Seadrill Limited — Investor Presentation 2017

Jan 31, 2017

Seadrill Limited Presentation to Bondholders

Strictly private & confidential

Subject to the disclosures, assumptions and qualifications set out in this presentation including, without limitation, the "Important Disclosures" set forth on page 2

09 December 2016

Disclaimer

We have prepared this document solely for informational purposes. You should not definitively rely upon it or use it to form the definitive basis for any decision, contract, commitment or action whatsoever, with respect to any proposed transaction or otherwise. You and your directors, officers, employees, agents and affiliates must hold this document and any oral information provided in connection with this document in strict confidence in accordance with the terms of the applicable non-disclosure agreement ("NDA") between (1) Seadrill Limited and you dated 09 December 2016, (2) Seadrill Limited and Moelis & Company LLC dated 28 September 2016, and (3) Seadrill Limited and Akin Gump Strauss Hauer & Feld LLP dated 29 September 2016 and may not communicate, reproduce, distribute or disclose it to any other person, or refer to it publicly, in whole or in part at any time except in accordance with an applicable NDA. If you are not the intended recipient of this document, please delete and destroy all copies immediately. This document is protected by rule 408 of the Federal Rules of Evidence and any other applicable statutes or doctrines protecting the use of disclosure of confidential settlement discussions.

The information contained herein includes certain statements, estimates and projections with respect to our anticipated future performance and anticipated industry trends. Such statements, estimates and projections reflect various assumptions concerning anticipated results and industry trends, which assumptions may or may not prove to be correct. Actual results and trends may vary materially and adversely from the projections contained herein. We have prepared this document and the analyses contained in it based, in part, on certain assumptions and information obtained by us from the recipient, its directors, officers, employees, agents, affiliates and/or from other sources. Our use of such assumptions and information does not imply that we have independently verified or necessarily agree with any of such assumptions or information, and we have assumed and relied upon the accuracy and completeness of such assumptions and information for purposes of this document. Neither we nor any of our affiliates, or our or their respective officers, employees or agents, make any representation or warranty, express or implied, in relation to the accuracy or completeness of the information contained in this document or any oral information provided in connection herewith, or any data it generates and accept no responsibility, obligation or liability (whether direct or indirect, in contract, tort or otherwise) in relation to any of such information. We and our affiliates and our and their respective officers, employees and agents expressly disclaim any and all liability which may be based on this document and any errors therein or omissions therefrom. Neither we nor any of our affiliates, or our or their respective officers, employees or agents, make any representation or warranty, express or implied, that any transaction has been or may be effected on the terms or in the manner stated in this document, or as to the achievement or reasonableness of future projections, management targets, estimates, prospects or returns, if any. Any views or terms contained herein are preliminary only, and are based on financial, economic, market and other conditions prevailing as of the date of this document or as at the date stated in respect of that information and are therefore subject to change. We undertake no obligation or responsibility to update any of the information contained in this document. Past performance does not guarantee or predict future performance.

This document and the information contained herein do not constitute an offer to sell or the solicitation of an offer to buy any security, commodity or instrument or related derivative, nor do they constitute an offer or commitment to lend, syndicate or arrange a financing, underwrite or purchase or act as an agent or advisor or in any other capacity with respect to any transaction, or commit capital, or to participate in any trading strategies, and do not constitute legal, regulatory, accounting or tax advice to the recipient. We recommend that the recipient seek independent third party legal, regulatory, accounting and tax advice regarding the contents of this document. This document does not constitute and should not be considered as any form of financial opinion or recommendation by us or any of our affiliates. This document is not a research report and was not prepared by the research department of Seadrill Limited or any of its affiliates.

Neither you nor your directors, officers, employees, agents and affiliates may use the information contained in this document in any manner whatsoever, in whole or in part, other than in connection with evaluating the proposal contained herein. This document may contain material non-public information concerning Seadrill Limited and/or its affiliates and/or Seadrill Limited's and/or its affiliates' securities. You and your directors, officers, employees, agents and affiliates must only use such information in accordance with your compliance policies and procedures, contractual obligations and applicable laws and regulations. Some or all of the information contained herein is or may be price sensitive information and the use of such information may be regulated or prohibited by applicable legislation relating to insider dealing. You and your directors, officers, employees, agents and affiliates must not use any such information for any unlawful purpose.

		Page
1.	Business Plan	4
2.	Recapitalisation Plan Overview	11
3.	Group Structure Before and After Recapitalisation	21
4.	Timeline and Next Steps	24
5.	Appendix	27

Business Plan

• Our five-year forecast (the "Business Plan") is the foundation of the Recapitalisation Plan
• To assist us in preparing the Business Plan, we commissioned various reports from third parties on the offshore drilling market to validate our dayrate and utilisation assumptions
• Rig day rate and utilisation assumptions are the cornerstone of the Business Plan
• Near-term, the forecast uses current contracts, adjusted for potential amendments based on recent customer discussions
• Long term we use a portfolio approach for forecasting purposes with blended common rollover assumptions for dayrates, utilisation and opex levels for drillships, BE jack-ups and HE jack-ups

Dayrate and Utilisation

• The Business Plan projections are developed on the following dayrate and utilisation assumptions
• The dayrate assumptions are utilised after existing contracts roll-off, and are equivalent within rig type and entity-to-entity
• Based on third-party reports on the offshore drilling market

Floaters

HE Jackups

Strictly private & confidential 6

Opex

• Operating costs of contracted rigs assumed to increase at a rate of 3% p.a.
• Rigs rollover operating cost including G&A assumption for:
• 1) Floaters (1)
  • 2017: +0% = \$145k/d
  • 2018: +4% = \$150k/d
  • 2019: +4% = \$155k/d
  • 2020: +8% = \$166k/d
• 2) HE Jackups (1)
  • 2017-2020:= \$150k/d
• 2) BE Jackups (1)
  • 2017-2020:= \$70k/d
• 4) Idle rigs (2)
  • 2017-2020 = \$10k/d

^1. All daily opex numbers (other than idle rigs) include \$20k/d of G&A

^2. Excludes G&A costs

Assumptions	Details
Non-Working Fleet Assumption	 Cold stacked (floaters and jack-ups both at \$10k / day) with no long-term maintenance or capital expenditures
Reactivation Fees	 Estimated reactivation fees of \$30mm for floaters and \$10mm for jack-ups
Working Capital Reserve	 \$50mm working capital increase in Q4 2016
Seamex Cash Call	 \$25mm drawn under intercompany RCF granted to Seamex in Q4 2016
SDLP Distributions to Seadrill Limited	 \$10mm distributions per quarter from Q4 2016 onwards  \$41mm receivables monetised in Q4 2016

