Q2 2015 Presentation

Oslo, 19th of August 2015

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. Q2 2015 Financial Results
1. Operational Update
1. Market Outlook
1. Summary
1. Q&A

1. Highlights

Announcement of USD 0.50 dividend
Total Q2 Revenue USD 69.0 million; EBITDA USD 50.3 million
Q2 Opex per rig approx. USD 87,900 per day
Total contract backlog at end of Q2 was USD 371 million
Revenue efficiency during Q2 was 97.3%

2. Q2 2015 Financial Results

Q2 2015 Income Statement

Condensed statement of comprehensive income

in USD thousands, except earnings per share		YTD
	Q2 2015	YTD 30.06.15	Q2 2014	30.06.14
	(unaudited)	(unaudited)	(unaudited)	(unaudited)

Contract revenue	68,366	136,205	65,075	127,286
Reimbursables	584	1,213	1,189	1,692
Other revenue	34	62	41	74
	68,984	137,480	66,305	129,052
Rig operating expenses	15,999	30,352	17,212	31,634
Reimbursables	206	474	373	568
General and administrative expenses	2,474	4,163	6,010	10,045
Other expense	-	-	269	281
Depreciation	4,527	9,046	4,462	8,862
	23,206	44,035	28,326	51,390
Operating profit	45,778	93,445	37,979	77,662
Interest income	19	90	17	56
Interest expense	(2,066)	(4,244)	(4,847)	(7,336)
Other financial items	385	(58)	-
Net financial items	(1,662)	(4,212)	(4,830)	(7,280)
Profit before tax	44,116	89,233	33,149	70,382
Tax (expense)	(8,771)	(14,651)	(7,224)	(9,976)
Net profit	35,345	74,582	25,925	60,406
Total comprehensive income	35,345	74,582	25,925	60,406

Attributable to shareholders of the parent	35,345	74,582	25,925	60,406
Basic and diluted earnings per share	1.18	2.48	0.86	2.01

Q2 2015 Balance Sheet

Condensed statement of financial position

in USD thousands

	30.06.2015	31.12.2014
	(unaudited)	(audited)
Rigs, machinery and equipment	249,972	251,165
Deferred tax asset	545	2,486
	250,517	253,651
Trade and other receivables	23,472	12,116
Prepayments and accrued revenue	27,255	28,938
Inventory	4,787	4,800
Cash and cash equivalents	86,371	75,951
Current tax	59,545	82,594
	201,430	204,399
Total assets	451,947	458,050
Paid in capital	130,142	130,142
Retained earnings	107,746	78,211
	237,888	208,353
Deferred tax liability	2,960	0
Long-term interest-bearing debt	105,000	110,000
	107,960	110,000
Current portion of long-term debt	10,000	10,000
Trade and other creditors	3,292	3,233
Accruals and provisions	16,405	17,942
Current tax payable	76,402	108,522
	106,099	139,697
Total equity and liabilities	451,947	458,050

3. Operational Update

Contract Status – Current Backlog USD 293 million*

WilHunter released early from Hess contract end of July
No negative financial repercussions from early termination to either parties
WilHunter SPS will only be carried out if sufficient follow-on work is secured
Warm stack status on WilHunter to be continuously reviewed

Solid Operational Performance Continues

Good operational performance in Q2 with 96.7 % operational uptime
Opex in Q2 in accordance with guidance
Continued positive customer feedback
Awilco Drilling attained the OHSAS 18001 Safety Standard during the quarter
The Company previously attained accreditation to the ISO 9001 Quality Standard and the ISO 14001 Environmental Standard. All three standards apply to both the onshore and offshore organisation

Upcoming SPS Yard Stay Projects

Experienced project team has been planning the yard stay projects since 2013
Budget for SPS project remains unchanged at USD 20 million per rig
Budget for new BOP's remains unchanged at USD 22.5 million per rig
WilPhoenix yard stay scheduled for late 2015/early 2016
WilHunter yard stay scheduled for Q2 2016, however, dependent on sufficient follow-on work being secured
Announcement of dividend payable of USD 0.50 per share
Dividend payable on or around the 25th September 2015
Share will trade ex-dividend on 25th August 2015, the record date will be 26th August
The Company's dividend policy remains unchanged:

"The Company intends to distribute all free cash flow above a robust cash buffer to support operational working capital requirements and capital expenditure, including SPS."

• Current levels of dividends will continue to be challenged by upcoming capital expenditure and future market prospects

4. Market Outlook

Dayrates have reduced considerably in the UK market

Up to 10 Rigs Available for New Contracts the Next 12 Months

UK FLOATER MARKET
CONTRACT STATUS
		2015			2016						2017
Company	Rig name		Aug Sep	Oct Nov	Dec					Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov		Dec	Jan Feb Mar Apr	May Jun Jul Aug Sep	Oct Nov	Dec
Transocean	Transocean Prospect
	Henry Goodrich
	Sedco 711		on contract
	Transocean John Shaw		on contract
	Sedco 714		on contract
	Sedco 704		on contract
	Sedco 712		on contract
	Paul B. Loyd, Jr		on contract											options
	Transocean Leader		on contract
	Ocean Nomad
	Ocean Princess
Diamond	Ocean Vanguard
Offshore	Ocean Guardian
	Ocean Valiant		on contract	options
	Ocean Patriot		on contract												options
	Borgny Dolphin
Dolphin Drilling	Byford Dolphin		on contract
	Blackford Dolphin		on contract										options
	Bollsta Dolphin			en route		on contract
Awilco Drilling	WilHunter		warm stacked						yard
	WilPhoenix		on contract				yard
Stena Drilling	Stena Spey		on contract		warm stacked
Paragon Drilling	Paragon MSS1		on contract		yard
Seadrill	West Phoenix		on contract warm stacked
Odfjell	Deepsea Aberdeen		on contract
	ON CONTRACT EN ROUTE YARD							WARM STACKED COLD STACKED

Timing of Return to Higher Activity Levels Remains Unknown

Market uncertainty continues with respect to the timing and shape of recovery
Operators continue with reductions in current and planned E&P expenditure
UK tax incentives aimed at operators have had little impact to date
Increased number of available rigs expected to continue through 2016 and potentially beyond
Lack of new contract opportunities currently leading to rig cold-stacking and attrition

5. Summary

Announcement of dividend payable of USD 0.50
Revenue efficiency during Q2 was 97.3 %, continued focus on cost discipline
Contract backlog of USD 293 million, focus on securing new work for WilHunter
Market uncertainty continues with respect to the timing and shape of recovery
Evaluating market opportunities on a case-by-case basis

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