UNITED STATESSECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K(Mark one) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2019OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _____ to _____

Commission file number 001-35345

PACIFIC DRILLING S.A.(Exact name of registrant as specified in its charter)

Grand Duchy of Luxembourg Not Applicable(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

8-10, Avenue de la GareL-1610 Luxembourg Not Applicable

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: +352 27 85 81 35Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbols(s) Name of each exchange on which registered Common shares, par value PACD $0.01 per share

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934

during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 ofRegulation S‑T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non‑accelerated filer, smaller reporting company or anemerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” inRule 12b‑2 of the Exchange Act.

Large accelerated filer Accelerated filer Non‑accelerated filer Smaller reporting company Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or

revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b‑2 of the Exchange Act). Yes No The aggregate market value of the Company’s Common Shares held by non-affiliates as of June 28, 2019 was $460,738,643. As of March 6, 2020, there were 75,198,547 shares outstanding.

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS.)Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange

Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes No DOCUMENTS INCORPORATED BY REFERENCE

None

TABLE OF CONTENTS

Item Page

PART I Item 1. Business 4Item 1A. Risk Factors 13Item 1B. Unresolved Staff Comments 30Item 2. Properties 31Item 3. Legal Proceedings 31Item 4. Mine Safety Disclosures 32

PART II Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases

of Equity Securities 33Item 6. Selected Financial Data 35Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 37Item 7A. Quantitative and Qualitative Disclosures About Market Risk 51Item 8. Financial Statements and Supplementary Data 52Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 89Item 9A. Controls and Procedures 89Item 9B. Other Information 90

PART III Item 10. Directors, Executive Officers and Corporate Governance 91Item 11. Executive Compensation 97Item 12. Security Ownership of Certain Beneficial Owners and Management and Related

Shareholder Matters 122Item 13. Certain Relationships and Related Transactions, and Director Independence 126Item 14. Principal Accounting Fees and Services 129Item 15. Exhibits and Financial Statement Schedules 129Item 16. Form 10-K Summary 133

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements and information contained in this annual report constitute “forward-looking statements” within themeaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are generally identifiable bytheir use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “our ability to,” “may,”“plan,” “potential,” “predict,” “project,” “projected,” “should,” “will,” “would,” or other similar words which are not generallyhistorical in nature. The forward-looking statements speak only as of the date of this annual report, and we undertake noobligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of newinformation, future events or otherwise.

Our forward-looking statements express our current expectations or forecasts of possible future results or events, includingfuture financial and operational performance and cash balances; revenue efficiency levels; market outlook; forecasts of trends;future client contract opportunities; future contract dayrates; our business strategies and plans or objectives of management;estimated duration of client contracts; backlog; expected capital expenditures; projected costs and savings, expectations regardingour application to appeal the arbitration award against our two subsidiaries related to the drillship known as the Pacific Zonda infavor of Samsung Heavy Industries Co. Ltd. (“SHI”), the outcome of such subsidiaries’ ongoing bankruptcy proceedings and thepotential impact of the arbitration Tribunal’s decision on our future operations, financial position, results of operations andliquidity.

Although we believe that the assumptions and expectations reflected in our forward-looking statements are reasonable andmade in good faith, these statements are not guarantees, and actual future results may differ materially due to a variety of factors.These statements are subject to a number of risks and uncertainties and are based on a number of judgments and assumptions asof the date such statements are made about future events, many of which are beyond our control. Actual events and results maydiffer materially from those anticipated, estimated, projected or implied by us in such statements due to a variety of factors,including if one or more of these risks or uncertainties materialize, or if our underlying assumptions prove incorrect.

Important factors that could cause actual results to differ materially from our expectations include:

evolving risks from the Coronavirus outbreak and resulting significant disruption in international economies, andinternational financial and oil markets, including a substantial decline in the price of oil during 2020, which if sustainedwould have a material adverse effect on our financial condition, results of operations and cash flow;

changes in actual and forecasted worldwide oil and gas supply and demand and prices, and the related impact ondemand for our services;

the offshore drilling market, including changes in capital expenditures by our clients;

rig availability and supply of, and demand for, high-specification drillships and other drilling rigs competing with ourfleet;

our ability to enter into and negotiate favorable terms for new drilling contracts or extensions of existing drillingcontracts;

our ability to successfully negotiate and consummate definitive contracts and satisfy other customary conditions withrespect to letters of intent and letters of award that we receive for our drillships;

actual contract commencement dates;

possible cancellation, renegotiation, termination or suspension of drilling contracts as a result of mechanicaldifficulties, performance, market changes or other reasons;

costs related to stacking of rigs and costs to reactivate a stacked rig;

downtime and other risks associated with offshore rig operations, including unscheduled repairs or maintenance,relocations, severe weather or hurricanes or accidents;

our small fleet and reliance on a limited number of clients;

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the risks of litigation in foreign jurisdictions and delays caused by third parties in connection with such litigation, theoutcome of our subsidiaries’ bankruptcy proceedings and any actions that SHI or others may take in the bankruptcy orother proceedings against the Company and its subsidiaries;

the risk that our common shares could be delisted from trading on the New York Stock Exchange (the “NYSE”) shouldwe fail to meet the continued listing criteria, including but not limited to the requirement that the average closing priceof our common shares equals or exceeds $1.00 per share over consecutive 30 trading-day periods (and if we wereunable to cure the deficiency within the applicable cure period, if any); and

the other risk factors described under the heading “Risk Factors” in Item 1A. of this annual report.

All forward-looking statements in this annual report are expressly qualified in their entirety by the cautionary statements inthis section and the “Risk Factors” section herein. Additional factors or risks that we currently deem immaterial, that are notpresently known to us, that arise in the future or that are not specific to us could also cause our actual results to differ materiallyfrom our expected results. Given these uncertainties, you are cautioned not to unduly rely on our forward-looking statements,which speak only as of the date made. We undertake no obligation to update any forward-looking statements, whether as a resultof new information, future events or developments, changed circumstances or otherwise. Further, we may make changes to ourbusiness strategies and plans at any time and without notice, based on any changes in the above-listed factors, our assumptions orotherwise, any of which could materially affect our results.

PART I

As used in this annual report, unless the context otherwise requires, references to “Pacific Drilling,” the “Company,” “we,”“us,” “our” and words of similar import refer to Pacific Drilling S.A. and its subsidiaries. Unless otherwise indicated, allreferences to “U.S. $” and “$” in this report are to, and amounts are represented in, United States dollars.

ITEM 1. BUSINESS

Overview

We are an international offshore drilling contractor committed to exceeding client expectations by delivering the safest,most efficient and reliable deepwater drilling services in the industry. We believe we own and operate the only deepwater fleetcomprised solely of sixth and seventh generation high-specification drillships, and that our current fleet of seven drillships offerspremium technical capabilities to our clients. The term “high-specification,” as used in the floating rig drilling industry to denotea particular segment of the market, can vary and continues to evolve with technological improvements. We generally considerhigh-specification requirements to include non-harsh environment drillships delivered in or after 2005 and capable of drilling inwater depths of 10,000 feet or more.

Pacific Drilling S.A. was formed on March 11, 2011, as a Luxembourg public limited liability company (société anonyme)under the Luxembourg law of 10 August 1915 on commercial companies, as amended. Our principal executive offices are locatedat 8-10, Avenue de la Gare, L-1610 Luxembourg and our telephone number is +352 27 85 81 35. Our registered agent inLuxembourg is Centralis S.A, which is located at 8-10, Avenue de la Gare, L-1610 Luxembourg. The operational headquarters ofour Company is located at 11700 Katy Freeway, Suite 175, Houston Texas 77079. Our telephone number at this address is 713-334-6662.

Our common shares were listed on the Norwegian OTC List from April 2011 to October 2016 and on the NYSE fromNovember 11, 2011 to September 12, 2017. From September 13, 2017 to December 17, 2018, our common shares were traded onthe over-the-counter market under the ticker symbols “PACDQ” and “PACDD,” respectively. Our common shares were relistedon the NYSE on December 18, 2018 and currently trade under the symbol “PACD.”

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Emergence from Bankruptcy Proceedings

By order entered on November 2, 2018 (the “Confirmation Order”), the United States Bankruptcy Court for the SouthernDistrict of New York (the “Bankruptcy Court”) confirmed the Company’s Modified Fourth Amended Joint Planof Reorganization, dated October 31, 2018 (the “Plan of Reorganization”) that had been filed with the Bankruptcy Court inconnection with the filing by the Company and certain of its subsidiaries (the “Initial Debtors”) of petitions (the “BankruptcyPetitions”) on November 12, 2017 (the “Petition Date”) with the Bankruptcy Court seeking relief under Chapter 11 of Title 11 ofthe United States Code (the “Bankruptcy Code”). During the course of the bankruptcy proceedings, the Initial Debtors continuedto operate their businesses as debtors-in-possession. On November 19, 2018 (the “Plan Effective Date”), the Company and theInitial Debtors other than the Zonda Debtors (defined below) (the “Debtors”) emerged from bankruptcy after successfullycompleting their reorganization pursuant to the Plan of Reorganization.

Prior to our emergence from bankruptcy on November 19, 2018, we had approximately $3.0 billion principal amount ofpre-petition indebtedness consisting of amounts outstanding under a 2013 senior secured revolving credit facility (the “2013Revolving Credit Facility”), a senior secured credit facility (the “SSCF”), a 2018 senior secured institutional term loan facility(the “Term Loan B,”), 2017 senior secured notes (the “2017 Notes”) and 2020 senior secured notes (the “2020 Notes”), plus anadditional $50 million in post-petition debtor-in-possession financing. One shareholder, Quantum Pacific Gibraltar Ltd (“QP”),owned approximately 70.3% of our outstanding common shares.

Reorganization Transactions Relating to Capital Structure

Pursuant to the Plan of Reorganization, we raised approximately $1.5 billion in new capital, before expenses, consisting ofapproximately $1.0 billion raised through issuance of our 8.375% First Lien Notes due 2023 (the “First Lien Notes”) and11.0%/12.0% Second Lien PIK Notes due 2024 (the “Second Lien PIK Notes” and, together with the First Lien Notes, the“Notes”), and $500.0 million raised through the issuance of new common shares pursuant to a private placement to QP and aseparate equity rights offering. We used a portion of the net proceeds to repay all of our pre-petition indebtedness that was notequitized pursuant to the Plan of Reorganization, to repay the post-petition debtor-in-possession financing, and to pay certain feesand expenses.

More specifically, upon emergence of the Company from bankruptcy on November 19, 2018 in accordance with the Planof Reorganization:

The Company’s pre-petition 2013 Revolving Credit Facility, SSCF and post-petition debtor-in-possession financingwere repaid in full;

Holders of the Company’s pre-petition Term Loan B, 2017 Notes and 2020 Notes received an aggregate of 24,416,442common shares (or, approximately 32.6% of the outstanding shares) in exchange for their claims;

The Company issued an aggregate of 44,174,136 common shares (or, approximately 58.9% of the outstanding shares)to holders of the Term Loan B, 2017 Notes and 2020 Notes who subscribed in the Company’s $460.0 million equityrights offering;

The Company issued 3,841,229 common shares (or, approximately 5.1% of the outstanding shares) to QP in a $40.0million private placement;

The Company issued 2,566,056 common shares (or approximately 3.4% of the outstanding shares) to members of an adhoc group of holders of the Term Loan B, 2017 Notes and 2020 Notes (the “Ad Hoc Group”) in payment of their feefor backstopping the equity rights offering;

The Company issued approximately 7.5 million common shares to Pacific Drilling Administrator Limited, a whollyowned subsidiary of the Company that serves as administrator of the Company’s 2018 Omnibus Stock Incentive Plan(the “2018 Stock Plan”), adopted by the Board, and which shares were reserved for issuance under the 2018 StockPlan;

Existing holders of the Company’s common shares received no recovery and were diluted by the issuances of commonshares under the Plan of Reorganization such that they held in the aggregate approximately 0.003% of the Company’scommon shares outstanding upon emergence from bankruptcy; and

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The undisputed claims of other unsecured creditors such as clients, employees and vendors, were paid in full in theordinary course of business.

Prior to the issuance of the shares described above, the Company effected a 1-for-10,000 reverse stock split (the “ReverseStock Split”). As a result of the Reverse Stock Split and the issuances of common shares described above, the Company hadissued and outstanding on the Plan Effective Date approximately 75.0 million common shares, and approximately 7.5 millionshares were reserved for issuance pursuant to the 2018 Stock Plan.

Our emergence from bankruptcy resulted in a change of control of the Company. In addition, pursuant to the Plan of Reorganization, on September 26, 2018 bankruptcy-remote subsidiaries of the

Company issued, and on November 19, 2018 such subsidiaries merged with the Company and the Company assumed (the “NotesAssumption”):

$750.0 million in aggregate principal amount of the First Lien Notes secured by first-priority liens on substantially allassets of the Debtors; and

$273.6 million in aggregate principal amount of the Second Lien PIK Notes secured by second-priority liens onsubstantially all assets of the Debtors. Approximately $23.6 million aggregate principal amount was issued as acommitment fee to the Ad Hoc Group for their agreement to backstop the issuance of the Second Lien PIK Notes.

Concurrent with the Notes Assumption, all of the Company’s subsidiaries other than the Zonda Debtors (defined below),certain immaterial subsidiaries and Pacific International Drilling West Africa Limited (“PIDWAL,” a Nigerian limited liabilitycompany indirectly 49% owned by the Company) guaranteed on a senior secured basis the First Lien Notes and Second Lien PIKNotes. If the Zonda Debtors are successful in their appeal of the Tribunal’s decision in the arbitration discussed below, it isexpected that the Zonda Debtors will guarantee the First Lien Notes and Second Lien PIK Notes upon their emergence frombankruptcy pursuant to the Zonda Plan (defined below). If the Zonda Debtors are unsuccessful in the appeal, the Companyexpects that the Zonda Debtors will be liquidated in accordance with the terms of the Zonda Plan and the Zonda Debtors wouldnot guarantee the First Lien Notes and Second Lien PIK Notes.

Other Reorganization Transactions

Pursuant to the Plan of Reorganization, the following additional principal transactions and events occurred on the PlanEffective Date:

Amendment of Articles of Association. The Company’s Articles of Association (our “Articles”) were amended to,among other things, reflect the new capital structure and establish a classified board of four Class A directors and threeClass B directors.

Governance Agreement. The Company entered into a Governance Agreement (the “Governance Agreement”) withcertain holders of its shares, which provides for, among other things, the rights of such shareholders to nominate thethree Class B directors, board observer rights of the parties, as well as an agreement to increase the Company’s sharecapital at the request of certain parties.

Resignation of Directors and Election of New Directors. All of the Company’s directors prior to our emergence frombankruptcy resigned from our board of directors and upon our emergence from bankruptcy, we had an entirely newboard of directors.

Appointment of Chief Executive Officer. Bernie G. Wolford Jr. was appointed Chief Executive Officer of the Company.

Registration Rights Agreement. The Company entered into a Registration Rights Agreement (the “Registration RightsAgreement”) with certain holders of its shares, which grants such holders certain registration rights with respect to ourcommon shares.

Zonda Arbitration

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The Company’s two subsidiaries involved in the arbitration with Samsung Heavy Industries Co. Ltd. (“SHI”) related to thedrillship known as the Pacific Zonda – Pacific Drilling VIII Limited (“PDVIII”) and Pacific Drilling Services, Inc. (“PDSI” and,together with PDVIII, the “Zonda Debtors”) – are not Debtors under the Plan of Reorganization and filed a separate plan ofreorganization that was confirmed by order of the Bankruptcy Court on January 30, 2019 (the “Zonda Plan”). On the date theZonda Plan was confirmed, the Zonda Debtors had $4.6 million in cash and no other material assets after accounting for post-petition administrative expenses (other than the value of their claims against SHI) for SHI to recover against on account of itsclaims. On January 15, 2020, an arbitration tribunal in London, England (the “Tribunal”) awarded SHI approximately $320million with respect to its claims against the Zonda Debtors. The award does not include approximately $100 million in interestand costs sought by SHI, on which the Tribunal reserved making a decision to a later date. As a result of the Tribunal’s decision,the Company recognized a loss of $220.2 million within loss from unconsolidated subsidiaries during the year ended December31, 2019 primarily related to the elimination of a receivable related to the Zonda Debtors’ claim on the balance sheet.