Financing Case – Key Metrics

Unlevered Free Cash Flow

1. Excludes mobilisation fees (non-cash item) and reimbursables (which cannot be forecasted)

Cash EBITDA (1)

Financing Case – Operating Cash Flow Overview

Summary Consolidated Operating Cash Flows
(\$ in millions)	2016	2017	2018	2019	2020
Contracted Revenues (1)	\$2,820	\$1,519	\$722	\$357	\$13
Assumed Revenues	-	232	1,322	2,364	3,036
Operating Expenditures	(1,033)	(809)	(1,066)	(1,219)	(1,260)
G&A Expenses	(220)	(220)	(220)	(220)	(220)
Cash EBITDA	\$1,567	\$723	\$758	\$1,282	\$1,569
Working Capital	18	127	(69)	(91)	(90)
Capex	(54)	(25)	(35)	(41)	(41)
Long-Term Maintenance Capex	(115)	(128)	(252)	(243)	(304)
Spare Parts Capex	(5)	(9)	-	-	-
Reactivation Costs	-	-	(90)	(70)	-
Tax Expense	(143)	(94)	(116)	(156)	(176)
Unlevered Free Cash Flow	\$1,268	\$594	\$196	\$680	\$959

Note: Financials include consolidated entities NADL, Sevan and AOD

1. Includes certain blend and extend contract assumptions

Recapitalisation Plan Overview

Current Group Structure and Liabilities

Consolidated Entities

• 1. Ship Finance rigs are already included in rig counts (two at Seadrill, one at NADL)
• 1. Other major shareholder is Mermaid Maritime Public Company Limited
• 1. Excludes the \$440mm facility secured against the T-15, T-16 which SDLP owned and West Telesto which is SDRL owned. This facility benefits from guarantees from both entities and has been included in the SDRL Ltd secured debt amount. There is a back to back arrangement between SDLP and SDRL to service the debt allocated to the T-15 and T-16 rigs
• 1. Includes unsecured derivative contracts entered into by Seadrill Limited and North Atlantic Drilling Limited guaranteed by Seadrill Limited
• 1. Other \$2,195mm of contingent payments for delivery of 8 jackup vessels and the Sevan developer do not have recourse to Seadrill Limited
• 1. c. \$910mm amount of cash was held in accounts (including Group cash pooling accounts) with banks that also have an interest in the Secured Facilities, other financing arrangements, and/or Derivative Contracts, and c. \$460mm amount of cash was held in accounts with banks that do not have such interests

Group Liabilities to Be Addressed

Liabilities		Size (\$mm)
Secured Debt
	Seadrill	4,393
	NADL	1,075
Secured Bank Debt	Sevan	980
	AOD	246
	SDLP(1)	640
Ship Finance (2)		908
Total Secured Debt		\$8,242
Unsecured Debt
	Seadrill USD Bonds	1,321
	Seadrill and NADL NOK / SEK Bonds	576
Bonds	NADL USD Bond	413
	Total Bonds	\$2,310
Total Secured and Unsecured Debt		\$10,552
Contingent Seadrill	Limited Liabilities
	Derivative Contracts (currency and interest rates) (6)	408
\$250mm Guarantee on \$750mm Facility and Other Support (3) Archer –		305
Bank Debt Guarantees(4) Seabras Sapura –	847
Obligations to the Shipyards(5) Newbuild		1,896
Total Contingent Liabilities		\$3,456
	Total Liabilities Addressed by Plan (as of Q3-16)	\$14,008

1. Excludes the \$440mm facility secured against the T-15, T-16 which SDLP owned and West Telesto which is SDRL owned. This facility benefits from guarantees from both entities and has been included in the SDRL Ltd secured debt amount. There is a back to back arrangement between SDLP and SDRL to service the debt allocated to the T-15 and T-16 rigs

2. Ship Finance debt related to the associated rigs is consolidated; a claim estimate would likely be calculated from a number of factors, including the PV of bareboat payments, PV of put rights and claim mitigation arguments

3. Includes guarantees for Hermes facility, Aberdeen warehouse and DNB facility

4. Includes: (i) financial guarantees provided in respect of 50% of secured debt against Diamante, Topazio, Onix and Jade vessels, and (ii) joint and several financial guarantee for Sapura Esmeralda FMM facility; Excludes Letters of Credit for DSRA and OMRA

5. Newbuild obligations guaranteed by Seadrill Limited as of Q3 2016

6. Includes unsecured derivative contracts entered into by Seadrill Limited and North Atlantic Drilling Limited guaranteed by Seadrill Limited

Recapitalisation Plan Overview

Stakeholder	Latest Proposal
	 Maturity Extension: c.5 years extension to period from Jun-21 to Dec-23
	 Amortisation Extension: 5 year extension of profile (c.\$360 MM savings p.a.)
Banks	 Undrawn RCF: Cancelled and replaced with \$500mm amortisation conversion election at option of the Company
	 MVC Covenant: Waived during the life of the Secured Credit Facilities
	 Financial Covenants: 3-year holiday period post closing subject to Minimum Liquidity Requirement. Limited financial covenants thereafter tested at bank debt level only
	 Minimum \$1,000mm in New Secured Notes issued by IHCo
	 Structural and contractual priority to provide downside protection
New Secured Notes	 7-year maturity with bullet repayment at maturity
	 Combination of fixed coupon plus equity upside participation at Seadrill Limited
	 Seadrill Limited and Guaranteed bonds exchanged at par into longer dated New Seadrill Bonds
	 Non-guaranteed bonds (NADL \$600mm Bond) converted at exchange ratio of 50% into New Seadrill Bonds
Bonds	 Maturity: Extended to period from Dec 2025 to Dec 2028
	 Interest: Payable in cash at a reduced level and through issuance of additional notes
	 Option to participate in New Secured Notes
SFL	 Similar treatment to Banks by deferring payments for 5 years
Contingent Claims and	 Includes interest and cross currency swaps and financial guarantee claims to minority owned entities (Archer and Seabras)
Financial Guarantees	 Each claim to be independently addressed in a settlement aligned with the overall principles of the Recapitalisation Plan
Newbuilds	 Existing newbuild arrangements will not be specifically amended or altered as part of recapitalisation plan and will be dealt with through bilateral relationships

