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Awilco Drilling PLC

Investor Presentation Feb 27, 2018

3547_iss_2018-02-27_b922a36d-67b9-4cb4-96b5-8af5c0a4f447.pdf

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INVESTOR PRESENTATION – TRANSFORMING THE COMPANY AT THE BOTTOM OF THE CYCLE

27 February 2018

DISCLAIMER

These materials have been prepared by Awilco Drilling PLC (the "Company") solely for use in its dialogue with possible investors ("Recipients") in a contemplated private placement of new shares by the Company (the "Offer Shares") with selected investors in and outside of Norway as are permitted or catered for by exemption rules under applicable securities laws (the "Private Placement") and may not be reproduced or redistributed, in whole or in part, to any other person. These materials are being provided to the Recipients for information purposes only.

These materials and the conclusions contained herein are necessarily based on economic, market and other conditions, as in effect on, and the information available to the Company as of, their date. These materials do not purport to contain a complete description of the Company or the market(s) in which the Company operates.

An investment in the Company involves risk, and several factors could cause the actual results, performance or achievements of the Company to be materially different form any future results, performance or achievements that may be expressed or implied by statements and information in this presentation. Should one or more of these risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this presentation. The Company does not intend, and does not assume any obligation, to update or correct the information included in this presentation. The contents of this presentation are not to be construed as financial, legal, business, investment, tax or other professional advice. Each prospective investor should therefore consult with its own financial, legal, business, tax or other adviser as to financial, legal, business and tax advice.

These materials have been provided to the Recipients on the basis that each Recipient keep these materials (and any other information that may be provided to such Recipient) confidential. The information used in preparing these materials was obtained by the Company and its representatives and is subject to change without notice. Neither the Company nor any of its affiliates or any third party have independently verified any such information. Neither the Company nor any of the affiliates (nor any of its or their respective directors, officers, employees, professional advisers or representative) makes any representation or warranty, express or implied, with respect to the fairness, correctness, accuracy, reasonableness or completeness of such information. Without limiting a person's liability for fraud, no responsibility or liability (whether in contract, tort or otherwise) is or will be accepted by the Company or any of its affiliates or any of its or their respective directors, officers, representatives, employees, advisers or agents as to, or in relation to, these materials, their contents, the accuracy, reliability, adequacy or completeness of the information used in preparing these materials, these materials, any of their contents or any of the results that can be derived from these materials or any written and any such responsibility, liability or obligations is expressly disclaimed, except to the extent that such responsibility, liability or obligations cannot be excluded by law. Analyses and opinions contained herein may be based on assumption that, if altered, can change the analyses or opinions expressed.

Any statement, estimate or projections included in these materials (or upon which any of the conclusion contained herein are based) with respect to anticipated future performance may prove not to be correct. No representation or warranty is given as to the completeness or accuracy of any forward-looking statement contained in these materials or the accuracy of any of the underlying assumptions. Nothing contained herein shall constitute any representation or warranty as to the future performance of the Company, any financial instrument, credit, currency rate or other market or economic measure. Information about past performance given in these materials is given for illustrative purposes only and should not be relied upon as, and is not, an indication of future performance.

Neither the Company nor any of its affiliates accepts or will accept any responsibility, duty of care, liability or obligations for providing any Recipient with access to additional information, for updating, modifying or otherwise revising these materials or any of their contents, for correcting any inaccuracy in these materials or their contents which may become apparent, or for notifying any Recipient or any other person of any such inaccuracy.

The securities of the Company have not been and will not be registered under the US Securities Act of 1933 (the "Securities Act") or with any securities regulatory authority of any state or jurisdiction of the United States and may not be offered, sold, resold, pledged, delivered, distributed or transferred, directly or indirectly, into or within the United States unless registered under the Securities Act or pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act or in compliance with any applicable securities laws of any state or jurisdiction of the United States. There will be no public offering of the securities of the Company in the United States. These materials are strictly private and confidential and exempt from the general restriction (in section 21 of the Financial Services and Markets Act 2000 ("FSMA")) on the communication of invitations or inducements in investment activity pursuant to the FSMA (Financial Promotion) Order 2055,0 as amended (the "Order") on the ground that in the United Kingdom, these materials are being directed at a restricted number of persons who are: (A(x)(i) persons having professional experience in matters relating to investments, i.e., investment professionals within the means of Article 19(5) of the Order; (ii) high net with entities falling within the meaning of Article 49(2)(a) to (d) of the Order; or (iii) any other person to whom it can otherwise be lawfully distributed, and (B) "Qualified Investors) as defined in section 86(/\7) of the FSMA (persons meeting criteria "A" and "B" are referred to herein as "Relevant Persons"). In the United States, these materials are directed only at persons reasonably believed to be "qualified institutional buyers" ("QIB") as defined under the Securities Act. Any person who is not a Relevant Person or QIB should not accept these materials, not act or rely on these materials. These materials are not intended for distribution to, or use by, any person in any jurisdiction where such distribution or use would be contrary to local laws or regulations. The Company does not accept any liability to any person in relation to the distribution or possession of these materials in or from any jurisdiction.

