Financial results 1Q 2017

Oslo,May 4, 2017

AGENDA

FINANCIAL RESULTS 1Q 2017

MARKET

OPERATIONS

SUMMARY

Income Statement – Key Figures

(USD mill) 1Q 2017 4Q 2016 Change

Operating revenues 95,5 152,5 (57,0)Recharged income 2,9 4,3 (1,4)Total revenues 98,4 156,8 (58,4)

Operating costs (54,7) (55,5) 0,8 Recharged expenses (2,9) (4,1) 1,2 Total operating expenses (57,6) (59,6) 2,0

Oper. result before depr. (EBITDA) 40,8 97,2 (56,4)

Depreciation (55,0) (65,2) 10,2 Impairment - (10,5) 10,5 Operating result (EBIT) (14,2) 21,5 (35,7)

Net financial items (6,6) (2,9) (3,7)Result before tax (20,8) 18,6 (39,4)

Estimated tax (5,6) (8,9) 3,3 Net result (26,4) 9,7 (36,1)

EBITDA comparison 1Q 2017 vs. 4Q 2016

41

15

13

13

10

597

0

20

40

60

80

100

120

4Q EBITDA Borgsten Bideford Overhead Blackford Other 1Q EBITDA

MU

SD

Financial Items Breakdown

(USD mill) 1Q 2017 4Q 2016 Change

Interest income 4,6 0,8 3,8 Gains on financial instruments 0,5 1,2 (0,7)Financial income 5,1 2,0 3,1

Interest expenses (8,3) (8,8) 0,5 Losses on financial instruments (0,3) (1,9) 1,6 Other financial expenses (2,8) (4,0) 1,2 Financial expenses (11,4) (14,7) 3,3

Net foreign currency gain (0,3) 9,8 (10,1)

Net financial items (6,6) (2,9) (3,7)

Offshore Drilling Segment

(USD mill) 1Q 2017 4Q 2016 Change

Operating revenues 90,2 149,9 (59,7)Recharged income 2,9 4,3 (1,4)Total revenues 93,1 154,2 (61,1)

Operating costs (48,6) (51,9) 3,3 Recharged expenses (2,9) (4,1) 1,2 Total operating expenses (51,5) (56,0) 4,5

Oper. result before depr. (EBITDA) 41,6 98,2 (56,6)

Depreciation (54,5) (64,8) 10,3 Impairment - (10,5) 10,5

Operating result (EBIT) (12,9) 22,9 (35,8)

Engineering & Fabrication Segment

(USD mill) 1Q 2017 4Q 2016 Change

Operating revenues (external) 5,3 2,6 2,7 Inter-segment revenues 0,2 0,2 - Total operating revenues 5,5 2,8 2,7

Operating costs (6,3) (3,8) (2,5)Oper. result before depr. (EBITDA) (0,8) (1,0) 0,2

Depreciation (0,5) (0,4) (0,1)

Operating result (EBIT) (1,3) (1,4) 0,1

Consolidated Balance Sheet

(USD mill) 31 Mar 2017 31 Dec 2016 Change

Property, plant & equipment 1 307,3 1 361,0 (53,7)Other non-current assets 17,4 17,3 0,1 Total non-current assets 1 324,7 1 378,3 (53,6)

Other current assets 189,4 221,3 (31,9)Cash and cash equivalents 333,3 290,4 42,9 Total current assets 522,7 511,7 11,0 Total assets 1 847,4 1 890,0 (42,6)

Equity 826,8 853,2 (26,4)

Non-current interest bearing debt 776,9 879,6 (102,7)Other non-current liabilities 92,7 90,9 1,8 Total non-current liabilities 869,6 970,5 (100,9)

Current interest bearing debt 95,5 - 95,5 Other current liabilities 55,5 66,3 (10,8)Total current liabilities 151,0 66,3 84,7 Total equity and liabilities 1 847,4 1 890,0 (42,6)

Consolidated Cash Flow

(USD mill) 1Q 2017 4Q 2016 Change

Profit before income taxes (20,8) 18,6 (39,4)Depreciation and impairment 55,0 75,7 (20,7)Interest expense 9,2 10,4 (1,2)Changes in working capital 29,2 18,2 11,0 Unrealized loss/(gain) financial instruments 0,5 (10,2) 10,7 Cash generated from operations 73,1 112,7 (39,6)

Interest paid (8,9) (8,5) (0,4)Taxes paid (3,9) (6,7) 2,8 Net cash flow from operating activities 60,3 97,5 (37,2)

Net investment in fixed assets (8,8) (3,3) (5,5)Cash flow used in investment activities (8,8) (3,3) (5,5)

Repayments of interest bearing loans (9,1) (190,9) 181,8 Cash flow used in financing activities (9,1) (190,9) 181,8