Financing Case – Operating Cash Flow Overview

Summary Financials
(\$ in millions)	2016	2017	2018	2019	2020
Unlevered FCF	\$1,268	\$594	\$196	\$680	\$959
Cash Interest	(462)	(420)	(379)	(354)	(332)
Levered FCF	\$806	\$174	(\$183)	\$326	\$626
Bank Amortization	(910)	(521)	(521)	(521)	(521)
Finance Lease Payments	(187)	(129)	(130)	(110)	(102)
SDLP Back-to-Back	27	17	17	16	16
Maturities	-	-	-	-	-
New Secured Notes	1,000	-	-	-	-
Other (1)	279	86	65	40	40
Net Cash Flow	\$1,015	(\$373)	(\$752)	(\$248)	\$59
Starting Cash Balance	\$1,044	\$2,059	\$1,686	\$933	\$685
Ending Cash Balance	\$2,059	\$1,686	\$933	\$685	\$744

1. Other items includes actuals adjustments up to Q3 2016, dividends and other receivables from SDLP, compensation for Sevan Developer cancellation, working capital reserve and Seamex cash call, refinancing fees and divestments

Liquidity Profile

Liquidity Profile before Recapitalisation Plan (1) Liquidity Profile after Recapitalisation Plan

1. Liquidity profile before Recapitalisation Plan assumes maturities under the Secured Credit Facilities and bonds are not refinanced at maturity

Maturity And Amortisation Profile

The Recapitalisation Plan addresses our refinancing risk by re-profiling our amortisation payments and maturities

Leverage Profile

• Financial leverage returns to lower and sustainable levels as the industry and earnings recover
• The composition of net debt and the position of creditors improve significantly during this period
• By 2020 the Company is positioned to access a broader set of refinancing alternatives

Plan Bridges Seadrill To a Recovery

1. Covenants tested quarterly. Table indicates worst level over each period considered

2. Extrapolated from Q4 2020

Covenants	2017-19	2020	2021 (2)	2022+ (2)
Net Leverage		< 4.75x	< 4.50x	< 4.00x
DSCR	Covenant Holiday	> 1.20x	> 1.50x
Financing Case (1)
Net Leverage	11.1x	3.3x		2.4x
Covenant Headroom	n.a.	45%	88%	67%
EBITDA Headroom	n.a.	393	708	608
DSCR	0.6x	1.7x		2.0x
Covenant Headroom	n.a.	37%		34%
EBITDA Headroom	n.a.	452		382

Key Benefits of Consensual Recapitalisation Plan for Bondholders

• Today, Bonds are unsecured liabilities of Seadrill Limited ranking pari passu with a significant amount of unsecured and contingent liabilities
• The Recapitalisation Plan delivers:
• i. Significant amount of new money
• ii. Extension of the Secured Credit Facilities to bridge towards a recovery
• iii. A more sustainable capital structure for the benefit of all stakeholders
• Bondholders in particular will benefit from:
• Amendments to Secured Credit Facilities to provide a five year runway for the business to operate and generate value
• Preserved debt claims to realise a full recovery over time as secured leverage reduces and value is created from an industry recovery
• Ability to participate in New Secured Notes
• Fair treatment vis-a-vis other unsecured claims
• Cash pooling and value generation flexibility for IHCo
• The value associated with a consensual or pre-negotiated deal, which delivers more value and certainty for stakeholders as a whole than non-consensual alternatives

Group Structure Before and After Recapitalisation

Before Recapitalisation

NADL AOD 70% 66% Sevan 50% Vessel & Charter Cos (7) 39-100% Seadrill Bonds Senior Secured Credit Facilities (any deficiency claim) NOK/SEK NADL Bonds (any deficiency claim) Derivative contracts (issued or guaranteed by Seadrill Limited) Other unsecured claims Secured Credit Facilities (each facility benefits from existing 1st lien mortgage) Financial Liabilities Seadrill Limited Seadrill Global Services 100% Seadrill UK Ltd Seadrill Sapura Participacoes Ltda(2) Seadrill Offshore AS Seabras Sapura Holdco GmbH 100% 50% 50% 100% Other Entities 1 - 100% Archer Limited 40% New Build Entities(1) 100% 100% Seadrill Jack Up Holding Ltd SeaMex Ltd 50% 100% Seadrill Partners LLC Seadrill Capricorn Holdings Seadrill Operating LP 47% 49% 42% Seadrill Management Ltd NADL bonds 1. Certain shareholdings are indirectly held by Seadrill Limited

1. Shareholding indirectly held by Seadrill UK Ltd

After Recapitalisation

• Creation of two new intermediate holding companies, IHCo and RigCo
• New Secured Notes will be raised at IHCo level
• Interests in SDLP, Seadrill Capricorn Holdings, Seadrill Operating LP [and Seadrill Management] will be moved to sit below IHCo
• RigCo will be a whollyowned subsidiary of IHCo

• Rig-owning entities, intragroup charterers, Seadrill Global Services, and equity interests in NADL, Sevan and AOD will sit below RigCo

• First ranking share charge to be granted in favour of the New Secured Noteholders 2. First ranking share charge to be granted in favour of the Bank Finance Parties 3. Second ranking charge to be granted in favour of the New Secured Noteholders

• 1. Shareholding indirectly held by Seadrill UK Ltd 6. Interest in SeaMex Ltd to be pledged in March 2018
• 1. Excluding certain entities that cannot be hived down due to change of control or tax reasons 8. 1st ranking guarantee to be granted in favour of the New Secured Noteholders
• 1. 2nd ranking guarantee to be granted in favour of the New Secured Noteholders

• Certain shareholdings are indirectly held by Seadrill Limited

RigCo Group

Timeline and Next Steps

• An in-principle agreement with all key stakeholders will be required in January to have sufficient time to solicit support for the transaction, agree on documentation and implement the plan before the Long Stop Date (30 April 2017)
• Key documents that must be agreed are:
• 1. Long form term sheets with CoCom and Ad Hoc Committee of Bondholders
• 1. Term sheet and binding commitment letters with New Secured Notes investors
• 1. Lock-up agreement, with support for alternative methods of implementation built in
• We intend to solicit support for the Recapitalisation Plan so that it may be implemented out-of-court, through Schemes of Arrangement or through Chapter 11
• If sufficient support for the Recapitalisation Plan cannot be achieved in January, we will consider alternative options in light of commercial pressure on the business, key deadlines and near-term creditor payments

Illustrative Implementation Timeline

Appendix Materials

Appendix A: Term Sheets

• Summary of Terms for Secured Credit Facilities
• Summary of Terms for New Secured Notes
• Summary of Terms for Bonds
• Summary Terms for Ship Finance Lease Agreements
• Summary Terms for Non-Consolidated Entities and Financial Guarantees
• Appendix B: Cash Pool Mechanics
• Appendix C: Other Information

