of remuneration which any future CEO employed directly by the company would receive.

Process for setting the Remuneration Policy

The Remuneration Committee (the "Committee") sets the remuneration policy based on the principles and framework outlined below. The Committee is briefed on and considers prevailing market conditions, the competitive environments and the positioning and relativities of pay and employment conditions across the wider Company workforce.

Following each meeting of the Committee, the Chair provides an update to the Board.

Although the Committee does not consult directly with employees on CEO or director remuneration, the Company conducts periodic employee engagement surveys that give employees an opportunity to provide feedback on a wide range of employee matters.

As part of the Company's commitment to good governance, the Committee also considers shareholder views when setting the remuneration policy. Feedback from shareholders and investors is shared with, and used as input into decision-making by, the Board and Committee in respect of the remuneration policy and its application. The Committee considers that this approach provides a robust mechanism to ensure its members are aware of matters raised, have a good understanding of current shareholders views, and can determine the Company's remuneration policy and make decisions as appropriate.

The remuneration policy is designed to avoid conflicts of interests between the Company and the interests of shareholders. In setting the remuneration policy, Committee members are subject to provisions designed to avoid or manage conflicts of interest, which are documented separately in the Company's compliance policies. None of the directors or CEO makes a decision relating to their own remuneration. Individual directors leave the meeting when their own remuneration is being discussed.

Remuneration policy

The Company operates in a highly competitive market and must attract, motivate and retain high quality directors and senior executives capable of achieving the Company's objectives and thereby enhancing shareholder value.

A significant proportion of the potential remuneration of the CEO and senior executives is performancerelated with appropriately stretching targets, thus aligning their interests with those of shareholders and encouraging performance at the highest levels.

The Committee has considered whether there are any aspects of the remuneration policy which could inadvertently encourage the executives to take inappropriate risk and has concluded that the policy remains appropriate in this regard.

How the views of employees are taken into account

As referred to above, the Company, in line with market practice, does not actively consult with employees on executive remuneration. The Committee is made aware of overall pay and employment conditions in the wider work force when it sets the executive remuneration policy.

How the views of shareholders are taken into account

As referred to above, the Committee takes into account the view of the shareholders through open and transparent communication with shareholders. If there are significant changes proposed to the remuneration policy, the Committee will consult with major shareholders.

Remuneration Policy Table – Executive Directors and CEO

The table below summarises the remuneration policy for any Executive Directors and any future CEO employed directly by the Company.

Element	Purpose	Operation	Opportunity	Performance Measure
Annual Salary	To attract and retain key individuals and reflect their responsibilities, market value and expected performance level	Reviewed annually or when a change in responsibility occurs	There is no maximum salary opportunity	Not applicable
Benefits	To provide a market competitive reward package to the employee	Benefits to be provided to Executive Directors or the CEO will be determined by the Committee taking into account such factors as it determines to be necessary, with the aim of creating a competitive overall package. The provision of benefits would not be expected to be performance related.	Car allowance is a fixed annual amount. There is no maximum for health/dental insurance as it will depend on the value of premiums paid in the year	Not applicable
	Benefits may include, but are not limited to:
		➢ Car allowance ➢ Private health care ➢ Travel and housing allowance Benefits may also be provided to reflect the jurisdiction in which an Executive Director or the CEO is recruited or to which an Executive Director or CEO is relocated for business reasons, including relocation costs, tax equalisation arrangements and arrangements to take into account exchange rates. Benefits may also include participation in any broad-based incentive plan operated by the Company from time to time, up to the relevant limit for participation as applies to such arrangement

	Directors' remuneration report		(continued)
--	--------------------------------	--	-------------

Element	Purpose	Operation	Opportunity	Performance Measure
Performance related bonus	To provide an incentive for superior work and to motivate executives toward even higher achievement and business results, to tie their goals and interests to those of the Company and its shareholders and to enable the Company to attract and retain highly qualified executives	Bonus payments are determined by the Remuneration Committee and awarded where justified by performance	The amount of bonus increases with the level of performance achieved, up to a maximum of 100% of salary	Annual bonuses will be determined by reference to performance, in the normal course measured over one financial year. The performance measures, weightings and targets for the annual bonus will be set by the Committee on an annual basis The Committee shall have discretion to determine the terms and level at which annual bonuses may be granted, including the minimum performance required for an annual bonus to be payable In respect of an Executive Directors' or CEO's participation in annual bonus arrangements in any year, the Committee will have power to amend performance measures and targets after they have been set if events happen that mean they are no longer a fair test of performance

Element	Purpose	Operation Opportunity		Performance Measure
Pension	To provide a market competitive long-term retirement benefit	Eligibility to participate in a Defined Contribution scheme which has a maximum employer contribution of 12%	Up to 12% of salary	Not applicable
Long Term Incentive Plan (LTIP)	To motivate and incentivise executives to achieve key long term incentives	The Company has operated a historic LTIP arrangement for the former CEO with all awards being synthetic share options which are cash-settled	Award of up to 100% of salary each calendar year	The awards are made at the discretion of the Board of Directors and are not guaranteed to be awarded each year
		In the event that the Company adopts a new long-term incentive plan (which may involve synthetic share options, cash or actual shares), the CEO would be eligible to participate in such plan, subject to the terms of, and the maximum levels of participation provided in, the rules of such plan.
		In respect of any performance-related long-term awards granted to the CEO, performance measures, weightings and targets would be set by the Committee
		Following grant of an award, the Committee would have power to amend performance measures and targets if events happen that mean they are no longer a fair test of performance
		The 2020 plan "vests" in 25% tranches linked to rig contract dates and expires after five years.

Notes to the Remuneration Policy Table

In considering the appropriate measures to apply to any performance-based awards, the Committee will seek to incentivise and reinforce delivery of the Company's strategic objectives achieving a balance between delivering annual returns to shareholders and ensuring long-term profitability and growth.

The performance targets set would be stretching and achievable, taking into account the Company's strategic priorities and the economic environment in which the Company operates.

Statement of consideration of employment conditions elsewhere in the Company

The Company's remuneration policies and practices are founded on a high degree of alignment and consistency across the organisation. Accordingly, remuneration for senior management is determined taking into account the remuneration principles that apply to the CEO, and similar principles also form the basis of the remuneration arrangements for the wider workforce.

The approach to salary reviews is consistent across the Company, with consideration given to the scope of the role, responsibility, individual performance and pay levels in the selected peer group. Retirement benefits, typically in the form of a pension, are provided based on local market practice. Other benefits provided to the wider employee population reflect local market practice and legislative requirements.

A high proportion of the wider employee population are eligible to participate in annual bonus arrangements. Opportunities and metrics which apply to these arrangements may vary by organisational level with functional performance indicators incorporated where appropriate.

Senior managers are eligible to participate in the LTIP, with opportunities varying across levels with the most senior managers having a bigger portion of their pay delivered under the LTIP.

The key difference between remuneration for the CEO and the wider employee population is the increased emphasis on long-term performance in respect of the CEO, with a greater percentage of their total remuneration being performance-related.

The Committee is regularly updated on the pay principles and practices in operation across the Company, in order to take these into account in setting the remuneration policy.

Other matters

In addition to the above, the Company is obliged to honour any contractual entitlement to compensation or benefits, and any incentive awards, which are held by: (i) any current or former Executive Director or CEO on the effective date of this policy; or (ii) an employee or officer of the Group on the date they are promoted to the role of Executive Director or CEO. Appropriate disclosure will be made of any compensation paid (or similar) to an Executive Director or CEO pursuant to any such arrangements.

The Company may reimburse all reasonable expenses incurred by an Executive Director or CEO in connection with their role. This will include expenses in attending Board or Board-committee meetings, or the Company may alternatively provide a travel allowance for such purpose. This may also include items which, for tax purposes, are treated as a taxable benefit, and in which case the Company may also pay any such tax on behalf of the Executive Director or CEO.

Approach to recruitment and promotions

In recruiting an Executive Director or CEO, including on promotion of an employee or officer from within the Group to the role of CEO, the Committee will offer the recruit a remuneration package that it believes is appropriate, taking into account the skills and experience of the individual and the need to recruit, retain and motivate individuals of the appropriate calibre. The remuneration package offered may include the components of remuneration described above in the Remuneration Policy Table.

For external hires, the Committee may determine that it would be appropriate to buy-out any existing incentive awards held by the individual that are forfeited as a result of the individual leaving their former employer. The Committee may also determine that it would be appropriate to grant recruitment-related awards. In the case of any buy-out of an equity based award, or the grant of any recruitment-related award, the award would normally be subject to such vesting and/or performance conditions as the Committee determines to be appropriate, either under a one-off arrangement or under the terms of the Company's incentive arrangements. In determining the terms of such awards, the Committee will take account of the vesting schedule and conditions attached to the forfeited awards (in the case of buy-out awards), but also other factors that it determines to be relevant, including the need to incentivise suitably and retain the individual during the initial years of their office.

The maximum level of variable remuneration (excluding any buy-out awards) that may be granted to any new Executive Director or CEO is 250% per annum of their salary.

Service contracts

The employment contract of the CEO is not of a fixed duration and therefore has no unexpired terms.

The notice period of the CEO's contract of employment is six months with the same notice period for the Company. The CEO's employment can be terminated in the six-month probationary period without notice in the case of wilful misconduct or gross negligence.

In the event of termination by the Company, where there is no basis for dismissal as a result of gross breach of duty or other material breach of the employment contract by the CEO, or as a result of mutual agreement, the CEO shall be entitled to twelve months' severance pay.

In the event of a change of control of the Company, the CEO can terminate the employment contract and would be entitled to twelve months' severance pay.

The CEO's service contract is available for inspection at the Company's registered office during normal hours of business.

The non-executive directors do not have service contracts but instead have letters of appointment.

Loss of office payments

Contractual entitlements

A departing Executive Director's or CEO's rights in respect of salary, retirement benefits and contractual benefits will be determined in accordance with his service contract.

Incentive plans

The terms of a departing Executive Director's or CEO's participation in any annual bonus or long-term incentive plans will be governed by the terms of such arrangements.

Corporate actions

The treatment of incentive awards in the event of a corporate action affecting the Company will be determined in accordance with the terms of such awards.

The Company may agree to pay reasonable legal fees on behalf of an Executive Director or CEO in respect of the effect of any corporate action on their personal position.

Other

The Company may enter into new contractual arrangements with a departing Executive Director or CEO in connection with the cessation of office or employment, including (but not limited to) in respect of settlement of claims, confidentiality, restrictive covenants and/or consultancy arrangements, where the Committee determines it necessary or appropriate to do so. The Company may pay reasonable legal fees on behalf of an Executive Director or CEO in connection with their cessation of office and employment. The Company may agree to provide other ancillary or non-material benefits, payments or similar to a departing Executive Director or CEO.

Reward Scenarios

The graph below shows how the total pay opportunities for any future CEO would vary under four performance scenarios. These have been prepared on the assumptions detailed below. The current interim CEO is on a fixed rate in accordance with a management on hire agreement and as a result no performance scenarios are applicable.