This presentation shall be governed by Norwegian law. Any dispute arising in respect of this presentation is subject to the exclusive jurisdiction of the Norwegian courts with Oslo District Court as legal venue

SUMMARY RISK FACTORS

Any investment in the Company's shares involves significant risks and prospective investors should consider, among others, the following risks related to the Company and its business:

  • The Company may not be able to enter into a construction contract for the new rig on the expected terms
  • There are various risks relating to the construction of the new rig, including risks of delays and cost-overruns
  • Risks related to the Company obtaining the additional capital required to finance remaining instalments on the rig
  • Risks related to obtaining contracts of employment for the Company's rigs
  • Risks related to fluctuations in oil prices
  • Risks related to the rig market, including the risk of an oversupply of rigs
  • Risks related to the costs of maintenance and repairs of the rigs
  • The Company's rigs are exposed to various maritime hazards and incidents

  • The Company's insurances may not secure the value of its assets and liabilities

  • Risks related to the Company having a limited number of rigs
  • The Company is exposed to various environmental risks
  • Risks related to contractual liabilities
  • The Company is exposed to various risks related to international operations
  • The Company may not be able to compete successfully in its market
  • Risks related to regulation
  • The Company may not be able to respond to technological developments
  • Risks related to the service life of the rigs
  • Risks related to having a limited organisation

TRANSACTION SUMMARY

Issuer
Awilco
Drilling Plc ("Awilco
Drilling" or the "Company")
About the issuer
Awilco
Drilling is a UK-based drilling contractor. The Company currently owns and operates two semi-submersible rigs
Listing venue
Oslo Axess
(AWDR NO)
Shares outstanding
30,031,500, each with a par value of GBP 0.0065
Market capitalisation
Approx. NOK 870 million (based on the Offer Price of NOK 29.00 per share)
Offering size
and
structure

Private Placement of new shares raising gross proceeds up to USD 65 million (NOK ~500 million) (the "Private Placement")
Offer price
The subscription price in the Private Placement has been set at NOK 29.00 per share (the "Offer Price")
Use of proceeds
The net proceeds from the Private Placement will be used to part finance the equity requirement for the building of a new semisubmersible drilling rig for harsh
environment use, to be built by the premium yard KeppelFELS
in Singapore at a price of approximately USD 425 million, and with planned delivery in 2021
Pre-commitments
The Company has received significant indications of interest to participate in the Private Placement and the Private Placement is fully covered. Pre-subscriptions from the
existing shareholders amount to approximately USD 40 million, including inter alia pre-subscription by Awilhelmsen
Offshore AS (currently holding 43.3% of the capital),
FVP Master Fund LP (currently holding 19.4% of the capital) and QVT Financial LP (currently holding 6.4% of the capital). In addition, Akastor
ASA has undertaken to
subscribe for shares in an amount of USD 10 million and will receive full allocation for this amount. Following a market sounding, significant additional subscriptions have
been received. As a consequence, only existing shareholders of the Company can expect to receive allocations in the Private Placement from subscriptions following this
announcement.
Application period
Start of application period: 27 February 2018 at 16:30 CET.

Close of application period: 28 February 2018 at 08:00 CET.

The Company, together with the Managers, reserve the right to close or extend the Application Period at any time in their sole discretion. If the Application Period is
extended, the other dates referred to herein will be extended accordingly
Conditions for
completion of the
Private Placement

The completion of the Private Placement is subject to the approval by an Extraordinary General Meeting (the "EGM") to be summoned shortly after conditional allocation
in the Private Placement has occurred and is expected to be held on or about 26 March 2018. Existing shareholders being allocated shares in the Private Placement
undertakes to vote in favour
of the approval of issuance of shares in the EGM

Further to this, the completion of the Private Placement is conditional upon the New Shares having been fully paid and legally issued

The Board reserves the right to cancel the Private Placement at any time and for any reason prior to delivery of the new shares
Subsequent Offering
The Board intends to conduct a subsequent offering at the same subscription price as in the Private Placement to existing shareholders in the Company who did not
participate in the Private Placement (the "Subsequent Offering"). Non-tradable subscription rights will be awarded. The Subsequent Offering is conditional on completion
of the Private Placement

The Board may at its discretion decide not to proceed with the Subsequent Offering
Managers
ABG Sundal
Collier ASA, Arctic Securities AS and Fearnley
Securities AS act as Joint Lead Managers and Joint Bookrunners
(the "Managers")