On February 11, 2020, the Zonda Debtors filed an application with the High Court in London seeking permission to appealthe Tribunal’s award. There can be no assurance that the Zonda Debtors will receive permission to appeal, or that if suchpermission is granted, that any such appeal will be successful. If the Zonda Debtors are successful in reversing the Tribunal’sdecision, they will emerge from their separate bankruptcy proceedings. If the Zonda Debtors are unsuccessful in the appeal, theCompany expects that the Zonda Debtors will be liquidated in accordance with the terms of the Zonda Plan. For additionalinformation, see Item 3. “Legal Proceedings.”

Our Business Strategies

Our principal business objective is to exceed client expectations by delivering the safest, most efficient and reliabledeepwater drilling services in the industry. Our operating strategy is designed to enable us to provide high quality, safe and cost-competitive services and to maintain and deploy our assets to position us to benefit from an expected increase in demand fordeepwater offshore drilling and increase our cash flow and profits. Specifically, we expect to achieve our business objectivesthrough the following strategies:

Enhanced focus on safety and operational excellence targeting key markets. Excelling in safety and operationalperformance is a key factor for success in our industry. Our management team is focused on providing quality drillingservices for our clients by minimizing downtime and maximizing rig operational efficiency. We believe that we havedeveloped a competitive advantage through our exceptional operating performance and plan to target a presence in keyhigh-specification, deepwater drilling geographies, including West Africa, Gulf of Mexico, Brazil and SoutheastAsia. We have built a strong team of experienced professionals that have expertise in diverse areas, such as regulatoryand operational affairs, in these key offshore areas.

Continued development of strategic relationships with high-quality clients. Improvement of our future revenue isdependent upon major international and national oil companies as well as independent exploration and productioncompanies increasing their exploration and development programs. Our existing and potential clients tend to take long-term approaches to the development of their projects, and we believe that our strong operational performance andefficient cost management will make us a preferred long-term partner. We plan to continue to manage our drillships insuch a way as to enable us to nimbly and cost-effectively exploit improvements in the market for deepwater drillingservices.

Efficiently manage costs while maintaining optionality and marketability. With a cost-competitive fleet, we believe wewill continue to benefit as the market improves. We have a well-positioned and well-maintained fleet that we believe isat the low end of the cost of supply curve. We have implemented company-wide cost-savings initiatives to reduce ouroperating, maintenance and supply chain management expenses while effectively maintaining our ability to restart idlerigs.

Clients

For information regarding the percentage of revenue earned from certain of our major clients, see Note 17 toour consolidated financial statements.

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Contract Backlog

Our contract backlog includes firm commitments only, which are represented by signed drilling contracts. As of March 6,2020, our contract backlog was approximately $189.2 million and was attributable to revenues we expect to generate on (i) thePacific Sharav under the drilling contract with a subsidiary of Chevron Corporation (“Chevron”) and under the drilling contractwith a subsidiary of Murphy Oil Corporation (“Murphy”), (ii) the Pacific Santa Ana under the drilling contract with PCMauritania 1 Pty Ltd. (“Petronas”), (iii) the Pacific Bora under the drilling contract with Eni Oman B.V., a subsidiary of EniS.p.A. (“Eni”) and (iv) the Pacific Khamsin under the drilling contract with a subsidiary of Equinor ASA (“Equinor”). Wecalculate our contract backlog by multiplying the contractual dayrate by the number of days committed under the contracts(excluding options to extend), assuming full utilization, and also including mobilization fees, upgrade reimbursements and otherrevenue sources, such as the standby rate during upgrades, as stipulated in the applicable contracts. For a well-by-well contract,we calculate the contract backlog by estimating the expected number of remaining days to drill the firm wells committed.

The actual amounts of revenues earned and the actual periods during which revenues are earned may differ from ourcontract backlog and periods shown in the table below due to various factors, including unplanned downtime and maintenanceprojects and other factors. Our contracts generally provide for termination at the election of the client with an “early terminationpayment” to be paid to us if a contract is terminated prior to the expiration of the fixed term. However, under certain limitedcircumstances, such as destruction of a drilling rig or sustained unacceptable performance by us, an early termination payment isnot required to be paid. Accordingly, the actual amount of revenues earned may be substantially lower than the backlog reported.

The following table sets forth certain contracting information regarding our fleet as of March 6, 2020.

Contracted Contract Rig Location Client Commencement Expected Contract Duration

Pacific Sharav U.S. Gulf of Mexico Chevron September 2019 Extension for three wells through May2020.

Mexico Murphy Q4 2020 Two firm wells and one option well.

Pacific Khamsin U.S. Gulf of Mexico Equinor/Total December 2019

Contract to operate in U.S. Gulf ofMexico for three firm wells throughNovember 2020, with one option well.Assigned to Total for second firm well.

Pacific Santa Ana Mauritania Petronas December 2019

Contract to perform integrated services fora plug and abandonment project estimatedat 360 days.

Senegal/Mauritania Total —

Two one-well options whosecommencement would follow contractwith Petronas.

Pacific Bora Oman Eni February 2020

Contract for one firm well with anestimated duration of approximately 30days and includes a $5 millionmobilization fee and a $5 milliondemobilization fee. The contract providesfor one option well.

Drilling Contracts

We typically provide drilling services on a “dayrate” contract basis. Under dayrate contracts, the drilling contractorprovides a drilling rig and rig crews and charges the client a fixed amount per day regardless of the number of days needed to drillthe well. In certain contracts, we may also provide additional third-party services integrated into the standard drilling rig contract,which results in additional revenue, costs and associated downtime risk. The client bears substantially all of the ancillary costs ofconstructing the well and supporting drilling operations, as well as the economic risk relative to the success of the well. Inaddition, dayrate contracts sometimes provide for a lump sum amount for mobilizing the rig to the well location and a reduceddayrate when drilling operations are interrupted or restricted by

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equipment breakdowns, adverse weather conditions or other conditions beyond the contractor’s control. A dayrate drillingcontract generally covers either the drilling of a single well or group of wells or has a stated term. These contracts may generallybe terminated by the client in the event the drilling unit is damaged, destroyed or lost or if drilling operations are suspended for anextended period of time as a result of a breakdown of equipment, “force majeure” events beyond the control of either party orupon the occurrence of other specified conditions. In addition, drilling contracts with certain clients may be cancelable, withoutcause, with little or no prior notice. Some longer-term contracts are subject to early termination payments. In some instances, thedayrate contract term may be extended by the client exercising options for the drilling of additional wells or for an additionallength of time at fixed or mutually agreed terms, including dayrates.

Competition

The contract drilling industry is highly competitive. Our competition ranges from large international companies offering awide range of drilling and other oilfield services to smaller, locally owned companies.

Drilling contracts are generally awarded on a competitive bid or negotiated basis. Pricing is often the primary factor indetermining which qualified contractor is awarded a job; however, rig availability, capabilities, age and each contractor’s safetyperformance record and reputation for quality also can be key factors in the determination. Operators also may consider crewexperience, technical and engineering support, rig location and efficiency, as well as long-term relationships with majorinternational oil companies and national oil companies.

We believe that the market for drilling contracts will continue to be highly competitive in the near and intermediate term.We believe that our fleet of high-specification drillships provides us with a competitive advantage over many competitors witholder fleets, as high-specification drilling units are generally better suited to meet the requirements of clients for drilling indeepwater, complex geological formations with challenging well profiles. However, certain competitors may have greaterfinancial resources than we do, which may enable them to better withstand periods of low utilization and compete moreeffectively on the basis of price.

Seasonality

In general, seasonal factors do not have a significant direct effect on our business.

Insurance

The contract drilling industry is subject to hazards inherent in the drilling of oil and natural gas wells, including blowoutsand well fires, which could cause personal injury, suspend drilling operations, or seriously damage or destroy the equipmentinvolved. Offshore drilling operations are also subject to hazards particular to marine operations including capsizing, grounding,collision and loss or damage from severe weather. While we maintain insurance to protect our drillships in the areas in which weoperate, certain political risks and other environmental risks are not fully insurable. We maintain insurance coverage that includescoverage for hull and machinery, marine liabilities, third party liability, workers’ compensation and employer’s liability, generalliability, vessel pollution and other coverages.

Our insurance is subject to exclusions and limitations, and our insurance coverage may not adequately protect us againstliability from all potential consequences and damages. We believe that our insurance coverage is customary for the industry andadequate for our business. However, there are risks that such insurance will not adequately protect us against and insurance maynot be available to cover all of the liability from all of the consequences and hazards we may encounter in our operations.

Governmental Regulation/Environmental Issues

Our operations are subject to stringent and comprehensive federal, state, local and foreign or international laws andregulations, including those governing the discharge of oil and other contaminants into the environment or otherwise relating toenvironmental protection.

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United States

In the United States, we must comply with the Oil Pollution Act of 1990, the Outer Continental Shelf Lands Act, theComprehensive Environmental Response, Compensation, and Liability Act, the Federal Water Pollution Control Act (commonlyreferred to as the Clean Water Act) and the International Convention for the Prevention of Pollution from Ships, as each has beenamended from time to time. Numerous governmental agencies, which in the United States include, among others, the U.S.Department of the Interior, Bureau of Ocean Energy Management, Bureau of Safety and Environmental Enforcement, U.S. CoastGuard and U.S. Environmental Protection Agency, issue regulations to implement and enforce environmental laws, which oftenrequire difficult and costly compliance measures. We could be subject to substantial administrative, civil and criminal penalties,cleanup obligations, legal damages for pollution or personal injury or injunctive relief for violations of or liabilities under theselaws. Moreover, it is possible that changes in these environmental laws and regulations or any enforcement policies that imposeadditional or more restrictive requirements or claims for damages to persons, property, natural resources or the environment couldresult in substantial costs and liabilities to us. We believe that we are in substantial compliance with currently applicableenvironmental laws and regulations.

Nigeria

As an independent drilling contractor operating in Nigeria, we are subject to Petroleum (Drilling and Production)Amendment Regulations 1988 (the “Regulations”) which require us to be accredited with the Department of Petroleum Resources(the “DPR”). The Guidelines and Application Form for Oil & Gas Industry Service Permit issued by the DPR (the “DPRGuidelines”) require that we are accredited and issued with a permit by the DPR (the “DPR Permit”) in order to carry out theservices in the industry. We have received and must annually renew the DPR Permit in accordance with the DPR Guidelines. Inaddition to the DPR Permit, under the Local Content Act (as defined below), we are required to be registered with the JointQualification System (“JQS”). The Nigerian Petroleum Exchange (“NIPEX”) administers the JQS. NIPEX is required to pre-qualify companies and categorize them into its database as a prerequisite for any company intending to offer services in theindustry and forms the basis for an invitation to tender for contracts. Under the Regulations we are also required to obtain a validlicense prior to operating a drilling rig (a “Drilling Rig Permit”). A Drilling Rig Permit is granted by the Minister of PetroleumResources (“Minister”) or any other public officer in the Ministry authorized by the Minister in writing in that regard.

Our operations are also subject to the provisions of the Environmental Guidelines and Standards for the Petroleum Industryof Nigeria which establish a uniform monitoring and control program in relation to discharges arising from oil exploration anddevelopment in Nigeria.

The Nigerian Oil and Gas Industry Content Development Act, 2010 (the “Local Content Act”) was enacted to provide forthe development, implementation and monitoring of Nigerian content in the oil and gas industry and places emphasis on thepromotion of Nigerian content among companies bidding for contracts in the oil and gas industry. It also provides for majorityNigerian equity distribution of the relevant companies. The Local Content Act requires contractors within the oil and gas industryto comply with the minimum Nigerian Content (as defined in the Local Content Act) specified for each particular project item,service or product specification as set out in Schedule A of the Local Content Act (the “Schedule”). The Schedule provides theparameters and minimum level/percentages to be utilized in determining and measuring Nigerian Content in the compositehuman, material resources and services applied by operators and contractors in any project in the industry. The most relevantcategories under the Schedule for us fall under the headings of “Well and Drilling Services/Petroleum Technology” and“Exploration, Subsurface, Petroleum Engineering and Seismic.” The activities listed therein include: “Producing DrillingServices” and “Drilling Rigs Semi-submersibles/Jack ups/others” which both apply to us. For offshore drilling services within theabove referenced categories, the minimum required Nigerian Content for the provision of such services provided in the Scheduleis stated in terms of “Manhours” (i.e., human resources) and is 85% and 55%, respectively. In the event there is insufficientNigerian capacity to satisfy the minimum percentages prescribed in the Schedule, the Minister may authorize the continuedimportation of the relevant item or personnel for a maximum period of three years from the commencement of the Local ContentAct. This implies that the Minister may grant a waiver for up to a maximum of three years from the commencement of the LocalContent Act (i.e., by 2013). Subject to any amendments to the Local Content Act, and/or guidelines issued by the NigerianContent Monitoring Board clarifying certain provisions of the Local Content Act, all entities must comply with the provisions ofthe Local Content Act.

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We are required to submit a proposed Nigerian Content Execution Plan and will provide a Monthly Nigerian ContentReport, a document that details the amount of Nigerian Content utilized in the performance of the contract.

In addition to the above Nigerian Content requirements, Nigerian subsidiaries of international companies are required todemonstrate that a minimum of 50% of the equipment deployed for execution of works is owned by the Nigerian subsidiary.

The Local Content Act also requires that our Nigerian subsidiary place 100% of its insurance policies with local Nigerianinsurers and that local capacity must have been exhausted before any insurance risk is placed with foreign insurers and anyoffshore placement of insurance must be with prior approval of the National Insurance Commission.

Ghana

We have formed a joint venture company in Ghana for the purpose of bidding on projects in Ghana. As an independentdrilling contractor operating in the upstream petroleum sector in Ghana, we must comply with, among others, the Petroleum(Exploration & Production) Act, 2016 (Act 919)(“the Act”); Petroleum Exploration and Production – HSE Regulations 2017 (L.I2258); Petroleum Exploration And Production - Data Management Regulations, 2017 (L.I 2257); Petroleum Exploration AndProduction (General) Regulations, 2018 (L.I 2359); Petroleum (Local Content and Local Participation) Regulations, 2013 (L.I2204); Petroleum Commission: Guidelines for the Formation of Joint Venture Companies in the Upstream Petroleum Industry ofGhana (March 2016) (“JV Guidelines”); Environmental Protection Agency Act, 1994 (Act 490); and the EnvironmentalAssessment Regulations, 1999 (L.I 1652), as each has been amended from time to time.

The Petroleum (Exploration & Production) Act, 2016 (Act 919), L.I 2204 and the JV Guidelines require us to incorporatein Ghana and to form a joint venture with an Indigenous Ghanaian Company (IGC), in which the IGC must have at least 10%shareholding, in order to provide services in Ghana. Both our incorporated company and the joint venture company must obtainpermits to operate from the Petroleum Commission.

The Petroleum (Exploration and Production) (Health and Safety and Environment) Regulations, 2017(L.I 2258), prescribesdifferent health and safety precautions that we must comply with. Furthermore, the Petroleum (Exploration and Production)(Data Management) Regulations, 2017(L.I 2257) provide that we are required to report and manage all petroleum data obtainedfrom our activities.

The Petroleum (Local Content and Local Participation) Regulations, 2013 (L.I 2204) was enacted to promote themaximization of value addition and job creation using local expertise, goods and services, businesses and financing in thepetroleum industry value chain and their retention in country. The law requires minimum thresholds for the procurement of localgoods and services where first consideration must be given to qualified Ghanaians.

Before engaging in petroleum activities, we are required to submit a Local Content Plan for approval by the Commission.The Local Content plan must include: (i) an Employment and Training Sub-Plan; (ii) a Research and Development Sub-Plan; (iii)a Technology Transfer Sub-Plan; (iv) a Legal Services Sub-Plan; and (v) a Financial Services Sub-Plan. It is an offence under L.I2204 to submit a false plan.

L.I2204 also requires that insurable risks relating to petroleum activity in the country shall be insured through anindigenous brokerage firm or where applicable, a reinsurance broker, and that we retain the services of a Ghanaian legalpractitioner or a firm of Ghanaian legal practitioners whose principal office is located in Ghana. We are further required to retainthe services of a Ghanaian financial institution or organization and maintain a bank account with an indigenous Ghanaian bank.

Environment, Health, Safety and Quality

Pacific Drilling recognizes that, as a leading offshore drilling contractor, we must be a responsible corporate steward witha strong commitment to sustainability. This commitment is fundamental to the way that we conduct business and is critical to ourfuture success.

