Awilco Drilling PLC

Investor Presentation • May 9, 2018

Q1 2018 PRESENTATION

Oslo, 9 th of May 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. Q1 2018 Financial Results
• 3. Operational Update
• 4. Market Outlook
• 5. Summary
• 6. Q&A

1. HIGHLIGHTS

HIGHLIGHTS FROM Q1 2018

• Private placement of USD 65 million with significant oversubscription
• Signed contract with KeppelFELS for the building of one new CS60 ECO MW rig equipped for harsh environment drilling with independent options to build up to three additional rigs
• Announcement of USD 0.20 dividend
• Total Q1 Revenue USD 34.1 million; EBITDA of USD 24.0 million, Net Profit of USD 19.1 million
• Q1 Opex average for WilPhoenix approx. USD 77 600 per day

TRANSFORMING THE COMPANY THROUGH A NEWBUILDING PROGRAMME

ATTRACTIVE UPSIDE POTENTIAL FROM NEWBUILDS THROUGH SIGNIFICANT LEVERAGE AND OPTIONS

…with significant flexibility and upside potential

• "Sleeping beauty provision" flexibility to delay delivery up to 12 months to optimise impact of delivery to market
• An early bet on a recovering market with low initial equity investment and limited downside enabled through an attractive financing structure
• Deal agreement providing sufficient time to secure further debt/equity financing at attractive terms

THE OPTIMUM SEMI SUB RIG FOR HE MW OPERATIONS, DIFFERENTIATING ITSELF FROM PEERS

Tailor-made harsh environment (HE) premium floater

Moss CS60 ECO MW

Category	Specs
Yard	Keppel FELS
Design	Moss Maritime CS60 ECO MW
Depth capacity	Up to 1,500 m
Variable deck-load	5,000 t (contract minimum, expected to be ~7,000 t)
Hook-load	2.0 million lbs
Station keeping	Mooring and Thruster assist
Drilling package	Automated drilling control
Thruster capacity	4 x 3,600 kW
BOP	15k psi 18 3/4" 5 rams
Accommodation	140 POB in one-person cabins
Main generators	5 x 4,900 kW
Certificates NCS & UK compliant	DNV, Drill (N), Posmoor (atar), Battery (Safety & Power), Clean (Tier III) Winterised (basic)

Key newbuilding attributes

Lowest environmental footprint

Enhanced operational efficiency ✓ and safety performance

Reduced operating cost for both ✓ rig owner and operator

✓ Latest Design and Technology

MOSS CS60 ECO MW REPRESENTS A GAME CHANGER IN DRILLING DESIGN, TECHNOLOGY & PERFORMANCE

Upgraded design

Reflecting the need to improve

• environmental footprint
• reduce time and cost per well
• safety performance
• reduce non-productive time

Hybrid Power Tech.

Reduced fuel oil consumption/ emissions

• protecting the environment
• saving of fuel cost , minimizing CO^₂ / NOx duty
• hybrid power supply with batteries
• hydraulic hoisting system with heave compensation
• energy saving and regeneration features

Real Time Data Support

Real time data support

• condition monitoring reducing likelihood of downtime
• Shore-based competence continuously available for interpretation of well data
• enhanced support , enhanced drilling efficiency and rig performance
• reduced OPEX and cost per well

Condition Monitoring

Continuous certification

• reduced likelihood of technical down time
• reduced offhire for special survey
• reduced opex
• higher revenue efficiency

The improved drilling efficiency and reliability of the CS60 ECO MW will deliver significant OPEX and spread cost savings in the range of USD 25,000 – 35,000 per day compared to competition

FOCUS ON BUILDING THE NEW AWILCO DRILLING

• Preparing to appoint senior positions based on individuals with whom we have previously worked on successful projects
• Marketing activities towards NCS oil companies
• Building an Awilco Drilling organisation in Norway

2. Q1 2018 FINANCIAL RESULTS

Q1 2018 INCOME STATEMENT

Condensed statement of comprehensive income

in USD thousands, except earnings per share

	Q1 2018	Q1 2017
	(unaudited)	(unaudited)
Contract revenue	33,759	31,647
Reimbursables	343	296
Other revenue	1	6
	34,103	31,949
Rig operating expenses	7,223	6,122
Reimbursables	141	42
General and administrative expenses	2,782	1,013
Depreciation	3,402	3,848
	13,548	11,025
Operating profit	20,555	20,924
Interest income	550	32
Interest expense	(1,642)	(1,817)
Other financial items	358	185
Net financial items	(734)	(1,600)
Profit before tax	19,821	19,324
Tax expense	(706)	(3,523)
Net profit	19,115	15,801
Total comprehensive income	19,115	15,801
Attributable to shareholders of the parent	19,115	15,801
Basic and diluted earnings per share	0.62	0.53

