Seadrill Limited — Investor Presentation 2017

Jan 31, 2017

Project Eagle

Bondholder Informal Group Restructuring Proposal

Disclaimer

Moelis & Company UK LLP ("Moelis") prepared this presentation based on a combination of public and non-publicly available information and solely for the purpose of the work being conducted under the engagement letter dated 19 October 2016 with Akin Gump Strauss Hauer & Feld LLP ("Akin Gump"), counsel to the informal group of holders of bonds of Seadrill Limited and North Atlantic Drilling Limited (the "Informal Group") and for the purposes of providing this Restructuring Proposal for discussion and settlement purposes only. Moelis has not verified and does not intend to verify independently any of such information, all of which Moelis assumes is accurate and complete in all material respects. If this presentation contains projections, forecasts or other forward-looking statements, Moelis assumes that they were prepared based on the best available estimates of the future events underlying such statements. This presentation speaks only as of its date and Moelis assumes no duty to update it or to advise any person that its conclusions or advice has changed.

This Restructuring Proposal is provided on a subject to contract basis, does not set forth all of the terms and conditions of the transactions contemplated hereby, and shall not constitute an offer to sell or buy, nor an offer capable of acceptance, nor the solicitation of an offer to sell or buy any of the securities referred to herein or the solicitation of acceptances of a chapter 11 plan, scheme of arrangement or other process or proceeding. Any such offer or solicitation shall only be made in compliance with all applicable laws. Without limiting the generality of the foregoing, this Restructuring Proposal is subject in all respects to diligence and the negotiation, execution and delivery of mutually acceptable definitive documentation consistent herewith. The pricing and terms included herein are based on market conditions on the date hereof and are subject to change. This Restructuring Proposal is for discussion purposes only and is proffered in the nature of a settlement proposal in furtherance of settlement discussions and is entitled to protection from any use or disclosure to any party or person pursuant to Federal Rule of Evidence 408 and other rules of similar import. The information contained herein is strictly confidential and may not be disclosed to any third party or circulated or referred to publicly or in discussions with any of the Company's other creditors or other stakeholders without the Informal Group's prior written consent.

Moelis provides mergers and acquisitions, restructuring and other advisory services to clients and its affiliates manage private investment partnerships. Its personnel may make statements or provide advice that is contrary to information contained in this material. Our proprietary interests may conflict with your interests. Moelis may from time to time have positions in or effect transactions in securities described in this presentation. Moelis may have advised, may seek to advise and may in the future advise or invest in companies mentioned in this presentation.

Moelis is acting as financial advisor to Akin Gump as counsel to the Informal Group in connection with the subject matter of this presentation and no one else, and will not be responsible to anyone other than Akin Gump and the Informal Group for providing the protections afforded to clients of Moelis nor for providing advice in relation to the subject matter of this presentation.

• The Informal Group of Seadrill Bondholders ("Informal Group") wishes to work with the Board of Seadrill Limited ("SDRL" or the "Company"), Hemen as a major stakeholder and Senior Secured Creditors (or "the Banks") to deliver a successful and consensual outcome to the restructuring process
• The Informal Group supports Seadrill's objectives to implement a comprehensive and long-term solution to address the Company's current overleveraged capital structure and liquidity issues and has prepared this Restructuring Proposal (the "Informal Group Proposal") to deliver on those objectives
• The Informal Group Proposal seeks to address the key financial issues facing Seadrill:
• Need for incremental capital and liquidity in order to bridge to a recovery of the offshore drilling industry and maintain flexibility to seize the commercial opportunities as they arise
• Need for deleveraging of the balance sheet and reduction of cash interest
• The Informal Group has taken note of the Company's current Recapitalisation Plan as presented by the Company on 13 October 2016 (the "Recapitalisation Plan") and broadly supports several key components of the proposed structure, as provided herein
• The Informal Group Proposal comprises a number of components that would address the Company's key objectives:
• Additional capital and liquidity in the form of a fully underwritten \$700m issue of New Secured Notes ("NSN") subordinated to the existing Secured Credit Facilities
• A significant equitisation of the Unsecured Seadrill and NADL Bonds (together "Bonds"), thereby reducing pro forma forecast leverage as set out on page 3
• A reduction of the Secured Credit Facilities fixed amortization profile in exchange for a cash sweep mechanism that repays Secured Credit Facilities through a proportion of excess year-end cash
• The Informal Group looks forward to working with Seadrill, Hemen and the Senior Secured Creditors to achieve a successful outcome to the restructuring process

