Investor Presentation - Odfjell Drilling...reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability

Investor Presentation April 2018

Important information

2

This presentation and any appendices hereto (the “Presentation”) has been produced by Odfjell Drilling Ltd (“Odfjell Drilling” or the “Company” and, together with its subsidiaries, the "Group") solely for

use at presentations to investors held in connection with the contemplated offering of new common shares in the Company (the "Private Placement"), as further discussed herein and as described in a

term sheet (the "Term Sheet") and an agreement governing applications to participate in the Private Placement (the "Application Agreement" and collectively with this Presentation and the Term Sheet,

the "Private Placement Materials").

ABG Sundal Collier ASA, ABN Amro, Danske Bank Markets, Norwegian branch of Danske Bank A/S, DNB Markets, a part of DNB Bank ASA, Nordea Bank AB (publ), filial i Norge, Pareto Securities AS

and SpareBank 1 Markets AS have been appointed as joint managers and bookrunners for the Private Placement (the “Managers”).

This Presentation is strictly confidential and may not be reproduced or redistributed, in whole or in part, to any other person. No representation or warranty (express or implied) is made as to, and no

reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or

misstatements contained herein, and, accordingly, neither the Company nor the Managers nor any of their parent or subsidiary undertakings nor advisors nor any such person’s officers or employees

accepts any liability whatsoever arising directly or indirectly from the use of this Presentation.

This Presentation includes certain forward-looking statements relating to the business, financial performance and results of the Group and/or the industry in which it operates. Forward-looking

statements relate to future circumstances and results and other statements that are not historical facts, sometimes identified by the words “believes”, “expects”, “predicts”, “intends”, “projects”, “plans”,

“estimates”, “aims”, “foresees”, “anticipates”, “targets”, and similar expressions. The forward-looking statements contained in this Presentation, including assumptions, opinions and views of the

Company or cited from third party sources, are solely opinions and forecasts which are subject to material risks, uncertainties and other factors that may cause actual events to differ materially from any

anticipated development. Neither the Company nor the Managers nor any of their parent or subsidiary undertakings nor advisors nor any such person’s officers or employees provide any assurance that

the assumptions underlying such forward-looking statements are free from errors, nor do any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or

the actual occurrence of the forecasted developments. The Company assumes no obligation, except as required by law, to update any forward-looking statements or to conform these forward-looking

statements to its actual results.

This Presentation contains information obtained from third parties. Such information has been accurately reproduced and, as far as the Company is aware and able to ascertain from the information

published by that third party, no facts have been omitted that would render the reproduced information inaccurate or misleading. By receiving this Presentation you acknowledge that you will be solely

responsible for your own assessment of the market and the market position of the Group and that you will conduct your own analysis and are solely responsible for forming your own opinion of the

potential future performance of the Group‘s business. In making an investment decision, investors must rely on their own examination of the Company and the Group, including the merits and risks

involved.

AN INVESTMENT IN THE COMPANY INVOLVES SIGNIFICANT RISK AND SEVERAL FACTORS COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE

COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT MAY BE EXPRESSED OR IMPLIED BY STATEMENTS AND

INFORMATION IN THIS PRESENTATION. A NON-EXHAUSTIVE OVERVIEW OF RELEVANT RISK FACTORS THAT SHOULD BE TAKEN INTO ACCOUNT WHEN CONSIDERING AN INVESTMENT

IN THE SHARES ISSUED BY THE COMPANY IS INCLUDED IN THIS PRESENTATION. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALISE, OR SHOULD

UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED IN THIS PRESENTATION. THE COMPANY DOES NOT INTEND,

AND DOES NOT ASSUME ANY OBLIGATION, TO UPDATE OR CORRECT THE INFORMATION INCLUDED IN THIS PRESENTATION.

The contents of this Presentation are not to be construed as legal, business, investment or tax advice. Each recipient should consult its own legal, business, investment or tax adviser as to legal,

business, investment or tax advice. By attending or receiving this Presentation you acknowledge that (i) you will be solely responsible for your own assessment of the market and the market position of

the Group and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Group’s business, (ii) if you are a U.S. person, you

are a QIB (as defined below), and (iii) if you are a non-U.S. person, you are a Qualified Investor or a Relevant Person (as defined below).

This Presentation has not been approved, reviewed or registered by or with any public authority or stock exchange. This Presentation is not a prospectus within the meaning of the EU Prospective

Directive (Directive 2003/71/EC), as amended (the "Prospectus Directive") and does not contain the same level of information as a prospectus. The new shares contemplated to be offered in the Private

Placement will be offered on the basis of the Private Placement Materials and publicly available information only, and no prospectus will have been approved or published in connection with the Private

Placement at the time of any application for or purchase of shares. The prospectus contemplated to be prepared in relation to the listing of the new shares on the Oslo Stock Exchange and a

contemplated subsequent offering of new common hares in the Company will contain more extensive information about the Group and its operations than the Private Placement Materials, and the

recipient will not have the benefit of the information contained in any such prospectus in making any application for new shares in the Private Placement.

Important information (cont'd)

3

This Presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in any jurisdiction or to any person in which or to whom it is unlawful to make such an offer or

solicitation. The distribution of this Presentation and the offering, subscription, purchase or sale of securities issued by the Company are in certain jurisdictions restricted by law. Persons into whose

possession this Presentation may come are required by the Company and the Managers to inform themselves about, and to comply with, all applicable laws and regulations in force in any jurisdiction in

or from which it invests in the securities issued by the Company or receives or possesses this Presentation and must obtain any consent, approval or permission required under the laws and regulations

in force in such jurisdiction. The Company shall not have any responsibility or liability whatsoever for these obligations. In particular, neither this Presentation nor any copy of it may be taken or

transmitted or distributed, directly or indirectly, into the United States, Canada, Australia or Japan.

This Presentation is strictly confidential and is being distributed in the United Kingdom solely to, and directed solely at, “Qualified Investors” who (i) have professional experience, knowledge and

expertise in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 of the United Kingdom, as amended, (ii) are high

net-worth entities and other persons falling within Article 49(1) of the Financial Promotion Order or (iii) are persons to whom an invitation or inducement to engage in investment activity (within the

meaning of section 21 of the Financial Services and Markets Act 2000 of the United Kingdom, as amended (the “FSMA”)) in connection with the issue or sale of any securities may otherwise lawfully be

communicated or caused to be communicated (all such persons together being referred to as “Relevant Persons”). This Presentation is directed only at Relevant Persons and must not be acted on or

relied on by persons who are not Relevant Persons. Any investment or investment activity to which this Presentation relates is available only to Relevant Persons and will be engaged in only with

Relevant Persons. This Presentation does not constitute a prospectus for the purposes of Section 85(1) of the FSMA. Accordingly, this Presentation has not been approved as a prospectus by the UK

Financial Conduct Authority (the “FCA”) under Section 87A of the FSMA and has not been filed with the FCA pursuant to the UK Prospectus Rules nor has it been approved by a person authorized

pursuant to Section 31 of the FSMA. Neither this Presentation nor any part of it may be reproduced, distributed, passed on, or the contents otherwise divulged, directly or indirectly, to any person who is

not a Relevant Person without the prior written consent of the Managers or the Company.