INVESTMENT HIGHLIGHTS

Well regarded contractor with proven ability to create shareholder value

  • Awilco Drilling is a well regarded contractor with proven operational track record and prudent financial control, having returned approximately ~2.0 x IPO price in dividends to shareholders since 2011
  • The company is supported by a strong entrepreneurial main shareholder with a demonstrated value creation record in multiple maritime and energy related segments
1
2018 NCS compliant
premium Harsh
Environment design
and technology

The CS 60 ECO MW newbuild will be the most environmentally friendly
drilling rig offered in the harsh environment market

New technology including digitalisation ensuring high operating
efficiency and very low opex
and spread cost compared to competition
2
Competitive newbuild
pricing from premium
yard being the "first
one out"

The rig will be built at the premium shipyard KeppelFELS
in Singapore
at an "all-in" cost of USD 425m + USD 30m1
-
"ready to drill" cost USD
455m

Significant discount to historical newbuild
prices and in the low range of
implied values observed in recent asset transactions
3
Favourable
supply/demand and
oil price macro
picture

North Sea rig market outlook is improving after the worst downturn ever

Market expected to move towards a more balanced supply in
2020/2021 as aging cold-stacked rigs will require contracts at a
significant premium to current rig dayrate
levels to justify the
reactivation costs
4
Financially
attractive deal

Favourable newbuild
contract with heavily "back-loaded" payment
structure 10/10/80 and no additional cost of carry up to delivery

3 independent options at similar commercial terms providing significant
upside potential (including "sleeping beauty provisions")

PROVEN TRACK RECORD OF CREATING SHAREHOLDER VALUE THROUGHOUT THE RIG CYCLE

Impeccable credentials of disciplined capital allocation and devotion to returning profits to shareholders

1) Other rig companies include the avg. total return for Seadrill, Transocean, Songa Offshore, Fred Olsen Energy and Noble Corp. Also include dividend payments

2) Value creation mentioned in USD, value creation in NOK is 231%

AWILCO DRILLING – WELL-REGARDED CONTRACTOR WITH PROVEN ABILITY TO CREATE SHAREHOLDER VALUE

Experienced management team with a proven track record… Premium support from a highly qualified Board of Directors

Jon Oliver Bryce – CEO

  • In Awilco Drilling since 2010
  • Former General Manager, Odfjell Drilling (UK) Ltd, and various positions with Prosafe, SantaFe Drilling, ENSCO, Noble Drilling

Ian Wilson – CFO

  • In Awilco Drilling since 2010
  • Former Director of Finance and Administration for ENSCO's European and African operations, and various positions with ENSCO and Diamond Offshore

Roddy Smith– COO

  • In Awilco Drilling since 2010
  • Former Director QHSE at Northern Offshore, and various positions at Global SantaFe and Transocean

Gary Holman – Operations Director

  • In Awilco Drilling since 2012
  • Former Country Manager for Archer AS, and various positions with Seawell and Noble Drilling

Jan Børge Usland – Commercial

  • Working with Awilco Drilling since 2010
  • Former Director of Business Development of Awilco Offshore

Claus Mørch – Technical

  • Working with Awilco Drilling since 2010
  • Former Technical Director of Awilco Offshore

Cathrine Haavind – Investor Relations Manager

  • Working with Awilco Drilling since 2010
  • Former Investor Relations Manager of Awilco Offshore

Sigurd E. Thorvildsen - Chairman

  • Chief Executive Officer of Awilhelmsen Group
  • Former Chairman of Awilco Offshore

Henrik Fougner – Non Executive Director

  • Chief Operating Officer of Awilhelmsen Group
  • Former CEO of Awilco Offshore

Daniel Gold – Non Executive Director

▪ Managing Partner, Founder, and Chief Executive Officer of QVT Financial LP

John Simpson – Non Executive Director

  • Executive Director of Marine Capital and Non-executive Director of public and private companies
  • Former CEO of DNB Bank in UK and Asia-Pacific

Synne Syrrist – Non Executive Director

  • Non-executive Director of both listed and private companies
  • Former Financial Analyst at First Securities

Jon Oliver Bryce– CEO and Executive Director

▪ CEO of Awilco Drilling

NEW AWILCO DRILLING IDEALLY POSITIONED FOR THE NORTH SEA MARKET RECOVERY…

Competitive newbuild-deal with high flexibility and optionality vs. future market development. Current fleet with positive cash flow and negative net debt secures market position and organisational preparation

  • 1) NCS = Norwegian Continental Shelf
  • 2) Unaudited numbers
  • 3) LOI for 450 days at undisclosed rate from around 1 Sept 2018
  • 4) Capitalised costs for yard supervision, commissioning, spares and tools (excluding mobilisation)

…WITH ATTRACTIVE UPSIDE POTENTIAL FROM NEWBUILDS THROUGH SIGNIFICANT LEVERAGE AND OPTIONS

Financing structure allows for a strong return on invested capital for Awilco Drilling shareholders

1) MoM = Money multiple = Equity return for a given asset value divided by initial equity investment of USD 65m

