Dolphin Drilling AS — Investor Presentation 2017

Oct 25, 2017

Fred. Olsen Energy ASA 3Q 2017 results presentation

Disclaimer

This presentation has been produced by Fred. Olsen Energy ASA (the "Company") based on information which is publicly available. This presentation is for information purposes only. Further to the aforementioned, this presentation is the result of an effort of the Company to present certain information which the Company has deemed relevant in an accessible format. The presentation is not intended to contain an exhaustive overview of the Company's present or future financial condition and there are several other facts and circumstances relevant to the Company and its present and future financial condition that has not been included in the this presentation. No representation or warranty (express or implied) is made or intended to be made as to the accuracy or completeness of any or all of the information contained herein and it should not be relied upon as such. The recipient of this presentation acknowledges that it will be solely responsible for its own assessment of the information.

This presentation contains forward-looking statements. Such forward-looking statements give the Company's current expectations and projections relating to its financial condition, the market in which it operates and the future performance of the Company. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Company's control that could cause the Company's actual results, performance or achievements to be materially different from the expected results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Company's present and future business strategies and the environment in which it will operate in the future.

Neither the Company's nor any of its affiliates (nor any department in any of those entities), nor any such person's directors, officers, employees, advisors or representatives (collectively the "Representatives"), in any capacity, shall have any liability whatsoever arising directly or indirectly from the use of this presentation, including (but not limited to) as a result of any liability for errors, inaccuracies, omissions or misleading statements in this presentation.

FINANCIAL RESULTS

• MARKET
• OPERATIONS
• SUMMARY

Income statement – key figures

( U S D i l l ) m	3 Q 2 0 1 7	2 Q 2 0 1 7	C h a n g e
O t i p e r a n g r e e n e s v u R h d i e c a r g e n c o m e T t l o a r e e n e s v u	7 2, 3 4, 0 7 6, 3	5 3, 0 1, 9 5 4, 9	1 9, 3 2, 1 2 1, 4
O i t t p e r a n g c o s s R h d e c a r g e e p e n s e s x T t l t i o a o p e r a n g e p e n s e s x	( 4 2 ) 7, ( ) 3, 8 ( ) 5 1, 0	( 2 4, 6 ) ( ) 1, 8 ( ) 2 6, 4	( 2 2, 6 ) ( ) 2, 0 ( ) 2 4, 6
O l t b f d ( E B I T D A ) p e r. r e s u e o r e e p r.	2 5, 3	2 8, 5	( 3, 2 )
D i t i e p r e c a o n I i t m p a r m e n O t i l t ( E B I T ) p e r a n g r e s u	( ) 5 5, 0 - ( 2 9, 7 )	( ) 5 7, 1 ( 7 5, 0 ) ( 1 0 3, 6 )	2, 1 7 5, 0 7 3, 9
f N t i i l i t e n a n c a e m s f R l t b t e s e o r e a u x	( ) 1 5, 5 ( 4 2 ) 5,	( ) 1 2, 2 ( 1 1 8 ) 5,	( ) 3, 3 0, 6 7
E i d t t t s m a e a x N l t t e r e s u	( 0, ) 5 ( 4 ) 5, 7	( 4 ) 7, ( 1 2 3, 2 )	6, 9 7 7, 5

EBITDA comparison 3Q 2017 vs. 2Q 2017

Financial Items Breakdown

( U S D i l l ) m	3 Q 2 0 1 7	2 Q 2 0 1 7	C h a n g e
I i t t n e r e s n c o m e G f i i i l i t t a n s o n n a n c a n s r m e n s u F i i l i n a n c a n c o m e	3, 1 0, 2 3, 3	0, 9 0, 2 1, 1	2, 2 - 2, 2
I t t n e r e s e x p e n s e s f L i i l i t t o s s e s o n n a n c a n s r u m e n s O f t h i i l e r n a n c a e p e n s e s x F i i l n a n c a e p e n s e s x	( 9, 0 ) ( 0, 3 ) ( ) 1, 5 ( ) 1 0, 8	( 8, 6 ) ( 0, 3 ) ( ) 1, 6 ( ) 1 0, 5	( 0, 4 ) - 0, 1 ( ) 0, 3
N f i l t e o r e g n c u r r e n c y o s s	( 8, 0 )	( 2, 8 )	( 2 ) 5,
f N t i i l i t e n a n c a e m s	( ) 1 5, 5	( ) 1 2, 2	( ) 3, 3