Below target = fixed pay only (base salary, benefits and pension)

On target = 50% payable of annual bonus, 0% LTIP award

Maximum = 100% payable of annual bonus, 100% LTIP award

Maximum 2 = 100% payable of annual bonus, 100% LTIP award and 50% share price increase over the performance period

The chart illustrates the potential rewards available under the remuneration policy on an annualised basis for the financial year 2021. The values (other than the Maximum 2 illustration) assume a constant share price and do not take into account dividend adjustments that may be received on the share awards. The potential awards available for "on-target" performance under the annual bonus and LTIP are provided for illustration only and do not reflect formal policy decisions that these amounts will be received. Maximum 2 illustration assumes a share price increase of 50% over the performance period but in all other respects is the same as the Maximum illustration. The figures used in the chart are provided for illustration only based on a theoretical grant over 100% of salary, being the maximum permitted under the policy table.

The salary level (on which the bonus and LTIP elements of the package are calculated) are based on the previous salary level of GBP 325,000 based on the GBP/NOK year end exchange rate.

Remuneration policy table – non-executive directors

The remuneration policy for non-executive directors is set out in the table below. No non-executive directors participate in the Company's incentive arrangements or pension plan.

Component	Purpose	Operation
Fees	The basic fee is a fixed annual fee agreed after taking external advice and making market comparisons, and relate to the service of the directors in connection with the Company's business. The additional fees payable to the Chairman and members of the Board Committees reflects the additional time commitment in preparing and attending additional meetings.	The fees for non-executive directors (including the Chairman) are reviewed annually and approved in aggregate at the annual general meeting. The current level of fees is detailed below.

New appointments

The same principles as described above will be applied in setting the remuneration of a new non-executive director. Remuneration will comprise fees only and be paid in accordance with the prevailing rate at the time of the appointment. No variable remuneration will be paid and there will be no compensation for any loss of remuneration in a previous employment.

Letters of appointments

The Non-executive Directors' Letters of Appointment are available for inspection at the Company's registered office during normal hours of business.

Other matters

In addition to the above, the Company is entitled to honour any contractual entitlement to compensation or benefits, and any incentive awards, which are held by any current or former Non-Executive Director on the effective date of this policy. Appropriate disclosure will be made of any compensation paid (or similar) to a Non-Executive Director pursuant to any such arrangements.

The Company may reimburse all reasonable expenses incurred by a Non-Executive Director in connection with their role. This will include expenses in attending Board or Board-committee meetings, or the Company may alternatively provide a travel allowance for such purpose. This may also include items which, for tax purposes, are treated as a taxable benefit, and in which case the Company may also pay any such tax on behalf of the Non-Executive Director.

Fees for non-executive directors

The current level of fees paid for 2020 and those proposed for 2021 are as follows:

	2021	2020
	GBP	GBP
Chairman	46,375	46,375
Basic Fee	33,125	33,125
Chair of Audit Committee	5,000	5,000
Member of Audit, Remuneration or Nomination Committee	3,000	3,000

Fees to be paid in respect of 2021 will be decided at the next AGM which is scheduled for 22 June 2022.

Retirement and re-election of directors

All directors were required, under the Articles of Association of the Company, to retire at the first AGM. At each subsequent AGM, any directors who have been appointed by ordinary resolution or by the directors since the last AGM or who were not appointed or reappointed at one of the preceding two AGMs must retire from office and may offer themselves for reappointment by the members. After recommendation by the Nomination Committee, all directors were re-appointed at the AGM on 9 th June 2021.

Directors' remuneration report (continued) Audited information

Directors' remuneration

Single total figure of remuneration table

2021	Basic Salary and Fees	Benefits (1)	Pension related benefits (2)	Total Fixed Remuneration	Performance Related bonus	Other (3)	Total Variable Remuneration
	GBP	GBP	GBP	GBP	GBP	GBP	GBP
Chief Executive Officer:
J E O Berge (4)	27,083	1,290	3,296	31,669	-	-	-
E D Jacobs (5)	170,337	-	-	170,337	-	-	-
	197,420	1,290	3,296	202,006	-	-	-
Non-executive Directors:
S E Thorvildsen	49,375	-	-	49,375	-	-	-
H Fougner	39,125	-	-	39,125	-	-	-
D A Gold	36,125	-	-	36,125	-	-	-
J N Simpson	38,125	-	-	38,125	-	-	-
S Syrrist	33,125	-	-	33,125	-	-	-
	195,875	-	-	195,875	-	-	-

2020	Basic Salary and Fees	Benefits (1)	Pension related benefits (2)	Total Fixed Remuneration	Performance Related bonus	Other (3)	Total Variable Remuneration
	GBP	GBP	GBP	GBP	GBP	GBP	GBP
Chief Executive Officer:
J E O Berge	325,000	15,789	39,552	380,341	-	-	-
	325,000	15,789	39,552	380,241
Non-executive Directors:
S E Thorvildsen	49,375	-	-	49,375	-	-	-
H Fougner	39,125	-	-	39,125	-	-	-
D A Gold	36,125	-	-	36,125	-	-	-
J N Simpson	38,125	-	-	38,125	-	-	-
S Syrrist	33,125	-	-	33,125	-	-	-
	195,875	-	-	195,875

(1) Includes non-cash benefits comprising car allowance and private health and dental care

(2) Contributions made during the year to the defined contribution scheme

(3) Cash-settled value of synthetic share options exercised during the year

(4) Resigned 1 February 2021

(5) Interim CEO, not employed by Company but provided under a management on hire agreement from a related party

Analysis of taxable benefits received

The Chief Executive Officer received the following taxable benefits:

	2021	2020
	GBP	GBP
J E O Berge (1)
Car allowance	1,290	15,789
Total	1,290	15,789

(1) Resigned 1 February 2021

Annual bonus 2021

For the year under review, there was no bonus awarded to the Chief Executive Officer.

Annual bonus 2022

The criteria for the 2022 bonus has yet to be finalised by the Remuneration Committee but it is considered unlikely that a bonus for 2022 will be awarded.

Long Term Incentive Plan

A long term incentive plan for the CEO and other key management personnel, with a total limit of up to 4% of the Company's issued share capital was approved at the Annual General Meeting on 26 June 2013. The awards for the years 2010, 2012, 2014 and 2016 are now fully exercised. A further award was issued in 2020 and a total limit of up to 4,000,000 shares was approved at the general meeting on 11 November 2019.

The 2020 plan "vests" in 25% tranches linked to rig contract dates.

						Market		Market
	Shares	Shares		Shares		price		price
	At 1	Granted	Shares	At 31		on	Interest	on
	January	in the	Exercised/Adjusted	December	Expiry	date of	vested	vesting
	2021	year	in the year	2021	date	award	in 2021	date
	No.	No.	No.	No.		NOK	No.	NOK
J E O	600,000	-	(600,000)	-	31 Dec	14.30	-	-
Berge					2025

There are no other directors who have any interests in shares.

Information not subject to audit:

Relative importance of the spend on pay

The graph below shows the relative importance of the spend on pay (for all employees) compared with the returns distributed to shareholders (Note no dividends paid in 2020 or 2021).

Total shareholder return performance graph

The graph below shows the total shareholder return in terms of change in value of an initial investment of £100 on 10 June 2011 (and assuming dividends are re-invested) in a holding of the Company's shares against the corresponding total shareholder return in a hypothetical holding of shares in the OBX (an index on the Oslo Bors stock exchange). This was selected as it represents a broad equity market index in which the Company is a constituent member. The graph is a reporting requirement, however, the LTIP awards that are made to the Executive Director are not based on share performance.

Chief Executive Officer ('CEO') remuneration

Five-year comparison

The table below summarises the Chief Executive Officer (the Executive Director)'s single total figure of remuneration, annual and long-term variable performance-related remuneration (and the percentage of the maximum opportunity that these represent) in relation to the past five years.

Year	Chief Executive	Single total figure	Annual variable element (actual
	Officer	of remuneration	award versus opportunity)
		GBP	GBP	%
2021	E Jacobs (4)	170,337	-	-
2021	J E O Berge (3)	557,625	-	-
2020	J E O Berge	380,341	-	-
2019	J E O Berge (1)	417,591	162,500	50%
2019	J O S Bryce (2)	719,207	-	0%
2018	J O S Bryce	383,030	82,800	31%
2017	J O S Bryce	350,062	50,000	19%

(1) Appointed 1 May 2019

• (2) Resigned 18 March 2019
• (3) Resigned 1 February 2021
• (4) Interim CEO, not employed by Company but provided under a management on hire agreement from a related party

Comparison of CEO remuneration to employee remuneration

	2021	2020	Change %	Employee remuneration change
	GBP	GBP
Salary and fees	197,420	325,000	(39)%	4%
Termination payment	529,252	-	n/a	n/a
Taxable benefits	1,290	15,789	(92)%	0%
Annual variable performance related	-	-	0%	(22)%
remuneration
Total Annual figure	727,962	380,341
Single total figure of remuneration	727,962	380,341

The above table shows the movement in remuneration for the Chief Executive Officer between the current and previous financial year compared with movement of the average remuneration (per head) for all Company employees.

Comparison of Directors remuneration to employee remuneration

	2021	2020	2019	2018	2017
	Change	Change	Change	Change	Change
	%	%	%	%	%
S E Thorvildsen	0%	0%	0%	0%	0%
H Fougner	0%	0%	0%	0%	0%
D A Gold	0%	0%	0%	0%	0%
J N Simpson	0%	0%	0%	0%	0%
S Syrrist	0%	0%	0%	0%	0%
Employees	1.5%	2%	(3.8)%	(1.5)%	(2.8)%

The above table shows the movement in remuneration for the Directors for the past five years compared with the average movement in remuneration (per head) for all Company employees.

	Total number of votes	% of votes cast
or	24,299,726	98.4%
Total votes cast	24,704,241	100.0%

to the members of Awilco Drilling PLC

Opinion

In our opinion:

• Awilco Drilling plc's group financial statements and parent company financial statements (the "financial statements") give a true and fair view of the state of the group's and of the parent company's affairs as at 31 December 2021 and of the group's loss for the year then ended;
• the group financial statements have been properly prepared in accordance with UK adopted International Accounting Standards and with International Financial Reporting Standards as adopted by the European Union;
• the parent company financial statements have been properly prepared in accordance with UK adopted international accounting standards as applied in accordance with section 408 of the Companies Act; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of Awilco Drilling plc (the 'parent company') and its subsidiaries (the 'group') for the year ended 31 December 2021 which comprise:

Group	Parent company
Group statement of financial position	Company statement of financial position
Group statement of comprehensive income	Company statement of changes in equity
Group statement of changes in equity	Company statement of cash flows
Group statement of cash flows	Related notes 1 to 28 to the financial statements including a summary of significant accounting policies
Related notes 1 to 28 to the financial statements, including a

summary of significant accounting policies

The financial reporting framework that has been applied in their preparation is applicable law and UK adopted International Accounting Standards and International Financial Reporting Standards as adopted by the European Union and, as regards to the parent company financial statements, as applied in accordance with section 408 of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

to the members of Awilco Drilling PLC

Emphasis of Matter - financial statements prepared on a basis other than going concern

We draw attention to Note 2 in the financial statements which explains the Group are currently no longer performing operational activities and therefore do not consider it to be appropriate to adopt the going concern basis of accounting in preparing the financial statements. Accordingly, the financial statements have been prepared on a basis other than going concern as described in Note 2. Our opinion is not modified in respect of this matter.