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Our business requires us to operate in remote and sensitive marine environments. On our drillships, our employees conducttheir work in challenging and complex industrial conditions. Our corporate Health, Safety and Environment (HSE) Policyhighlights the importance of HSE to our overall success and sets expectations for all personnel to take personal responsibility forthe safety of themselves, others and the environment. Pacific Drilling is committed to creating an incident free work place for allour employees, contractors, suppliers and clients. All personnel working for, or on behalf of, Pacific Drilling are empowered tostop their own work, or the work performed by co-workers, client representatives, contractors or management, if it causes concernrelated to health, safety, security or environmental pollution. We provide comprehensive training programs to ensure our peopleunderstand our safety policies and processes and are prepared to perform their work functions safely, including focused programsfor short service personnel as they develop their familiarity with our work environment. All personnel are expected to plan workin a manner that encourages active involvement in hazard identification and risk assessment, including the implementation ofappropriate risk reduction measures. We implement programs to involve all personnel in the monitoring of our work activities andproactively report and address at-risk behaviors and substandard conditions. If any HSE events do occur, we are prepared torespond in case of emergency, and we investigate all incidents with an aim to correct errors and share learnings. We track ourHSE performance and include HSE-focused metrics in our annual company goals to drive ongoing improvement.

Just as we are committed to sustainability in our current operations, we are also committed to longer-term efforts tominimize our environmental impact. In 2019, we initiated an accredited third-party study to analyze the current carbon footprintof our drilling operations worldwide. From this study we will establish a baseline to evaluate areas for improvement and set goalsfor future initiatives to increase our carbon efficiency and minimize our environmental impact.

At Pacific Drilling, we believe that the methods we employ to achieve our results are as important as the resultsthemselves. We believe that our aim to exceed client expectations by delivering the safest, most efficient and reliable deepwaterdrilling services in the industry is best accomplished through stringent ethical requirements and the highest standards of corporategovernance. Our Global Code of Conduct is designed to support the Company's core values and allow each of us to live up tothose values as we work. We deliberately set high expectations for our corporate and personal behavior that apply to allemployees—regardless of rank—and any independent contractors, agents, or consultants who are working for or on behalf of theCompany, no matter where in the world they may be located.

Organizational Structure and Joint Venture

We have 40 subsidiaries organized under the laws of various jurisdictions. For a full listing of our subsidiaries, includingtheir jurisdictions of organization, see Exhibit 21.1 to this annual report. All subsidiaries are, indirectly or directly, wholly-ownedby Pacific Drilling, S.A., except for Pacific International Drilling West Africa Limited (“PIDWAL”), Pacific Drillship NigeriaLimited (“PDNL”), Pacific Bora Ltd. (“PBL”), Pacific Scirocco Ltd. (“PSL”) and Pacific Menergy Ghana Limited (“PMGL”).

PSL and PBL, which own the Pacific Scirocco and Pacific Bora, respectively, are owned 49.9% by our wholly-ownedsubsidiary Pacific Drilling Limited (“PDL”) and 50.1% by PDNL. PDNL is owned 0.1% by PDL and 99.9% by PIDWAL, whichis our Nigerian joint venture with Derotech Offshore Services Limited (“Derotech”). Derotech owns 51% of PIDWAL and PDL,indirectly through another wholly-owned subsidiary, owns 49% of PIDWAL. Derotech will not accrue the economic benefits ofits interest in PIDWAL unless and until it satisfies certain outstanding obligations to us and a certain pledge is cancelled byus. Likewise, PIDWAL will not accrue the economic benefits of its interest in PDNL unless and until it satisfies certainoutstanding obligations to us and a certain pledge is cancelled by us. PIDWAL and PDNL are variable interest entities for whichwe are the primary beneficiary. Accordingly, we consolidate all interests of PIDWAL and PDNL in our consolidated financialstatements.

Employees

As of December 31, 2019, we had a total of 763 employees and three subcontractor, consisting of:

675 in engineering and operations; and

91 in finance, strategy and business development, sales and marketing and other administrative functions.

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As of December 31, 2019, approximately 501 members of our workforce were located in the United States and four werelocated in Nigeria. The remainder were in various other locations around the world.

We believe that our relations with employees are good.

Research and Development

We do not undertake any significant expenditure on research and development. Additionally, we have no significantinterests in patents or licenses.

Available Information

We file annual, quarterly and current reports and other information with the SEC. The SEC maintains a website atwww.sec.gov, which contains reports, proxy and information statements and other information regarding registrants that fileelectronically with the SEC. In addition, the Company maintains a website at www.pacificdrilling.com on which our latestannual report on Form 10-K, recent quarterly reports on Form 10-Q, recent current reports on Form 8-K, any amendments tothose filings, and other filings are available as soon as reasonably practicable after we file them with, or furnish them to, the SEC,and may be accessed free of charge.

ITEM 1A. RISK FACTORS

An investment in our common shares involves a high degree of risk. You should consider carefully the following riskfactors, as well as the other information contained in this annual report, before making an investment in our common shares. Anyof the risk factors described below could significantly and negatively affect our business, financial position, results of operationsor cash flows. In addition, these risks represent important factors that can cause our actual results to differ materially from thoseanticipated in our forward-looking statements.

Risks Related to Our Business

The demand for our services depends on the level of activity in the offshore oil and gas industry, which is significantlyaffected by, among other things, volatile oil and natural gas prices. Our business has been and may continue to be materiallyand adversely affected by the significant decline in the oil and gas industry. Since January 2020, the Coronavirus outbreakand fear of further spread of the Coronavirus have caused significant disruptions in international economies andinternational financial and oil markets, including a substantial decline in the price of oil. Lack of an improvement in themarket for our offshore contract drilling services would materially and adversely affect our liquidity and ability to repay orrefinance our indebtedness.

The offshore contract drilling industry has been cyclical and volatile, and the substantial drop in oil prices beginning mid-2014 resulted in a significant decline in drilling activity. Since January 2020, the Coronavirus outbreak and fear of further spreadof the Coronavirus have caused significant disruptions in international economies and international financial and oil markets,including a substantial decline in the price of oil, with such disruptions intensifying, and Brent crude oil prices closing at $36.7 onMarch 10, 2020. In addition, during 2020, major stock market indices have experienced substantial declines, with such declinesintensifying. As of March 10, 2020 the S&P 500 Index had fallen by 11.2% since the start of 2020. The Coronavirus outbreakhas weakened demand for oil, and after the Organization of the Petroleum Exporting Countries (“OPEC”) and a group of oilproducing nations led by Russia failed on March 6, 2020 to agree on oil production cuts, Saudi Arabia announced that it wouldcut oil prices and increase production, leading to a sharp further decline in oil trading prices. The Coronavirus and responses ofoil producers to the lower demand for oil and lower oil prices are rapidly evolving situations. Sustained low or worsening oilprices are likely to have a material adverse effect on our financial condition, results of operations and cash flow.

The demand for our services depends on the level of activity in oil and natural gas exploration, development andproduction in offshore areas worldwide. Oil and natural gas prices and market expectations of potential changes in these pricesalso significantly affect the level of offshore activity and demand for drilling units.

Oil and gas prices are extremely volatile and are affected by numerous factors beyond our control, including:

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worldwide economic, financial problems and pandemic risks such as Coronavirus and corresponding declines in thedemand for oil and gas and consequently for our services, as discussed above;

the worldwide production and demand for oil and natural gas, including production and pricing actions of Saudi Arabiaand other OPEC member nations, Russia and other oil producing countries, and any geographical dislocations in supplyand demand;

the development of new technologies, alternative fuels and alternative sources of hydrocarbon production, such asincreases in onshore shale production in the United States; and

the worldwide social and political environment, including uncertainty or instability resulting from changes in politicalleadership, an escalation or additional outbreak of armed hostilities, insurrection or other crises in the Middle East,Africa, South America or other geographic areas or acts of terrorism in the United States, or elsewhere.

Declines in oil and gas prices for an extended period of time, and market expectations of continued lower oil prices, havenegatively affected and could continue to negatively affect our business, including due to the Coronavirus. Sustained periods oflow oil prices have resulted in and could continue to result in reduced exploration and drilling. These commodity price declineshave an effect on rig demand, and periods of low demand can cause excess rig supply and intensify competition in the industry,which often results in drilling units of all generations and technical specifications being idle for periods of time. As a result of thelow commodity prices, exploration and production companies have significantly reduced capital spending over the last few years,leading to a current oversupply of drilling rigs and negative pricing pressure on our market. Recently, we have seen increasedcapital spending by exploration and production companies and subsequent demand for drilling rigs, which resulted in higherutilization and improving dayrates in certain regions of the world; however, these developments may be stopped or reversed bythe evolving Coronavirus outbreak and reactions to it.

We cannot accurately predict the future level of demand for our services or future conditions in the oil and gas industry andwe cannot assure you that the market will improve. If the market for our offshore contract drilling services does not improve as aresult of oil prices, demand for contract drilling services and/or levels of exploration, development or production expenditures byoil and gas companies, our revenues could be impacted and our business, results of operations, liquidity and ability to repay orrefinance our indebtedness would be materially and adversely affected.

Failure to secure new drilling contracts for our drillships could have a material adverse effect on our financial position,results of operations or cash flows.

As of March 6, 2020, we did not have signed drilling contracts for three of our seven drillships, the Pacific Meltem, thePacific Scirocco or the Pacific Mistral. Our ability to obtain drilling contracts for our drillships will depend on market conditionsand our clients’ drilling programs. Our recent new contracts are short to medium term in length and there is uncertainty as towhether new contracts we may enter into in the future will continue to have comparatively shorter durations or require us to workat lower dayrates. We may not be able to secure contracts for our drillships on favorable terms, or at all. Our failure to securedrilling contracts for our uncontracted drillships or currently operating drillships after the expiration of existing contracts, or tosuccessfully negotiate and execute definitive contracts and satisfy other conditions precedent to finalizing any letters of intent andletters of award, could have a material adverse effect on our financial position, results of operations or cash flows.

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An oversupply of rigs competing with our rigs could continue to impact the utilization and contract prices for our rigsand could adversely affect our financial position, results of operations or cash flows.

There are several high-specification floating rigs currently available for drilling services in the industry worldwide. Theoversupply of high-specification floating rigs has led to a significant reduction in dayrates and lower utilization over the past fewyears. Recently, we have seen improvement in the utilization and associated dayrates for our service, however there is noguarantee that this trend will continue going forward, particularly given recent developments related to Coronavirus. Should thisimprovement in utilization and dayrates not continue, it could require us to enter into lower dayrate contracts or to idle or stackmore of our drillships, which could have a material adverse effect on our business prospects, financial condition, liquidity andresults of operations.

We have a small fleet and rely on a limited number of clients. The loss of any client or significant downtime on anydrillship attributable to maintenance, repairs or other factors could adversely affect our financial position, results ofoperations or cash flows.

As a result of our relatively small fleet of seven drillships, we anticipate that revenues will depend on contracts with alimited number of clients. The loss of any one of our clients or any potential clients could have a material adverse effect on ourfinancial position, results of operations or cash flows. In addition, our limited number of drillships makes us more susceptible toincremental loss in the event of downtime on any one operating unit. If any one of our drillships becomes inactive for asubstantial period of time and is not otherwise earning contractual revenues, it could have a material adverse impact on ourfinancial position, results of operations or cash flows.

Our backlog of contract drilling revenue may not be fully realized.

Our contract backlog includes firm commitments only, which are represented by signed drilling contracts. We calculateour contract backlog by multiplying the contractual dayrate by the number of days committed under the contracts (excludingoptions to extend), assuming full utilization, and also including mobilization fees, upgrade reimbursements and other revenuesources, such as the standby rate during upgrades, as stipulated in the applicable contracts. For a well-by-well contract, wecalculate the contract backlog by estimating the expected number of remaining days to drill the firm wells committed. The actualamounts of revenues earned and the actual periods during which revenues are earned may differ from the amounts and periodsshown in the contract backlog amounts we present, due to various factors, including unplanned downtime and maintenanceprojects and other factors. We may not be able to realize the full amount of our contract backlog due to events beyond our control,and accordingly the actual amount of revenues earned may be substantially lower than the backlog reported. In addition, some ofour clients may experience liquidity issues, which could worsen if commodity prices remain low or decrease further for anextended period of time. Liquidity issues could lead our clients to seek to repudiate, cancel or renegotiate contracts for variousreasons, as described below under “—Our drilling contracts may be terminated early in certain circumstances.” Our inability torealize the full amount of our contract backlog could have a material adverse effect on our financial position, results of operationsor cash flows.

We may enter into drilling contracts with less favorable terms that expose us to greater risks than we would assumeunder stronger market conditions.

The current market conditions and oversupply of drilling rigs have impacted and could continue to impact our existingdrilling contracts. We may not be able to extend contracts with our clients on favorable terms, or at all.

We may enter into drilling contracts or amendments to drilling contracts that expose us to greater risks than we wouldassume under stronger market conditions, such as greater exposure to environmental or other liabilities and more oneroustermination provisions giving the client a right to terminate without cause or upon little or no notice. Upon termination, thesecontracts may not result in a payment to us or, if a termination payment is required, it may not fully compensate us for the loss ofa contract. In addition, the early termination of a contract may result in a rig being idle for an extended period of time, whichcould adversely affect our financial position, results of operations or cash flows. In certain contracts, we may also provideadditional third-party services integrated into the standard drilling rig contract. While these additional third-party servicesgenerate incremental revenue, they also lead to related costs and associated downtime risk. We can provide no assurance that anysuch increased risk exposure will not have a material negative impact on our future operations and financial results.

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We may not continue to realize the cost-savings we have recently achieved on our idle rigs and reactivation of idle rigsmay take longer or be more costly than we anticipate.

Our operating expenses and maintenance costs depend on a variety of factors including crew costs, provisions, equipment,insurance and maintenance and repairs, many of which are beyond our control. During periods in which a rig is idle, we maydecide to “smart-stack” the rig, which means the rig is maintained with a reduced level of crew to be ready to ramp up tooperational status for redeployment. During periods in which multiple rigs are idle, we may decide to maintain the rigs in“modified smart-stack” status, which means the idle rigs are maintained as a group with one rig providing the power source forthe other rigs, which have no crew onboard.

We believe our results for the year ended December 31, 2019 reflect the cost savings we expected to achieve from oursmart-stacking and modified smart-stacking approaches. We may not continue to realize those cost-savings, and, if we arerequired to idle additional rigs, we may not achieve similar cost savings.

Reactivation of idle rigs may take longer and be more costly than anticipated and there is limited history of reactivatingidle rigs after smart-stacking. Reactivation costs can be higher than expected due to a longer ramp up time than expected, andincreased capital expenditures required to bring the rig back to operational status. Contract preparation expenses vary based onthe client requirements, the scope and length of contract preparation required and the duration of the firm contractual period.

Our drilling contracts may be terminated early in certain circumstances.

Our contracts with clients generally may be terminated at the option of the client upon payment of an early termination fee,which is typically a significant percentage of the dayrate or the standby rate under the drilling contract for a specified period oftime. During periods of depressed market conditions, we are subject to an increased risk that our clients may seek to terminate ourcontracts. Early termination payments may not fully compensate us for the loss of the contract. Accordingly, the actual amount ofrevenues earned may be substantially lower than the backlog reported. Our contracts also generally provide for termination by theclient without the payment of any termination fee under various circumstances, such as sustained unacceptable performance byus, as a result of impaired performance caused by equipment or operational issues, destruction of a drilling rig, or sustainedperiods of downtime due to force majeure events (which could include downtime related to the Coronavirus) or otherwise. Manyof these events are beyond our control. If our clients terminate some of our contracts, and we are unable to secure new contractson a timely basis and on substantially similar terms, or if payments due under our contracts are suspended for an extended periodof time or if a number of our contracts are renegotiated, our financial position, results of operations or cash flows could bematerially adversely affected.

The market value of our drillships may decrease, which could cause us to take accounting charges or to incur losses ifwe decide to sell them following a decline in their values.

If the offshore contract drilling industry does not continue to improve, the fair market values of our drillships may declinefurther. The fair market values of the drillships we currently own or may acquire in the future may increase or decrease dependingon a number of factors, many of which are beyond our control, including the general economic and market conditions affectingthe oil and gas industry and the possible corresponding adverse effect on the level of offshore drilling activity.

Any such deterioration in the market values of our drillships could require us to record an impairment charge in ourfinancial statements, which could adversely affect our results of operations. We may not be able to sell our drillships at prices wedeem acceptable or at all. If we sell any of our drillships when prices for such drillships have fallen, the sale may be at less thansuch drillship’s carrying amount on our financial statements, resulting in a loss.