Offshore Drilling Segment

( U S D i l l ) m	3 Q 2 0 1 7	2 Q 2 0 1 7	C h a n g e
O i t p e r a n g r e e n e s v u R h d i e c a r g e n c o m e T t l o a r e v e n u e s	6 1 7, 4, 0 7 1, 1	4 9, 7 1, 9 5 1, 6	1 4 7, 2, 1 1 9, 5
O t i t p e r a n g c o s s R h d e c a r g e e x p e n s e s T l i t t o a o p e r a n g e x p e n s e s	( 3 9, 0 ) ( 3, 8 ) ( 4 2, 8 )	( 1 9, 7 ) ( 1, 8 ) ( 2 1, ) 5	( 1 9, 3 ) ( 2, 0 ) ( 2 1, 3 )
O l t b f d ( E B I T D A ) p e r. r e s u e o r e e p r.	2 8, 3	3 0, 1	( 1, 8 )
D i i t e p r e c a o n I i t m p a r m e n	( 5 4, 5 ) -	( 5 6, 6 ) ( 0 ) 7 5,	2, 1 0 7 5,
O t i l t ( E B I T ) p e r a n g r e s u	( 2 6, 2 )	( 1 0 1, 5 )	7 5, 3

Engineering & Fabrication Segment

( U S D i l l ) m	3 Q 2 0 1 7	2 Q 2 0 1 7	C h a n g e
O t i ( t l ) p e r a n g r e v e n u e s e x e r n a I t t n e r- s e g m e n r e e n e s v u T t l t i o a o p e r a n g r e v e n u e s	5, 2 - 5, 2	3, 3 0, 5 3, 8	1, 9 ( 0, ) 5 1, 4
O i t t p e r a n g c o s s O l t b f d ( E B I T D A ) p e r. r e s u e o r e e p r.	( 8, 2 ) ( 3, 0 )	( 4 ) 5, ( 1, 6 )	( 2, 8 ) ( 1, 4 )
D i t i e p r e c a o n	( 0, 5 )	( 0, 5 )	-
O ( ) t i l t E B I T p e r a n g r e s u	( ) 3, 5	( ) 2, 1	( ) 1, 4

Consolidated Balance Sheet

( U S D i l l ) m	3 0 Se p 2 0 1 7	3 0 Ju n 2 0 1 7	C ha ng e
& Pr ty lan t ip t op er p eq u me n , O he t t a ts r n on -c ur re n ss e To ta l n t a ts on -c ur re n ss e	1 1 2 4, 0 1 1, 1 1 1 3 5, 1	1 1 7 7, 7 1 1, 1 1 1 8 8, 8	( ) 5 3, 7 - ( 5 3, 7 )
O t he t a ts r c ur re n ss e Ca h a d c h e iva len ts s n as q u To l c ta t a ts ur re n ss e To ta l a ts ss e	1 5 9, 9 4 5 1, 9 6 1 1, 8 1 7 4 6, 9	1 6 0, 4 3 5 1, 9 5 1 2, 3 1 7 0 1, 1	( 0, 5 ) 1 0 0, 0 9 9, 5 4 5, 8
Eq i ty u	6 6 0, 3	7 0 3, 6	( ) 4 3, 3
No in be ing de b t te t t n- cu rre n re s ar O he l ia b i l i ies t t t r n on -c ur re n To ta l n t l ia b i l i t ie on -c ur re n s	6 8 8, 9 0, 0 7 7 5 8, 9	8 0, 8 7 1, 2 7 8 5 2, 0	( 9 1, 9 ) ( 1, 2 ) ( 9 3, 1 )
Cu t in te t be ing de b t rre n re s ar O t he t l ia b i l i t ies r c ur re n To l c l ia b i l i ie ta t t ur re n s To ta l e i ty d l ia b i l i t ie q a n s u	1 9 0, 9 1 3 6, 8 3 2 7, 7 1 7 4 6, 9	9 5, 5 5 0, 0 1 4 5, 5 1 7 0 1, 1	9 5, 4 8 6, 8 1 8 2, 2 4 5, 8