IN RELATION TO THE UNITED STATES AND U.S. PERSONS, THIS PRESENTATION IS STRICTLY CONFIDENTIAL AND IS BEING FURNISHED SOLELY IN RELIANCE ON APPLICABLE

EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”). ACCORDINGLY, NEITHER THIS

PRESENTATION NOR ANY PART OR COPY OF IT MAY BE TAKEN OR TRANSMITTED INTO THE UNITED STATES, OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES

OR TO ANY “U.S. PERSON” (AS THAT TERM IS DEFINED IN THE U.S. SECURITIES ACT) EXCEPT IN RELIANCE ON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE

SECURITIES ACT. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAWS.

THE SHARES ISSUED BY THE COMPANY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OR WITH ANY SECURITIES REGULATORY AUTHORITY OF

ANY STATE OR OTHER JURISDICTION IN THE UNITED STATES AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES, ABSENT REGISTRATION OR UNDER AN EXEMPTION

FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT. ACCORDINGLY, ANY OFFER OR SALE OF SHARES WILL ONLY BE

MADE (I) WITHIN THE UNITED STATES, OR TO OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS, TO QUALIFIED INSTITUTIONAL BUYERS (“QIBs”) WITHIN THE MEANING OF, AND

AS DEFINED IN, RULE 144A UNDER THE U.S. SECURITIES ACT AND (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER

THE U.S. SECURITIES ACT. ANY PURCHASER OF SHARES IN THE UNITED STATES, OR TO OR FOR THE ACCOUNT OF U.S. PERSONS, WILL BE DEEMED TO HAVE MADE CERTAIN

REPRESENTATIONS AND ACKNOWLEDGEMENTS, INCLUDING WITHOUT LIMITATION THAT SUCH PURCHASER IS A QIB.

This Presentation is made on 19 April 2018. There may have been changes in matters that affect the Company subsequent to the date of this Presentation. Neither the delivery of this Presentation nor

any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date.

The Company does not intend, and does not assume any obligation, to update or correct any information included in this Presentation.

Each of the Managers is acting only for the Company and will not be responsible to anyone other than the Company for providing the protections afforded to clients of such Manager. The Managers

and/or their employees may hold shares, options or other securities of the Company and may, as principal or agent, buy or sell such securities. The Managers may have other financial interests in

transactions involving these securities.

This Presentation is subject to Norwegian law and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts with Bergen district court (Nw: Bergen

tingrett) as legal venue.

Summary of risk factors

4

This is a brief summary only. For further discussion about the risks facing the Group, please see pages 36 to 38. An investment in the Company's shares should be considered as a high-risk

investment. An investment in the shares is only suitable for you if you have sufficient knowledge, sophistication and experience in financial and business matters to be capable of evaluating the merits

and risks of an investment decision relating to the shares, and if you are able to bear the economic risk, and to withstand a complete loss of your investment. All references to the "Group" shall in the

following be understood as a reference to Odfjell Drilling, together with its consolidated subsidiaries.

• Industry risks

- The Group's business is affected by a number of market conditions

- Changes in laws and regulations may affect the Group and its operations

- The Group may be exposed to environmental liability

- The Group may fail to comply with applicable laws and regulations

- The Group's business is exposed to numerous operating hazards

- The Group's insurance coverage may prove insufficient

- The Group's operations in various jurisdictions is exposed to inherent risks

- The Group is exposed to poor conditions on physical infrastructure and logistics systems in

some areas

- Certain jurisdictions in which the Group operates have inherent risks related to fraud, bribery

and corruption

- The Group may operate in jurisdictions that are subject to sanction regimes

• Group risks

- Backlog may not be ultimately realized

- Contracts may be subject to early termination

- Future business performance depends on ability to renew and extend existing contracts and

win new contracts

- The Group is exposed to unforeseen or unanticipated risks when bidding on or managing

contracts

• Operational risks

- Client concentration risk

- Operating and maintenance costs fluctuate in proportion to changes in operating revenues

- Newbuild projects are subject to risks

- Maintaining and repairing drilling units may lead to increased costs and loss of income

- The Group is exposed to disruptions of deliveries from suppliers

- The Group is exposed to the risk of sub-standard performance by third party subcontractors

- The quality of drilling units, spare parts and equipment purchased by the Group may be

inadequate

- The Group's strategies may be unsuccessfully implemented and there can be no assurance

that the Group will be able to secure favourable growth opportunities (or such opportunities at

all) for the proceeds from the Private Placement

- The Group is exposed to the risk of loss of key personnel

- The Group is exposed to the risk of labour interruptions

- Labour costs and related operating costs could increase

- Damage to the Group's reputation and business relationships may occur

- The Group is reliant on certain IT systems

- The Group may be unable to keep pace with changes in technological developments

- HSSE policies may not be sufficiently implemented or adhered to

• Risks related to laws, regulation and litigation

- Litigation may have a material adverse effect on the Group

- Technology disputes could impact operations

- Changes in tax laws could result in a higher tax expense or effective tax rate

• Financing and market risks

- Additional capital may be required to execute the Group's growth strategy (including the

financing of Ex. Stena MidMax, if applicable) and there can be no assurance that such financing

is secured

- Debt arrangements and the Company's other contractual commitments could limit the Group's

liquidity and flexibility to inter alia pay dividends

- Non-compliance with financial covenants could result in acceleration of repayment

- The Group is exposed to interest rate fluctuations

- The Group is exposed to exchange rate fluctuations

• Risks related to Group structure

- The Company is a holding company and depends on cash flow from subsidiaries

- The Group may fail to integrate acquired businesses or assets

- Divestments may subject the Company to risks and liabilities

- The Group is exposed to the risk of decrease of market value of acquired assets

• Risks related to the shares in the Company

- The market value may fluctuate significantly

- Odfjell Partners Ltd. has significant voting power

- Future sales of shares may affect the market price

- Future issuance of shares may affect the market price

- Exchange rate fluctuations may affect the value of the shares and dividends paid

- Investors may not be able to vote for shares held in nominee accounts

- Transfer of shares is restricted under securities laws of the US and other jurisdictions

- The Company may be unwilling or unable to pay dividends in the future

- Limited free float may have a negative impact on liquidity and market price

- Shareholders may be diluted if not participating in subsequent offerings

- Any future issuance of preference shares and/or warrants may dilute the common shares of the