Any such reduction in the fair market value of our fleet could also adversely affect our flexibility under our new $50.0million revolving credit facility (defined below under “Risks Related to our Indebtedness”), due to additional limitations that maybe imposed under the credit agreement if our aggregate fleet value were to decrease below $500 million.

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Our business and the industry in which we operate involve numerous operating hazards which, if they occur, may havea material adverse effect on our business.

Our operations are subject to the usual hazards inherent in the drilling and operation of oil and natural gas wells, such asblowouts, reservoir damage, loss of production, loss of well control, cratering, fires, explosions, spills of hazardous materials andpollution. The occurrence of any of these events could result in the suspension of our drilling or production operations, claims bythe operator, severe damage to or destruction of the property and equipment involved, injury or death to drilling unit personneland environmental and natural resources damages. Our operations could be suspended as a result of these hazards, whether thefault is ours or that of a third party. In certain circumstances, governmental authorities may suspend drilling operations as a resultof these hazards, and our clients may cancel or terminate their contracts. We may also be subject to personal injury and otherclaims by drilling unit personnel as a result of our drilling operations.

We may experience downtime as a result of repairs or maintenance, human error, defective or failed equipment ordelays waiting for replacement parts.

Our operations may be suspended because of machinery breakdowns, human error, abnormal operating conditions, failureof subcontractors to perform or supply goods or services, delays on replacement parts or personnel shortages, which may cause usto experience operational downtime and could have an adverse effect on our results of operations.

In addition, we rely on certain third parties to provide supplies and services necessary for our offshore drilling operations,including, but not limited to, suppliers of drilling equipment and catering and machinery suppliers. Mergers in our industry havereduced the number of available suppliers, resulting in fewer alternatives for sourcing key supplies. Such consolidation may resultin a shortage of supplies and services, potentially inhibiting the ability of suppliers to deliver on time, or at all. These delays mayhave a material adverse effect on our results of operations and result in downtime, and delays in the repair and maintenance of ourdrillships.

Our business is subject to numerous governmental laws and regulations, including environmental requirements, thatmay impose significant costs and liabilities on us.

Our operations are subject to federal, state, local, foreign and international laws and regulations that may, among otherthings, require us to obtain and maintain specific permits or other governmental approvals to control or limit the discharge of oiland other contaminants into the environment or otherwise relate to environmental protection, and which impose stringentstandards on our activities that are protective of the environment. For example, any operations and activities that we conduct inthe United States and its territorial waters are subject to numerous environmental laws, including the Oil Pollution Act of 1990,the Outer Continental Shelf Lands Act, the Comprehensive Environmental Response, Compensation, and Liability Act and theInternational Convention for the Prevention of Pollution from Ships (each, as amended from time to time), and analogous statelaws. Failure to comply with these laws, regulations and treaties may result in the assessment of administrative, civil and criminalpenalties, the imposition of remedial obligations, the denial or revocation of permits or other authorizations and the issuance ofinjunctions that may limit or prohibit some or all of our operations. Laws and regulations protecting the environment havebecome more stringent in recent years and may in certain circumstances impose strict liability, rendering us liable forenvironmental and natural resource damages caused by others or for acts that were in compliance with all applicable laws at thetime the acts were performed. The application of these laws and regulations, the modification of existing laws or regulations orthe adoption of new laws or regulations that curtail exploratory or developmental drilling for oil and natural gas could materiallylimit future contract drilling opportunities or materially increase our costs, including our capital expenditures.

The imposition of stringent restrictions or prohibitions on offshore drilling by a governing body may have a materialadverse effect on our business.

Prior catastrophic events that resulted in the release of oil or other contaminants offshore have heightened environmentaland regulatory concerns about the oil and gas industry. In the past, the U.S. federal government, acting through the U.S.Department of the Interior and its implementing agencies that have since evolved into the present day Bureau of Ocean EnergyManagement and Bureau of Safety and Environmental Enforcement, have issued various rules, Notices to Lessees and Operatorsand temporary drilling moratoria that interrupted operations and resulted in additional stringent environmental and safetyregulations or requirements applicable to oil and gas exploration, development and production operators in the U.S. Gulf ofMexico, some of whom are our clients. Any such regulatory initiatives may

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serve to effectively slow down the pace of drilling and production operations in the U.S. Gulf of Mexico due to adjustments inoperating procedures and certification requirements as well as increased lead times to obtain exploration and production planreviews. Also, our clients may require changes to our operations or procedures in order for our clients to meet their ownadditional compliance requirements, which may increase our costs.

Our global operations may be adversely affected by political and economic circumstances in the countries in which weoperate, including as a result of violations of the U.S. Foreign Corrupt Practices Act and similar foreign anti-bribery laws. Asignificant portion of our business has been, and may in the future be, conducted in West Africa, which exposes us to risks ofwar, local economic instabilities, corruption, political disruption and civil disturbance in that region.

We operate in oil and natural gas producing areas worldwide. We are subject to a number of risks inherent in any businessthat operates globally, including: political, social and economic instability; war; piracy and acts of terrorism; corruption; potentialseizure, expropriation or nationalization of assets; increased operating costs; wage and price controls; imposition or changes ininterpretation and enforcement of local content laws; and other forms of government regulation and economic conditions that arebeyond our control.

The United States Foreign Corrupt Practices Act (the “FCPA”), the UK Bribery Act 2010, the Nigerian Corrupt Practicesand Other Related Offenses Act of 2000, Brazil’s Anti-Corruption Law of 2014 and similar worldwide anti-bribery laws generallyprohibit companies and their intermediaries from making, offering or authorizing improper payments to government officials forthe purpose of obtaining or retaining business. We may operate in countries where strict compliance with anti-bribery lawsconflicts with local customs and practices. Violations of, or any non-compliance with, current and future anti-bribery laws (eitherdue to acts or inadvertence by us or our agents) may result in criminal and civil sanctions and could subject us to other liabilitiesin the U.S. and elsewhere.

In order to effectively compete in some foreign jurisdictions, we utilize local agents and/or establish joint ventures withlocal operators or strategic partners. Our agents often interact with government officials on our behalf. Even though some of ouragents and partners may not themselves be subject to the FCPA or other anti-bribery laws to which we may be subject, if ouragents or partners make improper payments to government officials in connection with engagements or partnerships with us, wecould be investigated and potentially found liable for violation of such anti-bribery laws and could incur civil and criminalpenalties and other sanctions, which could have a material adverse effect on our financial position, results of operations or cashflows.

These risks may be higher in developing countries such as Nigeria, Ghana and Mauritania. Countries in West Africa haveexperienced political and economic instability in the past and such instability may continue in the future. Disruptions in ouroperations may occur in the future, and losses caused by these disruptions may not be covered by insurance.

We may be required to make significant capital expenditures to maintain our competitiveness and to comply withapplicable laws, regulations and standards of governmental authorities and organizations.

Changes in offshore drilling technology, client requirements for new or upgraded equipment and competition within ourindustry may require us to make significant capital expenditures in order to maintain our competitiveness. Our competitors mayhave greater financial and other resources than we have, which may enable them to make technological improvements to existingequipment or replace equipment that becomes obsolete. In addition, changes in governmental regulations, safety or otherequipment standards may require us to make additional unforeseen capital expenditures.

If we are unable to fund these capital expenditures with cash flow from operations, we may either incur additionalborrowings or raise capital through the sale of debt or equity securities. Our ability to access the capital markets may be limitedby our financial position at the time, changes in laws and regulations and by adverse market conditions. In addition, our ability toraise additional capital is limited by the terms of our debt agreements. Our failure to obtain the funds for necessary future capitalexpenditures could limit our ability to continue to operate some of our vessels and could have a material adverse effect on ourbusiness and on our financial position, results of operations or cash flows.

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There may be limits on our ability to mobilize drillships between geographical areas and the time spent on and costs ofsuch mobilizations may materially and adversely affect our business.

The offshore contract drilling market is generally a global market, as drilling units may be mobilized from one area toanother. However, the ability to mobilize drilling units can be impacted by several factors including governmental regulation andcustoms practices, the significant costs to move a drilling unit, weather, political instability, civil unrest, military actions and thetechnical capability of the drilling units to operate in various environments. Additionally, while a drillship is being mobilizedfrom one geographic market to another, we may not be paid by the client for the time that the drillship is out of service. Also, wemay mobilize a drillship to another geographic market without a client contract, which may result in costs that are not reimbursedby future clients.

The loss of key personnel could negatively impact our business.

Our future operational performance depends to a significant degree upon the continued service of key members of ourmanagement as well as marketing, sales and operations personnel. The loss of one or more of our key personnel could have amaterial adverse effect on our business. We believe our future success will also depend in large part upon our ability to attract,retain and further motivate highly skilled management, marketing, sales and operations personnel. We may experience intensecompetition for personnel, and we may not be able to retain key employees or be successful in attracting, assimilating andretaining personnel in the future. In addition, our ability to attract, recruit and retain key personnel may be negatively impacted byour emergence from bankruptcy and the uncertainties currently facing the industry in which we operate.

Any significant cyber-attack or interruption in network security could materially and adversely disrupt and affect ouroperations and business.

We have become increasingly dependent upon digital technologies to conduct and support our offshore operations, and werely on our operational and financial computer systems to conduct almost all aspects of our business. Threats to our informationtechnology systems associated with cybersecurity risks and incidents or attacks continue to grow. Any failure of our computersystems, or those of our clients, vendors or others with whom we do business, could materially disrupt our operations and couldresult in the corruption of data or unauthorized release of proprietary or confidential data concerning the Company, its businessoperations and activities, clients or employees. Computers and other digital technologies could become impaired or unavailabledue to a variety of causes, including, among others, theft, cyber-attack, design defects, terrorist attacks, utility outages, humanerror or complications encountered as existing systems are maintained, repaired, replaced or upgraded. Any cyber-attack orinterruption could have a material adverse effect on our financial position, results of operations or cash flows, and our reputation.

Our insurance may not be adequate in the event of a catastrophic loss.

Damage to the environment could result from our operations, particularly through oil spillage or extensive uncontrolledfires. We may be subject to property, environmental, natural resource and other damage claims by oil and gas companies, otherbusinesses operating offshore and in coastal areas, environmental conservation groups, governmental entities and other thirdparties. Insurance policies and contractual rights to indemnity may not adequately cover losses, and we may not have insurancecoverage or rights to indemnity for all risks. In particular, pollution and environmental risks generally are not fully insurable.

Losses caused by the occurrence of a significant event against which we are not fully insured or caused by a number oflesser events against which we are insured but are subject to substantial deductibles, aggregate limits and/or self-insured amounts,could materially increase our costs and impair our profitability and financial position. Our policy limits for property, casualty,liability and business interruption insurance, including coverage for severe weather, terrorist acts, war, civil disturbances,pollution or environmental damage, may not be adequate should a catastrophic event occur related to our property, plant orequipment, or our insurers may not have adequate financial resources to sufficiently or fully pay related claims or damages. Whenany of our coverage expires, adequate replacement coverage may not be available, offered at reasonable prices or offered byinsurers with sufficient financial resources.

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Our clients may be unable or unwilling to indemnify us.

Consistent with standard industry practice, our clients generally assume, and indemnify us against, well control andsubsurface risks pursuant to our dayrate contracts. These risks are associated with the loss of control of a well, such as blowout orcratering, the cost to regain control or re-drill the well and associated pollution. However, the indemnification provisions in ourcontracts may not cover all damages, claims or losses to us or third parties, and our clients may not have sufficient resources tocover their indemnification obligations or may contest their obligation to indemnify us. The indemnification provisions of ourcontracts may be subject to differing interpretations and the laws or courts of certain jurisdictions may enforce such provisionswhile other laws or courts may find them unenforceable, void or limited by public policy considerations, including when thecause of the underlying loss or damage is our gross negligence or willful misconduct, when punitive damages are attributable tous or when fines or penalties are imposed directly against us. Also, in the interest of maintaining good relations with our keyclients, we may choose not to assert certain indemnification claims. In addition, in certain market conditions, we may be unable tonegotiate contracts containing indemnity provisions that obligate our clients to indemnify us for such damages and risks.

We may suffer losses as a result of foreign currency fluctuations.

A significant portion of the contract revenues of our foreign operations will be paid in U.S. dollars; however, somepayments are made in foreign currencies. As a result, we are exposed to currency fluctuations and exchange rate risks as a resultof our foreign operations. To minimize the financial impact of these risks when we are paid in foreign currency, we attempt tomatch the currency of operating costs with the currency of contract revenue. If we are unable to substantially match the timingand amounts of these payments, any increase in the value of the U.S. dollar in relation to the value of applicable foreigncurrencies could adversely affect our operating results.

Public health threats, including the evolving risks presented by the Coronavirus, could have a material adverse effect onour financial position, results of operations or cash flows.

Public health threats, such as Ebola, the H1N1 flu virus, the Zika virus, Severe Acute Respiratory Syndrome, and morerecently Coronavirus and other highly communicable diseases, outbreaks of which have occurred in various parts of the world inwhich we operate, could adversely impact our operations, the operations of our clients and the global economy, including theworldwide demand for oil and natural gas and the level of demand for our services. Since January 2020, the Coronavirus outbreakand fear of further spread of the Coronavirus have caused significant disruption in international economies and internationalfinancial and oil markets. For additional information, see the first Risk Factor under “Risks Related to our Business” above.

The Coronavirus outbreak has led to quarantines, cancellation of events and travel, business and school shutdowns, supplychain interruptions and overall economic and financial market instability. Further spread of the Coronavirus could causeadditional quarantines, reduction in business activity, labor shortages and other operational disruptions. Any quarantine ofpersonnel or inability to access our offices or rigs could adversely affect our operations. Travel restrictions or operationalproblems in any part of the world in which we operate, or any reduction in the demand for drilling services caused by publichealth threats, may adversely affect our financial position, results of operations or cash flows.

We may be adversely affected by national, state and foreign or international laws or regulatory initiatives focusing ongreenhouse gas (“GHG”) reduction.

Due to concern over the risk of climate change, there has been a broad range of proposed or promulgated initiativesregarding GHG reduction. Regulatory frameworks adopted, or being considered for adoption, to reduce GHG emissions includecap and trade regimes, carbon taxes, restrictive permitting, increased efficiency standards, and incentives or mandates forrenewable energy. Although it is not possible at this time to predict how new legislation or regulations that may be adopted toaddress GHG emissions in the United States would impact our business, any such future laws and regulations that requirereporting of GHGs or otherwise limit emissions of GHGs from oil and gas exploration and production operators, some of whomare our clients, could require such operators to incur increased costs, lengthen project implementation times, and adversely affectdemand for the oil and natural gas that they produce, which could decrease demand for our services. In addition, some expertsbelieve climate change could increase the frequency and severity of extreme weather conditions. We are currently unable topredict the manner or extent of any such potential GHG reduction or climate change effects.

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We are engaged in legal proceedings relating to a construction contract for the drillship known as the Pacific Zonda.We may be involved in other litigation, arbitration or other legal proceedings from time to time, the outcomes of which may beunpredictable and may have an adverse impact on our business and financial condition, which may be material.

Two of our subsidiaries, the Zonda Debtors, are involved in arbitration proceedings relating to the drillship known as thePacific Zonda, as described elsewhere in this report (the “Zonda Arbitration”). On January 15, 2020, the arbitration Tribunalawarded SHI approximately $320 million with respect to its claims against the Zonda Debtors. On February 11, 2020, the ZondaDebtors filed an application with the High Court in London seeking permission to appeal the Tribunal’s award. There can be noassurance that the Zonda Debtors will be granted permission to appeal, or if such permission is granted, that the appeal will besuccessful. If the Zonda Debtors are unsuccessful in the appeal, we expect the Zonda Debtors will be liquidated in accordancewith the terms of the Zonda Plan.

As a result of the Tribunal’s decision, we recognized a loss of $220.2 million during the year ended December 31, 2019 primarily related to the elimination of the receivable on our balance sheet related to the arbitration. For additional information,see Item 3 – Legal Proceedings, and Note 16 to our consolidated financial statements.

On December 20, 2018, after the Company and its subsidiaries other than the Zonda Debtors had completed the Plan ofReorganization and emerged from bankruptcy, SHI filed with the Bankruptcy Court an untimely secured contingency claimagainst Pacific Drilling S.A., our parent company, in the amount of approximately $387.4 million. We have filed an objection tothe claim on the basis that the claim should be disallowed due to its being filed long after the May 1, 2018 claims bar dateestablished by order of the Bankruptcy Court. In addition, we believe SHI has no basis for a claim against Pacific Drilling S.A.because, among other things, Pacific Drilling S.A. was not a party to the Construction Contract nor the guaranty.

