Prosafe SE

Earnings Release • May 12, 2016

Prosafe SE: First quarter 2016 results

Prosafe SE: First quarter 2016 results

Operating profit for the first quarter of 2016 amounted to USD 21.9 million and

net loss was USD 1.8 million. Utilisation of the fleet was 37 per cent.

Operations

Utilisation of the fleet was 37 per cent in the first quarter of 2016 (80 per

cent in the first quarter of 2015).

Safe Scandinavia Tender Support Vessel ("TSV") commenced a contract in mid-March

in Norway with a firm period through to July 2018. Drilling support operations

commenced in early April. The mobilisation fee of USD 12 million for the TSV was

recognised as income in the first quarter.

Safe Zephyrus was delivered from the Singapore construction yard in the first

quarter of 2016 and commenced transit to the North Sea. The vessel is scheduled

to commence its first contract in Norway early in Q3 2016.

Safe Notos was delivered from COSCO, (Qidong) Co., Ltd. in the first quarter of

2016 and is currently in international anchorage offshore Singapore. The vessel

was delivered to carry out a 4.5 year contract of ca. USD 145 million pursuant

to a letter of intent which was subsequently cancelled.

Safe Zephyrus and Safe Notos are not included in the first quarter utilisation

ratio above.

Safe Boreas commenced a contract in the UK in mid-March.

Safe Concordia and Safe Caledonia were fully contracted during the quarter.

Regalia was off-hire in the quarter and will commence a contract in the UK

during May.

Safe Bristolia was completing class renewals in the yard during the quarter and

is scheduled to commence a contract in the UK during May.

Safe Astoria was off-hire in the quarter and is currently cold-stacked in Batam,

Indonesia.

Jasminia and Safe Britannia were off-hire during the first quarter and Safe

Hibernia came off contract mid-February. Based on a strategic fleet review,

Prosafe has decided to scrap these three vessels.

The contracts for Safe Lancia and Safe Regency were suspended in mid-March 2016

and the vessels remained in Mexico in the first quarter. Safe Lancia is being

prepared for cold-stacking in the US. Safe Regency is being mobilised to a

suitable lay-up location.

Prosafe and Statoil (U.K.) Ltd agreed to re-phase the contract for the Mariner

Project on the UK Continental Shelf of the North Sea from 2016 into 2017. A re-

phasing charge of USD 30 million has been recognised as income in the first

quarter 2016.

The Company has been working to optimise fleet deployment and utilisation in a

situation where the fleet renewal strategy is being completed while the market

is historically soft and contracts are being suspended. Examples of these are

deferred deliveries, seller's credit 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 Jasminia, Safe Hibernia and Safe

Britannia, and to cold stack other units starting with Safe Astoria.

Financials

(Figures in brackets refer to the corresponding period of 2015)

Operating profit for the first quarter amounted to USD 21.9 million (USD 55.4

million). This decline reflects the lower utilisation of the fleet in poor

market conditions.

Net financial expenses for the first quarter were USD 20.3 million (USD 26.1

million). Interest expenses have increased mainly due to higher interest-bearing

debt.

Net loss amounted to USD 1.8 million (net profit of USD 27 million), and

earnings per share were USD 0.01 negative (USD 0.11 positive).

Total assets at 31 March amounted to USD 2,630.8 million (USD 2,157.5 million),

while the book equity ratio declined to 25.9 per cent (34.5 per cent). Net

interest-bearing debt stood at USD 1,650.7 million (USD 977.4 million).

Outlook

Despite a recent increase in oil price, general market uncertainty remains and

bidding activity is low. Clients remain focused on cost reduction and cash

preservation. Prosafe therefore maintains a cautious view in the near and medium

term and anticipate a possible upturn from 2018.

Financial restructuring

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.

Reference is also made to note 5 to the financial statements.

Subsequent events

The Board of Prosafe has appointed Stig H. Christiansen as the new interim Chief

Executive Officer ("CEO") for Prosafe Management AS. He replaces Karl Ronny

Klungtvedt who has agreed to step down. Mr Christiansen will continue to serve

as the Chief Financial Officer of Prosafe Management AS in addition to his

position as acting CEO.

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

CEO evaluating both internal and external candidates for the position.

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

Attachment: Q1 2016 report

Larnaca, 12 May 2016

Georgina Georgiou, General Manager

Prosafe SE

For further information, please contact:

Stig Harry Christiansen, Acting CEO and CFO

Prosafe Management AS

Phone: +47 51 64 25 17 / +47 478 07 813

Cecilie Helland Ouff, Senior Manager Finance and Investor Relations

Prosafe AS

Phone: +47 51 65 25 20

This information is subject to the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

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