Company significantly and limit the Company’s liquidity and flexibility to inter alia pay dividends

• Risks related to the Group's incorporation in Bermuda

- It may be difficult to enforce judgments obtained in the US

- The Company has anti-takeover provisions in its bye-laws

- Various conditions may cause an adverse tax effect if the

Company pays dividends

Transaction summary

5

Offering details Timetable and key considerations

• Application period: 19 April 2018 at 16:30 CET / 12:30pm EST – 20 April 2018 at 08:00 CET / 2:00am EST

– Application period may be closed or extended at any time

– Notification of allocation: 20 April 2018, before opening of the OSE

– Delivery versus payment (DVP): 24 April 2018, subject to satisfaction of the condition (see the term sheet)

– First day of trading: 20 April 2018

• Minimum application: NOK equivalent of EUR 100,000

• Documentation: Investor presentation, term sheet, application agreement and the stock exchange announcement

• Use of proceeds: Net proceeds will be used to (i) finance the Company's growth ambitions and (ii) for general corporate purposes. One growth opportunity is the possible purchase of the “Ex. Stena MidMax Rig", a Moss CS60E semi-submersible drilling rig construction (the "Unit") to be constructed at Samsung Heavy Industries Co., Ltd. (the "Yard"); no decision has been made to purchase the Unit, the Company may select other alternatives to realise its growth ambitions and completion of the Private Placement is not conditional upon the purchase of the Unit2

• The completion of the private placement is conditional upon:

– all necessary corporate resolutions

– payment being received for the allocated Offer Shares

• The Odfjell Drilling shares are listed on the Oslo Stock Exchange under the ticker code “ODL”

• Private Placement of new common shares in the Company (the “Offer Shares”) raising gross proceeds of up to approximately USD 200 million

– Equivalent to gross proceeds of up to approximately NOK 1.56 billion1

• The Private Placement is directed towards:

– Non-U.S. investors in reliance with Regulation S under the U.S. Securities Act of 1933, as amended; and

– U.S. 144A (QIB’s as defined by Rule 144A)

• Offer price: To be determined through an accelerated bookbuilding process

• Target markets: Non-professional, professional and eligible counterparties

• Negative target market: An investment in the Offer Shares is not compatible with investors looking for full capital protection or full repayment of the amount invested or having no risk tolerance, or investors requiring a fully guaranteed income or fully predictable return profile

• Allocation criteria: (i) ownership in the Company, (ii) timeliness of the application, (iii) price leadership, (iv) relative order size, (v) sector knowledge, (vi) perceived investor quality and (vii) investment horizon

• Joint Lead Managers: ABG Sundal Collier, ABN Amro, Danske Bank, DNB Markets, Nordea, Pareto, Sparebank1 Markets

1) USD/NOK exchange rate of 7.80 2) There can be no assurance that the Company decides to use its option to acquire the Unit; the decision will inter alia depend on whether sufficient comfort for the ability to secure employment of the Unit can be obtained before the deadline to declare the option. Such comfort is currently not secured and the option lapses on 30 April 2018 (unless it is extended)

Investment highlights

6

Growing high spec & harsh environment

fleet

The harsh environment

specialist

Attractive opportunities within reach

Market recovery is happening

• Target to acquire high spec & harsh environment rigs significantly below construction cost

• Strategy to grow drilling fleet from 4 to 6 - 10 rigs over the next few years

• Perfectly positioned to secure employment prior to potentially acquiring new rigs

• Preferred by the oil companies

• Excellent drilling efficiency

• Sold out on near-term rig capacity

• Multiple single assets available in the second-hand market

• Secured an option to acquire Ex. Stena MidMax at an attractive price

• Increased activity in the harsh environment market

• More wells sanctioned in Norway than in the prior upcycle

• Modern rigs are being preferred by the oil companies

Solid balance sheet

• Net debt/EBITDA below 4x

• Strong contract backlog will enable continued deleveraging

• Attractive bank financing of the fleet

Introduction to Odfjell Drilling

7

• Modern fleet of UDW1 and HE2 drilling units

• Extensive drilling experience

• Provision of integrated management services for drilling units

• Casing and tubular running services

• Drill tool and tubular rental

• Well intervention services

• Services in approximately 20 countries from 10+ bases in Europe and Middle East

• One of the leading contractors in the North Sea platform drilling market

• Drilling engineering services

• Established competence for the latest generation technology

Mobile Offshore Drilling Units Drilling & Technology Well Services

1) Ultra Deep-Water 2) Harsh Environment 3) Shaded area represent share of loss from JV (DSM Ltd) of USD 269 million

1000

1500

2000

0

150

300

450

2013 2014 2015 2016 2017

USD million USD million EBITDA (LHS) NIBD (RHS)

20153

Deepsea Atlantic2

Field: Johan Sverdrup

8

Preferred by the oil companies.. ..due to excellent drilling efficiency

Won 54% of all 6G work in Norway last 3 years Drilled around 50% faster than expected on

ongoing field developments

Source: DNB Markets, IHS Petrodata 1) Contracts awarded for 6G semis on the NCS 2) Initially 6 production wells and 7 injection wells in 36 months; delivered 8 production wells, 9 injection wells and 6 appraisal wells, total of 23 wells, in 21 months.

57

141

209

401

1,411

2,617

0 1,000 2,000 3,000

Rig days

North Atlantic Drilling

Transocean

Island Offshore

COSL

Odfjell Drilling

Saipem

Backlog days added last three years1

The harsh environment specialist

0

500

1,000

1,500

Act days per progam

488 days

1,095 days

-55% Days

Est days per progam

Deepsea Stavanger

Field: Maria

0

200

400

600

800

Est days per progam

584 days

Act days per progam

Days

300 days

-49%

Contract Option

9 1) Rates may include mix of currencies and fluctuate based on exchange rates 2) Statoil has awarded a conditional Letter of Intent for a drilling contract for Deepsea Atlantic for 6 firm wells with an estimated total duration of 18 months, scheduled to commence in early first quarter 2019; the contract contains the option to continue operations for Statoil after the firm period, and such options shall be based on market pricing

Sold out on near-term rig capacity

Signed LOI

Location /operatorDayrate

(USDk/day)1 Contract status

Deepsea

Stavanger

Norway

Wintershall/

Aker BP/Total/Aker BP

305/250/305/

279*

Deepsea Bergen

Norway

Statoil/Faroe/Wellesley

/OMV

328/120/135-200

Drilling unit

Deepsea Atlantic2 Norway

Statoil295/296*

Deepsea AberdeenUK

BP Exploration431

2021 2022 2023 20242017 2018 2019 2020

Alliance agreement with Aker BP, subject to call-off

Contract contains the option to continue operations for Statoil after the firm period