Foreign currency 0,5 (3,9) 4,4 Net change in cash and cash equivalents 42,4 (96,7) 139,1 Cash at beginning of period 290,4 391,0 (100,6)Cash at end of period 333,3 290,4 42,9

Offshore drilling EBITDA and margin

Fleet status

Bolette Dolphin DS/ Gusto P10' 12 000 Colombia Anadarko May 2014 - July 2018 419 000/ 488 000 1Q 2019

Blackford Dolphin SS / Aker H-3 7 000 Norway (UK compliant) Smart stacked 2Q 2019*

Belford Dolphin DS / LMG Marin 10 000 Malaysia Preserved and maintained

Bideford Dolphin SS / Aker H-3 1 500 Norway Statoil August-September 2017 172 000 2Q 2019

Borgland Dolphin SS / Aker H-3 1 500 Norway Smart stacked 1Q 2020*

Bredford Dolphin SS / Aker H-3 1 500 Norway Preserved and maintained 2Q 2017

Byford Dolphin SS / Aker H-3 1 500 Norway (UK compliant) Smart stacked 2Q 2020*

Borgsten Dolphin Tender support / AH-3 UK Cold stacked 1Q 2018

Borgholm Dolphin Accomodation / AH-3 UK Cold stacked 4Q 2017

* Subject to smart stacking period

MID WATER FLOATERS NORWAY

MID WATER FLOATERS UK

ULTRA- / DEEPWATER UNITS

FINANCIAL RESULTS

MARKET

OPERATIONS

SUMMARY

Global market – floating units

The market is bottoming out in 2017, longer term indicators are positive

The increase in requests and tender activity has continued during the quarter

The contract activity has strengthened with a number of new contracts awarded

The North Sea market is expected to balance earlier than the global ultra deepwater market

Cold stacking and some scrapping due to overcapacity is expected to continue

The decrease in offshore E&P spending seems to be levelling off with E&P companies also directing spending to short cycle and higher return activity offshore

Source: DNB

Dayrates- worldwide

Source: Clarksons Platou Offshore

NameWest NavigatorCOSLPioneerTransocean SearcherSonga TrymBredford DolphinPolar PioneerCOSLInnovatorWest VentureWest HerculesWest AlphaDeepsea Metro IISonga DeeBorgland DolphinSonga DeltaStena DonIsland InnovatorBideford DolphinTransocean ArcticScarabeo 5Leiv EirikssonDeepsea BergenTransocean SpitsbergenDeepsea StavangerScarabeo 8COSLPromoterDeepsea AtlanticSonga EquinoxSonga EnduranceSonga EncourageSonga Enabler

Contract Option Yard/under construction

2017 2018 2019Q4Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

Norwegian floater market

As per May 2017

Source: DNB and the Company

The utilization of the rig fleet in Norway is expected to continue to drop during 2017

However, the number of requests and tenders for 2018 has increased, predominantly for shorter term work

For 2019 and beyond, the number of requests and tenders has also increased with several longer term prospects

Some new contracts have been awarded through the quarter

Average dayrates Norway

Source: Clarksons Platou Offshore

NameOcean VanguardOcean NomadOcean PrincessTransocean ProspectWilHunterSertaoSedco 711Sedco 714Byford DolphinParagon MSS1Ocean GuardianBlackford DolphinPaul B. Loyd, Jr.West PhoenixStena SpeyStena IceMAXWilPhoenixSedco 712Ocean ValiantOcean PatriotTransocean LeaderDeepsea Aberdeen

Contract Option Yard/under construction

2017 2018 2019Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

UK floater market

As May 2017

Source: DNB and the Company

The development in the UK market is similar to Norway, with rig utilization continuing to drop during 2017

However, requests and tender activity is at a higher level, with new contracts recently being announced – including a new 2 year contract

A moderate improvement in drilling activity is expected in 2017, however a stronger demand for 2018 is expected

The accommodation segment remains weak

Average dayrates UK

Source: Clarksons Platou Offshore

FINANCIAL RESULTS

MARKET

OPERATIONS

SUMMARY

Main priorities

Deliver consistent performance and efficient operations

Focus on continued cost discipline and low opex

Prioritize capital expenditures to support high regularity

Operational excellence

Keeping the right competence

Two dedicated teams for inspection and maintenance of the smart stacked units

Common management team for operating subsidiaries and FOE

Maintaining units ready for

operations

Smart Stacked rigs are preserved and maintained with regular system integrated testing

Under the DNV GL regime of prolonged survey intervals the validity of Class and Statutory certificates are extended equal to the smart stacking period

Delayed capex and renewal of the class certificate

New contractsPursue new contracts opportunities for rigs in operations

Secure contracts for the units in lay up at acceptable dayrates and commercial value