Appendix A: Term Sheets

Summary of Terms with Secured Credit Facilities

Secured Credit Facilities

	Current Contractual Terms	Summary of Proposed Terms
Tenor	 December 2016 to August 2020	 June 2021 to December 2023
Amortisation	 Under Request 1 no change to number of existing scheduled amortisation payments	 Reduced on basis of linear paydown over repayment period extended by 5 years (c.\$360mm saving p.a.). Quarterly payment dates to be harmonised
Amortisation Conversion Election	 N/A	 Company may elect to convert up to \$500mm of scheduled amortisation in exchange for a new secured tranche under each Secured Facility Agreement with bullet maturity and a 550bps cash margin over LIBOR
Amendment Fee	 10bps waiver consent fee  Approximately 20-50bps maturity extension fee paid	 50bps calculated on the total commitments under the relevant Secured Credit Facilities on the refinancing closing date but subject to credit, in the case of any Facilities extended as part of Request 1, for 50% of the extension fees payable in respect of such Facility
Margin	 Original applicable margin will apply as increased by below margin grid Leverage Ratio Margin Leverage Ratio Margin <4.5x 0 bps 5.5x – 6.0x 75 bps 4.5x – 5.0x 12.5 bps >6.0x 150 bps 5.0x – 5.5x 25 bps	 100bps increase to the originally applicable margin  No return to margin grid
MVC Test	 Suspended until testing date post 30 June 2017	 Waived during the life of the Secured Facilities Agreements
Restricted Payments	 Essentially no dividends or other restricted payments to be made by Seadrill Limited during the negotiation for the amendments to the Secured Credit Facilities	 Essentially no dividends / other restricted payments  Restriction lifted from 31 December 2021 if certain pre-agreed financial metrics are met(1)  Subject to IHCo restricted payment membrane
Cross Default	 Full cross-default to various wholly-owned and non-wholly owned subsidiaries and investments (e.g. NADL, Sevan, AOD and certain other non-consolidated entities)	 Full cross-default between Secured Credit Facilities (including AOD, NADL and Sevan) subject to harmonisation of certain covenants and events of default  No cross default in respect of debt of other non-100% owned subsidiaries of Seadrill Limited from time to time and their subsidiaries or non-consolidated investments of Seadrill Limited from time to time and their subsidiaries
Seadrill Limited Deficiency Claim	 Each facility benefits from unsubordinated guarantee or direct borrowing claim from Seadrill Limited for any deficiency claim	 Any financial guarantee claim that becomes payable against Seadrill Limited will receive notes with the same terms and profile as the New Seadrill Bonds
RCF Availability	 RCFs blocked	 Cancellation and replacement of the RCFs with the \$500mm Amortisation Conversion Election construct
Consents Requirements	 100% of outstanding loans required for amendment to payment terms, release or granting of guarantees  66 2/3 % of outstanding loans required to add Seadrill as co-borrower (if required	 No change to consent requirements
1. Note: Not yet agreed with the banks

Secured Credit Facilities (cont.)

	Current Contractual Terms	Summary of Proposed Terms
Financial Covenants	 Reset of the Leverage Ratio covenant in each Group Facility Agreement so that:  6.0x up to 31 December 2016 included  6.5x from 31 March 2017 to and including 30 June 2017  4.5x from 30 September 2017  Equity Ratio covenant temporarily amended so that the market value adjustment to the Equity and Total Assets components of this financial covenant is deleted (subject to reinstatement on 30 June 2017)	 Minimum Liquidity Covenant to be satisfied at all times and to be tested quarterly from closing  Other Financial Covenants  Years 1-3 post-closing: none  Year 4 post-closing: DSCR at 1.2x and Net Leverage at 4.75x  Year 5 post-closing: DSCR at 1.5x and Net Leverage at 4.5x  Thereafter: DSCR at 1.5x and Net Leverage at 4.0x
Minimum Liquidity	 \$250mm	 RigCo group \$625mm first year post refinancing closing date and \$500mm thereafter
Asset Sales	 Provisions dealing with disposals of rigs and entities holding rigs unclear both as to extent of consents needed and thresholds for these	 Greater flexibility for sale of rigs and rig-owning entities as of right including where assets being sold for not less than 90% of the bank debt allocated to them as long as shortfall is made from cash flow
Excess Sales Proceeds	 N/A	 Excess Sales Proceeds will be paid into excess sales proceeds escrow account(s) that will be established at the RigCo group level  Security will be granted over the RigCo excess sales proceeds escrow account(s) with all Bank Finance Parties having a first priority claim and the New Secured Noteholders having a second priority claim subject to the Intercreditor Agreement
Security	 "Existing security arrangements to remain in place including:  A mortgage over the relevant rig;  A charge over the shares of the rig owning company;  Account pledges over bank accounts of the rig owning company and intragroup charterer; and  Earnings and insurance assignments granted by the rig owning company except in the case of SFL Linus Ltd (Bermuda) and North Atlantic Linus Charterer Ltd (Bermuda). Intra group charterers have granted earnings assignments except for Sevan Drilling North America LLC, Sevan Drilling Limited and Sevan Drilling Rig II AS who have granted earnings and insurance assignments  No cross collateralisation between the outstanding facilities.	 Existing bank security package to remain in place  Cross collateralization between outstanding facilities  First ranking charge to be granted in favour of the Bank Finance Parties over:  the shares in RigCo;  the shares in Seadrill UK Ltd and Seadrill Offshore AS;  the intercompany loans made by RigCo to IHCo and by IHCo to RigCo; and  the RigCo excess sales proceeds escrow account(s)
Change of Control (Hemen)	 Change of Control mandatory prepayment triggered if Hemen ceases to own a minimum of 20% of voting rights or share capital of Seadrill Ltd or otherwise control the appointment of board of Seadrill Ltd	 Adjustment to ownership requirement for any dilution as a result of the Recapitalisation Plan  Hemen to have the ability to reduce its ownership interest when Seadrill's capital structure has stabilised, on terms to be discussed. Conforming changes to be made in other financing documents, where applicable
Delayed Closing Adj. Mechanic	 N/A	 If closing occurs after Dec-16, amortisation payments falling in calendar year 2017 to be reduced to reflect a true up to an assumed closing of 31 December 2016

Financial Covenants Summary

Financial covenants applicable from Refinancing Closing Date to 31-Dec-2021 (included)