*Plus potential performance bonus

511 435

328 277

18

38

26

715

528

473

355

992

-

200

400

600

800

1,000

2018 2019 2020 After

Firm Options

Total revenue backlog per year1,2,3

1) Estimates at 31 December 2017; revenue from frame agreements and call-off contracts in Well Services and revenue from Technology and MODU Management is not included in the backlog

2) Recent LOI award to Deepsea Atlantic from Statoil is included in firm backlog estimate 3) Non-priced options not included in backlog estimate

Earnings visibility through USD 2.3 billion order backlog

USD million

Firm contracts USD 1.5 billion

Priced options USD 0.8 billion

Total backlog USD 2.3 billion

10

0

50

100

150

200

250

300

350

Noble Odfjell Drilling2

Transocean Seadrill Rowan Ensco Diamond

Robust capital structure

Remaining NIBD & newbuild capex

NPV of EBITDA backlog USD million

Source: DNB Markets, Bloomberg 1) Fully invested net debt (including newbuild capex) per UDW equivalent rig 2) Not taking into account the possible acquisition of Ex. Stena MidMax

NIBD1 per UDW equivalent adjusted for backlog NIBD / EBITDA YE 2017

8.7x

6.9x 6.8x

3.9x3.1x 2.8x

2.4x

8.0

6.0

4.0

2.0

0.0

10.0

Rowan Diamond Trans- ocean

Odfjell Drilling2

Noble Ensco Seadrill

11

Odfjell Drilling’s strong contract backlog will enable continued deleveraging as opposed to many of its peers

Strategy

12

Continue to develop a strong service provider within Well Services, Platform Drilling and Technology 3

• Expansion into new geographical markets • Diversified income stream across geography, service offering and onshore/offshore activities • Considering strategic options to visualize underlying values

Grow drilling fleet from 4 to 6-10 units over the next few years 2

• High specification and harsh environment floaters • Focus on fleet standardization • No speculative growth – comfort on ability to secure employment must be in place before adding rig capacity

Maintaining position as a leading harsh environment offshore driller 1

• Excellent long-term client relationships • Superior and robust operational performance • Continue to build on strategic alliances

Contract portfolio consisting of medium- to long-term contracts 5

• Ensuring financial visibility and flexibility

4

• Strict cost control through standardization, synergies and digitalization • Closer collaboration with reputable Oil companies (e.g. Aker BP alliance)

Continued emphasis on efficient operations

Potential growth opportunities in harsh environment

• Secured an option to acquire Ex. Stena MidMax

– Option lapses on 30 April 2018

• In dialogue with yards to obtain pricing of potential newbuilds

• Single assets in the second-hand market

• Other harsh environment capable rigs currently at yards

13

4 SDRL/NADL

COSL

1

1

1

1

2

3

Awilco newbuild

Ex. Stena MidMax

NODL

Ex West Rigel

Scarabeo 8

Island Innovator

1

3

ODL 3

RIG/SONG

6

North Sea Rigs

Delivered

Source: Pareto Securities, DNB Markets, IHS Petrodata

Newbuilds

Modern HE fleet (6G and 6G light) Several growth opportunities

Confident on securing additional work with a larger fleet

Option to acquire the Ex. Stena MidMax

14

One of the world’s most sophisticated semis

Key specifications1:

Design: Moss CS 60E

Construction yard: Samsung Heavy Industries

Classification: DNV Drill(N)

Rig water depth (m): 2,000 (riser for 500 meters)

Drilling depth (m): 10,750

DP system: Kongsberg DP3

Mooring system: Rolls-Royce winches, 10x2000m chain

Variable deck load (mt) 7,000

Accommodation (p): 150 (single cabin)

Derrick: NOV 64m tall with 16x16.9m base 1,250st@elevator

Drawworks: NOV AHDD 1400, 2x6900HP

Mud pumps: 4xNOV 14P-220, 7,500psi

Top Drive: NOV TDX-1250

BOP (psi): 15,000 (1xCameron 18-3/4” 5 ram)

Winterization: Fully winterized - NCS compliant (incl. Barents)

Built for superior operational efficiency and safety

1) As per purchase option

Modified design a result of Odfjell Drilling’s unique experience and expertise creating a truly

extraordinary drilling machine

✓ Purpose built for harsh environment including arctic areas

State of the art drilling system ✓

Efficient equipment & material handling arrangements ✓

Large unobstructed deck-space ✓

Large payload & bulk capacities ✓

Advanced compensation system for reduced wait on weather in harsh environments ✓

675

740 742

800 838

Uses of funds USD

million

Yard price (purchase option)1 505

Est. upgrades, spare parts and project supervision

45

Total project costs ex. Yard 550

Other 51

Working capital 17

Total uses 618

Sources of funds USD

million

Common equity 170

Preferred equity (see separate description) 75

Secured bank debt (estimate) 325

Seller’s credit (SHI) 48

Total sources 618

Attractive option price for Ex. Stena MidMax

15

Signed LOI and anticipated financing Purchase price below peers when adjusting for backlog

NODL price - West Mira

Historical project

cost Bollsta

Transocean’s acquisition of Songa (YE19)

Avg. all-in build

cost – 6G HE

semis2

All-in build cost - Stena

Midmax

Historical project

cost Mira

Riegel NODL price - Bollsta Dolphin

Additional capex Steel price Total project cost

Rig cost at +33% discount to building cost

Source: DNB Markets, IHS Petrodata, Companies 1) At signing: USD 225.75 million, at delivery: USD 231.25 million + seller credit: USD 48.25 million 2)15 NCS compliant semis built after 2008 (excl. Rigs built in China and Awilco Drilling newbuild)

ODL price -

HE semi

USD million

More wells to be sanctioned in Norway than in prior upcycle

16 Source: NPD, Pareto Securities Equity Research 1) Plan for development and operation

# of wells sanctioned under PDO1’s by rig type

1713

45

33

3

3

10

7

9

7

3

7

0

20

40

60

Wells sanctioned p.a.

23

# of PDO’s p.a. Wells sanctioned p.a.

59

# of PDO’s p.a.

PDO by delivery year

Wells sanctioned p.a.

