Solstad Offshore ASA — Investor Presentation 2016

Nov 9, 2016

Solstad Offshore

Company Presentation 3rd Quarter 2016 November 9, 2016

By Lars Peder Solstad and Sven Stakkestad

Solstad Offshore's position

• • Long history and solid track record in OSV market
• •Established in 1964, in OSV since 1973
• •Leading company in Norwegian OSV industry
• • Leading operator
• •Modern CSV fleet
• • Lean organization with strong commercial, operational and technical capabilities
• • Successful refinancing, strong industrial partner in Aker
• •Secured 5 year solution with creditors
• •New capital from existing shareholders and Aker
• • Well positioned
• •Open to participate in industry restructuring
• •Well positioned for market recovery

Solstad among first OSV companies to respond to current downturn

… SWIFTLY LAUNCHED TO RESPOND TO CRISIS

• • Early shifted focus on reducing cost and preserving cash balance
• • Lay-up of 12 vessels in Q3 2015 in expectation of continued weak market
• • ~NOK 500 mln reduced Opex in 2016 versus 2015 from lay-up and other cost saving initiatives
• • Initiated dialogue with banks and bondholders to secure required refinancing
• •Open process with creditors
• • Alignment around required liquidity over coming years
• •Company refinanced through 2020
• • Aker brought in as industrial partner
• •NOKM 500 in new capital
• •Access to M&A and additional financing capabilities
• •Synergies with Aker group

SOLSTAD OFFSHORE – HIGHLIGHTS 30.09.2016

Financial highlights

• Good earning Net revenues 3Q NOK 637 million – YTD NOK 2 108 million
• margins and stable underlying values Adjusted EBITDA 3Q NOK 238 million – YTD NOK 859 million
• Adjusted EBITDA margin 3Q 37% - YTD 41%
• Previously announced comprehensive financing plan approved and implemented
• Merger of REM Offshore with Solstad Offshore approved in General Meetings Oct 10th

Commercial & operational highlights

• backlog to first Delivery of CSV Normand Maximus – October 28th
• class counterparts More then 130 vessels in lay-up today in North Sea – mainly PSV's and AHTS
• Solstad: 17 vessels in lay-up
• Increased counterparty risk

Backlog

• Contract coverage for remainder of 2016 (incl JV)
• Key highlights as Firm coverage 4Q: NOK 450 million
• Total firm contract backlog NOK 6,5 billion

Solstad Offshore and REM Offshore combined through statutory triangular merger

OPERATING REVENUE AND EBITDA

(EX. GAIN / LOSS ON SALE OF ASSET / INCL. SHARE IN JV's)

Profit & loss accounts

(NOK million)	Q3 2016	Q3 2015	YTD Q3 2016	YTD Q3 2015	YTD 4Q 2015
Total operating income $\omega$	637	981	2.108	2.951	3.656
Operating expenses	-417	$-592$	$-1.344$	$-1.744$	$-2.227$
Ordinary depreciation	-106	-121	$-328$	$-365$	$-483$
Impairment			-100	-125	$-1.346$
Joint Venture & Associated Companies		17	41	54	65
Operating result	118	285	377	771	$-336$
Net agio	197	$-318$	492	$-547$	-654
Other financial items	$-182$	$-184$	$-188$	$-452$	$-589$
Result before taxes	133	$-217$	682	$-228$	$-1.579$
EBITDA (2)	238	419	859	1.309	1.555

(1) Including net gain on sale of assets, excluding share in JV's

(2) Excluding net gain of sale of assets, including share in JV's

Balance

(NOK million)	Q3 2016	Q3 2015	YTD 4Q 2015
Total fixed assets	13.762	15.341	14.212
Total current assets (1)	1.990	2.343	2.000
Assets held for sale		20	24
TOTAL ASSETS	15.752	17.704	16.236
Total equity	4.568	4.908	3.668
Total long-term debt	10.284	8.751	9.428
Total current liabilities (2)	900	4.044	3.141
TOTAL EQUITY AND LIABILITIES	15.752	17.704	16.236
(1) Hereof free cash	912	1.246	1.025
(2) Hereof current portion of long term debt	270	3.314	2.520
Booked equity per share	108	128	96

THE SOLSTAD OFFSHORE FLEET

44 VESSELS IN OPERATION AS PER NOVEMBER 9, 2016

Solstad offices

The Solstad fleet – market segments

1)Based on broker valuations as of 30.09.2016 (incl. SOFF's 50% share in "Normand Installer" and "Normand Oceanic"

CSV SEGMENT

General comments

• The long-term fundamentals for the subsea segment are still solid, but reduced activity coming years are expected.
• Increased tender activity for offshore work in 2018/19
• Counterpart risk increased as market gets slower
• Solstad has a strong position in this segment

Operational highlights

• 83% utilization in 3Q '16.
• As activity is slowing down, more vessel are taken out of operation
• Normand Maximus delivered to Saipem on 8 year contract
• Long term contract with Prysmian for CSV Normand Pacific
• Several project contracts for CSV-fleet

AHTS SEGMENT

General comments

• Still slow market, but reduced number of active vessels has given periods with acceptable rates
• Unbalance between rig activity and AHTS's in operation
• Dependent on future rig activity.

Operational highlights

• 75% utilization in 3Q '16 (excluding lay-up vessels)
• Relatively high project activity during the quarter

PSV SEGMENT

General comments

• No major changes from last quarter, segment is still oversupplied
• Poor utilisation and rates below crew cost in the spot-market.
• Reduction on supply side required to achieve sustainable rates again.

Operational highlights

99% utilization in 3Q '16 (excluding lay-up vessels)

Future outlook

• Challenging market expected coming years across all segments and geographies
• Measures needs to be taken to reduce costs across industry
• Will likely imply structural changes and consolidation
• Refinancing puts Solstad in a beneficial position to participate actively

Solstad will use downturn to emerge stronger when the market normalizes