Awilco Drilling PLC

Investor Presentation • Feb 25, 2014

Q4 2013 Presentation

Oslo, 25th of February 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.

• 1. Highlights
• 1. Q4 2013 and Preliminary Full-Year 2013 Financial Results
• 1. Operational Update
• 1. Market Outlook
• 1. Summary
• 1. Q&A

1. Highlights

• Announcement of USD 1.10 dividend
• Total Q4 Revenue USD 61.4 million; EBITDA USD 40.5 million
• Q4 Opex per rig approx. USD 88,700 per day
• Total contract backlog at end of Q4 was USD 762 million
• Revenue efficiency during Q4 was 95.6%

2. Q4 2013 and Preliminary Full-Year 2013 Financial Results

Q4 2013 Income Statement

Condensed statement of comprehensive income

in USD thousands, except earnings per share		Full Year		Full Year
	Q4 2013	2013	Q4 2012	2012
	(unaudited)	(unaudited)	(unaudited)	(audited)
Contract revenue	60,733	233,152	51,799	147,210
Reimbursables	635	3,314	770	4,800
Other revenue	29	66	184	217
	61,397	236,532	52,753	152,227
Rig operating expenses	16,313	56,568	14,445	56,545
Reimbursables	204	1,239	450	951
Provision for doubtful debts	-	-	3,562	9,700
General and administrative expenses	5,688	20,887	1,702	11,132
Other (income)	(1,335)	(3,535)	-	-
Other expense	-	1,900	-	-
Depreciation	4,415	17,609	4,219	17,474
	25,285	94,668	24,378	95,802
Operating profit	36,112	141,864	28,375	56,424
Interest income	20	120	5	19
Interest expense	(2,238)	(9,379)	(3,001)	(13,447)
Other financial items	-	(128)	(626)	(920)
Net financial items	(2,218)	(9,387)	(3,622)	(14,348)
Profit before tax	33,894	132,477	24,753	42,076
Tax (expense)	(2,332)	(10,214)	(1,842)	(2,682)
Net profit	31,561	122,263	22,911	39,394
Other comprehensive income	-	-	-	-
Total comprehensive income	31,561	122,263	22,911	39,394
Attributable to minority interests	-	-	-	-
Attributable to shareholders of the parent	31,561	122,263	22,911	39,394
Basic and diluted earnings per share	1.05	4.07	0.76	1.31

Q4 2013 Balance Sheet

Condensed statement of financial position

in USD thousands

	(unaudited) 245,279	(audited)
Rigs, machinery and equipment		250,173
Deferred tax asset	2,763	853
	248,042	251,026
Trade and other receivables	14,417	22,285
Prepayments and accrued revenue	25,835	15,529
Inventory	4,800	4,800
Cash and cash equivalents	52,347	16,926
Current tax	42,317	6,542
	139,716	66,082
Total assets	387,758	317,108
Paid in capital	130,142	130,142
Retained earnings	77,370	48,206
	207,512	178,348
Deferred tax liability	554	769
Long-term interest-bearing debt	87,098	98,098
	87,652	98,867
Current portion of long-term debt	11,000	16,500
Trade and other creditors	3,140	1,965
Accruals and provisions	25,182	12,041
Current tax payable	53,272	9,387
	92,594	39,893
Total equity and liabilities	387,758	317,108

3. Operational Update

Contract Status – Current Backlog USD 724 million*

Operational Performance

• Good operational performance in Q4 with 98.5% operational uptime
• Adverse weather conditions caused extensive waiting-on-weather
• Continued positive customer feedback
• Opex in Q4 close to guiding for 2013

• Increased spend on major expense projects as planned

• Announcement of dividend payable in Q1 of USD 1.10 per share

• Dividend payable on or around the 20th March 2014
• Share will trade ex-dividend on 4 th March 2014, the record date will be 6th March
• 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

Dayrates and Contract Duration remain Attractive in the UK Market

Limited Influx of Rigs to the UK and Limited Orderbook should keep the Market in Balance

MW Region
ASIA PACIFIC, INDIAN SUBC. & AUS/NZ	Active Supply	23
	Demand	21
	Cold stacked	4
	Active Utilization	91,3 %
NORTH SEA	Active Supply	35
	Demand	35
	Cold stacked	1
	Active Utilization	100,0%
	Active Supply	4
WEST AFRICA	Demand	3
	Cold stacked	1
	Active Utilization	75,0 %
GULF OF MEXICO	Active Supply	3
	Demand	3
	Cold stacked	4
	Active Utilization	100,0%
SOUTH AMERICA	Active Supply	9
	Demand	8
	Cold stacked	Ĥ
	Active Utilization	88,9 %

Current fleet	Semis	Drillships	Total
Active Supply	75	5	80
Demand	72	4	76
Cold stacked	12		12
Active Utilization	96,0%	80,0%	95,0%
Orderbook	Semis	Drillships	Total
Orderbook	4	0	4
Delivery 2014	2		2
Delivery 2015	2

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

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

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

• Sustained "high" oil price well above investment triggers is under-pinning operator confidence
• UK Government has set out a new vision to maximise the recovery of hydrocarbon reserves
• Major Operators increasing activity in new developments West of Shetland
• 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

• Market fundamentals remain positive
• Solid current contract backlog of USD 724 million
• Continued focus on operational efficiency
• Announcement of dividend payable in Q1 of USD 1.10
• Evaluating growth opportunities on a case-by-case basis

Q&A