58

# of PDO’s p.a.

Jackup Fixed inst. Semi PDO’s

2009-12 2013-16 2017-18

Modern rigs are taking over

17

Utilization for semis on NCS and UKCS Preference for modern rigs

Working floaters in Norway

Source: DNB Markets, IHS Petrodata and Company

0

10

20

30

40

50

60

70

80

90

100

2006 2008 2010 2012 2014 2016 2018

Modern 6G Standard

0

2

4

6

8

10

12

14

16

18

20

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Modern 6G Standard

Pct # of rigs

Older floaters Modern floaters

Supply balance looks healthy for modern rigs

18

Increased preference for modern equipment will lead to scrapping of older floaters

If history repeats itself, more newbuilds will be needed in the HS/HE market

Peak demand

Average demand

Current demand

Source: DNB Markets, Pareto Securities and IHS Petrodata

# of rigs

0

10

20

30

40

50

60

70

10-20yr 20-30yr

54

4

4

20

+30yr Total fleet 6G light

9

6G

17

Contracted / warm Cold stacked Newbuilds

19

0

6

12

18

24

30

36

42

48

54

Songa Trym

Borgland Dolphin

Polar Pioneer

West Venture

Scarabeo 5

Bredford Dolphin

Sedco 711

WilHunter West Navigator

Months stacked

Songa Dee

West Alpha

Sedco 714

Stena Don

Byford Dolphin

Songa Delta

# months stacked 2 years 1 year

Stacked floaters NCS and UK (Months)

Source: Company data, Nordea Markets

Stacked floaters have been inactive on average 24 months

12 of 15 stacked floaters are older than 28 years

Investment highligts

20

Market recovery is happening

Solid balance sheet

The harsh environment specialist

Growing high spec & harsh environment fleet

5 1

2

3

Attractive opportunities within reach

4

P&L - (USD million) Q4 17 Q4 16 FY 17 FY 16

Operating revenue 171 149 662 657

Other gains/losses 1 0 11 1

Personnel expenses -66 -38 -261 -233

Other operating expenses -39 -32 -139 -141

EBITDA 67 78 274 285

Depreciation -40 -127 -161 -251

Operating profit (EBIT) 27 -48 112 34

Share of profit (loss) from other joint ventures -0 0 -1 1

Net financial items -15 -21 -74 -74

Profit/(loss) before tax 11 -69 37 -39

Income taxes 3 -6 -1 -25

Profit/(loss) for the period 14 -75 35 -64

Group summary financials

Condensed consolidated income statement

21 1) Audited numbers

1 1

Summary statement of financial position

Group statement of financial position

• Group’s gross interest bearing debt was USD 1,234 million (net of capitalized financing fees) at 31 December 2017.

• USD 166 million in cash and cash equivalents at 31 December 2017.

• Equity-ratio of 36% at 31 December 2017.

Assets (USDm) 31.12.17 31.12.16

Deferred tax asset 4 2

Intangible assets 33 33

Property, plant and equipment 1 782 1 913

Financial fixed assets 1 9

Total non-current assets 1 819 1 957

Trade receivables 137 111

Other current assets 15 14

Cash and cash equivalents 166 182

Total current assets 319 307

Total assets 2 138 2 264

Equity and liabilities (USDm) 31.12.17 31.12.16

Total paid-in capital 329 329

Other equity 438 393

Total equity 767 722

Borrowings 1 076 1 208

Post-employment benefits 18 18

Deferred tax liability - -

Other non-current liabilities 5 2

Total non-current liabilities 1 100 1 227

Borrowings 157 204

Trade payables 35 17

Other current liabilities 79 93

Total current liabilities 272 314

Total liabilities 1 371 1 542

Total equity and liabilities 2 138 2 264


1 1 1 1 (USD million) (USD million)

Appendix

23

A truly extraordinary drilling machine

24

Ex. Stena MidMax

Moss CS-60 West Mira Bollsta Dolphin

West Rigel

Owner Samsung Awilco Drilling Northern Drilling

Northern Drilling

Unknown

Built 20191 20211 20191 20191 20181

Yards Samsung Heavy

Industries Keppel FELS

Hyundai Heavy Industries

Hyundai Heavy Industries

Jurong Shipyard Pte

Design Moss Maritime

CS-60 E Moss Maritime CS-60 ECO MW

Moss Maritime CS-60Mk



Drilling equipment

Single + enhanced offline

Single + offline Single + offline Single + offline Single + offline

Static hook load 2.5 MM lbs 2.0 MM lbs 2.3 MM lbs 2.5 MM lbs 2.0 MM lbs

Heave compensation system

Active digital positioning with

redundancy Active/Passive Active/Passive Active/Passive Active/Passive

Water depth capacity

6,562 feet 4,920 feet 10,000 feet 10,000 feet 10,000 feet

Accommodation 150 single 140 single 150 single 140 single 150 single

Variable deck load

7,000t 5,000t 7,100t 7,500t 7,500t

Thruster capacity

6 x 5.5 MW 4 x 3.6MW 8 x 4.2 MW /

80 tonn 8 x 4.8 MW

8 x 4.2 MW / 80 tonn

Dynamic positioning

Yes No Yes Yes Yes

Winterized Fully Basic Fully Fully Fully

Ex. Stena MidMax option

Source: Company 1) Expected 2) Often required in sensitive and/or crowded areas with multiple installations

20+ improvements to existing yard contract

✓

Enhanced offline handling capabilities will enable considerable efficiency gains

✓

Unique compensation method reducing waiting on weather and downhole well problems

✓

Ample deck space and deck load capacity enabling efficient production drilling campaigns

✓

Increased flexibility and redundancy with DP in addition to mooring2

✓

• Received indications, in the form of term sheets subject to final agreements, from leading Nordic banks for a term loan facility

Key terms:

• Facility: Senior secured term loan

• Borrower: SPV [TBD]

• Guarantor: Odfjell Drilling Ltd.

• Amount: USD 325 million

• Profile: 9.5 years

• Tenor: 5 years

• Interest: LIBOR + 375/350 bps

• Security: Standard for this type of facility, including a 1st lien pledge over the rig

• Financial covenants: In line with other facilities

• Draw-down: Subject to 4 years firm drilling contracts for the rig

• Main terms for preferred equity with warrants discussed with Akastor AS or affiliate2

Key terms:

• Instrument: Perpetual preferred equity

• Issuer: Odfjell Drilling Ltd.

• Amount: USD 75 million

• Tenor: Perpetual

• Amortization: None

• Commitment fee: USD 5.75 million

• Dividend: 5% cash + 5% PIK per annum

• Call price: 125% year 2, 120% year 3, 115% year 4, 110% year 5, 105% year 6, 100% thereafter

• Cash dividend step-up: 8.0% p.a. from year 7 and an additional 1.0% step-up per year until a maximum cash dividend of 10.0% p.a.