RussiaRussia

New ZealandNew Zealand

PapuaPapua ‐‐New GuineaNew Guinea

AustraliaAustralia

PhilippinesPhilippines

JapanJapan

BruneiBrunei

TaiwanTaiwan

South KoreaSouth Korea

North KoreaNorth Korea

IndonesiaIndonesia

MalaysiaMalaysia

VietnamVietnam

CambodiaCambodia

LaosLaosMyanmarMyanmar

Sri  LankaSri  Lanka

MadagascarMadagascar

IndiaIndia

MongoliaMongolia

ChinaChina

MozambiqueMozambique

South AfricaSouth Africa

MalawiMalawi

PakistanPakistan

ZimbabweZimbabwe

BotswanaBotswana

KirgistanKirgistan

TadschikistanTadschikistan

SomaliaSomalia

AfghanistanAfghanistan

TanzaniaTanzania

NamibiaNamibia

SambiaSambia

KenyaKenya

DschibutiDschibuti

QatarQatar

YemenYemen

UgandaUganda

EthiopiaEthiopia

UsbekistanUsbekistan

AngolaAngola

TurkmenistanTurkmenistan

EritreaEritrea

IranIran

ZaireZaire

SaudiSaudi‐‐ArabiaArabia

SudanSudan

IraqIraq

KazakhstanKazakhstan

AzerbaijanAzerbaijan

CongoCongo

ArgentinaArgentina

JordanJordan

Central AfricaCentral Africa

ChileChile

GabunGabun

IsraelIsrael

SyriaSyria

LebanonLebanon

GeorgiaGeorgia

CameroonCameroon

ChadChad

EgyptEgypt

CyprusCyprus

NigeriaNigeria

TurkeyTurkey

BeninBenin

TogoTogo

GhanaGhana

LibyaLibya

GreeceGreece

NigerNiger

BulgariaBulgaria

Ivory CoastIvory Coast

Burkina FasoBurkina Faso

LiberiaLiberia

UkraineUkraine

SerbiaSerbia

RomaniaRomania

TunesiaTunesia

Sierra  LeoneSierra  Leone

BelarusBelarus

MaliMali

GuineaGuinea

BrazilBrazil

HungariaHungaria

AlgeriaAlgeria

LithuaniaLithuania

ItalyItaly

GuineaGuinea‐‐ BissauBissau

EstoniaEstonia

LatviaLatvia

SenegalSenegal

GambiaGambia

PolandPoland

MauretaniaMauretania

FinnlandFinnland

BoliviaBolivia

West SaharaWest Sahara

GermanyGermany

MaroccoMarocco

SwedenSweden

DenmarkDenmark

SpainSpain

FranceFrance

BelgiumBelgium

NetherlandsNetherlands

PortugalPortugal

PeruPeru

NorwayNorway

FrenchFrench‐‐ GuayanaGuayana

United KingdomUnited Kingdom

GuyanaGuyana

IrelandIreland

ColumbiaColumbia

EcuadorEcuador

VenezuelaVenezuela

TrinidadTrinidad

PanamaPanama

Puerto RicoPuerto Rico

Costa RicaCosta Rica

Dominican RepublicDominican RepublicHaitiHaiti

NicaraguaNicaragua

JamaicaJamaica

HondurasHonduras

El SalvadorEl Salvador

IcelandIceland

BelizeBelize

CubaCuba

MexicoMexico

USAUSA

GreenlandGreenland

CanadaCanada

NepalNepalBhutanBhutan

BangladeshBangladesh

ThailandThailand

UruguayUruguay

GuatemalaGuatemala

KuwaitKuwait

OmanOman

United Arab EmiratesUnited Arab Emirates

LesothoLesotho

SwazilandSwaziland

BurundiBurundi

RwandaRwanda

CroatiaCroatia BosniaBosnia‐‐ HerzegovinaHerzegovina

AustriaAustria

SwitzerlandSwitzerland

LuxemburgLuxemburg

MoldawiaMoldawia

AlbaniaAlbania

MacedoniaMacedonia

MontenegroMontenegro

SloveniaSlovenia

Czech RepublicCzech Republic

SlovakiaSlovakia

ArmeniaArmenia

ParaguayParaguay

SurinamSurinam

Russia

New Zealand

Papua ‐New Guinea

Australia

Philippines

Japan

Brunei

Taiwan

South Korea

North Korea

Indonesia

Malaysia

Vietnam

Cambodia

LaosMyanmar

Sri  Lanka

Madagascar

India

Mongolia

China

Mozambique

South Africa

Malawi

Pakistan

Zimbabwe

Botswana

Kirgistan

Tadschikistan

Somalia

Afghanistan

Tanzania

Namibia

Sambia

Kenya

Dschibuti

Qatar

Yemen

Uganda

Ethiopia

Usbekistan

Angola

Turkmenistan

Eritrea

Iran

Zaire

Saudi‐Arabia

Sudan

Iraq

Kazakhstan

Azerbaijan

Congo

Argentina

Jordan

Central Africa

Chile

Gabun

Israel

Syria

Lebanon

Georgia

Cameroon

Chad

Egypt

Cyprus

Nigeria

Turkey

Benin

Togo

Ghana

Libya

Greece

Niger

Bulgaria

Ivory Coast

Burkina Faso

Liberia

Ukraine

Serbia

Romania

Tunesia

Sierra  Leone

Belarus

Mali

Guinea

Brazil

Hungaria

Algeria

Lithuania

Italy

Guinea‐ Bissau

Estonia

Latvia

Senegal

Gambia

Poland

Mauretania

Finnland

Bolivia

West Sahara

Germany

Marocco

Sweden

Denmark

Spain