Bondholder Informal Group Restructuring Proposal

STRICTLY PRIVATE AND CONFIDENTIAL SUBJECT TO CONTRACT FOR SETTLEMENT AND DISCUSSION PURPOSES ONLY SUBJECT TO FRE 408 AND OTHER RULES OF SIMILAR IMPORT

The Informal Group's Perspective on Comprehensive Solution

PERSPECTIVE ON RECAPITALISATION PLAN	 The Informal Group has taken note of the Recapitalisation Plan and broadly agrees with the following components: Proposed maturity extension of all Secured Credit Facilities and repayment ahead of the Bonds  Proposed consent fees and interest margin uplift  Proposed introduction of NSN senior to the Bonds to provide additional capital and liquidity to the business  Proposed Group structure upon completion of the transaction with the creation of two new intermediate holding companies, IHCo and  RigCo, subject to agreement of transaction terms, including respective collateral packages at each level
BONDHOLDER CONTRIBUTION UNDER THE INFORMAL GROUP PROPOSAL	 In order to support the comprehensive solution for Seadrill, the Informal Group is prepared to contribute: New liquidity: through underwriting NSN issue of \$700m (inclusive of Hemen participation)  Maturity runway: elimination of Bond maturities of \$2,295m between 2017 and 2020 across all Bonds  Substantial deleveraging and cash interest reduction:  Immediate deleveraging through equitisation of \$1,045m in Bonds  Future deleveraging through potential conversion of reinstated Convertible Secured Bond ("CSB") of \$1,250m prior to Secured  Credit Facilities' maturities Amended Bonds re-instated as a CSB with a conversion strike price at a modest premium (25-45%) to the implied equity market − price at completion of restructuring The Company would have option to force conversion of the CSB in the future if certain conditions (including equity − trading price) are met Reduction in interest expense post restructuring of c.\$65m per year and post conversion of CSB of a further c.\$75m per year  Noteholder consent for the new RigCo / IHCo structure and NSN issuance, subject to agreement of detailed terms for a comprehensive  solution, including collateral package  All components of Informal Group Proposal are interconditional
DELEVERAGING IMPACT OF INFORMAL GROUP PROPOSAL	Net Debt / EBITDA (x)¹ 2017 2018 2019 2020 Company Recapitalisation Plan² 11.6x 11.5x 6.7x 5.1x Informal Group Proposal - Pre-conversion of CSB 10.2x 9.9x 5.6x 4.1x - Post-conversion of CSB 8.4x 8.2x 4.6x 3.3x

1. Net Debt defined as Total Interest Bearing Debt (comprising Secured Credit Facilities, SFL lease obligations, NSNs and Bonds post-exchange) less Cash and Cash Equivalents; Cash EBITDA per the Financing Case

2. As per Company Model "14-D SDRL Consol Model 02-Dec-16", based on Financing Case

BANKS' CONTRIBUTION UNDER THE INFORMAL GROUP PROPOSAL

 In consideration for the substantial contributions being made by Bondholders in terms of deleveraging and contribution to increased capital and liquidity, the Informal Group requires the Banks to agree to a further reduction of fixed amortisation payments and the introduction of a variable amortisation component in the form of a cash sweep mechanism, that gives the Company additional runway to a recovery in the offshore drilling market  Banks would be required to support a detailed term sheet documenting the agreed terms of the Informal Group Proposal, including, without limitation, the items set out on pages 5 to 7 of this presentation

