Prosafe SE

Capital/Financing Update • Apr 27, 2016

Prosafe SE: Company update April 2016

Prosafe SE: Company update April 2016

Since Prosafe SE's ("Prosafe" or the "Company") Q4 2015 report, the offshore oil

services market has continued to deteriorate following the oil price decline.

For Prosafe, this negative development has been coupled with a further delay in

the start-up of the Safe Scandinavia Tender Support Vessel ("TSV"), suspension

of additional Mexico contracts as separately announced (including cancellation

of a letter of intent for a new 4.5 year contract of ca USD 145 million for Safe

Notos) and a consequent deterioration of Prosafe's contract backlog, as well as

the unavailability of the bond market as a refinancing source. As a consequence,

Prosafe was likely to enter into a situation where its financial covenants would

be under pressure. The Company has therefore engaged legal and financial

advisors and initiated a review of the Company's strategic options and funding

situation.

Prosafe is in an ongoing dialogue with the Company's key stakeholders, including

the main shareholders, bondholders, bank lenders and yards, and the Company is

currently working with stakeholders and advisors to evaluate alternatives to

improve the financial situation. The Company has obtained a reduced minimum

liquidity bank covenant of USD 20 million until the end of the third quarter

2016. This temporary reduced level is applicable to both the USD 1.3 billion

facility and the USD 288 million newbuild facility. In addition the Company will

utilize the 2nd skipped payment option that was granted by the banks in the

previous amendment process closed around year-end 2015. Further amendments to

the bank and bond agreements will however be required in order to secure a

robust financial foundation and to safeguard and further strengthen Prosafe's

market leading position in the industry. The dialogue is constructive and the

Company intends to communicate its updated financial plan during the second

quarter of 2016.

As a result of the negative developments following the preliminary Q4 2015

report, the Company has incurred additional impairment charges to those included

in the preliminary Q4 2015 report. These impairment charges totalling USD 145.6

mill are further explained in the 2015 Annual Report.

Aggregate capital expenditure (capex) for 2016 remains in line with previous

indications of USD 700 million. This figure includes final capex related to the

completion of the TSV conversion which in total has cost in excess of USD 300

million compared to the USD 140 million initially budgeted, as well as the last

three newbuild vessels of which the Safe Notos and the Safe Zephyrus were

delivered early 2016. However, given recent shifts in the contract portfolio the

Company is working with the yard to find an amicable solution regarding the

delivery of the Eurus and thereby reduce actual 2016 capex compared to above

figure. In this context it should also be noted that the Company is likely to

contest parts of the additional costs incurred on the TSV conversion project.

As previously announced, the TSV commenced operations for Statoil on the Oseberg

East field in March. The Company has been working to optimize the fleet

deployment and utilization in a situation where the fleet renewal strategy is

being completed while the market is historically soft and contracts are being

suspended. Examples of measures to optimize the fleet are deferred deliveries,

seller's credits and the replacement of Safe Boreas for Safe Notos for Talisman

in the UK. In addition the Company has decided to scrap three of its oldest

units, respectively the Jasminia, Hibernia and Safe Britannia, and to cold stack

other units starting with the Safe Astoria. Through these measures the Company

is seeking to reinforce its market leading position and contribute to a

necessary restructuring of the industry while also reducing cost. The Company is

currently in dialogue for potential employment of uncontracted vessels,

including Safe Notos. The board currently anticipates that the Company will

deliver an EBITDA in 2016 of between USD 170 mill and USD 220 mill depending on

the outcome of these contract discussions.

* * * * *

The board of Prosafe has resolved to appoint Stig H. Christiansen as the new

interim chief executive officer (CEO) for Prosafe Management AS. He will replace

Karl Ronny Klungtvedt, who has agreed to step down.  Mr. Christiansen will take

up the position immediately and will continue to serve as the CFO of Prosafe in

addition to his position as acting chief executive officer.

In due course, the board will start a recruitment process for a new permanent

CEO evaluating both internal and external candidates for the position.

The board looks forward to working with Mr. Christiansen on the challenges

facing the Company. Mr. Christiansen is experienced as both a former CEO and CFO

and will be a key asset over the coming months.

* * * * *

Prosafe is the world's leading owner and operator of semi-submersible

accommodation vessels. The company operates globally, employs 850 people and is

headquartered in Larnaca, Cyprus. Prosafe is listed on the Oslo Stock Exchange

with ticker code PRS. For more information, please refer to www.prosafe.com

Larnaca, 27 April 2016

Georgina Georgiou, General Manager

Prosafe SE

For further information, please contact:

Harald Espedal, Chairman

Prosafe SE

Phone: + 47 97 59 33 83

Stig Harry Christiansen, Acting Chief Executive Officer

Prosafe Management AS

Phone: +47 51 64 25 17

This information is subject of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#2007212]