Dolphin Drilling AS — Share Issue/Capital Change 2024

Apr 10, 2024

Dolphin Drilling AS: Contemplated private placement and company trading update

Dolphin Drilling AS: Contemplated private placement and company trading update

Dolphin Drilling AS: Contemplated private placement and company trading update

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, 10 April 2024, Dolphin Drilling AS ("Dolphin Drilling" or the "Company")

has retained Arctic Securities, Clarksons Securities AS and DNB Markets, a part

of DNB Bank ASA, as joint bookrunners and managers (the "Managers"), to advise

on and effect a private placement (the "Private Placement") of new shares (the

"Offer Shares") raising the NOK equivalent of approximately USD 40 million in

gross proceeds (the "Offer Size"). The price per share in the Private Placement

is fixed at NOK 6 per Offer share (the "Offer Price").

The net proceeds to the Company from the Private Placement will be used to

secure adequate runway towards having 3 out of the 4 rigs back in operation as

well as to provide the Company with contingency related to uncertainty

pertaining to (i) the outstanding receivables from General Hydrocarbons Limited

(GHL) and (ii) the tax claim from the His Majesty's Revenue & Customs (HMRC), as

referred to in prior disclosures by the Company.

Two of the Company's largest shareholders, being investment funds managed,

directly or indirectly by Strategic Value Partners, LLC ("SVP") and S.D.

Standard ETC Plc ("SDS"), are supportive of the Private Placement and have pre

-committed to subscribe for, and will be allocated, a total of approx. NOK 100

million of the Private Placement, such amount divided equally between SVP and

SDS. In addition, B.O. Steen Shipping AS has indicated an intention to subscribe

for NOK 50 million, while Surfside Holding AS has indicated an intention to

subscribe for the NOK equivalent of USD 5 million. In addition, certain members

of the Company's management have pre-committed to subscribe for, and will be

allocated, NOK 1,325,000 in the Private Placement.

The Private Placement will be directed towards selected Norwegian and

international investors (a) outside the United States, subject to applicable

exemptions from any prospectus and registration requirements and in reliance on

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

Act"), and (b) to investors in the United States who are QIBs as defined in Rule

144A under the Securities Act, in each case subject to an exemption being

available from offer prospectus requirements and any other filing or

registration requirements in the applicable jurisdictions and subject to other

selling restrictions

Applications

The application period for the Private Placement opens today at 18:00 CEST and

closes on 11 April 2024 at 08:00 CEST (the "Application Period"). The Company

reserves the right to shorten, close or extend the Application Period at any

time and for any reason on short, or without notice. If the Application Period

is shortened or extended, the other dates referred to herein may be changed

accordingly.

The minimum order size and allocation in the Private Placement will be the NOK

equivalent of EUR 100,000, provided that the Company may, at its sole

discretion, allocate Offer Shares for an amount below the NOK equivalent of EUR

100,000 to the extent applicable exemptions from relevant prospectus

requirements are available. Further selling restrictions and transaction terms

will apply. The Private Placement is for the avoidance of doubt solely directed

towards investors subject to, and in compliance with, applicable exemptions from

relevant prospectus or registration requirements.

Allocation and settlement

Allocation of Offer Shares will be made at the sole discretion of the Company's

Board of Directors (the "Board") in consultation with the Managers after expiry

of the Application Period (subject to any shortening or extension), who will

focus on criteria such as (but not limited to) pre-commitments, indications from

the wall-crossing phase, existing ownership in the Company, price leadership,

timeliness of the application, relative order size, sector knowledge, perceived

investor quality and investment horizon. Notifications of allocations are

expected to be distributed to applicants on or about 11 April 2024.

The Private Placement will be divided into two tranches. Tranche 1 of the

Private Placement ("Tranche 1") will consist of 48,644,708 Offer Shares (the "T1

Offer Shares"), which equals the maximum number of shares the Board may issue

pursuant to the authorization granted by the Company's annual general meeting of

30 June 2023 (the "Board Authorization"). Tranche 2 of the Private Placement

("Tranche 2") will consist of a number of Offer Shares (the "T2 Offer Shares")

that in aggregate corresponds to a total transaction size (i.e. both tranches)

equal to the Offer Size. SVP and SDS have agreed to take delivery of their

entire allocation of Offer Shares in Tranche 2. In addition, B.O. Steen Shipping

AS has agreed to take delivery of any remaining shares in Tranche 2 which

implies that all other investors are expected to receive their full allocation

in Tranche 1.

Settlement in the Private Placement is expected to take place as follows:

· Settlement of the T1 Offer Shares is expected to take place on 15 April 2024

(for applicants other than SVP and SDS). The T1 Offer Shares will be settled on

a delivery-versus-payment ("DvP") basis with existing and unencumbered shares in

the Company that are already listed on Euronext Growth Oslo, to be borrowed from

SVP and SDS (in their capacity as such, the "Share Lenders") by the Managers

pursuant to a share lending agreement entered into between the Managers, the

Company and the Share Lenders (the "Share Lending Agreement"). The share loan

will be settled with new shares (equal to the number of T1 Offer Shares) in the

Company to be resolved issued by the Board pursuant to the Board Authorization.

