Awilco Drilling PLC

Investor Presentation • Feb 13, 2019

Q4 2018 PRESENTATION

Oslo, 13th of February 2019

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. Q4 2018 and preliminary full-year 2018 Financial Results
• 3. Operational Update 4. Market Outlook
• 5. Summary 6. Q&A

TRANSFORMING THE COMPANY THROUGH A NEWBUILDING PROGRAMME

THE AWDR CS60 ECO - SETTING A NEW STANDARD

• An evolution of the Moss CS60 Design, tailored specifically for mid-water Harsh Environment – delivering Superior Uptime and Cost Efficiency
• Significantly reduced fuel consumption and emissions through a combination of DP and Mooring configuration, Latest RamRig configuration, Tier III Power Generation, Battery Technology and Power Regeneration – the Greenest rig on the market
• A bespoke equipment package incorporating the newest technology offering a game changer in Operational, Technical and Safety Capabilities
• Unique built-in Digitalization Technology reducing total Well Risk and Well Cost
• Condition-based Monitoring gives a new real-time approach to equipment maintenance not seen on rigs before – minimising Downtime Risk and Remedial Costs, delivering Superior Performance

EQUIPMENT AND PERFORMANCE DIFFERENTIATORS REDUCING NPT* AND FLAT SPOTS

• Enhanced tripping speeds
• Use of Range 3 pipe
• Use of latest generation RamRig
• Enhanced drilling operations from offline stand-building and superior racking speeds
• Enhanced drilling performance through extended slipjoint capability, real-time well monitoring, and automated mud-systems
• Enhanced Riser Running through click connections and unique handling systems
• Bespoke Wireline and Coiled Tubing Handing Systems significantly
• Rig can transit with a full (32,000 ft) set back

1. HIGHLIGHTS

HIGHLIGHTS

• Total Q4 Revenue USD 10.2 million, EBITDA of USD 4.6 million, Net Loss of USD 24.2 million after impairment charge of USD 25 million
• Q4 Opex average for WilPhoenix approximately USD 60 000 per day
• Total contract backlog at end of Q4 2018 was approximately USD 30.7 million

2. Q4 2018 AND PRELIMINARY FULL-YEAR 2018 FINANCIAL RESULTS

Q4 2018 INCOME STATEMENT

Condensed statement of comprehensive income

in USD thousands, except earnings per share	Q4 2018 (unaudited)	Full Year 2018 (unaudited)	Q4 2017 (unaudited)	Full Year 2017 (audited)
Contract revenue	10 192	55 917	33 525	130 403
Reimbursables	40	586	343	1 306
Other revenue	4	19	1	22
	10 236	56 522	33 869	131 731
Rig operating expenses	5 520	27 343	7 222	27 751
Reimbursables	15	263	137	357
General and administrative expenses	53	8 766	1 975	8 818
Depreciation	3 151	13 425	3 963	15 686
Impairment	25 000	25 000	45 000	45 000
	33 739	74 797	13 297	97 612
Operating (loss)/profit	(23 503)	(18 275)	20 572	34 119
Interest income	802	1 943	85	183
Interest expense	(0)	(4 671)	(1 800)	(5 304)
Other financial items	(466)	(167)	(186)	(191)
Net financial items	336	(2 895)	(1 901)	(5 312)
(Loss)/Profit before tax	(23 167)	(21 170)	18 671	28 807
Tax expense	(1 013)	(1 694)	(809)	(8 140)
Net (loss)/profit	(24 181)	(22 864)	17 862	20 667
Total comprehensive (loss)/income	(24 181)	(22 864)	17 862	20 667
Attributable to shareholders of the parent	(24 181)	(22 864)	17 862	20 667
Basic and diluted earnings per share	(0,49)	(0,52)	0,59	0,69

Q4 2018 BALANCE SHEET

Condensed statement of financial position

in USD thousands

	31.12.2018	31.12.2017
	(unaudited)	(audited)
Rigs, machinery and equipment	186 761	178 808
Deferred tax asset	461	1 372
	187 222	180 180
Trade and other receivables	9 075	17 168
Prepayments and accrued revenue	2 862	6 905
Inventory	4 809	4 809
Cash and cash equivalents	63 865	119 286
Current tax	340	3 551
	80 951	151 719
Total assets	268 173	331 899
Paid in capital	198 719	130 142
Retained earnings	62 671	101 068
	261 390	231 210
Long-term interest-bearing debt	-	80 000
	-	80 000
Current portion of long-term debt	-	10 000
Trade and other creditors	1 213	1 170
Accruals and provisions	5 504	9 519
Current tax payable	66	0
	6 783	20 689
Total equity and liabilities	268 173	331 899

3. OPERATIONAL UPDATE

WILPHOENIX CONTRACTED UNTIL AT LEAST SEPTEMBER 2019

• Operational uptime was 99.7% in Q4 2018
• 19 firm P&A wells and 10 options for P&A and exploration drilling wells
• Contract dayrate USD 116,200 per day, changing to market-indexed rate at 600 day point

NEWBUILD UPDATE

• Rig Build on schedule and on budget
• "First Steel" was mid-November 2018
• Newbuild project site team in place
• Marketing activities towards NCS oil companies ongoing
• Building a Norwegian Drilling organisation

4. MARKET OUTLOOK

CRUDE PRICING REMAINS INVESTMENT SUPPORTIVE

STRONG CASH FLOW PROJECTIONS UNDERPINNING INCREASED E&P SPENDING

TOTAL NORWEGIAN SEMI-SUBMERSIBLE MARKET

NORWEGIAN MARKET – MODERN RIGS

WHY MODERN HE SEMIS ARE PREFERRED OVER VINTAGE RIGS

Deck capacity	Better logistics on deck which has a $\bullet$ significant efficiency gain Less dependent on supply vessels, reducing $\bullet$ the spread cost
Motions	Significant better rig motion characteristics ensuring optimized uptime • Ability to operate in all locations worldwide
Winterization	• Capability to work year-around in the Barents Sea • Few rigs can operate year around in the Barents Sea
Digitalization/ Integration	Infrastructure, software and sensors $\bullet$ allowing oil service company (i.e. SLB or BHGE) to link their system to the rig AutoDrill capability allowing real ۰ time downhole information

Source: Arctic Securities

*Total days includes downtime when applying uptime efficiency

**The drilling cost to E&Ps for vintage HE semi will in reality be higher as they historically have paid for waiting on weather which is a significant part of the lower uptime vs a modern semi

CONTRACT STATUS & EXPECTED DEMAND FLOATING DRILLING UNITS – NCS¹

UK MARKET

3. SUMMARY

"WE HAVE ALL THE TIME IN THE WORLD"

• The Awilco Drilling CS60 ECO rig design will prove itself as a Harsh Environment mid-water game changer
• New rig build on schedule and budget
• Optionality and Flexibility in both new rig financing and contract timing
• Establishing a Norwegian organisation and engaging with NCS customers
• WilPhoenix contracted to Shell for 19 firm wells + 10 option wells
• The market is improving