2.5x

MoM1

4.1x

100

200

2) Capitalised costs of USD 30m for yard supervision, commissioning, spares, and tools not included

9

PURPOSE BUILT PREMIUM HE NEWBUILD FOR NORTH SEA OPERATIONS WITH HIGH OPERATING EFFICIENCY

Purpose built harsh environment (HE) premium floater

Moss CS60 ECO MW

1

Category
Specs
Yard
Keppel FELS
Design
Depth capacity
Up to 1,500 m
Variable
deck-load
5,000 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
Main generators
5 x 4,900 kW
DNV, Drill (N), Posmoor
Certificates
Battery (Safety & Power),
NCS & UK
Clean (Tier III) Winterised
compliant
(basic)
Moss Maritime CS60 ECO MW
140 POB in one-person cabins
(atar),

Key newbuilding attributes

Latest Design and Technology

Delivery in 2021 + option to delay

All warranties intact at delivery

No depreciation and no SPS1

MOSS CS60 ECO MW REPRESENTS A GAME CHANGER IN DRILLING DESIGN AND TECHNOLOGY

Moss CS60 ECO MW – Tailor-made for harsh environment operations

1

Lowest environmental footprint, designed and certified for HarshEnvironment including Barents Sea

12 point mooring with thruster assist1 , hybrid power supply, energy savingfeatures

Automated drilling controls, improved drilling efficiency, enhanced safetyperformance

Digitalization and integration of systems and controls, improved overallperformance to the benefit of the owner and client

MAIN DIFFERENTIATORS OF THE MOSS CS60 ECO MW

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 / 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

NEXT GENERATION DRILLING PACKAGE FROM MHWIRTH

Drilling package with solutions for improved efficiency, costs and environmental footprint

Value added through three main layers
Increased
drilling
efficiency

MH-RNX™ -
Iron Roughneck designed to reduce
OPEX and increase drilling efficiency

Market leading technology for quick and reliable
running of riser

Leading systems and software products for
automation of drilling and drillfloor
operations

Automatic drilling controls, digitalization
Game
changing
maintenance
concepts

Unique solutions for condition-based maintenance
enabled by Condition Monitoring, Data Analytics
and Reliability Centred Maintenance analysis
(RCM).

MHWirth
Riglogger™ enables data transfer to
implement maintenance optimization and combining
continuous monitoring and analysis
Reduced
CO

footprint

Reduced emissions and power consumption
through energy efficient solutions, storage and
increased efficiency

Power optimized equipment and systems

Systems for regeneration of power (VFDs,
Batteries)
  • Ram guide (Derrick) with associated hoisting drilling and handling systems
  • RamRig drilling equipment package with lifting capacity of 1,000 sh.ton
  • Top Drive 1,000shT AC - 2 motors
  • Drilling QTR Riser 500m - 75 ft/joint - Option plus 1,000m
  • 2 ea. RNX roughnecks Prepared for fully integrated Casing tong and Casing running tool
  • Full tensioning package incl. 4 dual multi capacity 200 kip riser tensioners
  • BOP crane, Riser and pipe handling cranes and feeding machines
  • 3 x 7,500 psi mud pumps
  • Drilling control Cabin including Drillview control and monitoring system
  • New technology for open interface of integration of "smart" modules and Automatic Drilling Control

ATTRACTIVE PRICE WELL BELOW HISTORICAL NEWBUILD COSTS

Source: Managers, IHS Petrodata

14

2

Note: Seadrill rigs include: West Hercules, West Aquaris and West Eminence Odfjell Drilling rigs include: Deepsea Atlantic and Deepsea Stavanger

FAVOURABLE OIL MARKET BACK-DROP – OFFSHORE PRODUCTION INCREASE NEEDED TO MEET DEMAND

Oil supply gap of ~17 mb/d in 2025

3

Well-invested infrastructure and high focus on operational efficiency in the North Sea - estimated break-even costs of USD 25-30 per barrel1 for projects sanctioned in 2018 and onwards

EVIDENT INCREASE IN NORTH SEA ACTIVITY

Early signs of market recovery from increasing number of tenders and PDOs¹ Activity level in the North Sea on the rise

New investments expected on the back of a period of underinvestment among key operators on NCS, driving up rig demand

  • Rig tender activity in the North Sea has been steadily increasing after bottoming out in early 2016
  • Catch-up effect in E&P spending on the back of a period with underinvestment for the large NCS players
  • Increasing PDO activity in Norway, supportive for drilling activity going forwards

Key players on the NCS:

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

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

MARKET MOVING TOWARDS A BALANCED SUPPLY OF PREMIUM HARSH ENVIRONMENT RIGS...