Covenants	Level	Calculation	Definition
Minimum Liquidity	 \$625mm for first year post refinancing closing date  \$500mm thereafter	 Min. liquidity requirement of \$625/500mm within RigCo and its Subsidiaries  To be satisfied at all times and to be tested on quarterly test dates	 All cash within RigCo and its Subsidiaries, including cash in the RigCo excess sales proceeds escrow account(s) where no event of default is continuing under the Secured Credit Facilities
	 Through 4Q 19: N.a.	 Covenant holiday	 Ratio of RigCo EBITDA over RigCo Debt Service Expense over the relevant testing period
Debt Service Cover Ratio	 From 1Q 20 to 4Q 20: 1.20x	 At each quarterly test dates, covenant level tested using greater of: a) RigCo EBITDA calculated over last 6 months; or b) RigCo EBITDA calculated over last 12 months	 RigCo EBITDA equal to consolidated EBITDA of RigCo and its Subsidiaries  RigCo Debt Service Expense equal to: a) Sum of Secured Credit Facility amortisation payments and interest expense over the relevant
	 From 1Q 21 to 4Q 21: 1.50x	 At each quarterly test dates, covenant level tested using RigCo EBITDA calculated over last 12 months	testing period, and b) Sum of net payments under existing interest rate swaps at Seadrill Limited
Minimum MVC	 	Minimum market value covenant and associated mandatory prepayment event to be waived during the life of the Secured Credit Facilities The Group will continue to provide market value of rigs annually on a reporting basis only as per the provisions of the Secured Credit Facility Agreements
Maximum Net Leverage Ratio	 Through 4Q 19: N.a.  From 1Q 20 to 4Q 20: 4.75x  From 1Q 21 to 4Q 21: 4.5x
Other Financial Covenants	 All other financial covenants to be deleted
	Financial covenants applicable from 1-Jan-2022 (included) onwards
Covenants	Level	Calculation	Definition
Minimum Liquidity	 \$500mm	 Min. liquidity requirement of \$500mm within RigCo and its Subsidiaries  To be satisfied at all times and to be tested on quarterly test dates	 All cash within RigCo and its Subsidiaries, including cash in the RigCo excess sales proceeds escrow account(s) where no event of default is continuing under the Secured Credit facilities
Minimum MVC	 	Minimum market value covenant and associated mandatory prepayment event to be waived during the life of the Secured Credit Facilities The Group will continue to provide market value of rigs annually on a reporting basis only as per the provisions of the Secured Credit Facility Agreements
	 terms to be harmonised across all Secured Facility Agreements	Financial covenant testing language to be amended to clarify that the financial covenants are tested on the relevant testing dates at the level of RigCo and its Subsidiaries and
Other Financial Covenants		A package of financial covenants similar to the existing covenants, including Net Leverage and DSCR which will apply at 4.0x and	1.5x, respectively
	 Facility Agreements	"Supra Majority Lenders" means two thirds majority of the lenders under the Secured Facility Agreements with reference to total outstanding commitments across the Secured

Terms

Summary of Terms with New Secured Notes

New Secured Notes

	Key Terms
Issuer	 IHCo
Guarantor	 Seadrill Limited and second ranking guarantee from RigCo
Amount	 Company seeking to raise \$1,250mm (subject to market demand) with a commitment to raise a minimum of \$1,000mm
Redemption	 Option to purchase at par with net proceeds of sales of assets over which New Secured Notes have first ranking security on the issue date where proceeds not reinvested
Use of Proceeds	 General corporate purposes and to support compliance with the continuing Minimum Liquidity covenant within the RigCo group
Amortisation	 Bullet repayment at maturity
Tenor	 [31 December] [2024]
Hemen	 Verbal indication from Hemen to participate pro rata share on market clearing terms
Economics	 [5]% cash interest and [7]% payment in additional New Secured Notes interest  [●]% cash commitment fee  Equity or warrants in Seadrill Limited in an amount to be determined  All economics based on market clearing terms
Security and Ranking	nd ranking security over the cross-collateralisation benefit and excess sales proceeds escrow account(s) at the RigCo  2 group level and the RigCo shares st ranking security over the shares in IHCo and the assets of IHCo  1 (other than the shares in RigCo, intercompany loan claims owed by RigCo to IHCo, upstream intercompany loans made by RigCo to IHCo and any cash pooling at IHCo) st ranking share pledge over certain unencumbered assets and certain subsidiaries of Seadrill Limited, including any subsidiary party to a  1 newbuild contract  Enforcement mechanics, voting thresholds, intercompany loan position and intercreditor protections

New Secured Notes and Banks Security Package

			New Secured Notes			Banks
	Assets	st 1 Ranking	nd 2 Ranking	Structural Priority	st Ranking 1	nd Ranking 2	Structural Priority
	 Seadrill UK Ltd shares (100% SDRL Ltd stake)				
	 Seabras Sapura Holdco GmbH shares (50% indirect SDRL Ltd stake)	
	 Seadrill Sapura Participacoes Ltda shares (50% indirect SDRL Ltd stake)	
SDRL Ltd	 Archer Limited shares (40% SDRL Ltd stake)	
level	 New Build Entities (stakes directly and indirectly owned by SDRL Ltd)	
	 Seadrill Jack Up Holding Ltd (100% SDRL Ltd stake)	
	 Seadrill Offshore AS				
	 SeaMex Ltd (1) (50% stake owned by Seadrill Jack Up Holding Ltd)	
	 IHCo shares (100% SDRL Ltd stake)	
	 Cash at IHCo (subject to Contribution Agreement obligation to maintain Minimum Liquidity at RigCo)			
IHCo	 Seadrill Partners LLC (47% IHCo stake)			
level	 Seadrill Capricorn Holdings (47% IHCo stake)			
	 Seadrill Operating LP (42% IHCo stake)			
	 Seadrill Management Ltd (100% IHCo stake)			
	 RigCo shares (100% IHCo stake)				
	 Existing rigs						
RigCo	 Excess sales proceeds escrow account(s) at the RigCo group level				
level	 Other cash at RigCo						
	 Intercompany loan claims owed by RigCo to IHCo and upstream intercompany loans made by RigCo to IHCo				