Overview of our audit approach

Audit scope •		We performed an audit of the complete financial information of five components and audit procedures on specific balances for a further component.
	•	The components where we performed full or specific audit procedures accounted for 100% of Loss before tax, 100% of Revenue and 100% of Total assets.
Key audit matters	•	Impairment of drilling rigs and right of use assets
Materiality	•	Overall group materiality of \$330k which represents 0.75% of Operating Costs.

An overview of the scope of the parent company and group audits

Tailoring the scope

Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for each company within the Group. Taken together, this enables us to form an opinion on the consolidated financial statements. We take into account size, risk profile, the organisation of the group and effectiveness of group-wide controls, changes in the business environment and other factors when assessing the level of work to be performed at each company.

In assessing the risk of material misstatement to the Group financial statements, and to ensure we had adequate quantitative coverage of significant accounts in the financial statements, of the six reporting components of the Group, we selected six components covering entities within Norway, Singapore and the United Kingdom which represent the principal business units within the Group.

Of the six components selected, we performed an audit of the complete financial information of five components ("full scope components") which were selected based on their size or risk characteristics. For the remaining component ("specific scope components"), we performed audit procedures on specific accounts within that component that we considered had the potential for the greatest impact on the significant accounts in the financial statements either because of the size of these accounts or their risk profile.

The reporting components where we performed audit procedures accounted for 100% (2020: 100%) of the Group's Loss before tax, 100% (2020: 100%) of the Group's Revenue and 100% (2020: 99%) of

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Tailoring the scope (continued)

the Group's Total assets. For the current year, the full scope components contributed 98% (2020: 94%) of the Group's Loss before tax, 100% (2020: 100%) of the Group's Revenue and 100% (2020: 100%) of the Group's Total assets. The specific scope component contributed 2% (2020: 6%) of the Group's Loss before tax, 0% (2020: 0%) of the Group's Revenue and 0% (2020: 1%) of the Group's Total assets. The audit scope of these components may not have included testing of all significant accounts of the component but will have contributed to the coverage of significant accounts tested for the Group.

The charts below illustrate the coverage obtained from the work performed by our audit teams.

The charts below illustrate the coverage obtained from the work performed by our audit teams.

Changes from the prior year

We have classified five entities as full scope and one as specific scope in the current year, compared to four entities as full scope and two as specific scope in the prior year. This is as a result of reduced materiality for the group.

Involvement with component teams

All audit work performed for the purposes of the audit was undertaken by the Group audit team.

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Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.

Risk	Our response to the risk	Key observations communicated to the Audit Committee
Impairment Refer to the; Accounting policies (page 53); and Note 16 of the Consolidated Financial Statements (page 63) Under IAS 36, the group is required to assess annually whether any impairment indicators exist at the year-end and if such conditions exist, an impairment assessment is required. The risk has increased in the current year due to no future work lined up for the rig, and subsequent agreement to sell the rig post year end. Under IAS 10, the group is required to consider whether events after the reporting period should be adjusted in the financial statements. The WilHunter Rig is carried at nil NBV therefore there is no risk in relation to impairment. There is a risk that other assets are overstated.	We discussed with management whether any impairment triggers existed at year end and noted than no further contracts had been agreed with customers for the post year end period, and that this should be considered an impairment trigger. - As a result of impairment triggers we requested Management consider obtaining independent third-party brokers' valuations of the WilPhoenix Rig - We assessed the competence of the brokers Subsequent to the year end Board approval to sell the WilPhoenix Rig to a third party was agreed - We obtained a copy of the post year end sale and purchase agreement for the WilPhoenix rig - We discussed and confirmed with management that the	Following the \$47.3m impairment charge to the WilPhoenix, we consider the carrying value of the drilling rig to be reasonable and that appropriate disclosures are made in the financial statements. Following the \$0.8m impairment charge, we consider the carrying value of the right of use asset to be reasonable and that appropriate disclosures are made in the financial statements.

to the members of Awilco Drilling PLC

Risk	Our response to the risk	Key observations communicated to the Audit Committee
	sale was not considered distressed - We took into account all information received post year end to determine whether management were correct to recognise an additional impairment following the agreed sales price of the WilPhoenix Rig - We challenged management on whether the sales price could be determined as the fair value less cost to sell as at the year-end date - We discussed with the client whether it was appropriate to continue to recognise a value in the right of use asset of the building in which the head office operates, given no future economic benefit as there was no future trade foreseeable - We have confirmed that the appropriate disclosures have been made in the consolidated financial statements. All procedures were performed by the Group team.

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Our application of materiality

We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit and in forming our audit opinion.

Materiality

The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our audit procedures.

We determined materiality for the Group to be \$330k (2020: \$950k) which is 0.75% (2020: 1%) of Operating Costs (2020: Equity). During 2021 the future prospects of the Group declined due to a lack of secured work and utilisation of the rigs. Operating Costs were considered a more appropriate materiality basis given the challenges faced by the group.

We determined materiality for the Parent Company to be \$2.1m (2020: \$3.3m), which is 5% (2020: 3%) of Equity.

During the course of our audit, we reassessed initial materiality and increased it due to the increase in Operating Costs.

Performance materiality

The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.

On the basis of our risk assessments, together with our assessment of the Group's overall control environment, our judgement was that performance materiality was 75% (2020: 75%) of our planning materiality, namely \$240k (2020: \$710k). We have set performance materiality at this percentage based on the history of past misstatements and lack thereof, our ability to access the likelihood of misstatements and the effectiveness of the internal control environment.

The performance materiality set for each component is based on the relative scale and risk of the component to the Group as a whole and our assessment of the risk of misstatement at that component. In the current year, the range of performance materiality allocated to components was \$72k to \$240k (2020: \$98k to \$710k).

Reporting threshold

An amount below which identified misstatements are considered as being clearly trivial.

We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of \$17k (2020: \$40k), which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.

We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other relevant qualitative considerations in forming our opinion.

Other information

to the members of Awilco Drilling PLC

The other information comprises the information included in the annual report set out on pages 2-12, other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.

Other information (continued)

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, the part of the directors' remuneration report to be audited has been properly prepared in accordance with the Companies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
• the strategic report and directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
• the parent company financial statements and the part of the directors' remuneration report to be audited are not in agreement with the accounting records and returns; or
• certain disclosures of directors' remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit

Responsibilities of directors

As explained more fully in the directors' responsibilities statement set out on page 13, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and

to the members of Awilco Drilling PLC

fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below.

However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the company and management.

• We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and determined that the most significant are those that relate to the reporting framework (IFRS and the Companies Act 2006) and the relevant tax compliance regulations in the jurisdictions in which Awilco operates. In addition, we concluded that there are certain significant laws and regulations that may have an effect on the determination of the amounts and disclosures in the financial statements and those laws and regulations relating to health and safety, employee matters, environmental, and bribery and corruption practices;
• We understood how Awilco Drilling PLC is complying with those frameworks by making enquiries of management and those responsible for legal and compliance procedures. We corroborated our enquiries through our review of Board minutes, papers provided to the Audit Committee and correspondence received from regulatory bodies and noted that there was no contradictory evidence;
• We assessed the susceptibility of the group's financial statements to material misstatement, including how fraud might occur by considering the risk of fraud through management override and, in response, we carried out procedures such as testing of transactions back to source information, which were designed to provide reasonable assurance that the financial statements were free from fraud or error;
• Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved journal entry testing, with a focus on journals meeting our defined risk criteria based on our understanding of the business.

to the members of Awilco Drilling PLC

A further description of our responsibilities for the audit of the financial statements is located on the

Financial Reporting Council's website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Jamie Dixon (Senior Statutory Auditor) For and on behalf of Ernst & Young LLP (Statutory Auditor) Manchester 25 May 2022

Notes:

• 1. The maintenance and integrity of the Awilco Drilling PLC web site is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the web site.
• 1. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Group statement of comprehensive income

for the year ended 31 December 2021

		2021	2020
	Notes	US\$000	US\$000
Revenue	5	33,077	25,602
Cost of sales		(33,986)	(33,460)
Impairment	15, 16, 22	(48,120)	(145,171)
Gross Loss		(49,029)	(153,029)
General and administrative expenses		(12,235)	(14,887)
Operating Loss	6	(61,264)	(167,916)
Finance income	9	-	386
Finance expense	10	(1,441)	(35)
Other expense		(4)	-
Net loss on foreign exchange transactions	11	(254)	(131)
Loss before taxation		(62,963)	(167,696)
Income tax expense	12	(9,266)	(161)
Loss for the year attributable to equity shareholders		(72,229)	(167,857)
There is no comprehensive income other than the results for the year.
Basic and diluted loss per share (US\$ per share)	13	(1.32)	(3.08)

Total comprehensive income for the year is attributable to the owners of the Company, as there is no minority interest.

		2021	2020
	Notes	US\$000	US\$000
Non-current assets
Property, plant and equipment	।	15,764	66,800
Right-of-use asset	22		1,096
Deferred tax asset	12		16
		15,764	67,912
Current assets
Inventory		ો રિ	3,026
Trade and other receivables	18	662	6,411
Cash and cash equivalents	19	9,685	14,738
		10,462	24,175
Total assets		26,226	92,087
Current liabilities
Trade and other payables	20	4,550	6,294
Provisions	21	1,100	1,573
Current tax payable		9,251	66
		14,901	7,933
Non-current liabilities
Trade and other payables	20	426	1,026
		426	1,026
Total liabilities		15,327	8,959
Net Assets		10,899	83,128
Shareholders' Equity
Called up share capital	24
Share premium account	24	525 218,381	ર ડેરે
Retained (deficit) / earnings		(208,007)	218,381
Total Shareholders' equity			(135,778)
		10,899	83,128

		2021	2020
	Notes	US\$000	US\$000
Non-current assets
Property, plant and equipment	ાં ર	419	489
Right of use assets	22		1,096
Investment in subsidiaries	17	75	279
Amount due from subsidiary undertakings	ટેને	15,245	92,728
Deferred tax			। (୧
		15,739	94,608
Current assets
Trade and other receivables	18	2,305	3,830
Cash and cash equivalents	19	9,346	13,961
		11,651	17,791
Total assets		27,390	112,399
Current liabilities
Trade and other payables	20	2,435	3,414
Non-current liabilities
Trade and other payables	20	426	748
Total liabilities		2,861	4,162
Net assets
		24,529	108,237
Shareholders' Equity
Called up share capital	24	525	રેટે રે
Share premium account	24	218,381	218,381
Retained (deficit) / earnings		(194,377)	(110,669)
Total Shareholders' equity		24,529	108,237