29 floaters were contracted in 2013 20 rigs are currently contracted Peak demand Current demand

Currently, 28 of these rigs in NCS waters – of these are 15 contracted and the rest cold-stacked

Source: IHS Petrodata, Fearnley Securities

1) Including all harsh-environment, North Sea compatible midwater semi-subs currently under construction (please see appendix for further reference)

2) 3-month rolling dayrates since 2005, adj. for 2% yearly inflation

18

... AS SUBSTANTIALLY HIGHER DAYRATES ARE REQUIRED TO JUSTIFY REACTIVATION OF COLDSTACKED RIGS ON THE NCS

Break-even dayrates for cold-stacked rigs

Implications for modern rigs

1) Methodology: Calculates the required dayrate to break-even for a given cost of SPS & Reactivation for a 5 year cycle (assumes rig free of debt before reactivation)

2) Assumptions: 5y SPS cycle, WACC = 10%, Utilisation = 95%, opex at USD 130kpd, G&A of USD 10kpd and maintenance capex of USD 20kpd, implying a cash opex at USD 160kpd

3) Including COSL Prospector which is in transit to Norway & Transocean Leader – currently undergoing SPS

19

AWILCO DRILLING WELL POSITIONED TOWARDS A MARKET RECOVERY…

Existing operations to deliver cash flow until delivery of newbuild(s)

4

Ability to leverage existing organisational capabilities and position in the market

Attractive financial position with downside protection for newbuilds (10/10/80 payment structure)

High financial upside from increasing asset values – "first-one-out" newbuild

A complementary company profile… …with significant value potential from delivery of newbuilds in 2021 and onwards

  • No "warehouse cost"
  • Market expectations are upwards turning
  • Only 10% initial stake at risk – high upside
  • Will be delivered after period with high scrapping activity
  • 3 independent options to capitalise on improving market conditions
  • Expected lifetime of 30 years – can deliver services until 2050

…WITH NEWBUILDS PROVIDING A HIGHLY ATTRACTIVE RISK-REWARD WITH SUBSTANTIAL VALUE CREATION POTENTIAL

EBITDA per rig at various dayrates1 Money multiple on asset price recovery 0 22 39 57 74 91 114 161 ~137 000 200 000 250 000 300 000 350 000 400 000 465 000 600 000 na 20.8x 11.6x 8.0x 6.2x 5.0x 4.0x Implied EV/EBITDA at various dayrates EBITDA In USDm 0 10 60 110 160 210 260 310 360 350 400 450 500 550 600 650 700 750 0.0x 0.9x 2.5x 3.2x 4.0x 4.8x 5.5x Implied money multiple at various rig values4 0.2x Equity value3 In USDm 1.7x Rig value (USDm) Dayrate (USD/day) 2.9x Current levels Last 10 years avg2

A highly leveraged asset play with further upside from asset appreciation through 3 independent newbuild option agreements at attractive terms makes Awilco Drilling a unique candidate to benefit from improving market conditions

  • 1) Assumptions: Opex of USD 130kpd and 95% utilisation. EV corresponds to "all-in" cost of USD 455m
  • 2) Avg. dayrates for a 6G harsh environment semi-sub between H2 2007 and H2 2017

21

  • 3) Return on the equity issue of USD 65m for a given asset value of the rig, assuming "all-in" build cost of USD 455m and USD 390m in outstanding balance
  • 4) Money multiple = Equity return for a given asset value divided by initial equity investment of USD 65m

SUMMARY HIGHLIGHTS

APPENDIX

OVERVIEW OF THE EXISTING OPERATION

Current fleet Contract situation SPS schedule
WILPHOENIX
Category
Year built
Design
Builder
Classification
Depth capacity
Station
keeping
Specs
1982

Extensively upgraded 2011 & 2016
Friede
& Goldman L907 Enhanced Pacesetter
Semi
Submersible
Gotaverken
Arendal
DNV 1A1 Column Stabilised Drilling Unit
Up to 1,200 ft
8-point
mooring
Active:

Apache –
to mid
Q2 2018

Undisclosed
customer –
450
days from Sept
2018
Next SPS:
Q2 2021
Accommodation 110 POB in two-man cabins
WILHUNTER
Category
Year built
Design
Builder
Classification
Depth capacity
Station
keeping
Accommodation
Specs
1983

Upgraded in 2011
Friede
& Goldman L907 Enhanced Pacesetter
Semi
Submersible
Daewoo shipbuilding
DNV 1A1 Column Stabilised Drilling Unit
Up to 1,500 ft
8-point
mooring
110 berths
Cold-stacked:

