Awilco Drilling PLC

Investor Presentation • Aug 14, 2019

Q2 2019 PRESENTATION

14th of August 2019

DISCLAIMER

This presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated («relevant persons»). Any person who is not a relevant person should not act or rely on these presentations or any of its contents. Information in the following presentations relating to price at which relevant investments have been bought or sold in the past or the yield on such investments cannot be relied upon as a guide to future performance of such investments. This presentation does not constitute an offering of securities or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities in Awilco Drilling PLC or any affiliated company thereof. The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law, and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about, and observe, such restrictions.

This presentation may include certain forward-looking statements, estimates, predictions, influences and projections with respect to anticipated future performance and as to the market for products or services which may reflect various assumptions made by the management of the Company. These assumptions may or may not prove to be correct and no representation is made as to the accuracy of such statements, estimates, projections, predictions and influences. These statements and forecasts involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. The information and opinions contained in this presentation are subject to change without notice and the Company assumes no responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.

AGENDA

• 1. Highlights
• 2. Q2 2019 Financial Results
• 3. Operational Update
• 4. Newbuild Update
• 5. Market Outlook
• 6. Summary
• 7. Q&A

3

1. HIGHLIGHTS

HIGHLIGHTS

• Office in Stavanger, Norway opened 1st of August
  • 6 new key employees hired, of which 3 already started
• Ramping up marketing activities towards potential NCS customers for the newbuild rigs with good progress
• Total Q2 2019 Revenue USD 10.4 million, EBITDA USD 2.4 million, Net Loss of USD 0.4 million
• Q2 Opex average for WilPhoenix approximately USD 66 000 per day

. Q2 FINANCIAL RESULTS

Q2 2019 INCOME STATEMENT

Condensed statement of comprehensive income

in USD thousands, except earnings per share	YTD			YTD
	Q2 2019	30.06.19	Q2 2018	30.06.18
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Contract revenue	9,636	18,608	8,927	42,686
Reimbursables	-	(24)	67	411
Other revenue	802	916	2	2
	10,438	19,500	8,996	43,099
Rig operating expenses	6,131	12,384	7,440	14,663
Reimbursables	-	2	30	172
General and administrative expenses	1,799	4,932	3,445	6,228
Depreciation	2,746	5,397	3,146	6,548
	10,676	22,715	14,061	27,611
Operating (loss)/profit	(238)	(3,215)	(5,065)	15,488
Interest income	71	604	506	1,056
Interest expense	-	-	(3,025)	(4,667)
Other financial items	(163)	(21)	19	378
Net financial items	(92)	583	(2,500)	(3,233)
(Loss)/Profit before tax	(330)	(2,632)	(7,565)	12,255
Tax expense	(62)	(112)	(50)	(756)
Net (loss)/profit	(392)	(2,744)	(7,615)	11,499
Total comprehensive (loss)/income	(392)	(2,744)	(7,615)	11,499
Attributable to shareholders of the parent	(392)	(2,744)	(7,615)	11,499
Basic and diluted earnings per share	(0.01)	(0.05)	(0.16)	0.29

Q2 2019 BALANCE SHEET

Condensed statement of financial position

in USD thousands

	30.06.2019	30.06.2018
	(unaudited)	(unaudited)
Rigs, machinery and equipment	226,501	215,182
Deferred tax asset	352	1,435
	226,853	216,617
Trade and other receivables	7,970	-
Prepayments and accrued revenue	2,059	1,021
Inventory	4,808	4,958
Cash and cash equivalents	42,397	75,787
Current tax	340	5,995
	57,574	87,761
Total assets	284,427	304,378
Paid in capital	218,905	198,719
Retained earnings	59,927	97,035
	278,832	295,754
Trade and other creditors	983	1,068
Accruals and provisions	4,612	7,556
Current tax payable	0	0
	5,595	8,624
Total equity and liabilities	284,427	304,378

3. OPERATIONAL UPDATE

WILPHOENIX' SHELL PROGRAMME EXPECTED TO END IN NOVEMBER 2019

• Operational uptime was 95.9% in Q2 2019
  • Reduction mainly caused by BOP downtime 3 days in June
  • Otherwise WilPhoenix performs very well
• Total contract backlog as of today is approximately USD 9 million
• Current programme with Shell UK expected to end early November 2019
• Actively pursuing new work for WilPhoenix, with several leads
  • However, limited number of opportunities during winter 2019/2020

4. NEWBUILD UPDATE

THE NEW RIGS

BUILDING IS ON TRACK, AND PROGRESS IS BEING MADE

KEY FEATURES

• CS60 ECO MW
• 6-column hull
• DP2, 12-point mooring with Thruster Assist
• MH Wirth drilling package
• RamRig
• NOV BOP
• Rolls Royce Tier III generator set
• Variable Frequency technology (VFD)
• Azimuth thrusters
• Fully electric cranes
• 140 one-person cabins
• Hybrid-technology
• Energy management system
• Data transmission and exchange
• Open Source technology
• Extensive use of sensors
• Condition-based monitoring
• Automated Drilling Controls
• 75 ft telescopic joint
• QTR riser
• Optimised Gooseneck handling system
• Heat regeneration from exhaust gas

IN PRACTICAL TERMS:

• First rig with hybrid energy solution built into design
• Unique energy management system with closed-bus technology
• Energy regeneration from moving equipment and heat regeneration from exhaust gas
• Substantial fuel savings and vast reduction in carbon emissions
• Optimized lay-out and higher degree of automation, ensuring a safer workplace
• Open interface network with unique digital infrastructure, enabling the use of any applicable software application

AWILCO DRILLING IS NOW ALSO ESTABLISHED IN NORWAY

• Office opened 1st of August
• VP Technical, VP Operations and Offshore Installation Manager started
• VP HR, VP HSEQ, and ICT Director start by 1st of October
• Meetings scheduled with a number of potential clients
• Next recruitment steps are already in progress

4. MARKET OUTLOOK

UK MARKET DAYRATES ARE TRENDING SLOWLY UPWARDS, BUT SEASONALITY EXPECTED TO CONTINUE

DAYRATES ARE INCREASING IN THE NORWEGIAN MARKET

LIMITED RIG AVAILABILITY AND INCREASE IN UTILISATION SUPPORT UPTICK IN DAYRATES FOR ALL HE SEGMENTS

AWILCO DRILLING IS IN GOOD SHAPE

• WilPhoenix operations going well, strong focus on securing new work
• Newbuild project progressing according to plan and budget
• Stavanger-office (Norway) opened and further recruitment ongoing
• Active discussions with several potential clients in Norway
• Market outlook for harsh environment is positive, with already high utilisation of Tier 1 rigs