Group statement of changes in equity

for the year ended 31 December 2021

	Called Up Share Capital US\$000	Share Premium account US\$000	Retained Earnings/(deficit) US\$000	Total shareholders equity US\$000
At 1 January 2020	525	218,381	32,079	250,985
Total comprehensive loss for the year			(167,857)	(167,857)
At 31 December 2020	525	218,381	(135,778)	83,128
Total comprehensive loss for the year	-	-	(72,229)	(72,229)
At 31 December 2021	525	218,381	(208,007)	10,899

Company statement of changes in equity

for the year ended 31 December 2021

	Called Up Share capital US\$000	Share Premium account US\$000	Retained Earnings/(deficit) US\$000	Total shareholders equity US\$000
At 1 January 2020	525	218,381	3,367	222,273
Total comprehensive profit for the year	-	-	(114,037)	(114,037)
At 31 December 2020	525	218,381	(110,669)	108,237
Total comprehensive loss for the year	-	-	(83,708)	(83,708)
At 31 December 2021	525	218,381	(194,377)	24,529

Group statement of cash flows

for the year ended 31 December 2021

			Restated
		2021	2020
	Notes	US\$000	US\$000
Operating activities
Loss before taxation		(62,963)	(167,696)
Adjustments to reconcile profit before tax to net cash flows:
Depreciation of fixed assets and right of use assets	15, 22	6,241	10,302
Impairment of fixed assets and right of use assets	15, 22	48,120	145,171
Inventory write off		3,026	1,620
Net finance expense /(income)		1,441	(351)
Share-based payment		(114)	(532)
Working capital adjustments:
Decrease in trade receivables		3,486	5,385
(Increase)/Decrease in inventory		(115)	300
Decrease / (increase) in prepayments and other receivables		2,249	(2,058)
(Decrease) / increase in trade and other payables		(3,605)	878
Interest paid	10	(53)	(35)
Interest received	9	-	386
Taxation paid		(65)	(74)
Net cash flows used in operating activities		(2,352)	(6,704)
Investing activities
Purchase of property, plant and equipment	15	(2,229)	(19,316)
Disposal of property, plant and equipment		-	29
Net cash flow used in investing activities		(2,229)	(19,287)
Financing activities
Payment of principal portion of lease liabilities	22	(472)	(520)
Net cash flows generated (used in)/from financing activities		(472)	(520)
Net decrease in cash and cash equivalents		(5,053)	(26,380)
Net foreign exchange difference		-	(131)
Cash and cash equivalents at beginning of year		14,738	41,249
Cash and cash equivalents at end of year	19	9,685	14,738

We have restated the movement in inventory, as was erroneously reported as a working capital adjustment at 31 December 2020. This has now been reclassified correctly to non-cash movements in the cashflow statement.

Company statement of cash flows

for the year ended 31 December 2021

		2021	2020
	Notes	US\$000	US\$000
Operating activities
Loss before taxation		(83,692)	(113,945)
Adjustments to reconcile (loss)/profit before tax to net cash flows:
Depreciation of fixed assets and right of use assets	15, 22	390	384
Impairment of fixed assets and investments	17, 22	979	-
Net finance income		(1,907)	(357)
Share based payment		(114)	(532)
Working capital adjustments:
(Increase) / Decrease in prepayments		(25)	110
Decrease in trade and subsidiary receivables	25	80,968	86,760
(Decrease) / increase in trade and other payables		(833)	312
Interest paid		(41)	(27)
Interest received		-	385
Net cash flows used in operating activities		(4,275)	(26,910)
Investing activities
Purchase of property, plant and equipment	15	-	(21)
Disposal of property, plant and equipment	15	-	29
Net cash flows generated from /(used in) investing activities		-	8
Financing activities
Payment of principal portion of lease liabilities	22	(340)	(340)
Net cash flows generated from/(used in) financing activities		(340)	(340)
Net increase/(decrease) in cash and cash equivalents		(4,615)	(27,242)
Cash and cash equivalents at beginning of year		13,961	41,203
Cash and cash equivalents at end of year	19	9,346	13,961

At 31 December 2021

1. General information

The Group and Company financial statements of Awilco Drilling PLC for the year ended 31 December 2021 were authorised for issue by the Board of Directors on 25 May 2022. The Company is a public company limited by shares, incorporated in the United Kingdom (England and Wales) under the Companies Act 2006 and listed on the Oslo Bors stock exchange. The Company's registered number is 7114196 and the address of the registered office is given on page 1. The principal place of the business is 2 Kingshill Park, Westhill, Aberdeenshire, AB32 6FL. The nature of the Group's operations and its principal activities are set out in the Strategic report.

2. Basis of preparation

Statement of compliance

The Group financial statements have been prepared in accordance with UK-adopted International Accounting Standards (UK-adopted IAS) and International Financial Reporting Standards as adopted by the European Union (EU adopted IFRS) as it applies to annual periods beginning 1 January 2021.

The Company financial statements are prepared in accordance with UK-adopted International Accounting Standards (UK-adopted IAS) as applied in accordance with section 408 of the Companies Act 2006.

Basis other than going concern

It is the responsibility of the directors to prepare the financial statements on a going concern basis unless it is inappropriate to presume the Group will continue in business. The Group is currently no longer performing operational activities. Accordingly, they adopt the basis other than going concern in preparing these financial statements. There have been no departures from IFRS, and no adjustments to carrying values as a result of the basis of preparation.

Basis of consolidation

The Group financial statements incorporate the financial statements of the Company and entities controlled by the Company. Under IFRS 10, control exists where the investor has: (a) power over the investee; (b) exposure, or rights, to variable returns from its involvement with the investee; and (c) the ability to use its power over the investee to affect the amount of the investor's returns.

The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies and prepared on a historical cost basis. The Group has elected to take the exemption under section 408 of the Companies Act 2006 not to present the Company income statement. The loss recorded by the Company for the year was US\$ 83.7 million (2020: US\$114.0 million loss).

3. Significant accounting judgements, estimates and assumptions

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of the assets and liabilities within the next financial year, are discussed below.

Impairment

The carrying amount of the Group's rigs are reviewed at each balance sheet date to determine whether there is any indication of impairment, or more frequently if events or changes in circumstances indicate they might be impaired. Impairment indicators were identified at the year-end in respect of the WilPhoenix rig, and as a result, management performed an impairment test to assess the asset's recoverable amount. As a sale of the rig has been agreed post year end this has been assessed as providing an accurate recoverable amount based on fair value, less cost to sell. This resulted in an impairment of US\$ 47.3 million at year end. As there is an agreed price, there are no sensitives on the impairment calculation.

At 31 December 2021

3. Significant accounting judgements, estimates and assumptions (continued) Contingent Liabilities

As detailed in Note 23, there is one item that is considered as a contingent liability. This is in connection with claims that have been submitted by Keppel FELS shipyard in respect of amounts it considers recoverable due to termination provisions in the contracts for Nordic Winter and Nordic Spring. The Group has applied judgement in evaluating them as contingent liabilities only and no provision has been made.

4. Accounting policies

New standards and interpretations

There were various standards effective for annual periods beginning on or after 1 January 2021 however none had any impact on these financial statements. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

New standards and interpretations - not yet adopted

The following standards and amendments and interpretations to existing standards have been published and are mandatory for the Group's accounting period beginning on or after 1 January 2022 or later periods, but the Group has not early adopted them:

• Reference to the Conceptual Framework Amendments to IFRS 3
• Property, Plant and Equipment: Proceeds before Intended Use Amendments to IAS 16
• Onerous Contracts Costs of Fulfilling a Contract Amendments to IAS 37
• AIP IFRS 9 Financial Instruments Fees in the '10 per cent' test for derecognition of financial liabilities
• IFRS 17 Insurance contracts

It is not anticipated that the application of these standards and amendments will have any material impact on the Group's financial statements.

Cash and cash equivalents

Cash and cash equivalents in the statement of financial position comprise cash at bank.

Property, plant and equipment

Rigs and equipment are stated at cost less depreciation and impairment losses. The cost of an asset comprises its purchase price and directly attributable cost of bringing the asset to its working condition. When it can be clearly demonstrated that subsequent expenditures have resulted in an increase in future economic benefits expected to be obtained from the use of the assets beyond their originally assessed standard of performance, the expenditure is capitalised as an additional cost of the asset. A component of an asset with a cost that is significant in relation to the total cost of the asset is depreciated separately. Components with a similar depreciation method and useful life are grouped together.

Depreciation is calculated using the straight-line method for each asset, after taking into account the estimated residual value, over its expected useful lives as follows:

Semi-submersible drilling rigs	–	20 years
Special purpose surveys	–	5 years
Other fixtures and equipment	–	3-5 years

Special purpose surveys are a five-yearly thorough inspection and recertification of the hull and main machinery components of the rig, which also include class and flag state renewal and verification. The carrying values of plant and equipment are reviewed for impairment if carrying value may not be recoverable, and are written down immediately to their recoverable amount.

At 31 December 2021

4. Accounting policies (continued)

Property, plant and equipment (continued)

Useful lives and residual values are reviewed annually and where adjustments are required, these are made prospectively. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the derecognition of the asset is included in the statement of comprehensive income in the period of derecognition.

Assets under construction

Assets under construction are costs directly associated with constructing an asset. While the asset is being constructed, no depreciation is applied. Once an asset is ready for use, all associated costs are transferred to the relevant asset category and depreciated accordingly.

Inventories

Inventories of drilling equipment and spares for future integrated drilling service wells are stated at the lower of cost incurred and net realisable value. These inventory items include spare parts and supplies relating to the operation of the semi-submersible drilling rigs.

Revenue recognition

Revenue derived from charter-hire contracts or other service contracts is recognised in the period that services are rendered at rates established in the relevant contracts. Certain contracts include mobilisation fees payable at the start of the contract. In cases where the fee covers a general upgrade of a rig or equipment which increases the value of the rig or equipment beyond the contract period, the fee is recognised as revenue over the firm contract period whereas the investment is depreciated over the remaining lifetime of the asset.

In cases where the fee covers specific upgrades or equipment specific to the contract, the mobilisation fees are recognised as revenue over the firm contract period.

Cost of sales

Cost of sales includes rig operating costs and the depreciation cost for the two rigs.

Taxation

Current income tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on tax rates and laws that are enacted or substantively enacted by the balance sheet date.

Income tax is charged or credited directly to equity if it relates to items that are credited or charged to equity. Otherwise income tax is recognised in the statement of comprehensive income.

Deferred income tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

• When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
• In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses.

At 31 December 2021

4. Accounting policies (continued)

Taxation (continued)

Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

• When the deferred tax asset relating to the deductible temporary differences arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss
• In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Foreign currency translation

Functional and presentation currency

Items included in the financial statements of each of the Group's entities are measured using United States Dollars (US\$) "the functional currency". The Group financial statements are presented in US\$, which is the Company's functional currency and presentation currency and all values are rounded to the nearest thousand dollars (US\$000) except when otherwise indicated.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the date of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currency are recognised in the statement of comprehensive income. The principal foreign currencies used by the Group are Pounds Sterling (£ or GBP), Euro (€) and Norwegian Kroner (NOK).

Earnings/(loss) per share

Basic earnings/(loss) per share amounts are calculated by dividing net profit for the period attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings/(loss) per share amounts are calculated by dividing the net profit by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

Leases

The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group has taken the recognition exemption in respect of short-term leases and leases of low value assets, and instead recognises the expense associated with such leases in the income statement on a straight line basis.