• Warrants: Number of warrants to give 20% IRR from preferred dividend and warrant structure only when ODL shareholders have achieved 20% IRR from issue price3

• Other: Certain rights and covenants4 in favour of Akastor AS or affiliate

Bank debt1 Preferred equity

25

• LOI with Samsung Heavy Industries

Key terms:

• Facility: Sellers credit

• Borrower: Odfjell Rig V Ltd

• Guarantor: Odfjell Drilling Limited or other acceptable collateral

• Amount: USD 48.25 million

• Repayment: Bullet

• Tenor: 5 years

• Interest: LIBOR + 200 bps

Sellers credit

A potential acquisition of Ex. Stena Midmax has the following intended financing structure

1) Current status: USD 265 million of USD 325 million credit committee approved. 2 additional banks are in the credit process, taking the total amount to USD 325 million 2) The preferred equity and warrants are part of the agreement with Akastor AS or affiliate to acquire the option from Akastor AS or affiliate to purchase Ex. Stena MidMax 3) 6 equal tranches. 1 warrant tranche exercisable p.a. during year 1-6 subject to share price appreciation of 20.0% p.a. above issue price (with catch-up effect). After year 6 warrants that has not been exercised in previous years gives rights to subscription of shares in ODL depending on the share price in year 6. 4) The draft agreements (subject to final negotiations) contain several covenants, including but not limited to an obligation not to pay dividends or other distributions exceeding 50% of the net profit from the preceding year (unless a similar portion of the preference capital is repaid prior to the distribution), and in any case not pay dividends or make distributions after year 6. Also the draft agreement includes a change of control covenant pertaining to restructurings with the effect that Odfjell Partner's shareholding falls below 25%. In the event of a breach of the covenants, the Company will in some instances be required to repay the entire preference capital with a premium not exceeding 15% and the warrants will become immediately exercisable. The draft agreements also contain certain other events of default and an obligation to repay USD 10 million of the preference capital per rig sold, if the Company sells any of its rigs (except Deepsea Bergen).

0

10

20

30

40

50

60

70

80

90

Number of tenders and pre-tenders in the North Sea

0

10

20

30

40

50

60

70

Total duration of tenders and pre-tenders in the North Sea

26

Increased tendering and pre-tender activity Increased duration of tenders and pre-tenders1

Currently, the number of identified oil companies out with a firm pre-tender or tender for a rig is 16, up from the bottom of five in early 2014, demonstrating diversified activity in the North Sea

Source: DNB Markets 1) Duration in rig years

North Sea is the high activity area for offshore drilling

Increased market activity

27

Floater fixtures in the North Sea increasing With scope for increased exploration drilling

5 57

57

5 46 7

11 10

13

16 16 162

2

46 7

6 5

55

10

13

1614

Q1-18

30

Q4-17

32

Q3-17

29

Q2-17

23

Q1-17

15

Q4-16

16

Q3-16

12

Q2-16

12

Q1-16

11

Q4-15

11

Q3-15

11

Q2-15

7

Q1-15

9

Q4-14

6

1

Q3-14

6

1

12m rolling # fixtures

UK Norway

Source: IHS-Petrodata and Nordea Markets, UK Oil and Gas Authority

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Norway UK

Norway and UK: Development drilling as a % of total wells drilled

5+5 year alliance agreement with Aker BP

28

Developing an integrated drilling solution with the use of turnkey services

Drilling and well alliance

• Odfjell Drilling to provide drilling services and drill the well

• Halliburton to provide well construction activities

• Total duration of 5 years plus 5 optional years

Odfjell Drilling to drill all wells suitable for semis for Aker BP

• Aker BP has committed to use Odfjell Drilling to drill all production and exploration wells suitable for semi-submersibles

– Subject to rig availability and that the alliance model is approved in the respective licenses

Aker BP is committed to increase productivity, quality, flow- and time efficiency

• The alliances will plan and execute sanctioned production and exploration drilling activities

• Use digitalization as a key enabler to further increase efficiency in drilling operations

• Enhanced value to Aker BP through

– Improved operational performance

– Better project execution through integrated planning between Aker BP and Halliburton

– Lower drilling costs

New service model increasingly demanded by most offshore E&P companies

Creating a truly unique operation

Well Services - Pricing pressure offset by cost efficiency measures

Key service offerings

Tubular Running Services Drill Tool Rental Services Well Intervention Services

Conventional and remote-operated casing running tools

Remote-operated and conventional power tongs

Casing / tubing running and recovery

Drill tools (drill pipe, drill collars and tubing)

Tubular handling equipment Stablisers, subs and valves Downhole tools

Wellbore clean-up tools and services Casing exits Fishing services Well abandonment Slot recoveries

Odfjell Well Services in numbers

400+ Employees

Services from

10+ bases

Operation in

20+ countries

29

Customer Platforms Contract status

Heidrun & Grane3 (NO)

Johan Sverdrup (NO)

Mariner (UK)

Bressay (UK)

Brage (NO)

4 UK platforms1

5 UK platforms2

Magnus (UK)

2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

A leading platform drilling operator in the North Sea

30

Clair Ridge

Andrew

Bruce

Clair

Operations on multiple platforms in Norway and UK Platform Drilling

• Provider of integrated drilling and maintenance services for fixed and floating drilling units

• First platform contract with Mobil on Statfjord B in 1978

• Strong platform for sale of add-on services from Technology and Well Services

• Focus on use of modern equipment and advanced technology

• Firm contract backlog of ~USD 300 million as of YE17, with value of priced optional periods of ~USD 800 million

Harding

Cormorant Alpha

North Cormorant

Eider

Tern Alpha

Brage Magnus Grane

Heidrun

Johan Sverdrup

Mariner

Bressay

Source: Company 1) Clair, Andrew, Bruce, Clair Ridge 2) Harding, Eider, Tern Alpha, Cormorant A, North Cormorant 3) Grane contract ending Oct-18, Heidrun contract continues with 4 year + 3x2 year options

Contract Option

Condensed P&L - (USD million) Q4 17 Q4 16 FY 17 FY 16


EBITDA 58 69 244 226

Depreciation and impairments -33 -118 -132 -216

EBIT 25 -49 111 10

Book value rigs 1 699 1 806 1 699 1 806

EBITDA-margin 49,4 % 63,7 % 50,7 % 51,7 %

EBIT-margin 21,0 % -45,8 % 23,2 % 2,3 %

Share of group revenue1

66,4 % 70,6 % 70,4 % 64,5 %

Share of group EBITDA1

82,8 % 83,6 % 83,9 % 84,0 %

Share of group EBIT1

82,5 % 112,4 % 86,3 % 59,9 %

1) Before group eliminations and corporate overheads

MODU Key financials

Segment reporting - MODU financials

Figures above do not include pro-rata 40% of Deep Sea Metro.

