Q3 2018 PRESENTATION

Oslo, 13th of November 2018

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. Q3 2018 Financial Results
3. Operational Update
4. Market Outlook
5. Summary
6. Q&A

TRANSFORMING THE COMPANY THROUGH A NEWBUILDING PROGRAMME

1. HIGHLIGHTS

HIGHLIGHTS

Total Q3 Revenue USD 3.2 million, EBITDA loss of USD 6.5 million, Net Loss of USD 10.2 million
Q3 Opex average for WilPhoenix approx. USD 76 000 per day
WilPhoenix commenced working for Shell on 7 th September
Shell contract amended with addition of options for three exploration wells
Transfer from the Oslo Axess to the Oslo Stock Exchange main list completed

2. Q3 2018 FINANCIAL RESULTS

Q3 2018 INCOME STATEMENT

Condensed statement of comprehensive income

in USD thousands, except earnings per share		YTD
	Q3 2018	30.09.18	Q3 2017	30.09.17
	(unaudited)	(unaudited)	(unaudited)	(unaudited)
Contract revenue	3,040	45,726	32,082	96,878
Reimbursables	135	545	331	963
Other revenue	12	15	9	21
	3,187	46,286	32,422	97,862
Rig operating expenses	7,159	21,823	8,089	20,529
Reimbursables	77	248	92	220
General and administrative expenses	2,486	8,713	3,347	6,844
Depreciation	3,726	10,274	3,961	11,723
	13,448	41,058	15,489	39,316
Operating (loss)/profit	(10,261)	5,228	16,933	58,546
Interest income	85	1,140	85	183
Interest expense	(4)	(4,671)	(1,800)	(5,304)
Other financial items	(78)	300	(186)	(191)
Net financial items	3	(3,231)	(1,901)	(5,312)
(Loss)/profit before tax	(10,258)	1,997	15,032	53,234
Tax expense	75	(681)	(809)	(8,140)
Net (loss)/profit	(10,183)	1,316	14,223	45,094
Total comprehensive (loss)/income	(10,183)	1,316	14,223	45,094
Attributable to shareholders of the parent	(10,183)	1,316	14,223	45,094
Basic and diluted earnings per share	(0.21)	0.03	0.47	1.50

Q3 2018 BALANCE SHEET

Condensed statement of financial position

in USD thousands

	30.09.2018	31.12.2017
	(unaudited)	(audited)
Rigs, machinery and equipment	212,919	178,808
Deferred tax asset	1,521	1,372
	214,440	180,180
Trade and other receivables	824	17,168
Prepayments and accrued revenue	4,126	6,905
Inventory	4,879	4,809
Cash and cash equivalents	66,321	119,286
Current tax	5,757	3,551
	81,907	151,719
Total assets	296,347	331,899
Paid in capital	198,719	130,142
Retained earnings	86,852	101,068
	285,571	231,210
Long-term interest-bearing debt	-	80,000
	-	80,000
Current portion of long-term debt	-	10,000
Trade and other creditors	2,263	1,170
Accruals and provisions	8,513	9,519
	10,776	20,689
Total equity and liabilities	296,347	331,899

3. OPERATIONAL UPDATE

WILPHOENIX CONTRACTED UNTIL AT LEAST SEPT. 2019

					AWILCO DRILLING PLC
CONTRACT STATUS
		2018		2019									2020
	Nov	Dec	Jan	Feb	March	April	May	June	July	Aug	Sept	Oct	Nov	Dec	Jan	Feb	March	April	May	June	July	Aug	Sept	Oct	Nov	Dec
WILHUNTER :
Cold Stacked
WILPHOENIX:
Shell		USD 116,200										Options

		Firm			Options		Hot stack			Cold Stack

OPERATIONS UPDATE

Operational uptime for WilPhoenix when on contract during the quarter was 99.9%
WilPhoenix contract with Shell commenced on 7th of September
Shell contract amended with addition of three options for exploration wells
Shell contract now 19 firm P&A wells and 10 option P&A and exploration drilling wells
Contract dayrate USD 116,200 per day, changing to market-indexed rate at 600 day point

NEWBUILD UPDATE

A bespoke high-end Harsh Environment semisubmersible, built to be the most cost efficient and environmentally friendly unit operating on the NCS and incorporating a new generation of technology including battery power and digitalisation
Rig Build on schedule and on budget
"First Steel" on track for mid-November
Newbuild project site team continuing to ramp-up
Marketing activities towards NCS oil companies ongoing
Building an Awilco Drilling organisation in Norway

ASSUMPTIONS FOR 2019

WilPhoenix:
Opex in 2019 expected to be around USD 80,000 per day for operations
Capex guidance is approximately USD 2 million
WilHunter:
Opex in 2019 expected to be around USD 2,000 per day for cold stack
No Capex planned – reactivation date TBA
Newbuild project:
Capex guidance is approximately USD 7 million
SG&A expected to be approximately USD 2.8 million per quarter
UK corporate tax rate 19%

4. MARKET OUTLOOK

CRUDE PRICING REMAINS INVESTMENT SUPPORTIVE

Crude continuously in the USD 60 to US 85 bbl band for the last twelve months
Brent has, however, seen a recent softening within this band
OPEC has reacted quickly
Production cuts announced and price now recovering
Operators will make money with a Brent floor of USD 70 bbl and will increase spending
US Shale still seeing negative cash flow, indicating higher than anticipated break-even

E&P SPENDING IS INCREASING…

Annual change in exploration spending Strong correlation between the Seismic market and Exploration spending

…PROVEN BY INCREASE IN FINAL INVESTMENT DECISIONS

MIDWATER ACTIVITY IS INCREASING

FIXTURES	UDW	Deepwater	Midwater
Last week
Current quarter
2018 YTD
2017 (full year)
2016 (full year) ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
2015 (full year)

NORWEGIAN SEMI-SUBMERSIBLE MARKET

MODERN HE SEMIS PREFERRED BY NCS OPERATORS – DETACHED UTILISATION INCREASE DRIVES DAYRATE UPTICK

Clear market preference for modern high spec rigs demonstrated in utilisation bifurcation

UK SEMI-SUBMERSIBLE MARKET

INCREASED MARKET ACTIVITY IN BOTH UK AND NORWAY

Global rig supply has reduced through continued attrition, helping to rebalance the market
Overall rig demand outlook continues to improve
Fleet contract utilization is improving
Seasonality is still, however, likely to prevail in UK through to 2019
Rig dayrates improving, especially in the high-end segment
The financial markets continue to support the funding of new asset acquisitions

5. SUMMARY

AWILCO DRILLING WELL POSITIONED TO CAPITALISE ON A RECOVERING MARKET IN THE NORTH SEA

· Transforming the Company at the bottom of the cycle through newbuild programme
· New rig build on schedule and budget
· Optionality and Flexibility in both new rig financing and contract timing
· Establishing Norwegian organisation and engaging with customers
· WilPhoenix contracted to Shell for 19 firm wells + 10 option wells
· The market is improving

AI Terminal

Awilco Drilling PLC

3547_rns_2018-11-13_d21c5457-e1d7-43e1-b857-ee8e2529eb4f.pdf