For all other leases, the Group recognises lease liabilities representing lease payments and right-of-use assets representing the right to use the underlying assets.

At 31 December 2021

4. Accounting policies (continued)

Leases (continued)

Right-of-use assets

The Group recognises right-of-use assets at the commencement date of the lease and are measured at cost, less any accumulated depreciation and impairment losses, adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct cost incurred, and lease payments made at or before the commencement date less any incentives received. Right of use assets are depreciated on a straight-line basis over the remaining lease term.

Lease liabilities

At the commencement date of the lease, the Group recognises lease liabilities at the present value of lease payments to be made over the lease term, using the interest rate implicit to the lease, and if not readily determinable, at the incremental borrowing rate.

The lease liabilities are included in trade and other payables in Note 20.

Financial assets

Financial assets are recognised when the Group becomes party to the contracts that give rise to them and are classified as financial assets at fair value through profit or loss, amortised cost, or fair value through other comprehensive income as appropriate. The Group determines the classification of its financial assets at initial recognition and, where allowed and appropriate, re-evaluates this designation at each financial year-end. When financial assets are recognised initially, they are measured at fair value, being the transaction price plus, in the case of financial asset not at fair value through profit or loss, directly attributable transaction costs.

Derecognition of financial assets

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is derecognised when:

• the rights to receive cash flows from the asset have expired; or
• the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and either:
• The Group has neither transferred control nor retained substantially all the risks and rewards of the asset, but had transferred control of the asset, or
• The Group has transferred substantially all the risks and rewards of the asset.

When the Group has transferred its rights to receive cash flows from an asset or has entered into a passthrough arrangement, and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group's continuing involvement in the asset. In that case, the Group also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Group has retained.

Impairment of financial assets

Further disclosures relating to impairment of financial assets are also provided in Note 18.

The Group recognises an allowance for expected credit loss (ECL) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

At 31 December 2021

4. Accounting policies (continued)

Impairment of financial assets (continued)

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL)."

Trade and other receivables

Trade receivables and amounts due from subsidiary undertakings, which generally have 60-day terms, are recognised and subsequently carried at the original invoiced value net of expected credit loss. Where the time value of money is material, receivables are carried at amortised cost.

Trade and other payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. Where an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in the statement of comprehensive income.

Share-based payment

The cost of cash-settled transactions is measured initially at fair value at the grant date using a Black-Scholes model, further details are given in Note 26. This fair value is expensed over the period until the vesting date with recognition of a corresponding liability. The liability is remeasured to fair value at each reporting date up to and including the settlement date, with changes in fair value recognised in statement of comprehensive income for the period.

Pension

The pension plan in place is a defined contribution plan. Pension contributions are charged to the statement of comprehensive income as an expense in the period to which the contributions relate. Once the contributions have been paid, there are no further payment obligations.

Government grants

Government grants are recognised where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as a deduction in reporting of the related expense, on a systematic basis over the periods that the related costs for which it is intended to compensate are expensed.

5. Revenue

Revenue represents the invoiced amount of services provided after the deduction of rebates and retrospective discounts. All items are stated net of value added tax.

The Group only has one segment – providing drilling services in the UK. As a result, no further segmental information has been provided.

Information about major customers

Annual revenue from two major customer amounted to US\$ 25 million and US\$ 8 million arising from the provision of drilling services (2020: US\$ 14 million and US\$ 11 million from two major customers).

At 31 December 2021

6. Operating profit

This is stated after charging

	2021	2020
	US\$000	US\$000
Depreciation (Note 15, 22)	6,241	10,307
Inventory recognised as an expense during the year	255	507
Write off of inventory	3,026	1,620

7. Auditors' remuneration

The Group paid the following amounts to its auditors in respect of the audit of the financial statements and for other services provided to the Group.

	2021	2020
	US\$000	US\$000
Audit of the financial statements	246	183
Local statutory audits of subsidiaries	23	52
Tax services - compliance	27	33
Tax services - advisory	-	43
	296	311

8. Staff costs

	2021	2021	2020	2020
	Group US\$000	Company US\$000	Group US\$000	Company US\$000
Wages and salaries	14,608	2,555	15,825	2,455
Directors Fees	277	277	282	282
Pension costs	649	120	921	110
Social security costs	1,877	457	2,121	341
Long term incentive plan	(19)	(19)	(407)	(407)
	17,393	3,391	18,742	2,781

The Company makes contributions to a defined contribution scheme for all eligible employees up to a maximum of 9% of salary. Contributions are charged to the income statement as incurred.

The average monthly number of employees during the year was made up as follows:

	2021	2020
	No.	No.
Onshore, including management (Company)	22	20
Offshore	96	104
	118	124

At 31 December 2021

9. Finance income

		2021	2020
		US\$000	US\$000
	Bank interest	-	386
10.	Finance expense
		2021	2020
		US\$000	US\$000
	Interest on lease liabilities	53	35
	Interest on taxation	1,388	-
11.	Net (loss)/gain on foreign exchange transactions
		2021	2020
		US\$000	US\$000
	Gain on foreign exchange transactions	14	214
	(Loss) on foreign exchange transactions	(268)	(345)
	Net (loss) on foreign exchange transactions	(254)	(131)
12.	Income tax
	Income tax on profit on ordinary activities
		2021 US\$000	2020 US\$000
	Foreign tax on the profit for the year	98	66
	Total current income tax	98	66
	Amounts under provided in previous years	9,152	3
	Tax credit available to the UK	-	-
	Total current income tax	9,250	69
	Deferred income tax: Origination and reversal of temporary differences	16	92
	Impact of changes in tax rates	-	-
	Total deferred income tax	16	92
	Income tax charge in the Group statement of comprehensive income	9,266	161

At 31 December 2021

12. Income tax (continued)

Reconciliation of the total income tax charge

	2021	2020
	US\$000	US\$000
Loss from continuing operations	(62,963)	(167,696)
Tax calculated at UK standard rate of corporation tax of 19% (2019:19%)	(11,963)	(31,862)
Expenses not deductible/(income not taxable) for tax purposes	112	18,995
Effect of (lower)/higher taxes on overseas earnings	98	2,292
Unrecognised deferred tax asset	11,867	10,742
Tax (over)/under provided in previous years	9,152	3
Effect of tax rate differences	-	(9)
Income tax charge in the Group statement of comprehensive income	9,266	161

The income tax expense above is computed at loss before taxation multiplied by the effective rate of corporation tax in the UK of 19% (2020: 19%).

The corporate tax measures announced in the March 2021 Budget set out that corporation tax will increase from 19% to 25% from April 2023 for firms with annual profits greater than £250,000.

Deferred income tax

The deferred income tax included in the statement of financial position is as follows:

	2021	2020
	US\$000	US\$000
Deferred tax asset
As at 1 January	16	108
Share-based payment	(16)	(92)
As at 31 December	-	16

Unrecognised deductible temporary differences

The Group has total tax losses of US\$ 82.1 million which arose in the UK (2020: US\$ 69.3 million) that are available for offset against future deductible profits that are not part of the bareboat charter ring-fence arrangements. There are further deductible temporary differences relating to fixed assets of US\$ 59.4 million and US\$ 40.6 million of unutilised capital allowances. Deferred tax assets have not been recognised in respect of these losses or differences due to the uncertainty of future profits being at this level.

At 31 December 2021

13. Loss per share

The following reflects the income and share data used in the basic and diluted loss per share computations:

	2021	2020
	US\$000	US\$000
Loss for the year attributable to equity share holders	(72,229)	(167,857)
	2021	2020
	No.000	No.000
Weighted average number of ordinary shares for basic and diluted earnings
per share	54,582	54,582

Total earnings and weighted average number of shares outstanding during the year is the same as for diluted earnings per share.

14. Government grants

	2021	2020
	US\$000	US\$000
At 1 January	-	-
Received during the year	14	310
Released to the statement of profit or loss	(14)	(310)
At 31 December	-	-

The above Government grants received were in respect of the UK Coronavirus Job Retention Scheme.

At 31 December 2021

15. Property, plant and equipment

	Semi	Assets under	Special	Other
Group	submersible	construction	purpose	fixtures and
	drilling rigs		surveys	equipment	Total
	US\$000	US\$000	US\$000	US\$000	US\$000
Cost:
At 1 January 2020	337,029	92,608	16,159	2,025	447,821
Additions	623	18,672	-	21	19,316
Disposals	-	-		(29)	(29)
At 31 December 2020	337,652	111,280	16,159	2,017	467,108
Adjustment	247	-	(247)	-	-
Additions	722	-	1,507	-	2,229
At 31 December 2021	338,621	111,280	17,419	2,017	469,337
Depreciation and impairment:
At 1 January 2020	(232,952)	-	(11,486)	(1,465)	(245,903)
Provided	(6,566)	-	(3,117)	(63)	(9,746)
Impairment	(33,379)	(111,280)	-	-	(144,659)
Disposals
At 31 December 2020	(272,897)	(111,280)	(14,603)	(1,528)	(400,308)
Adjustment	(578)		578		-
Provided	(4,295)	-	(1,555)	(70)	(5,920)
Impairment	(45,507)	-	(1,838)	-	(47,345)
At 31 December 2021	(323,277)	(111,280)	(17,419)	(1,598)	(453,573)
Net book value:
At 31 December 2021	15,345	-	-	419	15,764
At 31 December 2020	64,755	-	1,556	489	66,800

At 31 December 2021

15. Property, plant and equipment (continued)

fixtures and Company equipment US\$000 Cost: At 1 January 2020 2,025 Additions 21 Disposals (29) At 31 December 2020 2,017 Additions - Disposals - At 31 December 2021 2,017 Depreciation: At 1 January 2020 (1,465) Provided (63) At 31 December 2020 (1,528) Provided (70) At 31 December 2021 (1,598) Net book value:		Other
	At 31 December 2021	419
489 At 31 December 2020

16. Impairment

The Group considers annually whether there are indicators of impairment of its property, plant and equipment, and at the year-end identified that there were indicators the WilPhoenix rig may be impaired. In particular it was noted that there was no secured work for the rig, additional costs were expected to be needed to maintain the rig and the Group was contemplating disposing of the asset. As such, it was necessary to estimate the recoverable amount. Recoverable amount was assessed based on the rig's fair value less cost of disposal.

Post year end, a sale of the rig was agreed, and therefore the agreed sale price has been used as the basis for determining the fair value less cost of disposal of the rig. As a result, The Group has recognised US\$ 47.3 million as an impairment loss relating to the WilPhoenix rig. (2020: US\$ 33.4 million relating to WilPhoenix and WilHunter rigs).