118 108

481 438

Q4 17 Q4 16 FY 17 FY 16

Revenues

58 69

244 226

Q4 17 Q4 16 FY 17 FY 16

EBITDA


1 1

(USD million)

(USD million)



EBITDA 3 3 15 -0


EBIT 3 3 14 -4

EBITDA-margin 11 % 14,3 % 14,2 % 0,0 %

EBIT-margin 10 % 12,5 % 13,4 % -3,1 %


18 % 13,8 % 15,4 % 19,3 %


5 % 3,7 % 5,2 % 0,0 %


11 % -6,0 % 10,9 % -24,2 %


Drilling & Technology Key financials

Segment reporting - Drilling & Technology financials

32 21

105

131

Q4 17 Q4 16 FY 17 FY 16

Revenues

3 3

15

0

Q4 17 Q4 16 FY 17 FY 16

EBITDA


1 1

(USD million)

(USD million)



EBITDA 9 11 32 43


EBIT 2 3 4 11

Book value of equipment 82 105 82 105

Cost price for equipment in use 380 375 380 375

EBITDA-margin 31,6 % 43,9 % 32,6 % 39,2 %

EBIT-margin 7,4 % 11,8 % 3,8 % 9,8 %


15,3 % 15,6 % 14,2 % 16,2 %


12,2 % 12,8 % 10,9 % 16,0 %


6,7 % -6,4 % 2,8 % 64,3 %


Well Services Key financials

Segment reporting - Well Services financials

27 24

97

110

Q4 17 Q4 16 FY 17 FY 16

Revenues

9 11

32

43

Q4 17 Q4 16 FY 17 FY 16

EBITDA


1 1

(USD million)

(USD million)

(USD million) Q4 17 Q4 16 FY 17 FY 16

Operating revenue -6 -4 -21 -22

EBITDA -3 -4 -17 15

EBIT -3 -4 -17 17

EBIT for reportable segments 30 -44 129 17

Corporate / eliminations -4 -4 -19 -15

Share of profit from DSM Ltd Group - - - 0

Accounting differences 0 0 2 32

Group EBIT 27 -48 112 34

Share of profit from other joint ventures - 0 -1 1

Net financial items -15 -21 -74 -74

Group profit before tax 11 -69 37 -39

Group – Eliminations & Reconciliation

Group - Eliminations & Reconciliation


1 1

Cash Flow - (USDm) Q4 17 Q4 16 FY 17 FY 16

Profit before income tax 11 -69 37 -39

Cash from operations 70 78 245 241

Interest paid -17 -14 -65 -59

Income tax paid -0 -3 -15 16

Net cash from operations 53 61 166 199

Net cash used in investing activities -2 -5 -1 -22

Net cash from financing activities -61 -56 -184 -194

Net change in cash and cash equivalents -10 -0 -19 -17

Cash and cash equivalents at period end 166 182 166 182

Summary statement of cash flow

Group statement of cash flow


1 1

Risk factors (1/3)

36

An investment in the Company should be considered as a high-risk investment. A number of risk factors may adversely affect the Group. The risks listed below are not the only ones facing the Group.

Additional risks not presently known to the Company or which the Company currently deems immaterial may also adversely affect the Group. If any of the risks facing the Group should actually occur,

individually or together with other circumstances, the business, financial position, operating results and cash flows of the Group, and the transactions described herein, could be materially and adversely

affected, which may cause a decline in the value of the shares that could result in a loss of all or part of any investment in the shares. Prospective investors should carefully consider the risks involved in

an investment in the Company, including, but not limited to, those discussed below. Prospective investors should consult their own legal, tax and financial advisors as to all of these risks and an

investment in the Company. The order in which the risks are presented below is not intended to provide an indication of the likelihood of their occurrence nor of their severity or significance. These risks

should also be considered in connection with the “Important Information” on pages 2 and 3.

Risks relating to the industry in which the Group operates

Market conditions

• The Group's business, results of operations and financial condition depend on the level of exploration, development and production activity in the oil and gas industry, which is significantly affected

by, among other things, volatile oil and gas prices

• An over-supply of drilling units or rental equipment may lead to a reduction in day rates for the MODU segment and prices for the Well Services segment, which may materially impact the Group's

results of operations

• It may have a material adverse effect on the Group's ability to market its services if its competitors introduce new products or services with features, performance, prices or other characteristics

similar to, or better than, the Group's products and services or expand into service areas where the Group operates

Legal, regulatory and environmental risks

• Existing laws or a change of laws and regulations relating to the oil and gas industry could hinder or delay the Group's operations, increase the Group's operating costs, reduce demand for its

services and/or restrict the Group's ability to provide its services or operate its drilling units

• The Group may be subject to contractual environmental liability and liability under environmental laws and regulations, which could have a material adverse effect on the Group's business, results of

operations and financial condition

• The laws and regulations concerning import activity, export recordkeeping and reporting, export control and economic sanctions are complex and constantly changing, and a failure to comply with

these complex laws and regulations could adversely affect the Group's operations

Operational and country risks

• The Group's business involves numerous operating hazards and if a significant accident or other event occurs it could materially adversely affect the Group's results of operations, cash flows and

financial condition

• No assurance can be made that the Group has, or will be able to maintain in the future, adequate insurance or indemnity against certain risks, and there is no assurance that such insurance or

indemnification agreements will adequately protect the Group if a significant accident or other event occurs

• The Group's business segments operate in various jurisdictions, thereby exposing the Group to risks inherent in international operations and subjecting the Group to compliance with the laws and

regulations of the jurisdictions in which it operates

• Physical infrastructure and logistics systems, such as roads, air transport facilities and lines of communication, in certain areas of the world may be under-developed and may not have been

adequately funded and maintained, which may have an effect on the efficiency and safety of the Group's operations in these regions and may increase the costs of doing business

• Doing business in international developing markets brings with it inherent risks associated with enforcement of obligations, fraud, bribery and corruption and it may not be possible for the Group to

detect or prevent every instance of fraud, bribery and corruption in every jurisdiction in which its employees, agents, sub-contractors or joint venture partners are located

• The Group has conducted and may in the future conduct business in certain jurisdictions that are subject to US trade embargoes and sanctions by the US Office of Foreign Assets Control, including

countries which have been designated by the US government as state sponsors of terrorism, and may conduct business in jurisdictions that are subject to analogous Norwegian and European

Union sanctions

Risk factors (2/3)

37

Risks relating to the industry in which the Group operates

• Backlog does not provide a precise indication of the time period over which the Group is contractually entitled to receive such revenues and there is no assurance that such revenue will be actually

realised in the timeframes anticipated or at all

• The Group's clients may have the right to terminate their contracts without cause in compliance with applicable notice periods and, under certain circumstances, the Group's contracts may permit a

client to terminate its contract early without the payment of any termination fee, as a result of non-performance, delay, quality of deliverables or force majeure events

• The Group's future business performance depends on its ability to renew and extend existing contracts, and to win new contracts

• Unforeseen or unanticipated risks, costs or timing when bidding on or managing contracts could adversely affect the Group's business, results of operations and financial condition

Risks relating to operations

• The Group's results of operations and cash flows, and in particular the MODU segment and the Platform Drilling business area, could be materially adversely affected if any of its major clients fail to

compensate the Group, terminates their contracts, fail to renew existing contracts, fail to exercise options, or refuse to award new contracts to the Group and the Group is unable to enter into

contracts with new clients at comparable day rates

• The Group's operating and maintenance costs will not necessarily fluctuate in proportion to changes in operating revenues