Q1 2018 BALANCE SHEET

Condensed statement of financial position

in USD thousands

	31.03.2018	31.12.2017
	(unaudited)	(audited)
Rigs, machinery and equipment	217,935	178,808
Deferred tax asset	1,483	1,372
	219,418	180,180
Trade and other receivables	73,837	17,168
Prepayments and accrued revenue	13,173	6,905
Inventory	4,809	4,809
Cash and cash equivalents	92,472	119,286
Current tax	5,903	3,551
	190,194	151,719
Total assets	409,612	331,899
Paid in capital	194,060	130,142
Retained earnings	114,177	101,068
	308,237	231,210
Long-term interest-bearing debt	80,000	80,000
	80,000	80,000
Current portion of long-term debt	10,000	10,000
Trade and other creditors	926	1,170
Accruals and provisions	10,449	9,519
	21,375	20,689
Total equity and liabilities	409,612	331,899

3. OPERATIONAL UPDATE

WILPHOENIX COMMITTED UNTIL AT LEAST NOVEMBER 2019

OPERATIONAL UPDATE

• Operational uptime in Q1 was 99.5%
• Continued positive customer feedback
• Received Chairman's award for 2017 for safety performance (floating rigs) and OPITO accreditation for Competence Management System
• Contract negotiations with undisclosed LOI client close to completion for start-up around 1st of September
• WilPhoenix being marketed for summer work programmes

DIVIDEND DISTRIBUTION

• Announcement of dividend payable of USD 0.20 per share
• Dividend payable on or around 22 June 2018
• Shares will trade ex-dividend on 22nd of May 2018, the record date will be 23rd of May
• In view of the Company's new building programme, the Board intends to review the future dividend policy.

4. MARKET OUTLOOK

WHAT ARE THE OIL COMPANIES DOING WITH ALL THEIR FREE CASH?

DON'T LISTEN TO WHAT OIL COMPANIES ARE SAYING, LOOK AT WHAT THEY ARE DOING

EVIDENT INCREASE IN NORTH SEA ACTIVITY

Early signs of North Sea market recovery from increasing number of tenders and PDOs¹

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

INCREASED ACTIVITY ALSO IN THE UK MARKET

HIGH ACTIVITY LEVEL AND NEW WORK PROGRAMMES STILL BEING TENDERED, BUT ACTIVITY FORECAST TO DIP OVER WINTER

												UK FLOATER MARKET
CONTRACT STATUS
		2018									2019																2020
Company	Rig name	May	Jun	Jul	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
	Sedco 711
	Sedco 714
Transocean	Sedco 712		on contract
	Paul B. Loyd, Jr		on contract							options
	Transocean Leader		on contract
	Ocean Guardian		on contract
Diamond Offshore	Ocean Valiant	yard		on contract
	Ocean Patriot		on contract
	Ocean Endeavour	yard													on contract
Dolphin Drilling	Blackford Dolphin		on contract			options
Awilco Drilling	WilHunter
	WilPhoenix		warm stack			LOI
Stena Drilling	Stena Spey		on contract			options
Paragon Drilling	Paragon MSS1		on contract																	options
	West Hercules		on contract						options
North Atlantic Drilling	West Phoenix		on contract							warm stack								on contract
Odfjell	Deepsea Aberdeen		on contract
	COSLPioneer		on contract
COSL Drilling Europe	COSLProspector			on contr.
					LOA		OPTIONS			YARD					HOT/WARM STACKED			COLD STACKED

INCREASING SIGNS OF MARKET IMPROVEMENT BOTH IN THE UK AND IN NORWAY

• Global rig supply has reduced through continued attrition, further helping to rebalance the market
• The overall rig demand outlook continues to improve
• 2019 demand higher than 2018 but seasonality expected to continue
• 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
• · Announcement of dividend payable of USD 0.20
• · WilPhoenix LOI committed until at least November 2019
• · The market is improving
• · Evaluating further growth opportunities on a case-by-case basis