The total impairment cost in the year is US\$ 48.1 million. This includes a current year impairment of US\$ 0.8 million in respect of a right of use asset which has been impaired in full due to lack of trading activities and the preparation of the financial statements on a basis other than going concern. (2020 : US\$ 144.7 million, including US\$111.3 million in respect of assets under construction, following the termination of the rig construction contracts)

At 31 December 2021

17. Investments

Company Company
2021	2020
US\$000	US\$000
Company shares in subsidiary undertakings
At 1 January 279	279
Impairment of investment in WilHunter (UK) Ltd (100)	-
Impairment of investment in Awilco Drilling Offshore (UK) Ltd (100)	-
Impairment of investment in Awilco Drilling Norge AS (4)	-
At 31 December 75	279

Details of the holdings are as follows, all 100% shareholdings:

	Country of
Name	Incorporation	Registered Address
		11-12 St James's Square,
Awilco Drilling Offshore (UK) Ltd)	United Kingdom	London
		11-12 St James's Square,
WilHunter (UK) Ltd – in liquidation	United Kingdom	London
Awilco Drilling Pte. Ltd.	Singapore	8 Wilkie Road, Singapore
Awilco Rig 1 Pte. Ltd	Singapore	8 Wilkie Road, Singapore
Awilco Rig 2 Pte. Ltd	Singapore	8 Wilkie Road, Singapore
Awilco Rig 3 Pte. Ltd – dormant	Singapore	8 Wilkie Road, Singapore
Awilco Rig 4 Pte. Ltd - dormant	Singapore	8 Wilkie Road, Singapore
Awilco Drilling Norge AS – in liquidation		Norway Verksgata IA, 4013 Stavanger

At 31 December 2021

18. Trade and other receivables

	Group	Company	Group	Company
	2021	2021	2020	2020
	US\$000	US\$000	US\$000	US\$000
Trade receivables	37	37	3,522	3,522
Prepayments and other receivables	542	236	768	308
Accrued revenue	-	-	2,121	-
Accrued interest	-	1,949	-	-
VAT receivable	83	83	-	-
	662	2,305	6,411	3,830

As at 31 December, the analysis of ageing of trade receivables is as follows: Group

		Neither past due nor impaired	Past due but not impaired
	Total US\$000	<60 days US\$000	60-90 days US\$000	90+ days US\$000
2021	37	37	-	-
		Neither past due nor impaired	Past due but not impaired
	Total	<60 days	60-90 days	90+ days
	US\$000	US\$000	US\$000	US\$000
2020	3,522	3,522	-	-

Company		Neither past due nor impaired	Past due but not impaired
	Total	<60 days	60-90 days	90+ days
	US\$000	US\$000	US\$000	US\$000
2021	37	37	-	-
		Neither past due nor impaired	Past due but not impaired
	Total	<60 days	60-90 days	90+ days
	US\$000	US\$000	US\$000	US\$000
2020	3,522	3,522	-	-

At 31 December 2021

19. Cash and cash equivalents

	Group	Company	Group	Company
	2021	2021	2020	2020
	US\$000	US\$000	US\$000	US\$000
Cash at bank	9,685	9,346	14,738	13,961

Cash at bank earns interest at floating rates based on daily bank deposit rates. The Company has no restricted cash. (2020: nil)

20. Trade and other payables

	Group	Company	Group	Company
	2021	2021	2020	2020
	US\$000	US\$000	US\$000	US\$000
Trade and other payables:
Lease Liabilities	315	315	616	327
Trade payables	885	763	1,257	1,744
Accruals and other liabilities	3,350	1,357	4,421	1,343
	4,550	2,435	6,294	3,414
Non-current:
Lease Liabilities	424	424	1,017	739
Other liabilities	2	2	9	9
Total	426	426	1,026	748

21. Provisions

	Onerous
	Redundancy	Contract	Total
	US\$000	US\$000	US\$000
At 1 January 2021	640	933	1,573
Utilised	(640)	(933)	(1,573)
Arising during the year	1,100	-	1,100
At 31 December 2021	1,100	-	1,100

The redundancy provision is in relation to Offshore personnel, which was subsequently settled post year end.

22. Leases

The Group has a lease contract in place for the office building at 2 Kingshill Park, Westhill, Aberdeenshire, AB32 6FL. During the year, the lease for the office building at 103 Løkkeveien, 4007 Stavanger, Norway was terminated. Also during the year, the remaining right of use asset for the office building in Aberdeen was impaired. Set out below is the carrying amount of the right-of-use assets recognised and the movements during the period:

	Office Building		Office Building
	Group	Company	Group	Company
	2021	2021	2020	2020
	US\$000	US\$000	US\$000	US\$000
As at 1 January	1,096	1,096	1,417	1,417
Additions	-	-	747	-
Depreciation Expense	(321)	(321)	(556)	(321)
Impairment	(775)	(775)	(512)	-
As at 31 December	-	-	1,096	1,096

At 31 December 2021

22. Leases (continued)

Set out below are the carrying amounts of lease liabilities (included under trade and other payables) and the movements during the period:

	2021	2021	2020	2020
	Group	Company	Group	Company
	US\$000	US\$000	US\$000	US\$000
As at 1 January	1,633	1,066	1,406	1,406
Additions	-	-	747	-
Accretion of interest	53	41	35	28
Payments	(505)	(368)	(555)	(368)
Remeasurement	(442)	-	-	-
As at 31 December	739	739	1,633	1,066
Current	315	315	616	327
Non-current	424	424	1,017	739

The maturity analysis of lease liabilities is disclosed in Note 26.

The following are the amounts recognised in profit or loss:

	2021	2021	2020	2020
	Group	Company	Group	Company
	US\$000	US\$000	US\$000	US\$000
Depreciation expense of right-of-use assets	321	321	556	321
Interest expense on lease liabilities	53	41	35	28
Expense relating to leases of low-value assets (included in
administrative expenses)	3	3	6	6
Total amount recognised in profit or loss	377	365	597	355

The Group has total cash outflows for leases of US\$ 0.5 million (2020: US\$ 0.6 million).

23. Commitments and contingencies

Capital commitments

There were capital commitments of US\$ 0.9 million at 31 December 2021 (2020: US\$ 0.1 million).

	2021 US\$000	2020 US\$000
Amounts due within one year	873	80

At 31 December 2021

23. Commitments and contingencies (continued) Contingent Liabilities

It is recognised that Keppel FELS has submitted claims in respect of amounts it considers recoverable due to termination provisions in the contracts for both Nordic Winter and Nordic Spring. Statement of claims have been received from Keppel FELS in the amount of Singapore Dollars 562.75 million (US\$ 424.9 million) for Awilco Rig 1 Pte. Ltd. and Singapore Dollars 356.18 million (US\$ 268.9 million) for Awilco Rig 2 Pte. Ltd. but these claims are strongly denied. Due to the non-recourse nature of the contracts, this is considered as a contingent liability only of the subsidiaries and not the parent company. No provision has been made. It is expected that the final arbitration outcome for Awilco Rig 1 Pte Ltd, including any appeal process, will be no earlier than Q4 2022. The arbitration process for Awilco Rig 2 Pte Ltd, was started six months later and also expected no earlier than Q4 2022.

Contingent Asset

Following the termination of Nordic Winter and Nordic Spring, the subsidiary companies, Awilco Rig 1 Pte. Ltd and Awilco Rig 2 Pte. Ltd. have entered arbitration with KFELS in respect of deposit and variation order payments. A total amount of USD 97.7 million is considered to be recoverable and is therefore disclosed as a contingent asset.

24. Share capital

Group and Company
			2021	2020
Authorised			No.000	No.000
Ordinary shares of £0.0065 each			54,582	54,582
Group and Company
	2021	2021	2020	2020
Allotted called up and fully paid	No.000	US\$000	No.000	US\$000
At 1 January	54,582	525	54,582	525
At 31 December	54,582	525	54,582	525
Group and Company
			2021	2020
			Share	Share
			premium	premium
			account	account
			US\$000	US\$000

At 1 January	218,381	218,381
At 31 December	218,381	218,381

At 31 December 2021

25. Related party transactions

During the year the Group entered into transactions, in the ordinary course of business, with Awilhelmsen Offshore AS, which is a major shareholder through its subsidiaries.

Transactions entered into and trading balances outstanding at 31 December 2021 with Awilhelmsen AS and its subsidiaries are as follows:

	2021	2020
	US\$000	US\$000
Purchase of management services	918	2,195
Share based payment	-	-
Amounts owed to Awilhelmsen AS and its subsidiaries	(264)	(236)

Sales and purchases between related parties are made at normal market prices. Outstanding balances are unsecured, interest-free and cash settlement terms vary between 30 and 90 days. The Company has not provided or benefitted from any guarantees for any related party receivables or payables. Included are the amounts in respect of the interim CEO.

Directors and other key management personnel

The remuneration of directors and other key management personnel of the Group is as follows

	2021	2020
	US\$000	US\$000
Short-term employee benefits	1,437	1,759
Share-based payments	(112)	(534)
Termination benefits	529	-
Other long-term benefits	82	126

Included in the short-term employee benefits are director's emoluments of GBP 195,000 (2020: GBP 195,000). Five directors received remuneration in respect of their services to the Company during the year (2020: five). The highest paid director was Sigurd Thorvildsen - please refer to the Directors' remuneration report on page 30 for further details.

At 31 December 2021

25. Related party (continued)

Company

The Company entered into the following transactions and had the following balances with its wholly owned subsidiaries

	2021	2020
	US\$000	US\$000
Transactions:
Amounts invoiced to Awilco Drilling Offshore (UK) Ltd in respect of
services provided to the company	32,804	28,299
Amounts invoiced on behalf of Awilco Drilling Offshore (UK) Ltd	(36,384)	(24,247)
Invoiced to Awilco Drilling Pte. Ltd.	127	125
Transfer of funds to Awilco Drilling Pte. Ltd.	299	5,470
Amounts invoiced to Awilco Rig 1 Pte. Ltd. in respect of services provided
to the company	-	12,335
Amounts invoiced to Awilco Rig 2 Pte. Ltd. in respect of services provided
to the company	-	2,066
Amounts invoiced to Awilco Drilling Norge AS in respect of services
provided to the company	3,431	8,030
Taxation paid on behalf of subsidiaries	68	74
	345	32,152
	2021	2020
Balances:	US\$000	US\$000
Amounts receivable from Awilco Drilling Offshore (UK) Ltd	86,674	90,254

Amounts payable to WilHunter (UK) Ltd	(100)	(100)
Amounts receivable from Awilco Drilling Pte. Ltd.	6,473	5,979
Amounts receivable from Awilco Rig 1 Pte. Ltd	57,343	57,343
Amounts receivable from Awilco Rig 2 Pte. Ltd	44,298	44,298
Amounts receivable from Awilco Drilling Norge AS	13,394	9,964
	208,082	207,738
Allowance for expected credit loss	(192,837)	(115,010)
	15,245	92,728

The balances receivable from the subsidiary companies are considered long term. There are long term loan agreements in place with Awilco Rig 1 Pte. Ltd. and Awilco Rig 2 Pte. Ltd.

At 31 December 2021

25. Related party (continued)

Set out below is the movement in the allowance for expected credit losses of intercompany receivables:

	2021	2020
	US\$000	US\$000
As at 1 January	(115,010)	(1,484)
Provision for expected credit loss	(71,199)	(113,526)
As at 31 December	(192,837)	(115,010)

Expected credit loss triggered due to lack of committed future contracting opportunities for the WilPhoenix. Also due to expected non recoverability of amounts due from Awilco Drilling Norge AS and provision for amounts due from Awilco Drilling Pte. Ltd, Awilco Rig 1 Pte. Ltd. and Awilco Rig 2 Pte. Ltd.