Consolidated Cash Flow

( U S D i l l ) m	3 Q 2 0 1 7	2 Q 2 0 1 7	C h a n g e
f f P i t b i t r o e o r e n c o m e a x e s D i i d i i t t e p r e c a o n a n m p a r m e n I t t n e r e s e p e n s e x G i l f l d i t t t a n o n s a e o p r o p e r y, p a n a n e q u p m e n C h i i l a n g e s n p e n s o n p a n C h i k i i t l a n g e s n o r n g c a p a w U l i d l f i i l i t t n r e a z e o s s n a n c a n s r u m e n s C f h t d t i a s g e n e r a e r o m o p e r a o n s	( 2 ) 4 5, 5 5, 0 1 0, 0 ( 2, 8 ) - 8 3, 6 6, 1 1 0 6, 7	( 1 1 8 ) 5, 1 3 2, 1 9, 8 - ( 2 3, 7 ) 2 9, 6 2, 5 3 4, 5	0, 6 7 ( 7 7, 1 ) 0, 2 ( 2, 8 ) 2 3, 7 5 4, 0 3, 6 7 2, 2
I i d t t n e r e s p a T i d a x e s p a N h f l f i i i i t t t t e c a s o w r o m o p e r a n g a c v e s	( 8, 1 ) ( 0, 3 ) 9 8, 3	( 8, 7 ) ( 5, 1 ) 2 0, 7	0, 6 4, 8 6 7 7,
P d f l f i t r o c e e s r o m s a e o e q u p m e n f N t i t t i i d t e n v e s m e n n x e a s s e s C h f l f / d i i t t t i i t i a s o w r o m u s e n n v e s m e n a c v e s	4, 6 ( ) 1, 0 3, 6	- ( ) 1, 7 ( 1, 7 )	4, 6 0, 7 5, 3
f R t i t t b i l e p a m e n s o n e r e s e a r n g o a n s y C h f l d i f i i t i i t i a s o w u s e n n a n c n g a c v e s	( ) 3, 8 ( 3, 8 )	- -	( ) 3, 8 ( 3, 8 )
F i o r e g n c r r e n c u y N h i h d h i l t t e c a n g e n c a s a n c a s e q u v a e n s C h t b i i f i d a s a e g n n n g o p e r o C h d f i d t a s a e n o p e r o	1, 9 9 8, 1 3 5 1, 9 4 1, 9 5	( ) 0, 4 1 9, 0 3 3 3, 3 3 1, 9 5	2, 3 9, 1 7 1 8, 6 1 0 0, 0

Offshore drilling EBITDA and margin

EBITDA Offshore Drilling USD EBITDA % Offshore Drilling

Fleetstatus

R I G	D E S I G N	W D E P T H	L O C A T I O N	C L I E N T	C O N T R A C T S T A T U S	D A Y R A T E ( U S D ) N	E X T C R S
U L T R A- / D E E P W A T E	R U N I T S
B l t t D l h i o e e o p n	D S / G t P 1 0 ' u s o	1 2 0 0 0	T i f e n e r e		T i t i f i e r m n a o n o r c o n v e n e n c e	T i t i f U S e r m n a o n e e	D 9 6 i l l i m o n
B l k f d D l h i a c o r o p n	S S / A k H- 3 e r	0 0 0 7	N ( U K o r w a y	l i ) t c o m p a n	S k d t t m a r s a c e		4 Q 2 0 1 9 *
f B l d D l h i e o r o p n	S / G D L M M i a r n	1 0 0 0 0	M l i a a s a y		P d d i t i d r e s e r e a n m a n a n e v
M I D W A T E R F L O A T E	R S N O R W A Y
f B i d d D l h i e o r o p n	S S / A k H- 3 e r	1 5 0 0	N o r w a y	S t t i l a o	J N b 2 0 1 7 u n e o v e m e r -	1 7 2 0 0 0	Q 2 2 0 1 9
B l d D l h i o r g a n o p n	S S / A k H- 3 e r	1 5 0 0	N o r w a y		S t t k d m a r s a c e		1 Q 2 0 2 1 *
B d f d D l h i r e o r o p n	S S / A k H- 3 e r	1 0 0 5	N o r w a y		P d d i i d t r e s e r v e a n m a n a n e		2 Q 2 0 1 7
M I D W A T E R F L O A T E	R S U K
B f d D l h i o r o p n y	S S / A k H- 3 e r	1 5 0 0	N ( U K o r a w y	l i t ) c o m p a n	S t t k d m a r s a c e		2 Q 2 0 2 1 *