USD 1m/year

"Option on the
future"
Next SPS:
SPS required upon
reactivation

FINANCIAL OVERVIEW

Income statement Balance sheet
In USDm Q4 2017 Q4 2016 FY 2017 FY 2016
Contract revenue 33.5 34.8 130.4 94.6 Assets
Other revenue 0.3 0.3 1.3 0.7
Total revenue 33.9 35.1 131.7 95.3
Rig operating expenses -7.2 -7.3 -27.8 -36.7
General and administrative exp. -2.0 -2.4 -8.8 -8.9
Other opex -0.1 -0.1 -0.4 -0.2
Total operating expenses -9.3 -9.7 -36.9 -45.8
EBITDA 24.5 25.4 94.8 49.5
Depreciation
Impairment
-4.0
-45.0
-3.7 -15.7
-45.0
-15.6 Equity and liabilities
EBIT / Operating income -24.4 21.6 34.1 33.9
Net financial items 0.0 -2.9 -5.3 -9.5
Pre-tax profit -24.4 18.7 28.8 24.4
Tax expense 0.6 -3.8 -7.6 -3.4
Net profit -23.8 14.9 21.3 21.0
In USDm Q4 2017 Q4 2016
Assets
Rigs, machinery and equipment
Deferred tax assets
178.8
2.0
238.9
3.1
Non-current assets 180.8 241.9
Trade and other receivables
Prepayments and accrued revenue
Inventory
Cash and cash equivalents
Current tax
17.2
6.9
4.8
119.3
0.2
17.3
7.2
4.8
70.1
22.1
Current assets 148.4 121.5
Total assets 329.2 363.4
Equity and liabilities
Paid in capital
Retained earnings
Total equity
130.1
94.2
224.3
130.1
96.9
227.1
Deferred tax liability
Long-term interest-bearing debt
Non-current liabilities
2.8
85.0
87.8
1.1
90.0
91.1
Current portion of long-term debt
Trade and other creditors
Accruals and provisions
Current tax payable
10.0
1.2
9.5
4.2
10.0
0.6
10.7
23.9
Current assets
Total liabilities
24.9
112.7
45.2
136.3

SHAREHOLDER OVERVIEW1

SHAREHOLDER OVERVIEW1
# Shareholder # of shares In % of sales
1 Aw
ilhelmsen Offshore
12,998,938 43.3%
2 UBS Securities LLC 4,686,226 15.6%
3 Citibank, N.A. 1,907,507 6.4%
4 Euroclear Bank S.A./ 1,767,646 5.9%
5 Citigroup Global Mar 1,129,000 3.8%
6 Citibank, N.A. 879,600 2.9%
7 Bank of America, N.A 781,963 2.6%
8 Avanza Bank AB 685,669 2.3%
9 Clearstream Banking 591,415 2.0%
10 BNP Paribas 336,253 1.1%
11 Nordnet Bank AB 309,015 1.0%
12 Merrill Lynch, Pierc 281,974 0.9%
13 State Street Bank AN 276,021 0.9%
14 Interactive Brokers 165,033 0.5%
15 J.P. Morgan Securities 164,048 0.5%
16 UBS Sw
itzerland AG
152,710 0.5%
17 First Clearing LLC 139,567 0.5%
18 DZ Privatbank S.A. 0 131,000 0.4%
19 Citibank, N.A. 120,449 0.4%
20 JP Morgan Chase 115,531 0.4%
Other 2,411,935 8.0%
Total 30,031,500 100.0%

Note: FVP Master Fund LP with affiliated and related parties holds 19.4% of the capital QVT Financial LP with affiliated and related parties holds 6.4% of the capital

NORWEGIAN SUITABLE FLOATER FLEET (1/2)

# Rig Name Manager Rig Type Rig Water Depth (ft) Year
In Service
Rig Status Contract
Status
Build
Country
Next
SPS
1 Bideford
Dolphin
Dolphin (Fred
Olsen Energy)
Semisubmersible 1750 1975 Warm stacked Not Contracted Norway 2020
2 Songa
Trym
Songa
Offshore
Semisubmersible 1200 1976 Cold stacked Not Contracted Norway 2021
3 Borgland
Dolphin
Dolphin (Fred
Olsen Energy)
Semisubmersible 1475 1977 Warm stacked Not Contracted UK 2021
4 Songa
Delta
Songa
Offshore
Semisubmersible 1500 1980 Cold stacked Not Contracted Finland 2020
5 Bredford
Dolphin
Dolphin (Fred
Olsen Energy)
Semisubmersible 1500 1980 Cold stacked Not Contracted Netherlands 2020
6 Deepsea
Bergen
Odfjell Drilling Semisubmersible 1475 1983 Drilling Current Contracted Norway 2020
7 Songa
Dee
Songa
Offshore
Semisubmersible 1500 1984 Cold stacked Not Contracted Japan 2019
8 Polar Pioneer Transocean Semisubmersible 1640 1985 Cold stacked Not Contracted Japan 2020
9 Transocean Arctic Transocean Semisubmersible 1650 1986 Drilling Current Contracted Japan 2019
10 West Alpha North Atlantic Drilling Semisubmersible 1968 1986 Cold stacked Not Contracted Japan 2019
11 Transocean Leader Transocean Semisubmersible 4500 1987 Yard Current Contracted South Korea 2017
12 Scarabeo
5
Saipem Semisubmersible 6233 1990 Cold stacked Not Contracted Italy 2020
13 West Venture North Atlantic Drilling Semisubmersible 2600 2000 Cold stacked Not Contracted Japan 2020
14 West Navigator North Atlantic Drilling Drillship 7500 2000 Cold stacked Not Contracted Norway 2020
15 Leiv Eiriksson Ocean Rig Semisubmersible 7500 2001 Moving to location Current Contracted USA 2021
16 Stena
Don
Stena Semisubmersible 1640 2001 Warm stacked Not Contracted Germany 2020
17 Eirik Raude Ocean Rig Semisubmersible 10000 2002 Cold stacked Not Contracted USA 2017
18 West Phoenix North Atlantic Drilling Semisubmersible 10000 2008 Drilling Current Contracted South Korea 2018
19 West Hercules Seadrill Semisubmersible 10000 2008 Warm stacked Future Contracted South Korea 2018
20 Deepsea
Atlantic
Odfjell Drilling Semisubmersible 10000 2009 Drilling Current Contracted South Korea 2019
21 Transocean Barents Transocean Semisubmersible 10000 2009 Drilling Current Contracted Norway 2019