1. From March 2018 onwards

	Status of Negotiations
Bank Security Package	 Existing security under relevant Secured Credit Facilities  Security to be granted in favour of the Bank Finance Parties under the respective Secured Credit Facilities over any intercompany liability owed to RigCo by a subsidiary of RigCo whose shares are subject to existing security under the relevant Secured Credit Facilities  First ranking security (with second ranking security granted in favour of the New Secured Noteholders) over:  Upstream intercompany loans made by RigCo to IHCo  Excess sales proceeds escrow accounts established at the RigCo group level  Shares in RigCo, Seadrill UK Ltd and Seadrill Offshore AS and over intercompany loans advanced by IHCo to RigCo
New Secured Notes Security Package	 First ranking security over (i) shares in IHCo and over intercompany loans advanced by Seadrill Limited to IHCo, (ii) shares/equity interests in certain entities at Seadrill Limited, including any subsidiary party to a newbuild contract, (iii) intercompany loans owed by SDLP to Seadrill Limited or IHCo and (iv) certain unencumbered intercompany loan claims, related party debt claims and other receivables  Second ranking security (with first ranking security granted in favour of the Banks) over:  Upstream intercompany loans made by RigCo to IHCo  Excess sales proceeds escrow accounts established at the RigCo group level  Shares in RigCo, Seadrill UK Ltd and Seadrill Offshore AS and over intercompany loans advanced by IHCo to RigCo
Enforcement Mechanism	 Existing Security: for individual Secured Credit Facilities, consent of 66.7% of the lenders under that Secured Credit Facility alone, subject to notification obligation to New Secured Notes  Shared Security on behalf of Banks: Supra Majority Lenders (Banks to consult with New Secured Noteholders prior to taking action)  Shared Security for the benefit of New Secured Notes: Silent second ranking security so no independent enforcement right without Supra Majority Lender Consent and no standstill  New Secured Notes first ranking security (not shared with Banks): simple majority of New Secured Noteholders, subject to consultation/notification obligation to Banks
Voluntary Prepayment of New Secured Notes	 Permitted where prepayment is funded by the proceeds of an equity issuance, or  RigCo Net Leverage has been at or below 4.0x for two consecutive quarters
Option to Purchase	 Banks and New Secured Noteholders have option to purchase debt in full at par following event of default or where any enforcement process has commenced

Banks and NSN Intercreditor Principles (cont.)

	Status of Negotiations
Fair Value Protections	 Fair value protections on distressed disposals. Proceeds on enforcement of shared security and New Secured Notes first ranking security (not shared with banks) to be received entirely in cash, subject to credit bidding by New Secured Noteholders  No fair value or other intercreditor protections to restrict enforcement of security by Lenders below RigCo. No restrictions on non-cash consideration / credit bidding by Lenders below RigCo
Amendments (1)	 Certain amendments to the Secured Credit Facilities to be subject to consent of New Secured Noteholders  All amendments to New Secured Notes subject to consent of Banks except permitted amendments
Refinancing of Secured Credit Facilities	 Permitted subject to certain permitted refinancing parameters, including with respect to maturity and amount of refinancing debt
US-style Restructuring and Insolvency Related Provisions	 Market standard US-style restructuring and insolvency related provisions
Exercise of Acceleration Rights	 Exercise of acceleration rights with respect to an event of default to be decided on a facility-by-facility basis by the majority lenders under the relevant Secured Facility Agreement
Other	 Subordination of certain intra group debt  Level of senior headroom  Undertaking to move down Seadrill UK Ltd and Seadrill Offshore AS to the RigCo group

1. Note that Company has requested that new group wide covenants should be capable of being amended / waived with "Supra Majority" consent but that facility specific covenants may be waived with Majority Lender consent under each specific bank facility

Summary of Terms with Bonds

1	Key Terms
Exchange	 All Seadrill Limited and Seadrill Limited guaranteed bonds exchanged into four equal annual tranches of new bonds issued by Seadrill Limited (the "New Seadrill Bonds")  Claims to be equally distributed across the four series of New Seadrill Bonds (25% each)  For consenting NADL USD Bondholders, 50% recovery on claim against NADL in the form of New Seadrill Bonds  All New Seadrill Bonds to be denominated in USD
Tenor	 25% of claim in 6.0% Bonds due Dec [2025]  25% of claim in 6.5% Bonds due Dec [2026]  25% of claim in 7.0% Bonds due Dec [2027]  25% of claim in 7.5% Bonds due Dec [2028]
Interest	 1.5% in cash; remainder through issuance of additional notes
Consent Fee	 50 bps consent fee in cash
Cross Default	 Cross-default per existing Seadrill Limited bonds but no cross default in respect of debt of other non-100% owned subsidiaries or investments of Seadrill Limited from time to time or non-consolidated entities
Amendments	 Cross default, insolvency related provisions and similar provisions and covenants (e.g. debt incurrence provisions) to be amended
NOK/SEK Bonds	 Elimination of financial covenants in NOK/SEK bonds
Subscription Rights	 Each bondholder will be provided with a right to participate pro rata to its holdings in an amount to be determined in the New Secured Notes
Minimum Consent	 [90% / 98%; for discussion] of New York Law bonds and 66.7% of Norwegian Law bonds (unless alternative thresholds are agreed)
Other	 Seadrill will cancel all bonds it holds in treasury  Hemen to receive same treatment as other bondholders

Summary of Terms with Ship Finance Lease Agreements

Ship Finance Lease Agreements

	Outline Terms	 The Ship Finance Lease
Tenor / Purchase Obligation Date	 SFL Hercules Ltd. (West Hercules): Moved from 6 November 2023 to 6 June 2024  SFL Deepwater Ltd. (West Taurus): Moved from 14 November 2023 to 14 June 2024  SFL Linus Ltd. (West Linus): Unchanged at 25 May 2029	concessions are designed to be similar in size and structure to the Secured Credit Facilities concessions
Charter Hire Amendment	 Deferral of 30% of each charter payment due 2017-2021  Deferred amounts repaid through increased charter payments beginning in 2022  For West Hercules and West Taurus, for new payment dates which fall after the Purchase Obligation Date, the remaining deferred amount shall be added to the Purchase Obligation price  For West Linus, the deferred amounts will be paid back between 2022-2026 with no effect on the Purchase Obligation price	 The 30% reduction in bareboat charter payments during 2017 - 2021 is similar to the Banks' net deferral in the same 2017 - 2021 period
Financial Covenants	 Financial covenants to be amended in line with Secured Credit Facilities
Minimum Liquidity	 \$625mm for the first year; \$500mm thereafter
Deficiency Claims	 Any financial guarantee claim that becomes payable against Seadrill Limited will receive notes with the same terms and profile as the New Seadrill Bonds
Amendment Fee	 50 bps, calculated on the Ship Finance obligations

Summary of Terms with Non-Consolidated Entities and Financial Guarantees

Non-Consolidated Guarantees and Contingent Liabilities

	Description of Amendments Required from Counterparties
Derivatives	 60% hedge ratio for next 5 years plus blending existing MTM on existing IRS into IRS swap rates going forward  Cross currency swaps to be terminated, exposures crystallised and any liabilities converted into New Seadrill USD Bonds with maturity dates after the Secured Credit Facilities
Customers and Performance Guarantees	 All customers and performance guarantees to remain unaffected  Maintain flexibility to provide unlimited further customer and performance guarantees
Newbuilds	 Existing newbuild arrangements will not be specifically amended or altered as part of recapitalisation plan and will be dealt with through bilateral relationships
Financial Guarantees	 Counterparties requiring amendments to financial guarantees:  Archer (\$250mm Facility guarantee, Hermes guarantee, DNB guarantee, Warehouse Lease guarantee). Proposal sent to Archer banks to either: I. exchange claim for New Seadrill USD bond, or II. release exposure under guarantees for payment at [10%] face value  Seabras (Diamante Bank debt, Onix Bank Debt, Esmerelda Joint Guarantee)  SFL (bareboat payment guarantee)  Joint-venture partners in some circumstances  Any financial guarantee claim made against Seadrill Limited will receive notes with the same maturity and interest profile as the New Seadrill Bonds  For the avoidance of doubt, same treatment to apply to any claim arising from Seadrill Limited guarantees of SFL bareboat charters  Company will be restricted from providing further financial guarantees to Non-Consolidated Entities subject to limited exceptions
SDLP	 Removal of Seadrill Limited as Co-obligor  2.5-year extension of bank facilities' maturities and amortisation profile  Amendment of the back to back and comingled facilities to sit at SDLP entities only

• Comprehensive approach to addressing unsecured liabilities
• Each claim to be independently addressed in a settlement aligned with the overall principles of the Recapitalisation Plan

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Appendix B: Cash Pool Mechanics

Cash Pooling Mechanics On Closing

Description

• "Consolidated Cash Balance" to be equal to cash held at Seadrill Limited or in any of its consolidated subsidiaries, including NADL, Sevan and AOD, but excluding Ship Finance
• "Available Closing Cash" to be equal to Consolidated Cash Balance at closing, less the following deductions:
• Transaction Costs (including financing fees)
• Gross proceeds from New Secured Notes
• Restricted Cash (which for the avoidance of doubt excludes cash in earnings accounts)
• Available Closing Cash is distributed between IHCo and RigCo in the following way:
• RigCo holds greater of 80% of Available Closing Cash (RigCo Closing Cash) and \$750mm, in each case less adjustments for payments to banks post Dec-16
• IHCo holds remaining Available Closing Cash (IHCo Closing Cash)
• To the extent that RigCo Closing Cash is below \$750mm, this balance will be increased to \$750mm using proceeds from New Secured Notes
• At closing, IHCo will therefore hold the IHCo Closing Cash and the proceeds of the New Secured Notes less any amount required to be transferred to RigCo pursuant to the previous point

Cash Pooling Mechanics After Recapitalisation

	Cash Movements Restrictions		Cash Movements Post Closing
	RigCo Net Leverage > 4.0x	RigCo Net Leverage < 4.0x
	 RigCo Minimum Liquidity Requirement of \$500mm to be satisfied at all times		Subject to Group Wide Covenants
	 No restrictions to cash movements within RigCo group
	 Cash upstream to IHCo subject to RigCo Restricted Payments Membrane:
RigCo	 Junior Obligations Permitted Payments permitted if no Event of Default is continuing	 RigCo Restricted Payments Membrane	SDRL Ltd.
	 Structural Permitted Payments will be permitted to be made at any time irrespective of whether any event of default is continuing	falls away when RigCo Net Leverage goes below 4.0x for two consecutive quarterly testing dates	Unrestricted
	 Other payments only permitted if RigCo cash is above \$750mm (Non Specified Permitted Payments)
	 IHCo commits to provide necessary funds to RigCo to meet RigCo Minimum Liquidity Requirement (Contribution Agreement)		IHCo
	 No restrictions to cash movements within IHCo group
IHCo	 Cash upstream to Seadrill Limited not restricted, provided that cash held by Seadrill Limited and its subsidiaries (other than IHCo and its subsidiaries) will not be permitted to exceed \$25 mm at any time, subject to adjustment for transactions at that level		Specified Permitted Payments	IHCo commits to maintain \$500mm
	 Newbuilds and acquisitions at IHCo remain subject to IHCo Restrictions	 IHCo Restrictions fall away where RigCo Net Leverage has been at or below 4.0x for two consecutive quarterly testing dates	permitted at all times	minimum liquidity at RigCo
Seadrill Limited	 No dividends allowed outside of consolidated SDRL Group until 31 December 2021 if certain pre-agreed financial metrics are met		RigCo

1. Unless applicable solvency requirements require a greater amount

Appendix C: Other Information

Bank Facilities, Bonds and SLBs

Amount Facility Borrower(s) / Rig Owner~ Guarantors / Rig Owner~ Pledged Asset(s) outstanding Maturity (\$mm) Secured Credit Facilities Seadrill Saturn Ltd, Seadrill Ltd, Seadrill Gulf Operations Neptune LLC, West Saturn, West Neptune, \$1.5 Bn Senior Secured Credit Facility Seadrill Jupiter Ltd, 1,250 Aug-19 Seadrill Nigeria Operations Ltd, Seadrill Offshore Nigeria Ltd West Jupiter Seadrill Neptune Hungary Kft Seadrill Ltd, North Atlantic Alpha Ltd, North Atlantic Norway Ltd, North Atlantic Elara Ltd(^) , North Atlantic \$2 Bn Senior Secured Term Loan and Credit North Atlantic Drilling Ltd() Epsilon Ltd(^) , North Atlantic Navigator Ltd(^) , North Atlantic Phoenix Ltd(^) , 6 acquired drilling units Jun-17 1,075 Facility North Atlantic Drilling UK Ltd(^) , North Atlantic Venture Ltd(^) Seadrill Pegasus (S) Pte Ltd() , Seadrill Gemini Ltd() , Seadrill Orion Ltd, West Pegasus, West Gemini, \$1.35 Bn Senior Secured Credit Facility Seadrill Ltd Aug-19 1,080 Sea Dragon de México S De R.L. De C.V., Seadrill Offshore AS() West Orion Sevan Brasil Ltd, Sevan Driller Ltd, Seadrill Ltd, Sevan Drilling Rig II AS, Sevan Drilling Ltd(Scotland)(), Sevan Drilling North America LLC, Sevan Louisiana Hungary Kft, Sevan Sevan Driller, Sevan Brasil, \$1.75 Bn Senior Secured Credit Facility Sevan Brasil Ltd, Sevan Driller Ltd, Sevan Louisiana Hungary Kft, Sevan Drilling Pte Ltd, Sevan Drilling Rig II Oct-18 980 Drilling Pte Ltd, Sevan Drilling Rig II Sevan Lousiana Pte Ltd, Sevan Drilling Rig V Pte Ltd, Sevan Marine Servicos de Perfuracao Ltda Pte Ltd, Sevan Drilling Rig V Pte Ltd Seadrill Carina Ltd() , Seadrill Eclipse Ltd() , Seadrill Offshore AS() \$950 MM Senior Secured Credit Facility Seadrill Ltd West Carina, West Eclipse Jan-20 639 Seadrill Tellus Ltd() , Seadrill Ltd, Seadrill Gulf Operations Vela LLC, Seadrill Capricorn Holdings LLC, \$1.45 Bn Senior Secured Credit Facility West Tellus, West Vela Feb-18 363 Seadrill Offshore AS() Seadrill Vela Hungary Kft , Seadrill Partners LLC Seadrill Limited, Seadrill Offshore AS() \$450 MM Senior Secured Credit Facility Seadrill Eminence Ltd West Eminence 291 Dec-16 Asia Offshore Rig 1 Ltd, Seadrill Ltd, Asia Offshore Drilling Ltd, Seadrill GCC Operations Ltd() \$360 MM Senior Secured Credit Facility Asia Offshore Rig 2 Ltd, AOD 1, AOD 2, AOD 3 Apr-18 246 Asia Offshore Rig 3 Ltd Seadrill T-15 Ltd, Seadrill T-16 Ltd, Seadrill Telesto Ltd(), Seadrill UK Ltd() , \$440 MM Senior Secured Credit Facility Seadrill Ltd T-15, T-16, West Telesto Dec-17 207 Seadrill International Ltd, Seadrill Partners Operating LLC, Seadrill Partners LLC Seadrill Freedom Ltd, Scorpion Rigs Ltd() , Scorpion Vigilant Ltd, Scorpion Resolute Ltd, W. Mischief, W. Resolute, W. \$450 MM Senior Secured Facility Seadrill Ltd Seadrill Prospero Ltd, Seadrill Abu Dhabi Operations Ltd, Seadrill Ariel Ltd, Freedom, W. Vigilant, W. Ariel, 185 Aug-20 Seadrill Jack UP I BV, Seadrill Jack Up II BV, Seadrill Labuan Ltd, Seadrill Offshore Malaysia Sdn. Bhd. W. Prospero Seadrill Castor Ltd(), Seadrill Brunei Ltd, Seadrill Tucana Ltd(), Seadrill UK Ltd() , Sea Dragon de Mexico S. de \$300 MM Senior Secured Credit Facility Seadrill Ltd West Tucana, West Castor Aug-23 168 r.l. de C.V., Seadrill Castor Pte Ltd Seadrill Indonesia Ltd(), Seadrill UK Ltd() , Seadrill Far East Ltd, Seadrill Cressida Ltd() , West Cressida, West Callisto, \$400 MM Senior Secured Credit Facility Seadrill Ltd May-17 210 Seadrill Triton Ltd(), Seadrill GCC Operations Ltd() , Seadrill Calisto Ltd() West Leda, West Triton Total Seadrill Bank Debt (5) 6,694 Ship Finance International Sale and Leaseback Facilities (6) \$375 MM facility SFL Hercules Ltd Ship Finance International Ltd West Hercules 286 May-19 \$390 MM facility SFL Deepwater Ltd Ship Finance International Ltd West Taurus Oct-18 254 \$475 MM facility SFL Linus Ltd Ship Finance International Ltd West Linus Jun-18 368 Total SFL Sale and Leaseback Facilities 908 Unsecured Bonds \$600 MM Senior Unsecured Notes (1) North Atlantic Drilling 413 Jan-19 \$500 MM Senior Unsecured Notes (2) Seadrill Limited 479 Sep-20 \$1 Bn Senior Unsecured Notes (3) Seadrill Limited 843 Sep-17 NOK1.8 Bn Senior Unsecured FRNs Seadrill Limited Mar-18 215 NOK1.5 Bn Senior Unsecured FRNs (4) North Atlantic Drilling Seadrill Ltd Oct-18 177 SEK1.5 Bn Senior Unsecured FRNs Seadrill Limited Mar-19 182 Total Unsecured Debt Jul-20 2,310 Other credit facilities with corresponding restricted cash deposits 55 Total Consolidated Debt 9,967	As at Q3-16

1. \$186.6MM owned by Seadrill; Bond not guaranteed by Seadrill Limited

2. 1. \$21MM owned by Seadrill
3. 1. \$51.8MM owned by Seadrill; As of Jun-16, outstanding amount reduced by further \$105 MM in Debt-for-Equity exchange
4. 1. NOK82.5MM owned by Seadrill; Bond guaranteed by Seadrill Limited
5. 1. Does not include \$63 MM outstanding of \$90 MM Cash Pool Guarantee Facility secured against the NADL and Archer shares
6. 1. Seadrill Ltd is a guarantor of the intragroup charterer

* Entities with Intercompany liabilities owing to Seadrill Ltd of greater than \$100MM

^ Entities with Intercompany liabilities owing to NADL of greater than \$100MM

~ Rig owning entities are shown in italics

Other Seadrill Limited Contingent Liabilities

Name	Description	Amount (\$mm)
Newbuild Obligations to the Shipyards with recourse to Seadrill Limited	Potential liability for delivery payments of newbuilds, as reported in Q2 2016 Report	\$1,896
Newbuild Obligations to the Shipyards with no recourse to Seadrill Limited		2,195
Ship Finance Limited	• Includes SFL debt from West Linus, West Hercules and West Taurus	908
Seabras Sapura	• Includes: (i) financial guarantees provided in respect of 50% of secured debt against Diamante, Topazio, Onix, Rubi and Jade vessels, and (ii) joint and several financial guarantee for Sapura Esmeralda FMM facility; Excludes Letters of Credit for DSRA and OMRA	847
SDLP(1)	• Debt cross-guaranteed by Seadrill Limited (West Polaris, West Vela, T-15 &T-16) • Seadrill Limited as co-obligor	640
Derivative Contracts	• Currency and interest rate hedging contracts at Seadrill and NADL (all benefitting from Seadrill Limited guarantee)	408
Archer	• \$250mm guarantee from Seadrill Limited on \$750mm Facility • €48.4mm Hermes Facility (€28.5mm outstanding) • \$20mm DNB Facility	305
Total Contingent Liabilities (as of Q3-16)		\$7,199

1. Excludes the \$440mm facility secured against the T-15, T-16 which SDLP owned and West Telesto which is SDRL owned. This facility benefits from guarantees from both entities and has been included in the SDRL Ltd secured debt amount. There is a back to back arrangement between SDLP and SDRL to service the debt allocated to the T-15 and T-16 rigs