* Will be further postponed if further smart stacking period

• FINANCIAL RESULTS
• MARKET
• OPERATIONS
• SUMMARY

Global market

Floating units

• The market is turning in 2017 and longer term indicators are positive
• Strong increase in requests and contract activity in the North Sea market
• A high number of new development projects to be sanctioned in Norway from 2017 into 2019
• Contract awards in the UDW market has also seen an increase during 2017
• The pressure on day-rates is expected to be reduced
• However the contract durations will predominantly to be of shorter term nature albeit with some multi-year contract awards expected to materialize

Dayrates- worldwide

Source: Clarksons Platou Offshore

Norwegian floater market

• Continued increase in activity in the Norwegian market
• There has been an increase in number of requests and tenders through 2017, both for shorter and longer term work
• Several new contracts have been awarded and this is expected to continue with work targeted for 2018 and 2019
• An increase in activity on mature fields is expected in 2018 also increasing the demand for "fit for purpose" rigs
• One rig announced to be decommissioned during the quarter

Average dayrates Norway

UK floater market

• The UK market is also proving to be increasingly active, as the number of requests and tender activity continues to increase
• New contract awards are taking place and further awards are expected for work in 2018, but with some contracts also extending into 2019
• Several rigs announced to be retired during the quarter

Average dayrates UK

Source: Clarksons Platou Offshore

• FINANCIAL RESULTS
• MARKET
• OPERATIONS
• SUMMARY

The core fleet

Positioning the company for a recovering market

• Conserve class certificates on core units to benefit from expected recovery in dayrates
• Postponed capex outlays
• Our Aker H3 units are well suited for cost effective smart stacking
• Bolette Dolphin is hot stacked, contract opportunities are pursued aggressively

Ready for new contracts with smart stacking

Main focus areas

O t i l p e r a o n a l l e x c e e n c e	D l i i t t h i h f d f f i i t t i e v e r c o n s s e n g p e r o r m a n c e a n e c e n o p e r a o n s P i i t i i t l d i t t t h i h l i t d l i t r o r z e c a p a e x p e n u r e s o s u p p o r g r e g u a r y a n q u a y
N t t e w c o n r a c s	P t h i h t t t t i t i f t h i t u r s u e e r g c o n r a c o p p o r u n e s o r e c o r e u n s S f t t i t h b l d i k i l d t b l i l l e c u r e c o n r a c s w a a n c e r s p r o e a n a c c e p a e c o m m e r c a v a u e
U i t d f n s r e a y o r i t o p e r a o n s	S S k i i i l i f i d t t t t t t t t t m a r a c n g ; p r e s e r v a o n, m a n e n a n c e, r e g u a r e s n g o n e g r a e s y s e m s D t i l d t i t i l i t i l d t i l e a e r e a c v a o n p a n s ; o r g a n z a o n a a n o p e r a o n a
P i r e s e r v n g h d c a s a n i l w a v e r a p p r o v a	S f l i d h i t i t d t o c a s p o s o n a e n o q a r e r u W i f k l d E B I T D A l d i l d f J 2 0 1 8 t t t t a e r o m a r e a e a n r e a e c o e n a n s n e n o n e v v u v u u

• FINANCIAL RESULTS
• MARKET
• OPERATIONS
• SUMMARY

Summary

F i i l n a n c a	R U S D 6 i l l i 7 e e n e s e r e m o n v u w E B I T D A U S D 2 5 i l l i w a s m o n P f i f i U S D 4 6 i l l i t t t t r o a e r a x w a s n e g a v e m o n
M k t a r e	T h B i d f d D l h i d i l N b 2 0 1 7 t t t t e e o r o p n c o n r a c e x p e c e o e x p r e e a r y o v e m e r
O i l t p e r a o n a	S f f t t k i i t t i i t h h i h t h i l d i t i d m a r s a c n g o u n s c o n n u e s w g o c u s o n e c n c a c o n o n a n o n f f i i t t t e c e n r e s a r B l D l h i h k d h i l i i i t t t t t t t t o e e o p n o s a c e e p r s n g n e c o n r a c o p p o r n e s w u u w u

Q&A