Dolphin Drilling AS — Capital/Financing Update 2023

Jun 22, 2023

Dolphin Drilling AS: Private Placement Successfully Completed

Dolphin Drilling AS: Private Placement Successfully Completed

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART DIRECTLY OR

INDIRECTLY, IN AUSTRALIA, CANADA, JAPAN, HONG KONG, SOUTH AFRICA OR THE UNITED

STATES OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR

DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER

OF ANY OF THE SECURITIES DESCRIBED HEREIN.

(Oslo, 22 June 2023) Reference is made to the stock exchange announcement made

by Dolphin Drilling AS ("Dolphin Drilling" or the "Company") on 22 June 2023

regarding the launch of a contemplated private placement of new shares in the

Company (the "Offer Shares") raising gross proceeds of the NOK equivalent of

approximately USD 60 million through an accelerated bookbuilding process (the

"Private Placement").

Dolphin Drilling is pleased to announce that the board has resolved to

conditionally allocate 84,471,200 Offer Shares at a subscription price of NOK

7.50 (the "Subscription Price") per Offer Share, raising gross proceeds of NOK

633,534,000 million through the Private Placement. The Private Placement was

carried out on the basis of an accelerated bookbuilding process managed by

Arctic Securities AS, Clarksons Securities AS, DNB Markets, a part of DNB Bank

ASA, Fearnley Securities AS and Pareto Securities AS, as joint bookrunners in

the Private Placement (the "Managers"). The net proceeds to the Company from the

Private Placement will be used to finance the acquisition of Paul B. Loyd Jr.

and Transocean Leader (the "Transaction"), for working capital and other

Transaction related costs, as well as for general corporate purposes.

Two of the Company's largest shareholders, Strategic Value Partners LLC ("SVP")

and S.D. Standard ETC Plc ("SDS"), subscribed for, and were conditionally

allocated, Offer Shares for USD 13 million and USD 7 million, respectively.

Certain members of the Company's management subscribed for, and were

conditionally allocated, Offer Shares for approx. USD 0.235 million.

SVP, SDS and certain of the Company's primary insiders have entered into

customary lock-up arrangements with the Managers that will restrict, subject to

customary exceptions, their ability to, without the prior written consent of the

Managers, issue, sell or dispose of shares, as applicable, for a period of 180

days.

The Offer Shares will be settled with existing and unencumbered shares in the

Company that are already listed on Euronext Growth Oslo, pursuant to an

agreement entered into between certain Managers, the Company, SVP and SDS (the

"Agreement"). The shares delivered to the subscribers will thus be tradable upon

delivery subject to conditions having been met. Expected first day of trading

will be on or about 30 June (X) subject to conditions being met, and settlement

is expected on or about on or about 4 July (DVP X+2).

Completion of the Private Placement by allocation and delivery of the Offer

Shares to investors is subject to (i) approval by the Company's extraordinary

general meeting expected to be held on or about 30 June 2023 ("EGM") of the

Private Placement, the issue of the new A-shares and the share capital

reduction; (ii) the Agreement remaining unmodified and in full force and effect,

and (iii) binding agreements for the Transaction being validly entered into by

the parties thereto, including signed letter of agreement to consent (on

satisfaction of conditions) for sale of the rigs and novation by the

counterparties to the drilling contracts.

Subject to relevant approvals by the EGM, SVP and SDS have undertaken to use the

full proceeds received from the settlement of the Private Placement, in addition

to the consideration payable for Offer Shares allocated to SVP and SDS, to

acquire new A-shares in the Company. The number of A-shares to be issued will be

1 A-share per 10 Offer Shares allocated in the Private Placement, but with 10

times the number of votes and economic benefits compared to the ordinary shares,

and will be issued at a price per A-share equal to 10 times the price per Offer

Share. The purpose is to enable the Company to complete the Private Placement at

an Offer Price which is below the nominal value of the existing ordinary shares.

All of the new A-shares will be converted into ordinary shares by way of a 1:10

share split as soon as practically possible (following completion of a share

capital reduction by way of reducing the nominal value of the Company's shares).

The conversion is expected to take place within an overall timeline of eight (8)

weeks from the settlement date, including a 6 weeks' creditor notification

period. Following such conversion, the new A-shares (as converted to ordinary

shares) will rank pari passu with the other shares in the Company.

Completion of the Private Placement implies a deviation from the shareholders'

pre-emptive right to subscribe for the Offer Shares. The Board has considered

the Private Placement in light of the equal treatment obligations under

applicable regulations and is of the opinion that the waiver of the preferential

rights inherent in a private placement, taking into consideration the time,

costs and risk of alternative methods of the securing the desired funding, is in

the common interest of the shareholders of the Company.

The Company intends to carry out a subsequent offering with non-tradeable

subscription rights of up to 11,100,000 new shares in the Company at the

Subscription Price, each with a par value of NOK 10 (to be adjusted to NOK 1 per

share following completion of the share capital reduction), for gross proceeds

of up to NOK 83,250,000 (equal to up to 13.1% of the size of the Private

Placement) which, subject to applicable securities law, will be directed towards

existing shareholders in the Company as of end of trading on 22 June 2023 (as

registered in the VPS two trading days thereafter) who (i) were not included in

the wall-crossing phase of the Private Placement, (ii) were not allocated Offer

Shares in the Private Placement; and (iii) are not resident in a jurisdiction

where such offering would be unlawful, or would (in jurisdictions other than

Norway) require any prospectus filing, registration or similar action (the

"Subsequent Offering"). Completion of such Subsequent Offering will, inter alia,

be subject to (i) all relevant corporate resolutions being made, including

approval by the EGM; (ii) prevailing market price of the Company's shares,

including the price of the Company's shares not trading below the offer price in

the Subsequent Offering over a period with sufficient liquidity, (iii)

completion of the share capital reduction and (iv) the publication of an

offering prospectus.

Whether or not the Subsequent Offering will ultimately take place, will depend

inter alia on the development of the price of the shares in the Company after

completion of the Private Placement. The Subsequent Offering may be cancelled or

discontinued at the discretion of the Company, in cooperation with the Managers,

if the shares of the Company trade at or below the Subscription Price at

meaningful volumes, which will imply that eligible shareholders have had the

opportunity to limit dilution by acquiring listed shares in the secondary market

at price levels at or below the Subscription Price.

Implementation of a long-term incentive scheme

The Board of the Company has furthermore resolved to implement a long-term

incentive scheme for executives and members of the Management of the Company

(the "LTIP"). Under the LTIP, 6,225,000 options will be granted with the

following strike price and vesting structure: 1/3 after 12 months with a strike

price aligning with the Offer Price in the Private Placement, 1/3 after 24

months with a strike price of NOK 15 and 1/3 after 36 months with a strike price

of NOK 18.

Advisors:

Arctic Securities AS, Clarksons Securities AS, DNB Markets, a part of DNB Bank

ASA, Fearnley Securities AS and Pareto Securities AS are acting as Managers for

the Private Placement.

Advokatfirmaet Schjødt AS is acting as legal advisor to the Company and

Advokatfirmaet Simonsen Vogt Wiig AS is acting as legal advisors to the

Managers.

This information is considered to be inside information pursuant to the EU

Market Abuse Regulation and is subject to the disclosure requirements pursuant

to section 5-12 the Norwegian Securities Trading Act.

This stock exchange announcement was published by Ingolf Gillesdal, Head of

Investor Relations Dolphin Drilling AS on 22 June 2023 at the time set out in

this notice on behalf of the Company.

For further information, please contact:

Ingolf Gillesdal email: ingolf.gillesdal@dolphindrilling.com, tel: +47 920 45

320

Dolphin Drilling | www.dolphindrilling.com

Dolphin Drilling is a leading harsh environment drilling contractor for the

offshore oil and gas industry. Dolphin Drilling owns a fleet of three high

-technical standard 4th and 5th generation enhanced Aker H3 units, Borgland

Dolphin, Blackford Dolphin, and Bideford Dolphin, operated by an experienced

team with a strong operational track record. The company has offshore and

onshore offices and operations in Norway, Scotland, Brazil, and Nigeria.

* * *

Important information:

This announcement is not and does not form a part of any offer to sell, or a

solicitation of an offer to purchase, any securities of the Company. Copies of

this announcement are not being made and may not be distributed or sent into any

jurisdiction in which such distribution would be unlawful or would require

registration or other measures.

The securities referred to in this announcement have not been and will not be

registered under the U.S. Securities Act of 1933, as amended (the "Securities

Act"), and accordingly may not be offered or sold in the United States absent

registration or an applicable exemption from the registration requirements of

the Securities Act and in accordance with applicable U.S. state securities laws.

The Company does not intend to register any part of the offering in the United

States or to conduct a public offering of securities in the United States. Any

sale in the United States of the securities mentioned in this announcement will

be made solely to "qualified institutional buyers" as defined in Rule 144A under

the Securities Act.

In any EEA Member State, this communication is only addressed to and is only

directed at qualified investors in that Member State within the meaning of the

Prospectus Regulation, i.e., only to investors who can receive the offer without

an approved prospectus in such EEA Member State. The "Prospectus Regulation"

means Regulation (EU) 2017/1129, as amended (together with any applicable

implementing measures) in any Member State.

This communication is only being distributed to and is only directed at persons

in the United Kingdom that are (i) investment professionals falling within

Article 19(5) of the Financial Services and Markets Act 2000 (Financial

Promotion) Order 2005, as amended (the "Order") or (ii) high net worth entities,

and other persons to whom this announcement may lawfully be communicated,

falling within Article 49(2)(a) to (d) of the Order (all such persons together

being referred to as "relevant persons"). This communication must not be acted

on or relied on by persons who are not relevant persons. Any investment or

investments activity to which this communication relates is available only for

relevant persons and will be engaged in only with relevant persons. Persons

distributing this communication must satisfy themselves that it is lawful to do

so.

The issue, subscription or purchase of shares or other financial instruments in

the Company is subject to specific legal or regulatory restrictions in certain

jurisdictions. Neither the Company nor the Managers assume any responsibility in

the event there is a violation by any person of such restrictions. The

distribution of this release may in certain jurisdictions be restricted by law.

Persons into whose possession this release comes should inform themselves about

and observe any such restrictions. Any failure to comply with these restrictions

may constitute a violation of the securities laws of any such jurisdiction.

Matters discussed in this announcement may constitute forward-looking

statements. Forward-looking statements are statements that are not historical

facts and may be identified by words such as "believe", "expect", "anticipate",

"strategy", "intends", "estimate", "will", "may", "continue", "should" and

similar expressions. Any forward-looking statements in this release are based

upon various assumptions, many of which are based, in turn, upon further

assumptions. Such assumptions are inherently subject to significant known and

unknown risks, uncertainties, contingencies and other important factors which

are difficult or impossible to predict. Such risks, uncertainties, contingencies

and other important factors could cause actual events to differ materially from

the expectations expressed or implied in this release by such forward-looking

statements. The Company does not make any guarantee that the assumptions

underlying any forward-looking statements in this announcement are free from

errors nor does it accept any responsibility for the future accuracy of the

opinions expressed in this announcement or any obligation to update or revise

the statements in this announcement to reflect subsequent events. You should not

place undue reliance on any forward-looking statements in this announcement. The

information, opinions and forward-looking statements contained in this

announcement speak only as at its date, and are subject to change without

notice. The Company does not undertake any obligation to review, update,

confirm, or to release publicly any revisions to any forward-looking statements

to reflect events that occur or circumstances that arise in relation to the

content of this announcement.

This announcement is made by and, and is the responsibility of, the Company. The

Managers are acting exclusively for the Company and no one else and will not be

responsible to anyone other than the Company for providing the protections

afforded to their respective clients, or for advice in relation to the contents

of this announcement or any of the matters referred to herein. Neither the

Managers nor any of their respective affiliates makes any representation as to

the accuracy or completeness of this announcement and none of them accepts any

responsibility for the contents of this announcement or any matters referred to

herein.

This announcement is for information purposes only and is not to be relied upon

in substitution for the exercise of independent judgment. It is not intended as

investment advice and under no circumstances is it to be used or considered as

an offer to sell, or a solicitation of an offer to buy any securities or a

recommendation to buy or sell any securities of the Company. The distribution of

this announcement and other information may be restricted by law in certain

jurisdictions. Persons into whose possession this announcement or such other

information should come are required to inform themselves about and to observe

any such restrictions. This announcement is an advertisement and is not a

prospectus for the purposes of the Prospectus Regulation as implemented in any

Member State.