France

Belgium

Netherlands

Portugal

Peru

Norway

French‐ Guayana

United Kingdom

Guyana

Ireland

Columbia

Ecuador

Venezuela

Trinidad

Panama

Puerto Rico

Costa Rica

Dominican RepublicHaiti

Nicaragua

Jamaica

Honduras

El Salvador

Iceland

Belize

Cuba

Mexico

USA

Greenland

Canada

NepalBhutan

Bangladesh

Thailand

Uruguay

Guatemala

Kuwait

Oman

United Arab Emirates

Lesotho

Swaziland

Burundi

Rwanda

Croatia Bosnia‐ Herzegovina

Austria

Switzerland

Luxemburg

Moldawia

Albania

Macedonia

Montenegro

Slovenia

Czech Republic

Slovakia

Armenia

Paraguay

Surinam

ByfordDolphin

BorgstenDolphin

BorgholmDolphin

BlackfordDolphin

BidefordDolphin

BorglandDolphin

BredfordDolphin

BoletteDolphin

BelfordDolphin

Fred. Olsen Energy – Operating worldwide

Contract overview

Total backlog approx. USD 220 million

Unit

Bolette Anadarko

Belford Preserved and maintained

Blackford Chevron Smart stacked

Bideford Statoil Statoil

Borgland Smart stacked

Bredford Preserved and maintained

Byford Smart stacked

Borgsten Cold stacked

Borgholm Cold stacked

Firm contract Option

2017 2018

Ultra deepwater

Belford Dolphin

Bolette Dolphin

Ultra deepwater drillship delivered in 2014

Operates under a four-year contract with Anadarko estimated to expire in July 2018

Has operated offshore Colombia during the quarter, and is now en route to the Ivory Coast

Belford Dolphin

The unit is preserved and maintained, located outside Labuan, Malaysia

Marketed for contract possibilities worldwide

Completed the five-year class renewal survey at the Keppel yard in October 2015

Deepwater / midwater- UK

Blackford Dolphin

Continued the extended contract with Chevron during the quarter, operating offshore UK

The contract was concluded end of April 2017

Is now preparing for smart stacking in Flekkefjord, Norway, ready for operations

Completed its class renewal survey in June 2014

Byford Dolphin

The unit is smart stacked in Lyngdal, Norway, ready for operations

The unit completed its class renewal survey July 2015

Midwater - Norway

Belford Dolphin

Bideford Dolphin

Completed the contract extension end of March

A new contract extension with Statoil was entered into for a one well drilling program of approximately 50 days with commencement by end of July 2017. The contract includes one optional well

Completed its class renewal survey July 2014

Borgland Dolphin

The unit is smart stacked in Lyngdal, Norway, ready for operations

The unit completed its class renewal survey February 2015

Midwater – Norway / UK

Borgholm Dolphin

The accommodation unit will be sold for decommissioning

The transaction is estimated to take place during 2Q or 3Q 2017

Bredford DolphinThe unit is cold stacked at Kvinesdal, Norway

The class renewal survey was completed August 2012

A renewal of the class certificates will not be carried out in 2017 in the current market conditions

Borgsten DolphinThe unit was converted to Tender Support Vessel in 2013

The unit is cold stacked outside Invergordon, Scotland

Harland & Wolff

The activity has been low during the quarter with only smaller ship repairs

Secured a jacket contract as subcontractor to Lamprellfor deliveries in 2017/2018

Has also entered into a contract with ST3 Offshore, for supply of suction buckets for Dong Energy’s BorkumRiffgrund 2

Summary

Market

Contract backlog amounting to approximately USD 220 million

New one well contract extension for Bideford Dolphin with Statoil, including one optional well

Financial

Revenues were USD 98 million

EBITDA was USD 41 million

Profit after tax was negative USD 26 million

Operational

Blackford Dolphin to be smart stacked in Flekkefjord, Norway, from end of April

Bideford Dolphin in temporary lay up until commencement of the new contract

Borgholm Dolphin to be sold for decommissioning

Q&A