Our business involves numerous operating hazards and risks, and we operate in many different international jurisdictions.In the normal course of our business we may become involved in disputes and legal or arbitration proceedings, which may haveunpredictable outcomes and which may be material.

Risks Related to Our Emergence from Bankruptcy

We experienced a change of control in connection with our emergence from bankruptcy and our new board of directorsmay change our business strategy and has changed and may continue to change key personnel.

As a result of the issuances of common shares, change in the composition of our board of directors, amendments to ourArticles and execution and delivery of the Governance Agreement discussed elsewhere in this annual report, a change in controlof the Company occurred on the Plan Effective Date in connection with the Company’s emergence from the Chapter 11bankruptcy proceedings. Pursuant to the Governance Agreement, until the “Nomination Termination Time” (as defined therein),certain of our shareholders have the right to appoint our Class B directors, constituting three of our seven directors. As of the PlanEffective Date and March 6, 2020, only a few of our shareholders, if they were to act in concert, could control the election of ourremaining four Class A directors.

Pursuant to our Articles and the Governance Agreement, prior to the Nomination Termination Time, any two Class Bdirectors acting in their capacities as such (a “Class B Majority”) have broad authority to act on the Company’s behalf inconnection with any Acquisition Proposal or Acquisition (as such terms are defined in the Articles), including but not limited tothe authority to solicit prospective Acquisition Proposals, to retain, at the Company’s expense such consultants, legal counsel andother advisors as a Class B Majority may from time to time deem appropriate to assist the Class B directors in the performance oftheir duties with respect to Acquisition Proposals, and subject to specified conditions, to execute and deliver on behalf of theCompany definitive documentation providing for the consummation of an Acquisition. For additional information, see Item 13 –“Certain Relationships and Related Transactions, and Director Independence.”

Our post-emergence board of directors may change our business strategy, including but not limited to changing ouroperating strategy or soliciting Acquisition Proposals. On the Plan Effective Date, our new board of directors appointed a newchief executive officer and has made and may make other changes in key personnel. These or potential future changes may not besuccessful and may be disruptive to our business and relationships with clients, vendors, suppliers, service providers, other thirdparties and employees.

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We remain subject to risks and uncertainties associated with our emergence from bankruptcy.

Notwithstanding our emergence from bankruptcy on November 19, 2018, our operations and liquidity remain subject to anumber of risks and uncertainties related to the fact that we operated under Bankruptcy Court protection for approximately oneyear. These risks and uncertainties include the following:

our ability to maintain our relationships and contracts with our clients, vendors, suppliers, service providers and otherthird parties;

our ability to execute our business plan or make effective changes to our business plan in response to changes in marketconditions or changes in strategy implemented by our post-emergence board of directors or other factors;

our ability to attract, motivate and retain key employees; and

our ability to generate sufficient cash flow to operate our business and service our debt, and to comply with terms andconditions of the indentures governing our First Lien Notes and Second Lien PIK Notes.

Our operating results may be adversely affected by the possible reluctance of third parties to do business with a companythat recently emerged from Chapter 11 bankruptcy proceedings. For example, third parties could require that we provideadditional financial assurances, which could be costly. In addition, failure to retain or attract and maintain key personnel orerosion of employee morale could have a material adverse effect on our ability to meet client expectations, obtain new contractsand effectively operate our business, thereby adversely affecting our results of operations and financial condition. We cannotaccurately predict or quantify the ultimate impact that our emergence from bankruptcy may have on our business, results ofoperations and financial condition.

The Plan of Reorganization was based in large part upon assumptions and analyses developed by us. If theseassumptions and analyses prove to be incorrect, our results of operations, liquidity and financial condition may be materiallyand adversely affected.

As a part of the Plan of Reorganization process, we were required to prepare projected financial information todemonstrate to the Bankruptcy Court the feasibility of the Plan of Reorganization and our ability to continue operations uponemergence from bankruptcy. The Plan of Reorganization, and these projections, were reflective of assumptions and analysesbased on our experience and perception of historical trends, prevailing conditions and expected future developments, as well asother factors that we considered at the time to be appropriate under the circumstances. Whether actual future results anddevelopments will be consistent with our expectations and assumptions reflected in the Plan of Reorganization depends on anumber of factors, including but not limited to: (i) our ability to maintain our clients’ confidence in our viability as a continuingentity and to attract and retain sufficient business from them, (ii) our ability to retain or attract and retain key employees, (iii) theoverall strength and stability of general economic conditions of the financial and oil and gas industries, both in the U.S. and inglobal markets and (iv) our ability to make required interest payments on and ultimately pay or refinance our debt. Any of thesefactors could materially adversely affect the success of our reorganized business.

In addition, the Plan of Reorganization was developed in reliance upon financial projections, and these projections are notpart of this annual report, have not been and are not expected to be updated and should not be relied upon in connection with thepurchase of our common shares. Financial forecasts are necessarily speculative, and it is likely that one or more of theassumptions and estimates that are the basis of these financial forecasts will not be accurate.

In connection with our emergence from bankruptcy, our historical financial information may not be indicative of ourfuture financial performance.

In connection with our emergence from bankruptcy, we have adopted Fresh Start Accounting in accordance withprovisions of ASC 852, Reorganizations, which resulted in the Company becoming a new entity for financial reporting purposeson November 19, 2018, the effective date of emergence. Fresh Start Accounting results in the Company’s assets and liabilitiesbeing recorded at fair value as of the Plan Effective Date. As a result of the adoption of Fresh Start Accounting, the Company’sconsolidated financial statements subsequent to November 19, 2018 will not be comparable to its consolidated financialstatements on and prior to that date. The lack of comparable historical information may discourage investors from purchasing ourcommon shares.

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Our pre-emergence net operating losses may be significantly reduced and/or limited under Luxembourg income taxlaw.

From a Luxembourg Generally Accepted Accounting Principles (the “Lux GAAP”) standpoint, debt forgiveness resultingfrom the Chapter 11 bankruptcy proceedings would lead to an increase of the net asset value of the Luxembourg debtorbenefitting from the forgiveness. Such an increase would correspond to the amount of the debt that is forgiven for noconsideration. The increase of the net asset value would also be reflected in the Lux GAAP profit and loss through recognition ofcancellation of debt income (“COD Income”) corresponding to the amount of the debt forgiven for no consideration. Based on theprinciple of “accrochement du bilan fiscal au bilan commercial” (translated as “tax follows book”) provided in article 40 of theLuxembourg Income Tax Law (the “Luxembourg ITL”) (which is considered as the general rule), any COD Income realized uponthe cancellation of a debt from a Lux GAAP standpoint should also increase the net asset value of the debtor for Luxembourg taxpurposes.

Article 52 of the Luxembourg ITL relates specifically to gains derived by a Luxembourg corporate debtor upon total orpartial debt forgiveness occurring in the context of a financial reorganization aimed at the financial recovery of the debtor (i.e.,“gain d’assainissement” or “reorganization profit”). This article provides that the increase in the net asset value of a Luxembourgcorporate debtor resulting from a gain d’assainissement / reorganization profit is eliminated from the positive taxable result of theLuxembourg debtor only to the extent of that result. In other words, the tax exemption applies only to the portion of net gaind’assainissement / reorganization profit exceeding existing tax losses available during the year of the debt forgiveness.

Considering the above, we may benefit from an exemption of COD Income pursuant to article 52 of the Luxembourg ITLupon cancellation of our debts. Based on article 52 of the Luxembourg ITL and article 114(2)1 of the Luxembourg ITL, CODIncome derived by us upon cancellation of our debts should first be offset with existing tax losses carry forwards and be exemptbased on article 52 of the Luxembourg ITL for the remainder.

Luxembourg tax law allows tax losses to offset taxable profits unless it is determined that a change of shareholders resultsin tax abuse. Luxembourg jurisprudence uses a “facts and circumstances” analysis that indicates an abuse of law could be foundwhere the loss-generating activity is discontinued following a change in ownership and a new profitable business is begun.However, a finding of valid commercial reasons reflecting the economic reality should be sufficient to avoid the perception ofabuse of law. Also, after a corporate restructuring, utilizing accumulated tax losses within the same group should not be suspect ifthere are economic reasons beyond using the losses. Finally, the mere conversion of our legal form may, in certain situations, notprevent our use of the losses to offset future profits. Similarly, a mere change in shareholders should not result in loss of thedeductibility of the tax losses. However, a change in shareholders together with a change of activity (such as disposition of theloss generating assets and the beginning of a completely new activity by the loss company) would significantly increase the riskof characterization of the transaction as tax abusive and jeopardize the deductibility of the tax losses.

There is uncertainty regarding whether courts outside the United States will recognize the Confirmation Order.

Our parent company, Pacific Drilling S.A., is incorporated pursuant to, and the rights attaching to its shares are governedby, the laws of Luxembourg. Additionally, many of our subsidiaries which were Debtors under the Plan of Reorganization areincorporated under, and their interests are governed by, the laws of foreign jurisdictions other than the United States. Although weintend to make commercially reasonable efforts to ensure that the Confirmation Order and the steps we took to implement therestructuring thereunder are effective in all applicable jurisdictions, it is possible that if a creditor or stakeholder were to challengethe restructuring, a foreign court may refuse to recognize the effect of the Confirmation Order.

Risks Related to Our Indebtedness

We have substantial indebtedness and may incur additional debt.

As of December 31, 2019, we had total long-term debt of $1.1 billion. In February 2020, we entered into a $50.0 millionfirst lien superpriority revolving credit facility (the “Revolving Credit Facility”), on which no amounts were drawn as of March 6,2020. Our substantial debt could have important consequences to our debt and equity holders, including, but not limited to:

increasing our vulnerability to general adverse economic and industry conditions;

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requiring the dedication of a substantial portion of our cash flow from operations to the payment of principal andinterest on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capitalexpenditures, business development or other general corporate requirements;

limiting our ability to obtain additional financing to fund future working capital, capital expenditures, businessdevelopment or other general corporate requirements;

increasing the cost of borrowing under any future credit facilities;

making it more difficult to obtain surety bonds, letters of credit, bank guarantees or other financing, particularly duringperiods in which capital markets are weak;

limiting our flexibility in planning for, or reacting to, changes in our business and in the oil and gas industry; and

placing us at a competitive disadvantage compared to less leveraged competitors.

Our ability to service our debt obligations and fund any working capital needs and capital expenditures will depend, amongother things, on our future operating results, which could be affected by market, economic, financial, competitive and otherfactors beyond our control. We may not be able to generate sufficient cash flows or obtain other capital resources to service ourdebt obligations. If our cash flows and capital resources are insufficient to fund our debt service obligations and other cashrequirements, we may be forced to reduce or eliminate our share repurchase program, sell assets, seek additional capital or seek torestructure or refinance our indebtedness. These alternative measures may not be successful and may not permit us to meet ourdebt service obligations and fund other cash requirements.

The indentures governing our First Lien Notes and Second Lien PIK Notes, and the terms of our Revolving CreditFacility, contain restrictive covenants that may limit our ability to pursue business opportunities, change our capital structureor respond to changes in market conditions.

The indentures governing our First Lien Notes and Second Lien PIK Notes, and the terms of our Revolving Credit Facility,contain restrictive covenants that may limit our ability to pursue business opportunities, change our capital structure or respond tochanges in market conditions. For example, the indentures and the Revolving Credit Facility contain covenants that limit ourability, and the ability of our subsidiaries, to:

incur or guarantee additional indebtedness and issue preferred stock;

pay dividends on or redeem or repurchase capital stock, make certain investments or make certain payments on or withrespect to subordinated and junior debt;

create or incur certain liens;

impose restrictions on the ability of restricted subsidiaries to pay dividends;

merge or consolidate with other entities;

enter into certain transactions with affiliates;

impair our ability to grant security interests in the collateral securing our debt; and

engage in certain lines of business.

These limitations may adversely affect our ability to take actions that we would choose to take in the absence of suchrestrictions, such as pursue certain business opportunities, obtain certain financing, pay dividends, redeem shares, sell assets orfund capital expenditures, and may adversely affect our ability to react to changes in market or competitive conditions orwithstand a downturn in our business.

We and our subsidiaries may incur additional debt.

In February 2020, we entered into the $50.0 million first lien superpriority Revolving Credit Facility. We and oursubsidiaries may incur additional debt in the future, subject to the limitations in the indentures governing our First Lien Notes andSecond Lien PIK Notes and the terms of our Revolving Credit Facility. Our other permitted indebtedness capacity includes theability to incur up to $50.0 million with respect to a capital lease facility or to incur up to $50.0

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million through the use of our general indebtedness basket, which may be secured. If we incur additional debt, the risks related toour capital structure and outstanding indebtedness could be exacerbated, and we may not be able to meet all of our debtobligations.

We cannot assure you that we will ever pay cash interest on the Second Lien PIK Notes, and the payment of PIKinterest will increase our indebtedness and the risks associated therewith.

The indenture governing the Second Lien PIK Notes provides that we are permitted to pay all or a portion of the interest onsuch notes in cash in lieu of payment in-kind (“PIK”) interest. However, our ability to pay cash interest on the Second Lien PIKNotes will depend on available restricted payment capacity under the indenture governing the First Lien Notes and the terms ofthe Revolving Credit Facility. We cannot assure you that we will have available capacity or, if we do have available capacity, thatwe will use that capacity to pay cash interest on the Second Lien PIK Notes. As a result, holders of the Second Lien PIK Notescould potentially receive no cash interest on such notes. In addition, the payment of PIK interest will increase our indebtedness,related interest obligations, and the risks associated therewith. The original principal amount of the Second Lien PIK Notes was$273.6 million, and we project that if no cash interest is paid on the Second Lien PIK Notes throughout their term, the totalamount we would owe the holders of such notes upon maturity on the notes on April 1, 2024 is approximately $520.2 million. Foradditional information regarding our Second Lien PIK Notes, see Note 7 to our consolidated financial statements.

Default under the terms of the indentures governing our First Lien Notes and Second Lien PIK Notes or the RevolvingCredit Facility could result in an acceleration of our indebtedness.

If we are unable to make required payments of principal and interest on our debt or to comply with the other covenants andrestrictions in the indentures governing our First Lien Notes and Second Lien PIK Notes, the Revolving Credit Facility, or otherdebt agreements we may enter into in the future, there could be a default under the terms of these debt instruments. Our ability tomake such payments and to comply with other covenants and restrictions may be affected by events beyond our control. As aresult, we cannot assure you that we will be able to make such payments and to comply with the other covenants and restrictions.

If an event of default under the indentures governing our Notes or our Revolving Credit Facility occurs, the holders of theNotes and the lenders under the Revolving Credit Facility may accelerate the Notes and loan and declare all amounts outstandingdue and payable. Borrowings under other future debt instruments that contain cross-acceleration or cross-default provisions mayalso be accelerated and become due and payable. If any of these events occurs, our assets might not be sufficient to repay in fullall of our outstanding indebtedness and we may be unable to find alternative financing. Even if we could obtain alternativefinancing, it might not be on terms that are favorable or acceptable to us.

We are a holding company and will depend on cash flow from our operating subsidiaries to meet required payments onour debt.

We conduct our operations through, and many of our assets are owned by, our subsidiaries. Our operating income and cashflow are generated by our subsidiaries. As a result, the principal source of funds necessary to meet our obligations in respect ofour indebtedness will be cash we obtain from our subsidiaries. Contractual provisions or laws, as well as our subsidiaries’financial condition, operating requirements and debt requirements, may limit our ability to obtain cash from our subsidiaries tomeet our debt service obligations. Our inability to obtain cash from our subsidiaries may mean that, even though we may havesufficient resources on a consolidated basis to meet our obligations, we may not be able to pay our debts or meet our otherobligations. In addition, applicable tax laws may subject such subsidiaries’ distributions to us to further taxation.

We may not be able to satisfy our obligations to holders of our First Lien Notes and Second Lien PIK Notes and thelenders under our Revolving Credit Facility upon a change of control.

