Seadrill Limited — Earnings Release 2015

Nov 24, 2015

Sevan Drilling Ltd: Sevan announces third quarter 2015 results

Sevan Drilling Ltd: Sevan announces third quarter 2015 results

Highlights Third Quarter 2015

* Operating revenue in Q3 2015 was USD 98.4 million (Q3 2014 - USD 69.8

million).

* EBITDA in Q3 2015 was USD 59.5 million (Q3 2014 - USD 19.7 million).

* Net profit in Q3 2015 was USD 26.4 million (Q3 2014 - loss of USD 21.1

million).

* On 29 October 2015 Sevan Drilling and Cosco agreed to exercise the first

six-month option of the delivery deferral agreement for Sevan Developer,

which extends the deferral period to 15 April 2016.

Financial performance summary

For the three months ended September 30, 2015

Operating revenue

Operating revenue was USD 98.4 million compared to USD 69.8 million in Q3 2014.

The revenue increase is explained by improved operating performance for the

fleet compared to Q3 2014. The Sevan Louisiana achieved a Q3 2015 technical

utilization of 97.5% (30.6% in Q3 2014), Sevan Driller technical utilization was

100.0% (76.5% in Q3 2014), and Sevan Brasil technical utilization was 91.2%

(83.7% in Q3 2014).

Operating expenses

Total operating expense was USD 56.7 million compared to USD 70.6 million in Q3

2014. The decrease is the result of costs related to the downtime events in Q3

2014 on Sevan Louisiana, offset by reductions in operating expenses realized

across the fleet from cost savings initiatives and the impact of the Brazilian

Real devaluation in Q3 2015. General and administrative costs reduced to USD

3.3 million compared to USD 4.7 million in Q3 2014, as benefits from cost

savings were achieved. Depreciation expense decreased compared to Q3 2014 as a

consequence of asset impairment recorded in Q4 2014.

Net financial items

Net financial items amounted to USD 17.6 million in Q3 2015 compared to USD

19.2 million in Q3 2014. Interest and commitment fees on the Revolving Credit

Facility with Seadrill ("RCF") increased by USD 1.9 million due to draw downs

made and a higher outstanding balance on the RCF.  Interest expenses on the

secured bank loan facility decreased by USD 3.2 million due to a fall in the

outstanding balance due to instalments paid, as well as a fall in the floating

interest rate.

Net profit for Q3 2015 was USD 26.4 million compared to a net loss of USD 21.1

million in Q3 2014.

For the nine months ended September 30, 2015

Operating revenue

Operating revenue was USD 280.9 million for the nine months ended September

30, 2015 compared to USD 218.5 million for the comparative period in 2014. The

revenue increase is due to the Sevan Louisiana commencing operations in May

2014 and operating for the full period in 2015, in addition to improved

operating performance in 2015.

Operating expenses

Total operating expense was USD 186.4 million for the nine months ended

September 30, 2015 compared to USD 194.2 million for the comparative period in

2014. In the first half 2015, operating expenses increased by USD 6.0 million

mainly explained by Sevan Louisiana operating for the full 2015 period, offset

through cost savings initiatives across the fleet and impact of the Brazilian

Real devaluation in the 2015 period. General and administrative costs were USD

4.9 million lower from conclusion of the integration and restructuring.

Depreciation expense increased as a consequence of Sevan Louisiana in service in

the full period, offset by the impact of the asset impairment recorded in Q4

Net financial items

Net financial items amounted to USD 52.3 million for the nine months ended

September 30, 2015 compared to USD 45.1 million for the comparative period in

2014. This is explained by increased interest and commitment fees on the RCF of

USD 6.9 million.

The net profit was USD 42.3 million for the nine months ended September

30, 2015 compared to a net loss of USD 22.3 million for the comparative period

in 2014.

Balance sheet

Cash and cash equivalents amounted to USD 33.9 million as of September 30, 2015

compared to USD 30.2 million as of December 31, 2014.  During Q3 2015, interest

and principal payments under the debt facility and RCF were USD 15.6 million and

USD 35.1 million, respectively. As of September 30, 2015, USD 170.0 million was

drawn on the RCF.  Proceeds from the deferral agreement for Sevan Developer will

be utilized for general corporate purposes and to partially repay the

outstanding balance of the RCF.

Sevan Drilling Limited ("Sevan Drilling") is preparing its accounts on the

assumption that the company is a going concern. Liquidity remains sensitive to

performance of the rigs under their contracts, the continued availability of the

RCF, and other market conditions.

For further information, please contact:

Scott McReaken, CEO, Sevan Drilling Management AS

+47 91194651 mobile

About Sevan Drilling:

Sevan Drilling Limited is an international offshore drilling contractor

specializing in the ultra deepwater segment. Sevan Drilling Limited is listed on

Oslo Børs.

This information is subject of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

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