Dolphin Drilling AS - Capital/Financing Update 2016

Covenant waivers and amendments in bank syndicate facility

Fred. Olsen Energy ASA ("FOE" or the "Company") is pleased to announce that

approval has been obtained from its syndicate banks, subject to satisfactory

documentation, to certain amendments to the original USD 2 billion credit

facility agreement dated June 2014 (the "Facility"). A formal agreement by way

of an amendment to the Facility is expected to enter into force prior to

31 December 2016.

As per the key terms of such amendment the following covenants will be

temporarily waived until 30 June 2018:

· Minimum value

· Leverage ratio

· Interest cover ratio

with the effect that:

· The minimum cash covenant will be set at USD 80 million.

· The scheduled amortizations of USD 95.5 million in January 2017 and July

2017, in total USD 191 million, shall be prepaid before end of 2016. Other

amortizations of the Facility are unaffected by the agreement, hence the

original amortization schedule will be restored from 2018.

· The available amount under the revolving credit facility of USD 210 million

will be reduced by 50% and the remaining 50% will be temporarily suspended

during the waiver period.

· The interest margin under the Facility will increase from 2.3% to 2.7% until

30 June 2018.

The waiver of the leverage ratio and interest cover ratio covenants will be

conditional upon similar covenant waivers being accepted by the bondholders in

FOE05 (ISIN: NO 0010704125) in line with procedural rules for bondholder

meetings. The Company will accordingly initiate further dialogue with FOE05

bondholders as soon as possible.

Subject to the bondholders' approval of the relevant covenant waivers, this

arrangement with the syndicate banks will provide the Company with operational

and financial flexibility, and additional time to further develop and optimise

its financing structure. During this period, it is estimated that the liquidity

position of the Company will remain well above the applicable minimum cash

covenant.

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