Q1 2014 Presentation

Oslo, 14th of May 2014

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
1. Q1 2014 Financial Results
1. Operational Update
1. Market Outlook
1. Summary
1. Q&A

1. Highlights

Announcement of USD 1.15 dividend
Total Q1 Revenue USD 62.7 million; EBITDA USD 44.1 million
Q1 Opex per rig approx. USD 80,100 per day
Total contract backlog at end of Q1 was USD 707 million
Revenue efficiency during Q1 was 97.2%

2. Q1 2014 Financial Results

Q1 2014 Income Statement

Condensed statement of comprehensive income

in USD thousands, except earnings per share Full Year

	Q1 2014	Q1 2013	2013
	(unaudited)	(unaudited)	(audited)

Contract revenue	62,211	52,292	233,152
Reimbursables	503	1,060	3,314
Other revenue	33	5	66
	62,747	53,357	236,532

Rig operating expenses	14,422	13,550	56,568
Reimbursables	195	500	1,239
General and administrative expenses	4,035	5,379	20,887
Other (income)	-	-	(3,535)
Other expense	12	-	1,900
Depreciation	4,400	4,391	17,609
	23,064	23,820	94,668
Operating profit	39,683	29,537	141,864
Interest income	38	16	120
Interest expense	(2,488)	(2,423)	(9,379)
Other financial items	-	(116)	(128)
Net financial items	(2,450)	(2,523)	(9,387)

Profit before tax	37,233	27,014	132,477
Tax (expense)	(2,753)	(2,300)	(10,214)
Net profit	34,480	24,714	122,263
Other comprehensive income	-	-	-
Total comprehensive income	34,480	24,714	122,263

Attributable to minority interests	-	-	-
Attributable to shareholders of the parent	34,480	24,714	122,263

Basic and diluted earnings per share	1.15	0.82	4.07

Q1 2014 Balance Sheet

Condensed statement of financial position

in USD thousands

	31.03.2014	31.12.2013
	(unaudited)	(audited)
Rigs, machinery and equipment	248,146	245,279
Deferred tax asset	2,977	2,763
	251,123	248,042
Trade and other receivables	28,648	14,417
Prepayments and accrued revenue	17,129	25,835
Inventory	4,800	4,800
Cash and cash equivalents	45,175	52,347
Current tax	52,355	42,317
	148,107	139,716
Total assets	399,230	387,758
Paid in capital	130,142	130,142
Retained earnings	78,816	77,370
	208,958	207,512
Deferred tax liability	554	554
Long-term interest-bearing debt	0	87,098
	554	87,652
Current portion of long-term debt	95,348	11,000
Trade and other creditors	2,702	3,140
Accruals and provisions	27,809	25,182
Current tax payable	63,859	53,272
	189,718	92,594
Total equity and liabilities	399,230	387,758

3. Operational Update

Contract Status – Current Backlog USD 680 million*

AWILCO DRILLING PLC
CONTRACT STATUS
					2014				2015
	May	June	July	Aug	Sept	Oct	Nov	Dec	Jan	Feb	March	April	May	June	July	Aug	Sept	Oct	Nov	Dec
WILHUNTER :
Hess	\$360K		\$385,000								\$385,000									Yard
WILPHOENIX:
Premier Oil	\$322K	\$442,500
Apache								\$387,500
	CONTRACT STATUS (continued) 2016
	Jan	Feb	March	April	May	June	July	Aug	Sept	Oct	Nov	Dec
WILHUNTER :
Hess				Max 275 days option
WILPHOENIX:
Apache		Yard									Firm until 2H2017 + 27 months options

		Firm			Options			Yard											*as of	12 May 2014

Operational Performance

Good operational performance in Q1 with 99.4% operational uptime
Adverse weather conditions caused waiting-on-weather
Continued positive customer feedback
Opex in Q1 lower than guiding for 2014
Timing of projects
Lower intermediate survey cost on WilPhoenix
Announcement of dividend payable in Q2 of USD 1.15 per share
Dividend payable on or around the 20th June 2014
Share will trade ex-dividend on 19th May 2014, the record date will be 21st May
Future quarterly dividend payments will be in line with the Company's intent of distributing all free cash flow above a robust cash buffer to support operational working capital requirements and planned capital expenditure

4. Market Outlook

Contract Rates Remain Attractive in the UK Market

The UK Market is close to Sold Out until mid-2015

UK FLOATER MARKET

	UK FLOATER MARKET
CONTRACT STATUS
		2014									2015								2016
Company	Rig name	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Jan Feb Mar Apr May Jun Jul Aug					Oct	Nov	Dec	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec
	J.W.McLean
	GSF Arctic III		on contract
	Sedco 704		on contract
	Sedco 712		on contract
Transocean	Sedco 714		yard				on contract
	Transocean John Shaw		on contract
	Sedco 711		on contract
	Transocean Prospect		on contract
	Paul B. Loyd, Jr		on contract
	Ocean Nomad		on contract													options
Diamond	Ocean Princess		on contract
Offshore	Ocean Guardian		on contract											options
	Ocean Patriot		en route				yard		on contract
Dolphin	Byford Dolphin		on contract																			options
Drilling	Bollsta Dolphin														en route			on contract
	Blackford Dolphin	yard
Awilco Drilling	WilHunter		on contract														yard			option
	WilPhoenix		on contract																yard
Stena Drilling	Stena Spey		on contract
Noble Drilling	Noble Ton Van Langeveld		on contract										options
Seadrill	West Phoenix		on contract
Odfjell	Deepsea Aberdeen								en route			on contract
					FIRM			OPTIONS			EN ROUTE	YARD	MOVING			COLD STACKED

Why do we expect the UK market to be tight beyond mid-2015?

Sustained "high" oil price and increased operator financial discipline anticipated to increase global operator investments from 2015/2016 onwards
UK Government has set out a new vision to maximise the recovery of hydrocarbon reserves
Major Operators continuing to commit to development drilling throughout the North Sea
Major Operators increasing decommissioning and well abandonment activity
Independent Operators continuing to exploit marginal fields & push the sublet market
UK market has barriers to entry

5. Summary

Long term market fundamentals remain positive
Solid current contract backlog of USD 680 million, positioning Awilco Drilling well for any potential near term market softness
Continued focus on operational efficiency
Announcement of dividend payable in Q2 of USD 1.15
Evaluating growth opportunities on a case-by-case basis

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Awilco Drilling PLC

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