• All future newbuild construction projects will be subject to risks of delay, quality issues, damage to personnel, equipment and environment, or cost overruns inherent in any large construction project

due to numerous factors which could cause delays or cost overruns and have a material adverse effect on the Group's business, results of operation, cash flows and financial condition

• The Group must maintain and repair its drilling units, including maintaining the classification of the drilling units, which may lead to increased costs and loss of income

• Disruptions of deliveries by the Group's suppliers could increase operating costs, decrease revenues and adversely impact the Group's ‎operations. In addition, consolidation of suppliers may limit

the Group's ability to obtain supplies and services when needed at an acceptable cost or at all

• The Group relies on third parties, including subcontractors, to complete some parts of its projects and may be adversely affected by the sub-standard performance or non-performance of those third

party subcontractors

• The Group's purchase of existing drilling units, spare parts and equipment carries risks associated with the quality of such assets

• The Group may not be able to successfully implement its strategies and any failures, material delays or unexpected costs related to the implementation of the Group's strategies could have a

material adverse effect on its business, financial condition, cash flow and results of operations. There can be no assurance that the Group will be able to secure favourable growth opportunities (or

such opportunities at all) for the proceeds from the Private Placement

• Loss of key personnel or the failure to obtain or retain highly skilled personnel could materially adversely affect the Group's operations

• Labour interruptions could have a material adverse effect on the Group's operations

• The Group's labour costs and related operating costs could increase as a result of a number of factors, such as high growth within the industry which may increase the cost of qualified personnel

and equipment

• Any circumstances that publicly damage the Group's goodwill, injur the Group's reputation or damage the Group's business relationships may lead to a broader adverse effect on its business and

prospects than solely the monetary liability arising directly from the damaging events by way of loss of business, goodwill, clients, joint venture partners and employees.

• The Group relies on information technology systems to communicate with its drilling units and conduct its business, and disruption, failure or security breaches of these systems could adversely

affect its business and results of operations

• The market for the Group's services is affected by significant technological developments and the Group may not be able to keep pace with a significant step change in technological development

• Policies, procedures and systems to safeguard employee health, safety and security may not be adequate or sufficiently implemented or adhered to

Risks relating to laws, regulation and litigation

• The Group may be subject to litigation that could have a material adverse effect on the Group's business, results of operations, cash flow and financial condition

• Technology disputes involving the Group, the Group's suppliers or sub-suppliers could impact the Group's operations

• The Group is exposed to risk due to its use of certain trademarks such as the "Odfjell" name

• A change in tax laws of any country in which the Group operates from time to time, or complex tax laws associated with international operations which the Group may undertake from time to time,

could result in a higher tax expense or a higher effective tax rate on the Group's earnings

Risk factors (3/3)

38

• A loss of a major tax dispute or a successful tax challenge to the Group's operating structure or to the Group's tax payments, among other things, could result in a higher tax rate on the Group's

earnings, which could have a material adverse effect on the Group's earnings and cash flows

Risks related to financing and market risk

• In order to execute the Group's growth strategy, the Group may require additional capital in the future, which may not be available (including the financing of Ex. Stena MidMax, if applicable) and

there can be no assurance that such financing is secured

• The Group's existing or future debt arrangements as well as the preference shares and warrants instruments of Akastor AS or affiliate if the Group should decide to proceed with the acquisition of

Ex. Stena MidMax, could limit the Group's liquidity and flexibility in obtaining additional financing, in pursuing other business opportunities or the Company's ability to declare dividends to its

shareholders

• If the Group is unable to comply with the restrictions and the financial covenants in the agreements governing its indebtedness, there could be a default under the terms of these agreements, which

could result in an acceleration of repayment of funds that have been borrowed

• The Group is exposed to interest rate risk, primarily in relation to its long-term borrowings issued at floating interest rates, and interest rate fluctuations could affect the Group's cash flow and

financial condition

• The Group has currency exposure to both transaction risk and translation risk and fluctuations in exchange rates and non-convertibility of expenses could result in financial losses for the Group

Risks related to Group structure

• The Group currently conducts its operations through, and most of the Group's assets are owned by, the Group's subsidiaries and the Company is therefore dependent upon cash flow from

subsidiaries to meet its obligations and in order to pay dividends to its shareholders

• The Group's financial condition may be materially adversely affected if the Group fails to successfully integrate acquired assets or businesses, or is unable to obtain financing for acquisitions on

acceptable terms

• The Group has provided certain representations, warranties and indemnities in connection with the businesses it has sold and may, as a result, be subject to the risk of liability for breach of

representations and warranties and/or indemnity obligations in favour of the respective buyers

• The market value of the drilling units and rental equipment and/or those the Group may acquire in the future may decrease, which could cause the Group to incur losses due to impairment of book

values or if it decides to sell assets

Risks relating to the shares

• The market value of the shares may fluctuate significantly, which could cause investors to lose a significant part of their investment

• Odfjell Partners Ltd. has significant voting power and the ability to influence matters requiring shareholder approval

• Future sales, or the possibility for future sales, of substantial numbers of shares may affect the shares' market price

• Future issuances of shares or other securities may dilute the holdings of shareholders and could materially affect the price of the shares

• Exchange rate fluctuations could adversely affect the value of the shares and any dividends paid on the shares for an investor whose principal currency is not NOK

• Investors may not be able to exercise their voting rights for shares registered in a nominee account

• The transfer of shares is subject to restrictions under the securities laws of the United States and other jurisdictions

• Pursuant to the Company's dividend policy, dividends are only expected to be paid if certain conditions are fulfilled and the Company may be unwilling or unable to pay any dividends in the future

• Prior to the Private Placement, approximately 71.5% of the issued and outstanding share capital is held by Odfjell Partners Ltd., which may have a negative impact on the liquidity of the shares and

result in a low trading volume of the shares, which again could have an adverse effect on the then prevailing market price for the shares

• Eligible shareholders who do not participate in the Private Placement or the subsequent offering may experience significant dilution in their direct or indirect shareholding in the Company and there

can be no assurance that shareholders participating will maintain their relative ownership in the Company

• Any default under the Company's preference shares and warrant agreements if issued may have a material adverse effect on the Group

Risks related to the Company's incorporation in Bermuda

• Investors in the United States may have difficulty enforcing any judgment obtained in the United States against the Company or its directors or executive officers

• The Company's Bye-Laws contain provisions that could make it more difficult for a third party to acquire the Company without the consent of the Board of Directors

• Various conditions may cause an adverse tax effect for the shareholder if the Company pays dividends

For more information see: www.odfjelldrilling.com

http://www.odfjelldrilling.com/en/

Documents

Investor Presentation - Odfjell Drilling...reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability