Dolphin Drilling AS — Earnings Release 2015

May 6, 2015

Financial results 1Q 2015

Oslo, 6 May 2015

AGENDA

FINANCIAL RESULTS 1Q 2015

• MARKET
• OPERATIONS
• SUMMARY

Income Statement – Key Figures

(USD mill)	1Q 2015	4Q 2014	Change
Operating revenues	272,0	286,4	(14,4)
Recharged income	11,9	11,2	0,7
Total revenues	283,9	297,6	(13,7)
Operating costs	(114,9)	(129,6)	14,7
Recharged expenses	(11,7)	(10,9)	(0,8)
Total operating expenses	(126,6)	(140,5)	13,9
Oper. result before depr. (EBITDA)	157,3	157,1	0,2
Depreciation	(91,1)	(86,6)	(4,5)
Operating result (EBIT)	66,2	70,5	(4,3)
Net financial items	8,7	33,7	(25,0)
Result before tax	74,9	104,2	(29,3)
Estimated tax	(5,2)	(8,6)	3,4
Net result	69,7	95,6	(25,9)

EBITDA Comparison 1Q 2015 vs. 4Q 2014

Financial Items Breakdown

(USD mill)	1Q 2015	4Q 2014	Change
Interest income	0,4	0,4	-
Gains on financial instruments Financial income	- 0,4	- 0,4	- -
Interest expenses	(11,5)	(12,3)	0,8
Capitalized borrowing cost (projects)	1,7	1,7	-
Losses on financial instruments	(7,6)	(9,4)	1,8
Other financial expenses	(3,7)	(4,2)	0,5
Financial expenses	(21,1)	(24,2)	3,1
Net foreign currency gain	29,4	57,5	(28,1)
Net financial items	8,7	33,7	(25,0)

Offshore Drilling Segment

(USD mill)	1Q 2015	4Q 2014	Change
Operating revenues Recharged income Total revenues	268,0 11,9 279,9	283,3 11,2 294,5	(15,3) 0,7 (14,6)
Operating costs Recharged expenses Total operating expenses	(111,8) (11,7) (123,5)	(128,1) (10,9) (139,0)	16,3 (0,8) 15,5
Oper. result before depr. (EBITDA)	156,4	155,5	0,9
Depreciation	(90,5)	(86,0)	(4,5)
Operating result (EBIT)	65,9	69,5	(3,6)

Engineering & Fabrication Segment

(USD mill)	1Q 2015	4Q 2014	Change
Operating revenues (external) Inter-segment revenues Total operating revenues	4,0 33,7 37,7	3,1 3,0 6,1	0,9 30,7 31,6
Operating costs Oper. result before depr. (EBITDA)	(35,4) 2,3	(4,4) 1,7	(31,0) 0,6
Depreciation	(0,6)	(0,6)	-
Operating result (EBIT)	1,7	1,1	0,6

Consolidated Balance Sheet

(USD mill)	1Q 2015	4Q 2014	Change
Intangible assets	12,2	13,3	(1,1)
Property, plant & equipment	2 989,7	2 901,6	88,1
Other non-current assets	30,8	31,4	(0,6)
Total non-current assets	3 032,7	2 946,3	86,4
Other current assets	331,1	318,9	12,2
Cash and cash equivalents	152,4	203,4	(51,0)
Total current assets	483,5	522,3	(38,8)
Total assets	3 516,2	3 468,6	47,6
Equity	1 376,5	1 307,9	68,6
Non-current interest bearing debt	1 238,6	1 359,9	(121,3)
Other non-current liabilities	135,1	139,0	(3,9)
Total non-current liabilities	1 373,7	1 498,9	(125,2)
Current interest bearing debt	190,9	95,5	95,4
Current liabilities newbuilds	337,2	292,7	44,5
Other current liabilities	237,9	273,6	(35,7)
Total current liabilities	766,0	661,8	104,2
Total equity and liabilities	3 516,2	3 468,6	47,6

Consolidated Cash Flow

(USD mill)	1Q 2015	4Q 2014	Change
Profit before income taxes	74,9	104,2	(29,3)
Depreciation and impairment	91,1	86,6	4,5
Interest expense	9,9	10,6	(0,7)
Gain on sale of assets	0,1	-	0,1
Changes in working capital	(28,5)	33,4	(61,9)
Unrealized loss/(gain) financial instruments	(20,3)	(43,0)	22,7
Cash generated from operations	127,2	191,8	(64,6)
Interest paid	(11,9)	(12,8)	0,9
Taxes paid	(7,0)	(19,7)	12,7
Net cash flow from operating activities	108,3	159,3	(51,0)
Net investment in fixed assets	(157,0)	(130,7)	(26,3)
Cash flow used in investment activities	(157,0)	(130,7)	(26,3)
Cash flow from financing activities	-	-	-
Foreign currency	(2,3)	0,3	(2,6)
Net change in cash and cash equivalents	(48,7)	28,6	(77,3)
Cash at beginning of period	203,4	174,5	28,9
Cash at end of period	152,4	203,4	(51,0)

Offshore drilling EBITDA and margin

Fleet status

Rig	Type / design	W depth ft	Location	Client	Contract status	Day rate (in USD)	Next CR survey
				Ultra-deepwater and deepwater units
Bollsta Dolphin	SS / Moss	10 000	UK	Chevron	4Q 2015- 4Q 2020	560 000	3Q 2020
Bolette Dolphin	DS/ Gusto P10'	12 000	Colombia	Anadarko	2Q 2014 - 2Q 2018	488 000	1Q 2019
Belford Dolphin	Drillship	10 000	Mozambique	Anadarko	January '12 - September '15 September '15 - March'16	495 000 Termination for convenience	2Q 2015
Blackford Dolphin	SS / Aker H-3	7 000	UK UK	Nexen Chevron Option	October '14 - May '15 June '15 - January '17 January '17 - October '17	428 000 428 000	4Q 2018
	Midwater floaters Norway
Bideford Dolphin	SS / Aker H-3	1 500	Norway	Statoil	February '14 - February '17	NOK 1048' + USD 301'	2Q 2019
Borgland Dolphin	SS / Aker H-3	1 500	Norway	Consortium*	April '14 - December '17	NOK 1046' + USD 349'	4Q 2019
Bredford Dolphin	SS / Aker H-3	1 500	Norway	Consortium**	October '13 - September '15	NOK 1025' + USD 274'	2Q 2017
				Midwater floaters UK
Byford Dolphin	SS / Aker H-3	1 500	UK	BP Option	April '13 - September '16 September '16 - August '19	345 500	Ongoing
Borgsten Dolphin	Tender support / AH-3		UK	Total Option	February '13 -May '16 June '16 - June '17	202 000/ 240 500 incl. capital contribution	1Q 2018
Borgholm Dolphin	Accomodation / AH-3		UK	BG	October '14 - May '15	240 000	4Q 2017
Borgny Dolphin	SS / Aker H-3	2 300			Idle

Participants in the consortiums:

* Wintershall, Tullow Oil, E.ON Ruhrgas, Suncor Energy ** RWE DEA, Lundin, Noreco, Repsol

FINANCIAL RESULTS

• MARKET
• OPERATIONS
• SUMMARY

Global market – floating units

• The market continues to be challenging in all segments
• The contracting and tender activity is low, while further newbuilds are entering the market
• The imbalance between demand and supply is expected to prevail through 2015 and into 2016
• Increased stacking and scrapping is materializing

Norwegian floater market

• The low contracting activity over the last two years will continue through 2015
• Several rigs will come off contract during 2015, including Bredford Dolphin
• Contract renewal will be challenging and increased idle time is expected

Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
			2015 Contract			Option	2016				2017 Yard/under construction

As per April 2015

Source: DNB

Average dayrates Norway

UK floater market

• The activity is weak also in the UK market
• Despite some tendering activity there is still limited visibility for contract renewal during the next year
• The low activity in the market in general is affecting the accommodation segment, with low contracting activity also in this market