NORWEGIAN SUITABLE FLOATER FLEET (2/2)

# Rig Name Manager Rig Type Rig Water Depth (ft) Year
In Service
Rig Status Contract
Status
Build
Country
Next
SPS
22 West Aquarius Seadrill Semisubmersible 10000 2009 Hot stacked Future Contracted South Korea 2019
23 West Eminence Seadrill Semisubmersible 10000 2009 Cold stacked Not Contracted South Korea 2019
24 Deepsea
Stavanger
Odfjell Drilling Semisubmersible 10000 2010 Drilling Current Contracted South Korea 2020
25 Transocean Spitsbergen Transocean Semisubmersible 10000 2010 Drilling Current Contracted Norway 2020
26 COSLPioneer COSL Semisubmersible 1640 2010 Warm stacked Future Contracted China 2020
27 COSLInnovator COSL Semisubmersible 1640 2011 Warm stacked Future Contracted China 2021
28 COSLPromoter COSL Semisubmersible 1640 2012 Drilling Current Contracted China 2017
29 Island Innovator Odfjell Drilling Semisubmersible 2300 2012 Moving to location Future Contracted China 2017
30 Scarabeo
8
Saipem Semisubmersible 9843 2012 Warm stacked Future Contracted Italy 2017
31 COSLProspector COSL Semisubmersible 5000 2014 En route Not Contracted China 2019
32 Songa
Encourage
Songa Offshore Semisubmersible 1640 2015 Drilling Current Contracted South Korea 2020
33 Songa
Endurance
Songa Offshore Semisubmersible 1640 2015 Drilling Current Contracted South Korea 2020
34 Songa
Equinox
Songa Offshore Semisubmersible 1640 2015 Drilling Current Contracted South Korea 2020
35 Songa
Enabler
Songa Offshore Semisubmersible 1640 2016 Drilling Current Contracted South Korea 2021
36 West Mira Seadrill Semisubmersible 10000 2019 Under construction Not Contracted South Korea 2023
37 West Rigel Not known Semisubmersible 10000 2020 Standby Not Contracted Singapore 2023
38 North Dragon North Sea Rigs Semisubmersible 1650 2020 Standby Not Contracted China 2023
39 Bollsta Dolphin Northern Drilling Semisubmersible 7500 2020 Standby Not Contracted South Korea 2023
40 Stena
MidMax
Samsung Semisubmersible 6562 2020 Under construction Not Contracted South Korea 2023
41 Beacon
Atlantic
North Sea Rigs Semisubmersible 1650 2020 Under construction Not Contracted China 2022
42 Beacon
Pacific
North Sea Rigs Semisubmersible 1640 2020 Under construction Not Contracted China 2023

RISK FACTORS

Any investment in the shares of Awilco Drilling involves significant risks. Before deciding whether or not to participate in the Placement, an investor should consider carefully all of the information set forth in this presentation and, in particular, the specific risk factors set out below. An investment in the shares is suitable only for investors who understand the risk factors associated with this type of investment and who can afford a loss of all or part of the investment. If any of the risks described below materialise, individually or together with other circumstances, they may have a material adverse effect on the Awilco Drilling's business, results of operations, cash flow and financial condition, which may cause a decline in the value and trading price of the shares that could result in a loss of all or part of any investment in the shares.

Risk relating to negotiations for newbuilding

While the Company intends to enter into a construction contract for a new semi-submersible drilling rig, negotiations for such shipbuilding contract have not been finalised and there can be no assurance that the Company will be able to enter into the contract or that the terms of such contract, if entered into, will reflect the terms currently expected.