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1 ISSUANCE OF NEW SECURED NOTES	 New capital and liquidity is injected in the form of \$700m of NSN at IHCo
	 Current Bondholders contribute the full amount of the NSN new money investment
	Informal Group, Hemen and other large Bondholders would agree to underwrite the NSN pre-launch, but participation available to all  Bondholders pro rata to holdings (subject to limitations below for NADL 2019 Bonds)
	NSN underwriters receive an underwriting fee of 6% of their NSN underwriting commitment, payable-in-kind via strip of additional NSN  issuance and common equity
	 NSN terms:
	9.5% cash and 2.5% PIK interest 
	Maturity on 30 June 2024 
	Security package, including inter-alia a guarantee from SDRL, security on any other available assets in the group (other than unencumbered  assets at SDRL to be pledged to the CSB) and a share charge over shares in IHCo
	Equity compensation for an agreed percentage of the fully diluted equity post-CSB conversion on basis to be determined 
	Amended Issuance of NSN and associated equity to occur upon completion of the transaction 
2 EXCHANGE OF UNSECURED BONDS	 Exchange into new CSB and new equity: The Unsecured Bonds are exchanged for a package of \$1,250m of CSB on the terms set out below and all remaining common equity post allocation of new equity to NSN
	 CSB terms :
	Floating charge at SDRL and liens on other available SDRL assets (other than IHCo equity) 
	Maturity on 31 March 2025 
	Company would have option to force conversion of the CSB in the future if certain conditions (including equity trading price) are met 
	Conversion strike price at a premium (c.25-45%) to the implied equity market price at completion of the restructuring 
	6% cash coupon 
	 NADL 2019 Bonds are treated pari passu with other Bonds based on a reduced percentage of face amount to be agreed between the Bondholders

3 EXISTING EQUITY	 Current shareholders allocated a nominal amount of out of the money warrants post-restructuring
4 SECURED CREDIT FACILITIES	 As per the Recapitalisation Plan: Secured Credit Facilities maturities extended for an average of 5 years (June 2021 to December 2023)  Margin uplift and consent fees   Fixed amortisation reduced to 15% of the pre-restructuring scheduled amount for all Secured Credit Facilities  All Secured Credit Facilities to benefit from a cash sweep starting 2018  Covenant and security package to be agreed with Informal Group  Equivalent maturity extension amendments and reduction in payments to Ship Finance Limited facilities Amended
5 CASH SWEEP FOR SECURED CREDIT FACILITIES	 Cash sweep of excess cash at RigCo level commencing end of 2018. Cash sweep thresholds and percentage swept to Banks: 2018 threshold: \$700m; 60% of excess cash swept to Banks  2019 threshold: \$600m; 70% of excess cash swept to Banks  2020, 2021, 2022 and 2023 threshold: \$500m; 80% of excess cash swept to Banks   Annual test date for the cash sweep at 31 December 2018 and each year thereafter  Excess cash defined as cash at the RigCo level minus the sum of (i) the cash sweep threshold for the relevant year and (ii) 50% of scheduled debt amortisation payments falling due within 12 months following the test date  12-month forward-looking backlog test at level to be agreed with Company to be satisfied on each test date in order for the cash sweep to be triggered

6 OFF B/S LIABILITIES

 Informal Group to approve a comprehensive solution for derivatives, customer and performance guarantees, newbuild liabilities and financial guarantees to be agreed with relevant counterparties, including inter alia removal of Seadrill Limited as co-obligor on Seadrill Partners liabilities  Overriding principle is that all other liquidated unsecured liabilities of SDRL are treated pari passu with the existing Bonds (including, inter-alia, crystalized MTM values of terminated interest rate and FX swaps)

7 GROUP STRUCTURE AND CREDIT SUPPORT

 As part of an agreement of detailed terms for a comprehensive solution: Creation of two new intermediate holding companies, IHCo and RigCo (as per the Recapitalisation Plan)  Enhanced credit support for Secured Credit Facilities (terms to be agreed with Informal Group)  Minimum cash balances at RigCo and IHCo (amounts to be agreed with Informal Group) 