The Offer Shares in Tranche 1 will be tradeable from notification of allocation

to applicants, expected on or about 11 April 2024.

· Settlement of the T2 Offer Shares to applicants is expected to take place

within two trading days following completion of the EGM (as referred to below)

(for applicants other than SVP and SDS). The T2 Offer Shares will be settled on

a DvP basis with existing and unencumbered shares in the Company that are

already listed on Euronext Growth Oslo pursuant to the Share Lending Agreement.

Settlement vis-à-vis applicants in Tranche 2 is subject to (inter alia) a

resolution by an extraordinary general meeting of the Company, expected to be

summoned shortly and to be held before end of April (the "EGM"), to issue the T2

Offer Shares.

Completion of Tranche 1 in the Private Placement is subject to a resolution by

the Board to consummate the Private Placement, including to allocate the Offer

Shares (conditionally in respect of Tranche 2) and issue the T1 Offer Shares

pursuant to the Board Authorisation. Completion of Tranche 2 is subject to (i)

completion of Tranche 1 and (ii) the EGM resolving to issue the T2 Offer Shares.

The Company, in consultation with the Managers, reserves the right, at any time

and for any reason, to cancel, and/or modify the terms of, the Private

Placement.

As the number of shares allocated in the Private Placement will exceed

48,644,708, which is the maximum number of shares available under the Board

Authorization, it is expected that the Board will convene the EGM to approve the

issuance of the T2 Offer Shares to re-deliverer such shares to the Share Lenders

and, if applicable, to authorize the Board to issue new shares in the a

potential subsequent offering (see below). The T2 Offer Shares are expected to

be tradeable on Euronext Growth Oslo upon completion of the EGM. Should the EGM

fail to approve such issuance, applicants having received allocation of shares

in Tranche 2 will not receive such shares and the Company's gross proceeds from

the Private Placement will be limited to the gross proceeds from the Offer

Shares in Tranche 1.

Lock-ups

SDS as well as certain primary insiders of the Company have entered into

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

exceptions, will restrict 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 after the date hereof. SVP has agreed to a 6 month' lock-up for 83% of

shares held by funds under its management (subject to customary exclusions). For

the remaining approx.10,2 million shares, they are due to certain considerations

applicable to one or more of their investment funds that are shareholder(s)

unable to enter into a lock-up. SVP are subscribing for NOK 50 million in the

private placement and these new shares will be subject to a full lock-up for the

6 month' period.

Potential subsequent repair offering

The Board has considered the structure of the contemplated Private Placement in

light of the equal treatment obligations under the Norwegian Public Limited

Companies Act, the Norwegian Securities Trading Act and the rules on equal

treatment under Euronext Growth Rule Book II and the Oslo Stock Exchange's

guidelines on the rule of equal treatment, and is of the opinion that the

proposed Private Placement is in compliance with these requirements. By

structuring the transaction as a private placement, the Company will be in a

position to raise capital in an efficient manner with a lower discount to the

current trading price and with significantly lower completion risks compared to

a rights issue. Furthermore, the number of Offer Shares to be issued in

connection with the contemplated Private Placement implies that the dilution of

existing shareholders will be limited. Finally, the Board will consider to carry

out a subsequent offering directed towards shareholders who do not participate

in the Private Placement (see details below) in order to further limit the

dilute effect of the Private Placement. On this basis and based on an assessment

of the current equity markets, the Board has considered the Private Placement to

be in the common interest of the Company and its shareholders. As a consequence

of the contemplated Private Placement structure, the shareholders' preferential

rights to subscribe for the Offer Shares will be set aside.

Notwithstanding the above, the Company reserves the right, subject to completion

of the Private Placement, to carry out a customary subsequent offering of new

shares at the Offer Price. Any such subsequent offering, if applicable and

subject to applicable securities laws, will be directed towards existing

shareholders in the Company as of 10 April 2024 (as registered in the VPS two

trading days thereafter), who (i) were not allocated Offer Shares in the Private

Placement, and (ii) 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. Whether a subsequent

offering will be carried out will, among other things, depend on the result of

the Private Placement and the subsequent development of the Company's share

price.

Company trading update:

Following a continued assessment of the Receivables balances at 2023, a

provision for impairment against the GHL outstanding amount is currently being

considered by the Company and its auditor. The cost booked to the P&L is

partially offset by taxes which will not crystallize if the debt is unpaid.

Future cash receipt from GHL will result in reversal of any such impairment

(positive P&L impact). The assessment of how 2024 revenue is recognised is

ongoing. The final 2023 position is yet to be fully audited.  Three scenarios

are anticipated; provision of the 2023 position 1) in full ($52.7m), 2) net of

the value of cash received to 31/03/24 ($42.6m) or; 3) net of the value of cash

expected to be received (if paid) by 30/04/24 ($19.0m). The reported liquidity

position remains unchanged. For further information, please see the attached

company presentation.

Advisors

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

ASA, are acting as joint bookrunners and managers (the "Managers").

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

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, VP Corporate

Finance and Investor Relations Dolphin Drilling AS on 10 April 2024 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 four high

technical standard 4th and 5th generation enhanced Aker H3 and H4 units,

Borgland Dolphin, Blackford Dolphin, Paul B. Loyd, Jr. and Dolphin Leader

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.