The indentures governing the Notes contain provisions relating to certain events constituting a “change of control” (asdefined therein). Upon a change of control, holders of the Notes will have the right to require us to repurchase the Notes at 101%of their principal amount, plus accrued and unpaid interest. Our ability to repurchase Notes upon a change of control would belimited by our access to funds at the time of the repurchase and the terms of our then-outstanding debt agreements, which couldrestrict or prohibit such a repurchase. A change of control results in a

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default under our Revolving Credit Facility, giving the lenders the ability to accelerate payment of any amounts borrowed underthe facility. A change of control may also result in a default under other future debt instruments, giving the holders of suchobligations the right to accelerate payment thereunder. We cannot assure you that we will have sufficient funds available upon achange of control to make any required repurchases of Notes, pay amounts borrowed at the time under our Revolving CreditFacility or to make any other required repayments of debt.

Risks Related to Our Common Shares

Our common shares were relisted and began trading on the New York Stock Exchange (the “NYSE”) on December 18,2018. We may not be able to continue to meet the NYSE’s continued listing criteria. Investors may be unable to sell commonshares at or above the price they bought them for.

Our common shares were relisted and began trading on the NYSE on December 18, 2018. We believe that as of March 6,2020, approximately 90.3% of our outstanding common shares were controlled by eight principal shareholders. There can be noassurance that any of our existing shareholders will sell any or all of their common shares. There may be a lack of supply of, ordemand for, our common shares on the NYSE, and in such case, the trading prices of our common shares may be particularlyvolatile, and a holder of common shares may not be able to sell the number of shares such holder wants to sell at the desired price.

The closing price of our common shares fell below $1.00 per share in recent trading. The continued listing standards of theNYSE require us, at a minimum, to maintain an average closing price per share of our common shares of at least $1.00 per shareover a period of 30 consecutive trading days. Generally speaking, the NYSE provides a six-month cure period for thisstandard. In addition, we must maintain an average global market capitalization of not less than $15.0 million over a consecutive30 trading-day period, and failure to do so would result in immediate delisting. The NYSE also imposes immediate delisting forshares that trade at an “abnormally low share price,” typically considered $0.15 per share or less.

The delisting of our common shares could result in a less liquid market available for existing and potential shareholders totrade the common shares and could further depress the trading price of the common shares. The delisting of our common sharesfrom the NYSE could also result in other adverse consequences, including lower demand for our shares, adverse publicity and areduced interest in our Company from investors, analysts and other market participants. In addition, the delisting could impairour ability to raise additional capital through equity or debt financing and our ability to attract and retain employees by means ofequity compensation. We cannot assure you that we will meet the NYSE’s continued listing standards in the future

Sales of our common shares by existing shareholders, or the perception that these sales may occur, may depress thetrading price of our common shares or cause the trading price of our common shares to decline.

Pursuant to our obligations under the Registration Rights Agreement that we entered into as of the Plan Effective Date withcertain of our shareholders, we filed a registration statement with the Securities and Exchange Commission (the “SEC”) toregister for resale certain of the shares held by those shareholders, and are generally required to maintain the registrationstatement for use by those shareholders, subject to exceptions and limitations in the Registration Rights Agreement. Up toapproximately 54.8 million of our common shares may be sold pursuant to the registration statement by the selling shareholders,which represents approximately 73% of our issued and outstanding common shares as of March 6, 2020. We cannot predict thetiming or amount of future sales of our common shares by selling shareholders, but such sales, or the perception that such salescould occur, may adversely affect prevailing trading prices for our common shares. In connection with the Company no longerqualifying to report under the U.S. federal securities laws as a foreign private issuer effective January 1, 2020, promptly afterfiling this annual report on Form 10-K, the Company intends to file a post-effective amendment to the Form F-3 on Form S-3.

We may pay little or no dividends on our common shares.

We do not expect to pay dividends on our common shares for the foreseeable future. The payment of any future dividendsto our shareholders will depend on decisions that will be made by our board of directors and will depend on then-existingconditions, including our operating results, financial condition, business prospects, Luxembourg corporate law restrictions, andrestrictions under the indentures governing our Notes, our Revolving Credit Facility and under any future debt agreements orcontracts.

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We cannot guarantee that our share repurchase program will be fully implemented or that it will enhance long-termshareholder value. Repurchases of our common shares could also increase the volatility of the trading price of our commonshares and will diminish our cash reserves.

On February 22, 2019, our shareholders approved a share repurchase program for a total expenditure of up to $15.0 millionfor a two-year period. The share repurchase program does not obligate the Company to repurchase a specific number or dollarvalue of our common shares and may be suspended or discontinued at any time, which could result in a decrease in the tradingprice of our common shares. We cannot guarantee that the program will be fully consummated or that it will enhance long-termshareholder value. The share repurchase program will diminish our cash reserves. In addition, repurchases of our common sharesthrough the program could affect the trading price of our common shares and increase volatility. The existence of a sharerepurchase program could cause the price of our common shares to be higher than it would be absent such a program and couldpotentially reduce the market liquidity for our common shares. As of March 6, 2020, we had $14.3 million remaining availableunder the program.

Certain shareholders have the right to appoint directors to our board of directors, and have the ability to influence othercorporate matters, and their interests may not coincide with yours.

Our Articles establish a board of directors of seven directors, with three Class B directors and four Class A directors.Pursuant to the Governance Agreement, until the “Nomination Termination Time” (as defined therein), certain funds affiliatedwith Avenue Capital Management II, L.P. (collectively, the “Avenue Parties”) have the right to nominate one Class B director,certain affiliates of Strategic Value Partners, LLC (collectively, the “SVP Parties”) have the right to nominate one Class Bdirector and the other parties to the Governance Agreement (defined therein collectively as the “Other Lenders”) have the right tonominate one Class B director. From and after the Nomination Termination Time, the board of directors will cease to beclassified.

Pursuant to our Articles and the Governance Agreement, prior to the Nomination Termination Time, any two Class Bdirectors acting in their capacities as such (a “Class B Majority”) have broad authority to act on the Company’s behalf inconnection with any Acquisition Proposal or Acquisition (as such terms are defined in the Articles), including but not limited tothe authority to solicit prospective Acquisition Proposals, to retain, at the Company’s expense such consultants, legal counsel andother advisors as a Class B Majority may from time to time deem appropriate to assist the Class B directors in the performance oftheir duties with respect to Acquisition Proposals, and subject to specified conditions, to execute and deliver on behalf of theCompany definitive documentation providing for the consummation of an Acquisition. For additional information, see Item 13 –“Certain Relationships and Related Transactions, and Director Independence.”

In addition, as of March 6, 2020, only a few of our shareholders, if they were to act in concert, could control the election ofour four Class A directors. As a result of the nomination rights in the Governance Agreement and the concentration of ownershipof our common shares, a relatively few number of shareholders are able to influence the composition of our board of directors andthereby our management and business strategy. Further, as of the Plan Effective Date, only a few of our shareholders, if they wereto act in concert, could determine the outcome of a shareholder vote on significant corporate matters. The interests of theseshareholders may not coincide with your interests.

The rights of our shareholders and responsibilities of our directors and officers are governed by Luxembourg law anddiffer in some respects from the rights and responsibilities of shareholders under other jurisdictions, including jurisdictions inthe United States.

Our corporate affairs are governed by our Articles, and by the laws governing companies incorporated in Luxembourg,including the Luxembourg Company Law ( loi du 10 août 1915 concernant les sociétés commerciales-). The rights of ourshareholders and the responsibilities of our directors and officers under Luxembourg law differ in some respects from those of acompany incorporated under other jurisdictions, including jurisdictions in the United States. Corporate laws governingLuxembourg companies may not be as extensive as those in effect in U.S. jurisdictions and the Luxembourg Company Law (asdefined above) in respect of corporate governance matters might not be as protective of shareholders as the corporate law andcourt decisions interpreting the corporate law in Delaware, where the majority of U.S. public companies are incorporated. Inaddition, we anticipate that all of our shareholder meetings will take place in Luxembourg. Our shareholders may have moredifficulty in protecting their interests in connection with actions taken by our directors and officers or our principal shareholdersthan they would as shareholders of a corporation incorporated in a jurisdiction in the United States.

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Because we are incorporated under the laws of Luxembourg, shareholders may face difficulty protecting their interests,and their ability to obtain and enforce judgments through other international courts, including courts in the United States,may be limited.

We are a public limited liability company incorporated under the laws of Luxembourg, and as a result, it may be difficultfor investors to effect service of process within the United States upon us or to enforce judgments against us obtained in U.S.courts based on the civil liability provisions of the federal securities laws of the United States. In addition, a substantial portion ofour assets may be located outside the United States. There is uncertainty as to whether the courts of Luxembourg would enforcefinal judgments of United States courts obtained against us predicated upon the civil liability provisions of the federal securitieslaws of the United States.

Tax Risks

Changes in tax laws, treaties or regulations or adverse outcomes resulting from examination of our tax returns couldadversely affect our financial results.

Our future effective tax rates could be adversely affected by changes in tax laws, treaties and regulations, both in theUnited States and internationally. Tax laws, treaties and regulations are highly complex and subject to interpretation.Consequently, we are subject to changing tax laws, treaties and regulations in and between countries in which we operate or areresident. Our income tax expense is based upon the interpretation of the tax laws in effect in various countries at the time that theexpense was incurred. A change in these tax laws, treaties or regulations, or in the interpretation thereof, could result in amaterially higher tax expense or a higher effective tax rate on our worldwide earnings. If any country successfully challenges ourincome tax filings based on our structure, or if we otherwise lose a material tax dispute, our effective tax rate on worldwideearnings could increase substantially and our financial results could be materially adversely affected.

We may not be able to make distributions without subjecting our shareholders to Luxembourg withholding tax.

If we are not successful in our efforts to make distributions, if any, through a withholding tax-free reduction of sharecapital or share premium (the absence of withholding on such distributions is subject to certain requirements), then any dividendspaid by us generally will be subject to a Luxembourg withholding tax at a rate of 15% (17.65% if the dividend tax is not withheldfrom the shareholder). The withholding tax must be withheld by the Company from the gross distribution and paid to theLuxembourg tax authorities. Under current Luxembourg tax law, a reduction of share capital or share premium is not subject toLuxembourg withholding tax provided that certain conditions are met, including, for example, the condition that we do not havedistributable reserves or profits. However, there can be no assurance that our shareholders will approve such a reduction in sharecapital or share premium, that we will be able to meet the other legal requirements for a reduction in share capital or sharepremium, or that Luxembourg tax withholding rules will not be changed in the future. In addition, over the long term, the amountof share capital and share premium available for us to use for capital reductions will be limited. If we are unable to make adistribution through a withholding tax-free reduction in share capital or share premium, we may not be able to make distributionswithout subjecting our shareholders to Luxembourg withholding taxes.

U.S. tax authorities could treat us as a “passive foreign investment company,” which could have adverse U.S. federalincome tax consequences to U.S. holders of our common shares.

A foreign corporation will be treated as a “passive foreign investment company,” or “PFIC”, for U.S. federal income taxpurposes if, after the application of certain look-through rules, either: (i) at least 75% of its gross income for any taxable yearconsists of certain types of “passive income” or (ii) at least 50% of the value (determined on the basis of a quarterly average) ofthe corporation’s assets for any taxable year produce or are held for the production of those types of “passive income.” Forpurposes of these tests, “passive income” includes dividends, interest and gains from the sale or exchange of investment propertyand rents and royalties other than certain rents and royalties that are received from unrelated parties in connection with the activeconduct of a trade or business but does not include income derived from the performance of services. For purposes of the abovetests, if a non-U.S. corporation owns, directly or indirectly, 25% or more of the total value of another corporation, it will betreated as if it (a) held a proportionate share of such other corporation and (b) received directly a proportionate share of theincome of such other corporation. U.S. shareholders of a PFIC are subject to a disadvantageous U.S. federal income tax regimewith respect to the income derived by the PFIC, the distributions they receive from the PFIC, and the gain, if any, they derivefrom the sale or other disposition of their interests in the PFIC. These adverse consequences to U.S. shareholders include (i) thetreatment of all

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or a portion of any gain on disposition of their interests in the PFIC as ordinary income, (ii) the application of a deferred interestcharge on such gain and the receipt of certain dividends and (iii) the obligation to comply with certain reporting requirements.

Based on our operations as of the date of this annual report, we believe that we will not be a PFIC in the current taxableyear and that we will not become a PFIC in any future taxable year. However, this involves a facts and circumstances analysis andit is possible that the IRS would not agree with this conclusion. Further, the determination of whether a corporation is a PFIC ismade annually and thus may be subject to change. Therefore, we can give investors no assurance as to our PFIC status. Investorsare encouraged to consult their own independent tax advisors about the PFIC rules, including the availability of certain electionsand reporting requirements.

We may become a controlled foreign corporation in the future.

While we do not believe that we are currently a controlled foreign corporation (“CFC”), we will become a CFC if U.S.persons, who own (or are considered to own, as a result of the attribution rules) 10% or more of the voting power of our stock(each a “10% U.S. shareholder”), collectively own more than 50% of either the total combined voting power of all classes of ourvoting stock or the total value of our stock.

If we become a CFC, each U.S. Holder that is a 10% U.S. shareholder may be required to include in income its allocableshare of our “Subpart F” income reported. Subpart F income generally includes dividends, interest, net gain from the sale ordisposition of securities, non-actively managed rents and certain other generally passive types of income. The aggregateSubpart F income inclusions in any taxable year relating to a particular CFC are limited to such entity’s current earnings andprofits (as determined for U.S. federal income tax purposes). These inclusions are treated as ordinary income (whether or not suchinclusions are attributable to net capital gains). Thus, if we become a CFC, a 10% U.S. shareholder may be required to report asordinary income its allocable share of our Subpart F income without corresponding receipts of cash.

Further, if we become a CFC, the tax basis of a 10% U.S. shareholder shares will be increased to reflect any requiredSubpart F income inclusions. Such income may be treated as income from sources within the United States, for certain foreign taxcredit purposes, to the extent derived by us from U.S. sources. Such income will not be eligible for the reduced rate of taxapplicable to “qualified dividend income” for individual U.S. persons.

Regardless of whether we have any Subpart F income, if we become a CFC, any gain recognized by a 10% U.S.shareholder from the disposition of our stock will be treated as ordinary income to the extent of such holder’s allocable share ofour current and/or accumulated earnings and profits. In this regard, earnings would not include any amounts previously taxedpursuant to the CFC rules.

If we are classified as both a CFC and a PFIC, a 10% U.S. shareholder will be required to include amounts in income asdescribed this subheading, and the consequences described under the above risk factor entitled “U.S. tax authorities could treat usas a ‘passive foreign investment company,’ which could have adverse U.S. federal income tax consequences to U.S. holders ofour common shares” above will not apply. The interaction of these rules is complex. U.S. Holders should consult their ownadvisers as to the consequences of the CFC and PFIC rules in their individual circumstances.

Changes in our U.S. federal income tax classification, or that of our subsidiaries, could result in adverse taxconsequences to our 10% or greater U.S. shareholders.

The Tax Cuts and Jobs Act (the “2017 Act”) signed on December 22, 2017 may have changed the consequences to U.S.shareholders that own, or are considered to own, as a result of the attribution rules, 10% or more of the voting power or value ofthe stock of a non-U.S. corporation (a “10% U.S. shareholder”) under the U.S. federal income tax laws applicable to owners ofU.S. controlled foreign corporations (“CFCs”).

The 2017 Act repealed Section 958(b)(4) of the Internal Revenue Code of 1986, as amended (the “Code”), which mayresult in classification of certain of the Company’s foreign subsidiaries as CFCs with respect to any single 10% U.S. shareholder.This may be the result without regard to whether 10% U.S. shareholders together own, directly or indirectly, more than 50% ofthe voting power or value of the Company as was the case under prior rules. In late 2019, the IRS issued guidance in the form of asafe harbor that provides relief to certain U.S. shareholders from this change.

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Additional tax consequences to 10% U.S. shareholders of a CFC may result from other provisions of the 2017 Act. Forexample, the 2017 Act added Section 951A of the Code which requires a 10% U.S. shareholder of a CFC to include in income itspro-rata share of the global intangible low-taxed income (GILTI) of the CFC. The 2017 Act also eliminated the requirement inSection 951(a) of the Code necessitating that a foreign corporation be considered a CFC for an uninterrupted period of at least 30days in order for a 10% U.S. shareholder to have a current income inclusion.

From time to time, the Company may elect to employ measures such as the share repurchase program approved by theCompany’s shareholders on February 22, 2019 that could inadvertently create additional 10% U.S. shareholders or result in theCompany itself becoming a CFC, and thus trigger adverse tax consequences for those shareholders as described above.