Construction risks

There will be a number of risks associated with construction of the Company's contemplated newbuilding, including risks of delay, risks of termination of the shipbuilding contracts by the Yard, the risk of need for variation orders and amendments resulting in additional need for capital, the ability of the Yard to perform its duties under the shipbuilding contracts, and the risk of failure by key suppliers to deliver necessary equipment. Delays in delivery of the newbuilding may affect the Company's potential revenue, or potentially loss of contracts from clients.

Risks related to funding

While the Placement is expected to fully finance the first instalment for the Company's contemplated newbuilding, the Company will need to raise significant amounts of new capital to finance the remaining instalments and other costs associated with the newbuilding. Furthermore, the Company USD 125 million bond matures in April 2019. There can be no assurance that the Company will be able to raise the capital which is necessary to pay for the newbuilding or repay the bond issue, or at that the cost of any new debt financing will be at an commercially attractive level. It is expected that a significant portion of the required funding to finance the newbuilding will have to be raised through new equity. This may result in significant dilution for existing shareholders. There is also risk that the Company will not be able to comply with the terms of any existing or new debt financing.

Risks related to contracts for the Company's rigs

The Company has not entered into any contract for the employment of the newbuilding, and there can be no assurance that it will be able to enter into any such contracts on commercially acceptable terms. Furthermore, the contract for WilPhoenix will expire during the first half of 2018 and the WilHunter is currently cold-stacked. There can be no assurance that the Company will obtain contracts of employment for either WilPhoenix or WilHunter. In addition, any failure of a counterparty to comply with the terms of a contract for the employment of a rig may have material adverse consequences for the Company.

Risks related to oil prices

The demand for drilling rigs particularly sensitive to fluctuations in oil price, which in

turn is dependent on a number of factors such as general economic trends, the availability of oil in the world markets, the availability of alternative energy sources, regulation of the energy market etc.

Risks related to the rig market

The market for drilling rigs have historically been cyclical. An oversupply of rigs may have a significant negative effect on the rates for drilling rigs and may make it difficult to secure employment for rigs at acceptable rates.

Risks related to maintenance and repairs.

Repair and maintenance costs for rigs are inherently difficult to predict and may be substantially higher than expected.

Maritime risks

The Company will operate in the maritime environments and its rigs are exposed to a number of potential hazards, incidents and accidents which can result in downtime, repair costs, liability towards third parties or total losses of rigs, any one of which can have a material adverse effect on the Company's business, operating results or financial condition.

RISK FACTORS

Risks related to insurance

In the event of a casualty to a rig or other catastrophic events, the Company will rely on insurance to pay the insured value of the rig, the damage incurred or any liability towards third parties. However, the Company may not have insurance cover for the full range of risks to which the Company are exposed and/or any particular claim may not be paid. A significant loss that is not covered by insurance may have material adverse effect for the Company.

Risks related to a limited number of rigs

The Company owns two rigs and intends to enter into a contract for the construction of one additional rig. The limited number of rigs means that a failure to secure employment for any one rig or any incidents or adverse occurrences relating to any one rig may have a material adverse impact on the Company's profitability and financial position.

Environmental risks

The Company may be subject to liability under environmental laws and regulations, which could have a material adverse effect on the Company's business results of operations and financial condition.

Risks relating to contractual liabilities

Contracts in the offshore sector require high standards of safety, and all offshore contracts are associated with considerable risks and responsibilities. These include technical, operational, commercial and political risks, and it is impossible to insure against all the types of risk and liabilities mentioned. For instance, under some contracts the Company may have unlimited liability for losses caused by its own gross negligence.

Risks related to international operations

Operations in international markets are subject to risks inherent in international business activities, including, in particular, general economic conditions in each such market, overlapping differing tax structures, management and organisation spread over various jurisdictions, unexpected changes in regulatory requirements, complying with a variety of foreign laws and regulations.

Risks relating to competition

The market in which the Company operates is highly competitive. Drilling contracts are often awarded on a competitive bid basis, with intense price competition frequently being the primary factor determining which qualified contractor is awarded the job. Many of the Company's competitors have significantly larger resources than the Company.

Risks related to regulation

National and international laws and regulations may hinder or delay the Company's operations, increase the Company's operating costs, reduce demand for its services and/or restrict its ability to operate its rigs.

Risks related to technological developments

The market for the Company's services is characterised by continual and rapid technological developments that have resulted in, and will likely continue to result in, substantial improvements in equipment functions and performance. If the Company is not successful in acquiring new equipment or upgrading its existing equipment on a timely and cost effective basis in response to technological developments or changes in standards in the industry, this could have a material adverse effect on the Company's business.

Risks related to service life

The service life of the rigs to be operated by the Company will ultimately depend on their efficiency. The Company's two existing rigs, WilPhoenix and WilHunter, are both older rigs. There can be no assurance of how long the rigs will be in operation. The capital associated with the repair and maintenance of each rig increases with age.

Risks related to a limited organisation

The Company has a limited organisation and any loss of key employees may have a material negative impact on the Company.

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