Prosafe SE

Earnings Release • Nov 5, 2014

Prosafe SE : Third quarter 2014 results

Prosafe SE : Third quarter 2014 results

Financials

(Figures in brackets refer to the corresponding period of 2013)

Operating profit for the third quarter amounted to USD 93 million (USD 90.4

million). This quarterly result is the highest ever in Prosafe's history.

Utilisation of the vessels was 96 per cent (91 per cent).

Safe Scandinavia, Safe Caledonia, Safe Concordia, Safe Lancia, Jasminia, Safe

Hibernia, Safe Britannia and Safe Regency were in full operation throughout the

quarter.

Safe Concordia is operating on a three-year contract with Petrobras in Brazil.

The average effective day rate in the third quarter was approximately USD

158,000.

Regalia completed the work for Statoil at the Grane field in Norway in early-

August and commenced the contract with Talisman for accommodation support at the

Montrose field in the UK in late-August.

Safe Bristolia was off-hire for 9 days between completion of the contract with

ConocoPhillips at the Judy field in the UK and commencement of the work for BG

Group at the Everest field. Operation of the vessel was suspended in mid October

due to storm damage to her lifeboats and the vessel has been demobilised for

repair works to be carried out.

Safe Astoria completed its Indonesian operations for Swiber in May. In mid-July,

the vessel commenced mobilisation to the Malampaya field in the Philippines,

with the firm contract period of 11 months starting 1 August.

Net financial costs amounted to USD 17.7 million (USD 3.4 million). This change

is mainly due to revaluation of forward exchange contracts.

Net profit equalled USD 67.4 million (USD 85.2 million), corresponding to

diluted earnings per share of USD 0.29 (USD 0.36).

Total assets at 30 September amounted to USD 1 769 million (USD 1 543 million).

Net interest-bearing debt equalled USD 773.3 million (USD 613.7 million), while

the book equity ratio declined to 41.1 per cent (45.7 per cent).

Dividend

The Board of Directors has resolved to declare an interim dividend equivalent to

USD 0.053 per share to shareholders of record as of 14 November 2014. The shares

will trade ex dividend on 12 November 2014. The dividend will be paid in the

form of NOK 0.36 per share on 26 November 2014.

Dividend policy

The Board has re-affirmed the long-term dividend policy of paying out up to 75

per cent of the preceding year's net profit, adopted in 2011.

The exact level of dividend to be paid in each period will depend on the

supply/demand balance in the market, the investment level and the overall

financial position of the Group.

On the basis of a faster fleet growth, the Board will normally target a pay out

ratio in the range of 40 to 60 per cent of the preceding year's net profit. In

periods with exceptional conditions the pay-out ratio may be outside that range.

Guidance for the coming period

In light of the current weak market outlook in the North Sea and the increase in

overall supply, the Board of Directors shall focus on strengthening the balance

sheet and securing strategic flexibility. Therefore, for the period until the

end of 2016 the Board is targeting quarterly dividend payments corresponding to

an annual payout ratio in the range of 25 to 35 per cent of the preceding year's

net profit.

New builds

The new build projects are progressing well and cost forecasts remain as

previously communicated.

Delivery of the first vessel, Safe Boreas, is on track for delivery during the

fourth quarter, giving adequate time for mobilisation for the first contract,

commencing in April/May 2015. Its sister vessel, Safe Zephyrus, will be ready

for operations during the summer of 2015.

Construction of the Safe Notos and Safe Eurus at COSCO Quidong in China is

progressing as planned and the vessels should be ready for operations during the

first and second half of 2016 respectively.

Outlook

Statoil, Premier Oil and Prosafe have entered into an agreement for the

assignment of Safe Scandinavia from the Snorre field in the Norwegian

Continental Shelf, to the Solan field in the UK Continental Shelf with effect

from early October 2014. Upon completion of the assignment, Safe Scandinavia

will demobilise to the Westcon yard in Norway where it will undergo a temporary

conversion to a tender support vessel (TSV). The TSV contract with Statoil at

the Oseberg Øst field is expected to commence mid 2015.

As a result of E&P companies' spending and cost cutting initiatives there has

been a softening of demand for accommodation vessels in the North Sea region.

Several projects both in Norway and in the UK have been descoped and/or

postponed, resulting in a temporary reduction in demand for accommodation

support. Overall, this will most likely lead to a reduction in the North Sea

contract inflow going forward, compared to the levels experienced during the

past two to three years.

The demand outlook in Mexico remains positive. The activity level in shallow

waters is high, evidenced by substantial growth in the number of drilling jack-

ups under contract in the region. This bodes well for continued robust demand

for accommodation support services in the short-to-medium-term.

The recently introduced energy reform in Mexico should encourage increased

exploration and, eventually, development activity in the deep-water areas.

Although this does not affect demand for accommodation support services in the

near-term, it represents substantial potential opportunities in the longer-term.

The outlook for further demand growth in Brazil is positive and there should be

potential for further contract awards in the coming year. However, the Brazilian

market is characterised by a crowded and fragmented supply side. Accordingly,

competition for contracts will continue to be strong.

Prosafe is the world's leading owner and operator of semi-submersible

accommodation/service rigs. Operating profit reached USD 245.1 million in 2013

and net profit was USD 199.1 million. The company operates globally, employs

650 people and is headquartered in Larnaca, Cyprus. Prosafe is listed on the

Oslo Stock Exchange with ticker code PRS. For more information, please refer to

www.prosafe.com.

Attachments: Q3 2014 report, Q3 2014 presentation

Larnaca, 5 November 2014

The Board of Directors of Prosafe SE

For further information, please contact:

Karl Ronny Klungtvedt, Chief Executive Officer

Prosafe Management AS

Phone: + 47 51 64 25 81

Sven Børre Larsen, Chief Financial Officer

Prosafe Management AS

Phone: +47 909 43 673

This information is subject of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#1868792]