We urge shareholders to consult their individual tax advisers for advice regarding the 2017 Act revisions to the U.S.Federal income tax laws applicable to owners of CFCs.

If a U.S. Person is treated as owning at least 10% of our common shares, such holder may be subject to adverse U.S.federal income tax consequences.

If a U.S. person is treated as owning (directly, indirectly, or constructively) at least 10% of the value or voting power ofour common shares, such person may be treated as a “U.S. shareholder” with respect to each “controlled foreign corporation” inour group (if any). If our group includes one or more U.S. subsidiaries, certain of our non-U.S. subsidiaries could be treated ascontrolled foreign corporations, regardless of whether or not we are treated as a controlled foreign corporation. A U.S.shareholder of a controlled foreign corporation may be required to report annually and include in its U.S. taxable income its prorata share of “Subpart F income,” “global intangible low-taxed income,” and investments in U.S. property by controlled foreigncorporations, regardless of whether we make any distributions. Failure to comply with these reporting obligations may subject aU.S. shareholder to significant monetary penalties and may prevent the statute of limitations with respect to such shareholder’sU.S. federal income tax return for the year for which reporting was due from starting. An individual who is a U.S. shareholderwith respect to a controlled foreign corporation generally would not be allowed certain tax deductions or foreign tax credits thatwould be allowed to a U.S. shareholder that is a U.S. corporation. We cannot provide any assurances that we will assist investorsin determining whether any of our non-U.S. subsidiaries is treated as a controlled foreign corporation or whether any investor istreated as a U.S. shareholder with respect to any such controlled foreign corporation or furnish to any U.S. shareholdersinformation that may be necessary to comply with the aforementioned reporting and tax paying obligations. A U.S. investorshould consult its advisors regarding the potential application of these rules to an investment in our common shares.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not Applicable.

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ITEM 2. PROPERTIES

Our Fleet

The following table sets forth certain information regarding our fleet as of March 6, 2020:

Water Depth Hook Load # of Blowout Dual LoadRig Name Delivered (in feet) (tons) Preventers PathPacific Bora 2010 10,000 1,000 2 NoPacific Mistral 2011 12,000 1,000 1 NoPacific Scirocco 2011 12,000 1,000 1 YesPacific Santa Ana 2011 12,000 1,000 1 YesPacific Khamsin 2013 12,000 1,250 2 YesPacific Sharav 2014 12,000 1,250 2 YesPacific Meltem 2014 12,000 1,250 2 Yes

(1) All of our drillships have a dual derrick drilling system and five of our seven drillships are dual load path capable. The dualload path capable drillships can lower pipe and equipment to the seafloor from both drilling stations under the derrick,reducing well construction time by allowing operations to be conducted concurrently, rather than consecutively in series asthe process has, due to equipment limitations, traditionally required. The remaining two drillships contain a dual derrickdrilling system, but only use the secondary derrick to prepare pipe and equipment for the primary drilling process.

Our Revolving Credit Facility and the First Lien Notes are secured by first-priority liens (with a superpriority right to

repayment in favor of the Revolving Credit Facility), and the Second Lien PIK Notes are secured by second-priority liens, onsubstantially all assets of the Company including all of our drillships.

Properties

We lease our registered office in Luxembourg and our principal executive and operational headquarters in Houston, Texas.We also provide technical, operational and administrative support from leased offices in Nigeria and Dubai.

ITEM 3. LEGAL PROCEEDINGS

Zonda Arbitration

In January 2013, our subsidiary PDVIII entered into, and our subsidiary PDSI guaranteed, a contract with SHI for theconstruction of the Pacific Zonda, with a purchase price of approximately $517.5 million and original delivery date of March 31,2015 (the “Construction Contract”). On October 29, 2015, PDVIII and PDSI exercised their right to rescind the ConstructionContract due to SHI’s failure to timely deliver the drillship in accordance with the contractual specifications. SHI rejected therescission, and on November 25, 2015, formally commenced an arbitration proceeding against the Zonda Debtors in Londonunder the Arbitration Act 1996 before a tribunal of three arbitrators (as specified in the Construction Contract) (the “Tribunal”).SHI claims that the Zonda Debtors wrongfully rejected their tendered delivery of the drillship and seeks the final installment ofthe purchase price under the Construction Contract. On November 30, 2015, the Zonda Debtors made demand under the third-party refund guarantee accompanying the Construction Contract for the amount of the advance payments made under theConstruction Contract of approximately $181.1 million, plus interest. Any payment under the refund guarantee is suspended untilan award in the Zonda Debtors’ favor under the arbitration is obtained. In addition to seeking repayment of the advance paymentsmade under the Construction Contract, the Zonda Debtors made a counterclaim for the return of their purchased equipment, or thevalue of such equipment, and damages for wasted expenditures. The Zonda Debtors owned $75.0 million in purchased equipmentfor the Pacific Zonda, a majority of which remains on board the Pacific Zonda. An evidentiary hearing was held in London beforethe Tribunal from February 5 through March 2, 2018. Written closing submissions and short

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(1)

replies to such submissions were filed with the Tribunal in May 2018. Oral closing submissions were heard by the Tribunal inAugust 2018.

As part of our “first day” relief sought in the Chapter 11 bankruptcy proceedings, the Bankruptcy Court granted us amodification of the automatic stay provisions of the Bankruptcy Code to allow the arbitration to proceed. In our bankruptcyproceedings, SHI asserted claims against the Zonda Debtors, secured by the Pacific Zonda, for approximately $387.4 million, forthe remaining unpaid purchase price, interest and costs. Subsequent to the initial plan of reorganization filed by the Debtors andthe Zonda Debtors with the Bankruptcy Court, the Company filed an amended plan of reorganization that removed the ZondaDebtors from the Plan of Reorganization. The Zonda Debtors are not Debtors under the Plan of Reorganization and filed aseparate plan of reorganization that was confirmed by order of the Bankruptcy Court on January 30, 2019 (the “Zonda Plan”). Onthe date the Zonda Plan was confirmed, PDVIII and PDSI had $4.6 million in cash and no other material assets after accountingfor post-petition administrative expenses (other than the value of their claims against SHI) for SHI to recover against on accountof its claims.

On January 15, 2020, the Tribunal awarded SHI approximately $320 million with respect to its claims against the ZondaDebtors. The award does not include approximately $100 million in interest and costs sought by SHI, on which the Tribunalreserved making a decision to a later date. On February 11, 2020, the Zonda Debtors filed an application with the High Court inLondon seeking permission to appeal the Tribunal’s award. There can be no assurance that the Zonda Debtors will receivepermission to appeal, or that if such permission is granted, that any such appeal will be successful in reversing the Tribunal’saward.

If the Zonda Debtors are successful in the appeal and reverse the Tribunal’s award, the Zonda Debtors will emerge fromtheir separate plan of reorganization, and will guarantee the First Lien Notes, Second Lien PIK Notes, and the Revolving CreditFacility. In addition, the Company will be required to offer to purchase First Lien Notes at 100.0% of the principal amountthereof, plus accrued and unpaid interest, with any cash proceeds from a settlement or award in connection with the arbitration,with such offer to be for an aggregate principal amount of First Lien Notes equal to the lesser of (x) 50.0% of such cash proceedsand (y) $75.0 million. The Company will also be required to offer to purchase Second Lien PIK Notes at 100.0% of the principalamount thereof, plus accrued and unpaid interest, with the portion of such cash proceeds, if any, that has been declined by theholders of First Lien Notes. If the Zonda Debtors are unsuccessful in the appeal, the Company expects the Zonda Debtors will beliquidated in accordance with the terms of the Zonda Plan.

As a result of the Tribunal’s decision, the Company recognized a loss of $220.2 million during the year ended December31, 2019 primarily related to the elimination of a receivable related to the Zonda Debtors’ claim on the balance sheet. We do notbelieve that the ultimate outcome resulting from this arbitration will have a material adverse effect on our financial position,results of operations or cash flows, although given the unpredictable nature of arbitration, litigation and bankruptcy proceedings,we cannot provide you with any assurances.

On December 20, 2018, after the Company and its subsidiaries other than the Zonda Debtors had completed the Plan ofReorganization and emerged from bankruptcy, SHI filed with the Bankruptcy Court an untimely secured contingency claimagainst Pacific Drilling S.A., our parent company, in the amount of approximately $387.4 million. We have filed an objection tothe claim on the basis that the claim should be disallowed due to its being filed long after the May 1, 2018 claims bar dateestablished by order of the Bankruptcy Court. In addition, we believe SHI has no basis for a claim against Pacific Drilling S.A.because, among other things, Pacific Drilling S.A. was not a party to the Construction Contract nor the guaranty.

ITEM 4. MINE SAFETY DISCLOSURE

Not Applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS ANDISSUER PURCHASES OF EQUITY SECURITIES

Market for Shares of our Common Equity

Our common shares were listed on the Norwegian OTC List from April 2011 to October 2016 and on the NYSE fromNovember 11, 2011 to September 12, 2017. From September 13, 2017 to December 17, 2018, our common shares were traded onthe over-the-counter market under the ticker symbol “PACDQ” and “PACDD,” respectively. Our common shares are currentlylisted on the NYSE, and trade under the symbol “PACD.” As of March 6, 2020, there were 15 record holders of our commonshares. This does not include the number of shareholders that hold shares in “street name” through banks or broker dealers.

Distribution Policy

We do not expect to pay dividends on our common shares for the foreseeable future. The payment of any future dividendsto our shareholders will depend on decisions that will be made by our board of directors and will depend on then-existingconditions, including our operating results, financial condition, business prospects, Luxembourg corporate law restrictions, andrestrictions under our Revolving Credit Facility, the indentures governing our Notes and under any future debt agreements orcontracts.

Exchange Controls

There are no legislative or other legal provisions currently in force in Luxembourg or arising under our Articles thatrestrict the payment of dividends or distributions to holders of our common shares not resident in Luxembourg, except forregulations restricting the remittance of dividends, distributions and other payments in compliance with United Nations andEuropean Union sanctions. There are no limitations, either under the laws of Luxembourg or in our Articles, on the right of non-Luxembourg nationals to hold or vote our common shares.

Certain Luxembourg and U.S. Tax Considerations

For a discussion of Material Luxembourg Tax Considerations for U.S. Holders of Common Shares and a discussion ofMaterial U.S. Federal Income Tax Considerations for Holders of Common Shares, see the information under those headings inExhibit 4.10 to this Annual Report, which information is incorporated herein by reference.

Share Repurchase Program

On February 22, 2019, our shareholders approved a share repurchase program for a total expenditure of up to $15.0 millionfor a two-year period. We may purchase shares in one or several transactions on the open market or otherwise; however, we arenot obligated to repurchase any dollar amount or specific number of common shares under the program. We anticipate thatrepurchases will be funded with cash on hand. As of March 6, 2020, we have repurchased a total of 44,710 of our common shareson the open market and had approximately $14.3 million remaining available under the program.

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ISSUER REPURCHASES OF EQUITY SECURITIES

Total number of Approximate dollar shares repurchased value of shares that as part of publicly may yet be repurchased Total number of Average price paid announced plans or under the plans orPeriod shares repurchased per share ($) programs programsOctober 1-31, 2019 — — — $ 14,347,529November 1-30, 2019 — — — $ 14,347,529December 1-31, 2019 — — — $ 14,347,529Total — — —

For information regarding our securities authorized for issuance under our equity compensation plans, see Item 12.“Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.”

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The graph below matches the cumulative one-year total return of holders of Pacific Drilling S.A.'s common stock with thecumulative total returns of the Russell 2000 index, the PHLX Oil Service Sector index and a customized peer group of fivecompanies that includes: Diamond Offshore Drilling Inc, Noble Corporation Plc, Seadrill Ltd, Transocean Ltd and Valaris Plc.The graph assumes that the value of the investment in our common stock, in each index, and in the peer group (includingreinvestment of dividends) was $100 on December 18, 2018, the day our common shares were relisted on the NYSE and tracks itthrough December 31, 2019.

12/18/18 12/18 3/19 6/19 9/19 12/19 Pacific DrillingS.A. 100.00 97.80 103.26 92.31 28.64 29.89Russell 2000 100.00 88.12 100.97 103.09 100.61 110.61PHLX Oil ServiceSector 100.00 77.26 91.26 78.82 63.89 76.84Peer Group 100.00 96.77 111.29 77.13 49.79 70.56

The stock price performance included in this graph is not necessarily indicative of future stock price performance.

ITEM 6. SELECTED FINANCIAL DATA

On the Plan Effective Date, we adopted and applied the relevant guidance with respect to the accounting and financialreporting for entities that have emerged from bankruptcy proceedings, or “Fresh Start Accounting.” Under

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Fresh Start Accounting, our balance sheet on the Plan Effective Date reflects all of our assets and liabilities at fair value. Ouremergence from bankruptcy and the adoption of Fresh Start Accounting resulted in a new reporting entity, referred to herein asthe “Successor”, for financial reporting purposes. To facilitate discussion and analysis of our financial condition and results ofoperations herein, we refer to the reorganized Debtors as the Successor for periods subsequent to November 19, 2018 and as the“Predecessor” for periods on or prior to November 19, 2018. As a result of the adoption of Fresh Start Accounting and the effectsof the implementation of the Plan, our consolidated financial statements subsequent to November 19, 2018 may not becomparable to our consolidated financial statements prior to November 19, 2018, and as such, “black-line” financial statementsare presented to distinguish between the Predecessor and Successor companies.

You should read the following selected consolidated financial data in conjunction with Item 7. “Management’s Discussionand Analysis of Financial Condition and Result of Operations” and our historical consolidated financial statements and relatednotes thereto included elsewhere in this annual report. The financial information included in this annual report may not beindicative of our future financial position, results of operations or cash flows.

Successor Predecessor Period From Period From

November 20,

2018 January 1,

2018 Year Ended through through December 31, December 31, November 19, Years Ended December 31, 2019 2018 2018 2017 2016 2015(in thousands, except per shareinformation) Statement of operations data: Contract drilling revenue $ 229,777 $ 28,489 $ 236,379 $ 319,716 $ 769,472 $ 1,085,063Operating income (loss) (449,939) (23,583) (252,133) (290,456) 140,154 314,679Net income (loss) (556,465) (27,484) (2,154,877) (525,166) (37,157) 126,230Earnings (loss) per common share Basic $ (7.42) $ (0.37) $ (100.89) $ (24.64) $ (1.76) $ 5.97Diluted $ (7.42) $ (0.37) $ (100.89) $ (24.64) $ (1.76) $ 5.97

Successor Predecessor Years Ended December 31, Years Ended December 31, 2019 2018 2017 2016 2015(in thousands) Balance sheet data: Cash, cash equivalents and restricted

cash $ 284,709 $ 389,075 $ 317,448 $ 626,168 $ 116,033Property and equipment, net 1,842,549 1,915,172 4,652,001 4,909,873 5,143,556Total assets 2,256,559 2,748,213 5,362,961 5,998,207 5,792,720Long-term debt 1,073,734 1,039,335 3,043,967 3,145,449 2,845,670Shareholders’ equity 1,068,831 1,618,958 2,151,801 2,666,200 2,692,055

(1) For 2019, includes a loss from unconsolidated subsidiaries of $220.2 million. See Note 16 to our consolidated financialstatements.

(2) Per share data for the year ended December 31, 2015 has been restated to reflect a 1-for-10 reverse stock split in May 2016.(3) Includes current maturities of long-term debt, net of debt issuance costs. Debt balances as of December 31, 2017 are

presented within liabilities subject to compromise on the balance sheet.

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 through through Year Ended December 31, November 19, Years Ended December 31, December 31, 2019 2018 2018 2017 2016 2015(in thousands) Other financial data Net cash provided by (used in)

operating activities $ (67,183) $ (41,752) $ (180,902) $ (114,873) $ 249,104 $ 422,146Net cash used in investing

activities (35,110) (2,697) (23,534) (42,645) (52,625) (181,458)Net cash provided by (used in)

financing activities (2,073) (13,651) 334,163 (151,202) 313,656 (292,449)

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(1)

(1)

(2)

(2)

(3)

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OFOPERATIONS

The following discussion and analysis should be read in conjunction with Item 1A. “Risk Factors,” Item 6. “SelectedFinancial Data” and the financial statements in Item 8, “Financial Statements.”