	2015			2016				2017
Name	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Ocean Vanguard
Ocean Nomad
Ocean Princess
Transocean Prospect
Ocean Guardian
West Phoenix
Paragon MSS1
Sedco 711
Transocean John Shaw
WilHunter
Sedco 704
Ocean Valiant
Sedco 714
Stena Spey
Sedco 712
Blackford Dolphin
Paul B. Loyd, Jr.
Byford Dolphin
WilPhoenix
Ocean Patriot
Transocean Leader
Bollsta Dolphin
Deepsea Aberdeen

As per April 2015 Source: DNB and the Company

Average dayrates UK

Wordwide deepwater dayrates

FINANCIAL RESULTS

• MARKET
• OPERATIONS
• SUMMARY

Fred. Olsen Energy – Operating worldwide

Contract overview

Average contract length ca. 19 months

Contract backlog

Bollsta Dolphin

• Harsh environment ultra deepwater semi-submersible under construction
• Moss Maritime CS 60 E (Enhanced) design from Hyundai Heavy Industries
• Delivery is scheduled to 3Q 2015
• Mechanical completion continues
• Has secured a five-year contract with Chevron for operations West of Shetland in the UK sector

Ultra deepwater

Bolette Dolphin

• Operates under a four-year contract with Anadarko, estimated to expire 2Q 2018
• Continued drilling operations under a two well drilling campaign offshore Colombia

Belford Dolphin

• Continued operations for Anadarko offshore Mozambique
• A notice for termination has been received effective from early September 2015. The termination fee is approximately USD 52 million
• The unit will undertake its five-year Class Renewal Survey in 2/3Q 2015, estimated to approximately 100 days and at a cost of USD 130 million

Midwater - Norway

Borgland Dolphin

• Continued its operations under the contract with an RMN consortium after the class renewal survey. The contract is estimated to be completed end of 2017
• The five year class renewal survey was completed end of February. The total cost was USD 160 million, including a life extension program of USD 50 million
• A new 15K BOP was installed during the yard stay

Bideford Dolphin

• Operates under a three-year contract with Statoil, estimated to be completed end of January 2017
• Completed its five-year class renewal survey July 2014

Midwater - Norway / United Kingdom

Bredford Dolphin

• Continued under the 12-well contract with an AGR consortium. The contract is expected to expire end of 3Q 2015
• The class renewal survey was completed August 2012

Borgholm Dolphin

• Continued operations under the BG contract, estimated to expire end of May 2015
• Class renewal survey was completed March 2013

Midwater - United Kingdom (cont.)

Byford Dolphin

• The rig is under a drilling contract with BP Exploration, estimated to expire 3Q 2016
• The class renewal survey was commenced early January 2015. An increase in scope includes some structural upgrade, subsea investment and general repair of equipment
• The unit is now expected to complete the CRS in June and will cost approx. USD 190 million

Borgsten Dolphin

• Continued under the tender support services contract of 40 months duration with Total E&P UK. Two six month options exist under the contract
• Completed class renewal survey and conversion to tender support vessel in February 2013

Deepwater – United Kingdom

Blackford Dolphin

• Continued under the contract with Nexen, estimated to be completed end of May 2015. A contact with Chevron of approximately 19 months will follow. Chevron has an option for extending the contract between 300 and 700 days
• The unit completed its class renewal survey in June 2014

Harland & Wolff

• Focus on ship repair, ship building, steel fabrication and engineering services
• Byford Dolphin is undertaking its class renewal survey at the yard, estimated to be completed first half of June 2015
• A number of ship dockings have been carried out in the quarter

Summary

Financial

• Revenues were USD 284 million
• EBITDA was USD 157 million
• Profit before tax was USD 75 million
• Contract backlog amounting to approximately USD 2.9 billion
• Annual General Meeting to be held 27th of May 2015

Operational

• Borgland Dolphin class renewal survey completed end of February
• Byford Dolphin class renewal survey commenced early January

Market

Average contract duration approximately 19 months