Entity with significant influence over the Group

Awilhelmsen Offshore AS, owns 37.1% of the ordinary shares in Awilco Drilling PLC.

26. Capital management, financial risk management objectives and policies

The Group's and the Company's principal financial liabilities comprise trade and other payables. The main purpose of these financial liabilities is to finance the Group's operations. The Group has trade and other receivables, and cash and cash equivalents that arrive directly from its operations. Management has assessed the fair values of the financial instruments are approximates to their carrying values.

The Group and the Company are exposed to market risk, credit risk and liquidity risk.

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises foreign currency risk. Financial instruments affected by market risk are trade and other payables and accruals.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group's and Company's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's and Company's operating activities (when expenses are denominated in a different currency from the Company's functional currency).

At 31 December 2021

26. Capital management, financial risk management objectives and policies (continued)

Foreign currency risk (continued)

At the balance sheet date, the Group held GBP 0.9 million in trade and other payables (2020: GBP 1.3 million). A 5% strengthening or weakening of US\$ to GBP would have an effect of US\$ 0.1 million on the Group 2021 result (2020: US\$0.1 million). The Group has no other material currency exposures.

Credit risk

Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily for trade receivables). The Company has credit risk due to its trade and other receivables from subsidiary undertakings and from external clients.

Management assess the credit rating of new and existing clients and determine if any action is required to secure the financial security in respect of work performed.

Liquidity risk

The Group's objective is to maintain sufficient liquidity in order to support the needs of the business and meet the repayments of the debt and commitments as they fall due. In order to achieve this, the Group also has the prospect of issuing new equity or entering into new borrowing arrangements.

The table below summarises the maturity profile of the Group's financial liabilities based on contractual undiscounted payments.

Group	Less than 3 months	3 to 12 months	1-5 years	Total
Trade and other payables	5,335	-	2	5,337
Lease liabilities	-	368	522	890
31 December 2021	5,335	368	524	6,227
Trade and other payables	4,853	825	9	5,687
Lease liabilities	-	616	1,017	1,633
31 December 2020	4,853	1,441	1,026	7,320

The table below summarises the maturity profile of the Company's financial liabilities based on contractual undiscounted payments.

	Less than	3 to 12	1-5
Company	3 months	months	years	Total
Trade and other payables	2,120	-	2	2,122
Lease liabilities	-	368	522	890
31 December 2021	2,120	368	524	3,012
Trade and other payables	3,087	-	9	3,096
Lease liabilities	-	327	739	1,066
31 December 2020	3,087	327	748	4,162

At 31 December 2021

26. Capital management, financial risk management objectives and policies (continued)

Capital management

Capital includes called up share capital, share premium and retained earnings / (deficit).

As the Company is currently no longer performing operational activities, there will be no dividends distributed arising from operational activity.

The Company's capital is monitored at a Group level. The Group monitors capital using a gearing ratio, which is net debt divided by total shareholders' funds plus net debt. The Group includes within net debt, bonds and loans less cash and cash equivalents.

	Group	Group
	2021	2020
	US\$000	US\$000
Cash and cash equivalents (note 19)	(9,685)	(14,738)
Net debt / (funds)	(9,685)	(14,738)
Capital	10,899	83,128
Capital and net debt	1,214	68,390
Gearing ratio	n/a	n/a

27. Share-based payments

Long Term Incentive Plan

A long term incentive plan for key management personnel, with a total limit of up to 4% of the Company's issued share capital was approved at the Annual General Meeting on 26 June 2013. The awards for the years 2010, 2012, 2014-2016 are now fully exercised. A further award was issued in 2020, and a total limit of up to 4,000,000 shares was approved at the general meeting on 11 November 2019.

The 2020 plan "vests" in 25% tranches linked to rig contract dates and expires after five years. The awards are options with a strike price of NOK 30.

All share options and share awards are synthetic based and are cash settled.

At 31 December 2021

27. Share-based payments (continued)

The following table list the inputs to the model used for these valuations (share prices are in NOK).

Group and Company	2021	2020
	2020 Plans	2016 Plans	2020 Plans
Exercise price	30.0	-	30.0
Year-end Share price	3.20	4.65	4.65
Expected life	0.56 years	-	3.25 years
Volatility	0.18	-	0.67
Risk free interest rate	0.34%	-	0.42%
Model used	Black Scholes

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options and awards during the year.

Group	2021	2021	2020	2020
	No.	WAEP (NOK)	No.	WAEP (NOK)
Outstanding as at 1 January	1,247,284	25.86	364,425	-
Granted during the year	-	-	2,150,000	30.0
Exercised during the year	(172,284)	-	(192,141)	-
Forfeited during the year	(600,000)	30.0	-	-
Adjusted during the year	-	-	(1,075,000)	30.0
Outstanding at 31 December	475,000	30.0	1,247,284	25.86
Exercisable at 31 December	-	-	172,284	-

Company	2021 No.	2021 WAEP (NOK)	2020 No.	2020 WAEP (NOK)
Outstanding as at 1 January	1,247,284	25.86	364,425	-
Granted during the year	-	-	2,150,000	30.0
Exercised during the year	(172,284)	-	(192,141)	-
Forfeited during the year	(600,000)	30.0	-	-
Adjusted during the year	-	-	(1,075,000)	30.0
Outstanding at 31 December	475,000	30.0	1,247,284	25.86
Exercisable at 31 December	-	-	172,284	-

At 31 December 2021

27. Share-based payments (continued)

The estimated fair value of the granted share options and awards are reached on the basis of the "Black-Scholes option pricing model". The model is applied utilising a risk-free discount rate and also taking into account the terms and conditions upon which the options and awards are granted as well as the performance conditions that are required to be satisfied before vesting. The weighted average remaining contractual life at 31 December 2021 is 0.56 years. The Group total share option and award credit amounted to US\$0.1 million (2020: US\$ 0.5 million credit). The carrying amount of the liability relating to the cash-settled options at 31 December 2021 is US\$ 0.1 million (2020: US\$ 0.1 million).

The table below summaries the carrying amount of the liability at 31 December 2021

Group and Company	Less than 3 months	3 to 12 months	1 – 5 years	Total
	US\$000	US\$000	US\$000	US\$000
Share options and awards 2021	-	-	2	2
The table below summaries the carrying amount of the liability at 31 December 2020
	Less than 3
Group and Company	months	3 to 12 months	1 – 5 years	Total
Share options and awards	106	-	9	115
At 31 December 2019	106	-	9	115

28. Subsequent events

During March 2022, the subsidiary company WilHunter (UK) Ltd was placed into liquidation. The affairs, business and property of the Company are being managed by the Joint Liquidators, Geoff Jacobs and Blair Nimmo of Interpath Advisory.

During March 2022, the Company signed a Sale and Purchase Agreement with Rota Shipping Inc to recycle the WilHunter at the Aliaga Shipyard in Turkey. The sale is expected to be concluded no later than 15 June 2022.

During May 2022, the Company signed a Memorandum of Agreement (MOA) for the sale of the WilPhoenix to Well-Safe Solutions Ltd for an agreed purchase price of USD 15.5 million. Expected delivery time of the rig is on or around 1 June 2022.

During May 2022, the Company signed a short-term shareholder loan with Awilhelmsen Offshore AS and QVT Family Office Fund LP. The loan is for a total of up to USD 4 million, structured as a draw-down facility, with interest rate of 10 percent per annum on the aggregated outstanding principal amount. In addition, there is an arrangement fee of 2 percent on the total amount. Maturity date for the loan is 1 July 2022. The loan shall be used for general working capital purposes.

As a result of the agreements to dispose of both rigs after the year end, the Group is currently no longer performing operational activities and the financial statements have been prepared on a basis other than going concern. However, the Board shall continue to consider future opportunities and take the necessary action as required.

DIRECTORS' REMUNERATION POLICY

Introduction

The Company's CEO is not an Executive Director of the Company but under UK company law, there is a requirement for quoted companies to treat the Chief Executive Officer, for the purposes of certain remunerationrelated requirements, as if that person were a director of that quoted company. The current CEO was appointed following a proposal from the Board of Directors after the resignation of the previous CEO, acting on an interim basis. His services are provided to the Company under a management on hire agreement from a related party. The rates are per the management on hire agreement, which is currently NOK 2,751 per hour, and billing is based on an hours worked basis. This rate was not subject to review by the renumeration committee or approval by shareholders. The following remuneration report sets out the policy in respect of the components of remuneration which any future CEO employed directly by the company would receive.

Process for setting the Remuneration Policy

The Remuneration Committee (the "Committee") sets the remuneration policy based on the principles and framework outlined below. The Committee is briefed on and considers prevailing market conditions, the competitive environments and the positioning and relativities of pay and employment conditions across the wider Company workforce.

Following each meeting of the Committee, the Chair provides an update to the Board.

Although the Committee does not consult directly with employees on CEO or director remuneration, the Company conducts periodic employee engagement surveys that give employees an opportunity to provide feedback on a wide range of employee matters.

As part of the Company's commitment to good governance, the Committee also considers shareholder views when setting the remuneration policy. Feedback from shareholders and investors is shared with, and used as input into decision-making by, the Board and Committee in respect of the remuneration policy and its application. The Committee considers that this approach provides a robust mechanism to ensure its members are aware of matters raised, have a good understanding of current shareholders views, and can determine the Company's remuneration policy and make decisions as appropriate.

The remuneration policy is designed to avoid conflicts of interests between the Company and the interests of shareholders. In setting the remuneration policy, Committee members are subject to provisions designed to avoid or manage conflicts of interest, which are documented separately in the Company's compliance policies. None of the directors or CEO makes a decision relating to their own remuneration. Individual directors leave the meeting when their own remuneration is being discussed.

Remuneration policy

The Company operates in a highly competitive market and must attract, motivate and retain high quality directors and senior executives capable of achieving the Company's objectives and thereby enhancing shareholder value.

A significant proportion of the potential remuneration of the CEO and senior executives is performance-related with appropriately stretching targets, thus aligning their interests with those of shareholders and encouraging performance at the highest levels.

The Committee has considered whether there are any aspects of the remuneration policy which could inadvertently encourage the executives to take inappropriate risk and has concluded that the policy remains appropriate in this regard.

How the views of employees are taken into account

As referred to above, the Company, in line with market practice, does not actively consult with employees on executive remuneration. The Committee is made aware of overall pay and employment conditions in the wider work force when it sets the executive remuneration policy.

How the views of shareholders are taken into account

As referred to above, the Committee takes into account the view of the shareholders through open and transparent communication with shareholders. If there are significant changes proposed to the remuneration policy, the Committee will consult with major shareholders.

Remuneration Policy Table – Executive Directors and CEO

The table below summarises the remuneration policy for any Executive Directors and the CEO.

