Seadrill Limited — Earnings Release 2016

Aug 25, 2016

Sevan Drilling Ltd: Sevan announces second quarter 2016 results

Sevan Drilling Ltd: Sevan announces second quarter 2016 results

Highlights Second Quarter 2016

* Operating revenue in Q2 2016 was USD 61.5 million (Q2 2015 - USD 99.4

million).

* EBITDA in Q2 2016 was USD 29.1 million (Q2 2015 - USD 52.1 million).

* Net loss in Q2 2016 was USD 7.4 million (Q2 2015 - profit of USD 13.7

million).

* On April 14, 2016 Sevan Developer exercised the second six-month option of

the delivery deferral agreement with Cosco Shipyard, which extends the

deferral period to October 15, 2016.

* On April 29, 2016 the Company announced the extension of the revolving

credit facility ("RCF") with Seadrill Limited to December 31, 2017 and

amendments to certain covenants in its bank facility.

Subsequent Events

* On August 25, 2016 Birgitte Ringstad Vartdal and Svend Anton Maier resigned

as Directors of the Company. Per Wullf was appointed Chairman and Georgina

Sousa was appointed as Director.

Financial performance summary

For the three months ended June 30, 2016

Operating revenue

Operating revenue was USD 61.5 million compared to USD 99.4 million in Q2 2015.

The decrease in revenue is primarily due to the Sevan Driller being idle until

it commenced a well service program at a lower rate during the quarter and Sevan

Brasil at a reduced day rate for the full quarter. The Sevan Louisiana achieved

a Q2 2016 technical utilization of 96.9% (93.8% in Q2 2015), Sevan Brasil

technical utilization while operating under contract was 99.5% (98.9% in Q2

2015) and Sevan Driller technical utilization while on contract was 99.4% (91.0%

in Q2 2015)

Total Operating expenses

Total operating expense was USD 49.0 million compared to USD 66.4 million in Q2

2015. Vessel operating expenses were USD 27.8 million compared to USD 43.2

million in Q2 2015. The decrease is mainly attributable to Sevan Driller being

idle for part of the quarter and lower operating costs due to continued cost

saving initiatives across the fleet. General and administrative costs were USD

3.8 million compared to USD 3.9 million in Q2 2015.  Depreciation expenses were

USD 16.6 million compared to USD 19.1 million in Q2 2015.

Net financial items

Net financial items amounted to USD 18.5 million in Q2 2016 compared to USD

17.3 million in Q2 2015.  Interest and commitment fees on the Revolving Credit

Facility ("RCF") with Seadrill increased by USD 1.4 million. Interest expenses

on the secured bank loan facility decreased by USD 0.1 million.

Net loss for Q2 2016 was USD 7.4 million compared to a net profit of USD 13.7

million in Q2 2015.

For the six months ended June 30, 2016

Operating revenue

Operating revenue was USD 114.3 million for the six months ended June 30, 2016

compared to USD 182.5 million for the comparative period in 2015. The decrease

in revenue is primarily due to the Sevan Driller being idle until it commenced a

well service program at a lower rate during the second quarter and Sevan Brasil

at a reduced day rate for the first half of 2016.

Total Operating expenses

Total operating expense was USD 106.5 million compared to USD 129.7 million in

th comparative period in 2015. Vessel operating expenses decreased by USD 22.5

million primarily due to Sevan Driller being idle for most of the first half of

2016 in addition to lower operating costs due to continued cost saving

initiatives across the fleet.  General and administrative costs increased by USD

1.4 million due additional corporate activities part of which are reflected

through higher costs from external advisers and in management services.

Net financial items

Net financial items amounted to USD 35.3 million compared for the six months

ended June 30, 2016 compared to USD 34.7 million in 2015. Interest and

commitment fees on the Revolving Credit Facility ("RCF") with Seadrill increased

by USD 1.1 million.

Net loss was USD 27.8 million for the six months ended June 30, 2016 compared to

a net profit of USD 15.9 million for the comparative period in 2015.

Balance sheet

Cash and cash equivalents amounted to USD 31.6 million as of June 30, 2016

compared to USD 42.4 million as of December 31, 2015.  During Q2 2016, interest

and principal payments under the debt facility and RCF were USD 13.9 million and

USD 105.0 million, respectively.

As of June 30, 2016, USD 160.0 million was drawn on the RCF after repayments

were made in the quarter.

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 22 33 00 00

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.