Element	Purpose	Operation	Opportunity	Performance Measure
Annual Salary	To attract and retain key individuals and reflect their responsibilities, market value and expected performance level	Reviewed annually or when a change in responsibility occurs	There is no maximum salary opportunity	Not applicable
Benefits	To provide a market competitive reward package to the employee	Benefits to be provided to Executive Directors or the CEO will be determined by the Committee taking into account such factors as it determines to be necessary, with the aim of creating a competitive overall package. The provision of benefits would not be expected to be performance related. Benefits may include, but are not limited to: ➢ Car allowance ➢ Private health care ➢ Travel and housing	Car allowance is a fixed annual amount. There is no maximum for health/dental insurance as it will depend on the value of premiums paid in the year	Not applicable
		allowance Benefits may also be provided to reflect the jurisdiction in which an Executive Director or the CEO is recruited or to which an Executive Director or CEO is relocated for business reasons, including relocation costs, tax equalisation arrangements and arrangements to take into account exchange rates. Benefits may also include participation in any broad-based incentive plan operated by the Company from time to time, up to the relevant limit for participation as applies to such arrangement

Element	Purpose	Operation	Opportunity	Performance Measure
Performance related bonus	To provide an incentive for superior work and to motivate executives toward even higher achievement and business results, to tie their goals and interests to those of the Company and its shareholders and to enable the Company to attract and retain highly qualified executives	Bonus payments are determined by the Remuneration Committee and awarded where justified by performance	The amount of bonus increases with the level of performance achieved, up to a maximum of 100% of salary	Annual bonuses will be determined by reference to performance, in the normal course measured over one financial year. The performance measures, weightings and targets for the annual bonus will be set by the Committee on an annual basis The Committee shall have discretion to determine the terms and level at which annual bonuses may be granted, including the minimum performance required for an annual bonus to be payable In respect of an Executive Directors' or CEO's participation in annual bonus arrangements in any year, the Committee will have power to amend performance measures and targets after they have been set if events happen that mean they are no longer a fair test of performance

Element		Purpose	Operation	Opportunity	Performance Measure
Pension		To provide a market competitive long-term retirement benefit	Eligibility to participate in a Defined Contribution scheme which has a maximum employer contribution of 8%	Up to 12% of salary	Not applicable
Long Incentive (LTIP)	Term Plan	To motivate and incentivise executives to achieve key long term incentives	The Company has operated a historic LTIP arrangement for the former CEO with all awards being synthetic share options which are cash-settled In the event that the Company adopts a new long-term incentive plan (which may involve synthetic share options, cash or actual shares), Executive Directors or the CEO would be eligible to participate in such plan, subject to the terms of, and the maximum levels of participation provided in, the rules of such plan. In respect of any performance-related long-term awards granted to Executive Directors or the CEO, performance measures, weightings and targets would be set by the Committee Following grant of an award, the Committee would have power to amend performance measures and targets if events happen that mean they are no longer a fair test of performance. The 2020 plan "vests" in 25% tranches linked to rig contract dates and expires after five years.	Award of up to 100% of salary each calendar year	The awards are made at the discretion of the Board of Directors and are not guaranteed to be awarded each year

Notes to the Remuneration Policy Table

In considering the appropriate measures to apply to any performance-based awards, the Committee will seek to incentivise and reinforce delivery of the Company's strategic objectives achieving a balance between delivering annual returns to shareholders and ensuring long-term profitability and growth.

The performance targets set would be stretching and achievable, taking into account the Company's strategic priorities and the economic environment in which the Company operates.

Statement of consideration of employment conditions elsewhere in the Company

The Company's remuneration policies and practices are founded on a high degree of alignment and consistency across the organisation. Accordingly, remuneration for senior management is determined taking into account the remuneration principles that apply to the CEO, and similar principles also form the basis of the remuneration arrangements for the wider workforce.

The approach to salary reviews is consistent across the Company, with consideration given to the scope of the role, responsibility, individual performance and pay levels in the selected peer group. Retirement benefits, typically in the form of a pension, are provided based on local market practice. Other benefits provided to the wider employee population reflect local market practice and legislative requirements.

A high proportion of the wider employee population are eligible to participate in annual bonus arrangements. Opportunities and metrics which apply to these arrangements may vary by organisational level with functional performance indicators incorporated where appropriate.

Senior managers are eligible to participate in the LTIP, with opportunities varying across levels with the most senior managers having a bigger portion of their pay delivered under the LTIP.

The key difference between remuneration for the CEO and any executive director and the wider employee population is the increased emphasis on long-term performance in respect of the CEO and executive directors, with a greater percentage of their total remuneration being performance related.

The Committee is regularly updated on the pay principles and practices in operation across the Company, in order to take these into account in setting the remuneration policy.

Other matters

In addition to the above, the Company is entitled to honour any contractual entitlement to compensation or benefits, and any incentive awards, which are held by: (i) any current or former Executive Director or CEO on the effective date of this policy; or (ii) an employee or officer of the Group on the date they are promoted to the role of Executive Director or CEO. Appropriate disclosure will be made of any compensation paid (or similar) to an Executive Director or CEO pursuant to any such arrangements.

The Company may reimburse all reasonable expenses incurred by an Executive Director or CEO in connection with their role. This will include expenses in attending Board or Board-committee meetings, or the Company may alternatively provide a travel allowance for such purpose. This may also include items which, for tax purposes, are treated as a taxable benefit, and in which case the Company may also pay any such tax on behalf of the Executive Director or CEO.

Approach to recruitment and promotions

In recruiting an Executive Director or CEO, including on promotion of an employee or officer from within the Group to the role of Executive Director or CEO, the Committee will offer the recruit a remuneration package that it believes is appropriate, taking into account the skills and experience of the individual and the need to recruit, retain and motivate individuals of the appropriate calibre. The remuneration package offered may include the components of remuneration described above in the Remuneration Policy Table.

For external hires, the Committee may determine that it would be appropriate to buy-out any existing incentive awards held by the individual that are forfeited as a result of the individual leaving their former employer. The Committee may also determine that it would be appropriate to grant recruitment-related awards. In the case of any buy-out of an equity based award, or the grant of any recruitment-related award, the award would normally be subject to such vesting and/or performance conditions as the Committee determines to be appropriate, either under a one-off arrangement or under the terms of the Company's incentive arrangements. In determining the terms of such awards, the Committee will take account of the vesting schedule and conditions attached to the forfeited awards (in the case of buy-out awards), but also other factors that it determines to be relevant, including the need to suitably incentivise and retain the individual during the initial years of their office.

The maximum level of variable remuneration (excluding any buy-out awards) that may be granted to any new Executive Director or CEO is 250% per annum of their salary.

Service contracts

The employment contract of the CEO is not of a fixed duration and therefore has no unexpired terms.

The notice period of the CEO's contract of employment is six months with the same notice period for the Company. The CEO's employment can be terminated in the six month probationary period without notice in the case of wilful misconduct or gross negligence.

In the event of termination by the Company, where there is no basis for dismissal as a result of gross breach of duty or other material breach of the employment contract by the CEO, or as a result of mutual agreement, the CEO shall be entitled to twelve months' severance pay.

In the event of a change of control of the Company, the CEO can terminate the employment contract and would be entitled to twelve months' severance pay.

The CEO's service contract is available for inspection at the Company's registered office during normal hours of business.

The non-executive directors do not have service contracts but instead have letters of appointment.

Loss of office payments

Contractual entitlements

A departing Executive Director's or CEO's rights in respect of salary, retirement benefits and contractual benefits will be determined in accordance with his service contract.

Incentive plans

The terms of a departing Executive Director's or CEO's participation in any annual bonus or long-term incentive plans will be governed by the terms of such arrangements.

Corporate actions

The treatment of incentive awards in the event of a corporate action affecting the Company will be determined in accordance with the terms of such awards.

The Company may agree to pay reasonable legal fees on behalf of an Executive Director or CEO in respect of the effect of any corporate action on their personal position.

Other

The Company may enter into new contractual arrangements with a departing Executive Director or CEO in connection with the cessation of office or employment, including (but not limited to) in respect of settlement of claims, confidentiality, restrictive covenants and/or consultancy arrangements, where the Committee determines it necessary or appropriate to do so. The Company may pay reasonable legal fees on behalf of an Executive Director or CEO in connection with their cessation of office and employment. The Company may agree to provide other ancillary or non-material benefits, payments or similar to a departing Executive Director or CEO.

Reward Scenarios

The graph below shows how the total pay opportunities for the CEO vary under four performance scenarios. These have been prepared on the assumptions detailed below. The current interim CEO is on a fixed rate in accordance with a management on hire agreement and as a result no performance scenarios are applicable.

Below target = fixed pay only (base salary, benefits and pension) On target = 50% payable of annual bonus, 0% LTIP award Maximum = 100% payable of annual bonus, 100% LTIP award Maximum 2 = 100% payable of annual bonus, 100% LTIP award and 50% share price increase over the performance period

The chart illustrates the potential rewards available under the remuneration policy on an annualised basis for the financial year 2021. The values (other than the Maximum 2 illustration) assume a constant share price and do not take into account dividend adjustments that may be received on the share awards. The potential awards available for "on-target" performance under the annual bonus and LTIP are provided for illustration only and do not reflect formal policy decisions that these amounts will be received. Maximum 2 illustration assumes a share price increase of 50% over the performance period but in all other respects is the same as the Maximum illustration. The figures used in the chart are provided for illustration only based on a theoretical grant over 100% of salary, being the maximum permitted under the policy table. The salary level (on which the bonus and LTIP elements of the package are calculated) are based on the previous salary level of GBP 325,000 based on the GBP/NOK year end exchange rate.

Remuneration policy table – non-executive directors

The remuneration policy for non-executive directors is set out in the table below. No non-executive directors participate in the Company's incentive arrangements or pension plan.

Component	Purpose	Operation
Fees	The basic fee is a fixed annual fee agreed after taking external advice and making market comparisons, and relate to the service of the directors in connection with the Company's business. The additional fees payable to the Chairman and members of the Board Committees reflects the additional time commitment in preparing and attending additional meetings.	The fees for non-executive directors (including the Chairman) are reviewed annually and approved in aggregate at the annual general meeting. The current level of fees is detailed below.

New appointments

The same principles as described above will be applied in setting the remuneration of a new non-executive director. Remuneration will comprise fees only and be paid in accordance with the prevailing rate at the time of the appointment. No variable remuneration will be paid and there will be no compensation for any loss of remuneration in a previous employment.

Letters of appointments

The Non-executive Directors' Letters of Appointment are available for inspection at the Company's registered office during normal hours of business.

Other matters

In addition to the above, the Company is entitled to honour any contractual entitlement to compensation or benefits, and any incentive awards, which are held by any current or former Non-Executive Director on the effective date of this policy. Appropriate disclosure will be made of any compensation paid (or similar) to a Non-Executive Director pursuant to any such arrangements.

The Company may reimburse all reasonable expenses incurred by a Non-Executive Director in connection with their role. This will include expenses in attending Board or Board-committee meetings, or the Company may alternatively provide a travel allowance for such purpose. This may also include items which, for tax purposes, are treated as a taxable benefit, and in which case the Company may also pay any such tax on behalf of the Non-Executive Director.