Predecessor and Successor Reporting

On November 2, 2018, the Bankruptcy Court issued the Confirmation Order approving the Plan of Reorganization and onNovember 19, 2018, the Plan of Reorganization became effective pursuant to its terms and we emerged from our Chapter 11bankruptcy proceedings. We had filed the Plan of Reorganization with the Bankruptcy Court in connection with our voluntarypetitions for relief under Chapter 11 of Title 11 of the United States Code, initially filed on November 12, 2017, which werejointly administered under the caption In re Pacific Drilling S.A., et al., Case No. 17-13193 (MEW).

On the Plan Effective Date, we adopted and applied the relevant guidance with respect to the accounting and financialreporting for entities that have emerged from bankruptcy proceedings, or “Fresh Start Accounting.” Under Fresh StartAccounting, our balance sheet on the Plan Effective Date reflects all of our assets and liabilities at fair value. Our emergence frombankruptcy and the adoption of Fresh Start Accounting resulted in a new reporting entity, referred to herein as the “Successor,”for financial reporting purposes. To facilitate discussion and analysis of our financial condition and results of operations herein,we refer to the reorganized Debtors as the Successor for periods subsequent to November 19, 2018 and as the “Predecessor” forperiods on or prior to November 19, 2018. As a result of the adoption of Fresh Start Accounting and the effects of theimplementation of the Plan, our consolidated financial statements subsequent to November 19, 2018 may not be comparable toour consolidated financial statements on or prior to November 19, 2018, and as such, “black-line” financial statements arepresented to distinguish between the Predecessor and Successor companies.

Market Outlook

Historically, operating results in the offshore contract drilling industry have been cyclical and directly related to thedemand for and the available supply of capable drilling rigs, which are influenced by various factors. Although dayrates andutilization for high-specification drillships have in the past been less sensitive to short-term oil price movements than those ofolder or less capable drilling rigs, the sustained decline in oil prices from 2014 levels rendered many deepwater projects lessattractive to our clients. This decline, coupled with investor pressure on our clients to be free cash flow positive, has significantlyimpacted the number of projects available for high-specification drillships. However, over the period from 2015 to today, ourclients have managed to reduce their total well construction costs thereby allowing them economic success at lower oil prices andmaking deepwater projects more attractive.

Drilling Rig Supply

We estimate that there are currently 107 high-specification drillships across the industry. There has been one order placedsince April 2014 to build an additional high-specification drillship, and within the last year, there have been several delays indelivery dates for new drillships. We estimate that there are approximately 12 high-specification drillships in late stages ofconstruction still to be delivered with only one having a firm contract announced.

However, as a result of significantly reduced contracting activity, a significant number of floating rigs have been removedfrom the actively marketed fleet through cold stacking or scrapping since early 2014. Despite this reduction in supply, the excesssupply of high-specification drillships is expected to continue in 2020. Although we have visibility into the maximum number ofhigh-specification drillships that could be available, we cannot accurately predict how many of those rigs will be activelymarketed or how many of those rigs may be temporarily or permanently removed from the market.

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Drilling Rig Demand

Demand for our drillships is a function of the worldwide levels of deepwater exploration and development spending by oiland gas companies, which has decreased or been delayed significantly as a result of the sustained weakness in oil prices. The typeof projects that modern drillships undertake are generally located in deeper water, in more remote locations, and can be morecapital intensive or require more time to first oil than competing alternatives. The drilling programs of oil and gas companies arealso affected by the global economic and political climate, access to quality drilling prospects, exploration success, perceivedfuture availability and lead time requirements for drilling equipment, advances in drilling technology, and emphasis on deepwaterand high-specification exploration and production versus other areas.

We have recently seen some increases in the capital expenditure budgets for many exploration and production companiesfrom the lows of the market downturn. Overall, 2019 saw an improving pace for high-specification drillship contracting activitywith about 40 rig years contracted, compared to 32 rig years in 2018. There is currently a total demand for 70 high-specificationdrillships. We expect contracting activity to continue to improve; however, no assurances can be given as to the scope, pace orduration of any recovery.

Supply and Demand Balance

Since 2014, the imbalance of supply and demand has resulted in significantly lower dayrates. While recent scrapping andcold stacking of floating assets have lowered the total rig supply, supply of deepwater drilling rigs continues to exceed demand.However, we believe that, if oil prices at March 6, 2020 levels are sustained, reduction in rig supply continues and breakevencosts for deepwater projects remain competitive, utilization of high-specification floating rigs should improve in 2020 and overthe next few years.

Fleet Status

The status of our fleet as of March 6, 2020 and certain historical fleet information for the periods covered by the financialstatements included in this annual report follows:

The Pacific Bora operated under a contract with Folawiyo AJE Services Limited in Nigeria from February 9, 2017 toMay 16, 2017. From August 1, 2017 to October 3, 2017 and from November 2017 to February 2018, the Pacific Boraoperated under a contract with Erin Energy Corporation in Nigeria. In November 2018, the Pacific Bora commencedoperations with Eni to operate in Nigeria for two wells which it completed in July 2019. The Pacific Bora is currentlyworking offshore Oman under a contract with Eni that started in February 2020 for one firm well and one option well.

The Pacific Mistral is currently idle in Las Palmas while actively seeking a contract.

The Pacific Scirocco is currently idle in Las Palmas while actively seeking a contract.

The Pacific Santa Ana operated in Mauritania under a contract with Petronas to perform integrated services underPhase I of a two-phased plug and abandonment project from December 2017 to May 2018. From April to September2019, the Pacific Santa Ana operated under a contract with Total for one well in Senegal and one well in Mauritania.This contract also provides for two option wells that would follow the Petronas Phase II work. The Pacific Santa Ana iscurrently working on Phase II of the plug and abandonment project under the contract with Petronas in Mauritania,which started in December 2019 with an estimated 360 days of work.

The Pacific Khamsin is currently working in the U.S. Gulf of Mexico under a contract with Equinor/Total that startedin December 2019 for three firm wells and one option well.

The Pacific Sharav operated under a five-year contract with a subsidiary of Chevron through August 27, 2019. ThePacific Sharav is currently operating under an extension of the contract with Chevron in the U.S. Gulf of Mexicothrough May 2020. On February 25, 2020, the Pacific Sharav entered into a contract with Murphy in Mexico for twofirm wells and one option well, expected to start in the fourth quarter of 2020.

The Pacific Meltem is currently mobilizing to the U.S. Gulf of Mexico.

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From time to time, we are awarded letters of intent or receive letters of award for our drillships. Certain of those lettersremain subject to negotiation and execution of definitive contracts and other customary conditions. No assurance can be given asto the terms of any such arrangement, such as the applicable duration or dayrate, until a definitive contract is entered into by theparties, if we are able to finalize a contract at all.

Factors Affecting our Results of Operations

The primary factors that have affected our historical operating results and are expected to impact our future operatingresults include:

energy market conditions, including oil prices;

our clients’ capital expenditure budgets;

the number of drillships in our fleet;

dayrates earned by our drillships;

utilization rates of drillships industry-wide;

operating expenses of our drillships;

administrative expenses;

interest and other financial items; and

tax expenses.

Our revenues are derived primarily from the operation of our drillships at fixed daily rates, which depend principally uponthe number and availability of our drillships, the dayrates received and the number of days utilized. We recognize revenues fromdrilling contracts as services are performed upon and after contract commencement.

Additionally, we may receive revenues for preparation and mobilization of equipment and personnel or for capitalimprovements to rigs. Revenues earned directly related to contract preparation and mobilization are deferred and recognized overthe primary term of the drilling contract. We may also receive fees upon completion of a drilling contract that are conditionalbased on the occurrence of an event, such as demobilization of a rig.

Our expenses consist primarily of operating expenses, depreciation, administrative expenses, interest and other financialexpenses and tax expenses.

Operating expenses include the remuneration of offshore crews, repairs and maintenance, as well as expenses for shore-based support offices and onshore operations support staff.

Depreciation expense is based on the historical cost or, upon the adoption of Fresh Start Accounting, fair value of ourdrillships and other property and equipment and recorded on a straight-line basis over the estimated useful lives of each class ofassets. Upon the adoption of Fresh Start Accounting, the estimated useful lives of our drillships and their related equipmentgenerally range from 8 to 33 years.

General and administrative expenses include the costs of management and administration of our Company, such as thelabor costs of our corporate employees, remuneration of our directors and legal and advisory expenses.

Interest expense primarily depends on our overall level of indebtedness and interest rates.

Tax expenses reflect current and deferred tax expenses. Our income tax expense generally results from the taxable incomeon our drillship operations. We also incur withholding taxes on cross border intercompany payments, such as services or bareboatcharter fees, and we sometimes operate in jurisdictions that levy income taxes on a deemed profit or gross income basis.

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Results of Operations

References to the year ended December 31, 2018 relate to the combined Successor and Predecessor periods for the yearended December 31, 2018.

Year ended December 31, 2019 compared to Year ended December 31, 2018

The following table provides a comparison of our consolidated results of operations for the years ended December 31,2019 and 2018:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 Year Ended through through December 31, 2019 December 31, 2018 November 19, 2018(in thousands) Revenues

Contract drilling $ 229,777 $ 28,489 $ 236,379Costs and expenses

Operating expenses 228,143 19,744 189,606General and administrative expenses 38,293 4,245 50,604Depreciation and amortization expense 193,128 27,277 248,302Loss from unconsolidated subsidiaries 220,152 806 —

679,716 52,072 488,512Operating loss (449,939) (23,583) (252,133)Other income (expense)

Interest expense (97,698) (10,904) (106,632)Reorganization items (1,975) (1,300) (1,799,664)Interest income 6,292 1,008 3,148Other income (expense) (729) 526 (1,904)

Loss before income taxes (544,049) (34,253) (2,157,185)Income tax expense (benefit) 12,416 (6,769) (2,308)

Net loss $ (556,465) $ (27,484) $ (2,154,877)

Revenues. The decrease in revenues of $35.1 million for the year ended December 31, 2019, as compared to the revenuesof $264.9 million for the year ended December 31, 2018 resulted primarily from lower operating revenues from the PacificSharav completing its legacy Chevron five-year contract in late August 2019 and rolling over to continue working for Chevron ata lower current market dayrate, and lower amortization of deferred revenue. This decrease in revenue was partially offset byincreased fleet utilization. During the year ended December 31, 2019, we achieved fleet utilization of 30.0% compared to 21.6%during the year ended December 31, 2018. Fleet utilization is defined as the total number of contracted operating days divided bythe total number of rig calendar days in the measurement period.

Revenue for the years ended December 31, 2019 and 2018 included amortization of deferred revenue of $1.9 million and$20.2 million, respectively, and reimbursable revenues of $12.0 million and $6.5 million, respectively. The decrease in theamortization of deferred revenue was due to elimination of deferred revenue upon the adoption of Fresh Start Accounting inNovember 2018.

During the year ended December 31, 2019, we achieved an average revenue efficiency of 97.4%, compared to 97.8%during the year ended December 31, 2018. Revenue efficiency is defined as actual contractual dayrate revenue (excludingmobilization fees, upgrade reimbursements and other revenue sources) divided by the maximum amount of contractual dayraterevenue that could have been earned during such period.

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Operating expenses. The following table summarizes operating expenses:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 Year Ended through through December 31, 2019 December 31, 2018 November 19, 2018(in thousands) Direct rig related operating expenses $ 183,058 $ 17,149 $ 136,815Integrated services 6,069 — 15,529Reimbursable costs 9,425 647 4,656Shore-based and other support costs 27,899 1,820 18,724Amortization of deferred costs 1,692 128 13,882

Total $ 228,143 $ 19,744 $ 189,606

The increase in direct rig related operating expenses for the year ended December 31, 2019, as compared to the year endedDecember 31, 2018, resulted primarily from the Pacific Khamsin incurring ramp-up costs for its contract with Equinor. Theincrease was also due to the Pacific Santa Ana operating at a higher level of costs while performing drilling service for Total in2019, compared to the costs incurred under the contract with Petronas to perform integrated services under Phase I of the plug andabandonment project in 2018. The increase was partially offset by lower costs of maintaining our idle rigs together in Las Palmas.

Integrated services for the year ended December 31, 2019 represent costs incurred by the Pacific Khamsin and the PacificSanta Ana for subcontractors to perform integrated services as part of the contract with Equinor and Phase II of the plug andabandonment project with Petronas, respectively, both of which commenced in December 2019. Integrated services for the yearended December 31, 2018 represent costs incurred by the Pacific Santa Ana for Phase I of the plug and abandonment project withPetronas that was completed in May 2018.

Reimbursable costs are not included under the scope of the drilling contract’s initial dayrate but are subject toreimbursement from our clients. Reimbursable costs can be highly variable between quarters. Because the reimbursement of thesecosts by our clients is recorded as additional revenue, the expense does not negatively affect our profit in general.

The increase in shore-based and other support costs for the year ended December 31, 2019, as compared to the year endedDecember 31, 2018, was primarily due to the classification of health and safety and supply chain costs within operating supportcosts upon the adoption of Fresh Start Accounting in November 2018, compared to being classified within general andadministrative expenses in the Predecessor period in 2018. The increase was partially offset by the impact of cost control andprocess optimization initiatives implemented during the first quarter of 2019.

The decrease in amortization of deferred costs for the year ended December 31, 2019, as compared to the year endedDecember 31, 2018, was primarily due to the elimination of deferred costs upon the adoption of Fresh Start Accounting inNovember 2018.

General and administrative expenses. The decrease in general and administrative expenses for the year ended December31, 2019, as compared to the year ended December 31, 2018, was primarily due to the classification of health and safety andsupply chain costs in shore-based and other support costs as discussed above, lower legal costs associated with the arbitrationproceeding related to the Pacific Zonda and the impact of cost control and process optimization initiatives implemented duringthe first quarter of 2019.

Depreciation and amortization expense. The decrease in depreciation and amortization expense for the year endedDecember 31, 2019, as compared to the year ended December 31, 2018, resulted from the fair value adjustment of our propertyand equipment upon the adoption of Fresh Start Accounting in November 2018, partially offset by the amortization expense ofour client-related intangible asset.

Loss from unconsolidated subsidiaries. For the year ended December 31, 2019, we recognized a loss of $216.7 million,recorded in loss from unconsolidated subsidiaries, due to the write-off of the $204.7 million receivable related to the ZondaArbitration and other asset balances associated with the Zonda Debtors. See Note 16 to our consolidated financial statements.

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Interest expense. The decrease in interest expense for the year ended December 31, 2019, as compared to the year endedDecember 31, 2018, was primarily due to less interest expense incurred on lower outstanding debt balances. The decrease wasalso due to default interest incurred on the 2013 Revolving Credit Facility and SSCF in accordance with the Plan ofReorganization in 2018.

Reorganization items. We classified all income, expenses, gains or losses that were incurred or realized subsequent to thePetition Date and as a result of the Chapter 11 proceedings as reorganization items, which primarily consisted of professionalfees. See Note 3 to our consolidated financial statements.

Income taxes. During the year ended December 31, 2019, income tax expense was $12.4 million, compared to an incometax benefit of $9.1 million for the year ended December 31, 2018. The income tax benefit for the year ended December 31, 2018was primarily the result of internal restructuring in 2018 allowing recognition of the tax benefits of net operating losses. Taxexpense from ongoing operations for the year ended December 31, 2019 increased primarily from profitable operations in certainjurisdictions.

The relationship between our provision for or benefit from income taxes and our pre-tax book income can varysignificantly from period to period considering, among other factors, (a) the overall level of pre-tax book income, (b) changes inthe blend of income that is taxed based on gross revenues or at high effective tax rates versus pre-tax book income or at loweffective tax rates and (c) our rig operating structures. Consequently, our income tax expense does not necessarily changeproportionally with our pre-tax book income. Significant decreases in our pre-tax book income typically result in higher effectivetax rates, while significant increases in pre-tax book income can lead to lower effective tax rates, subject to the other factorsimpacting income tax expense noted above. Additionally, pre-tax book losses typically result in negative effective tax rates due towithholding taxes, local taxation on profitable operations, and deemed profit tax based on revenue even while reportingoperational losses. During the years ended December 31, 2019 and 2018, our effective tax rate was (2.3)% and 0.4%,respectively.

Year ended December 31, 2018 compared to Year ended December 31, 2017

The following table provides a comparison of our consolidated results of operations for the years ended December 31,2018 and 2017:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 through through Year Ended December 31, 2018 November 19, 2018 December 31, 2017(in thousands) Revenues

Contract drilling $ 28,489 $ 236,379 $ 319,716Costs and expenses

Operating expenses 19,744 189,606 244,089General and administrative expenses 4,245 50,604 87,134Depreciation and amortization expense 27,277 248,302 278,949Loss from unconsolidated subsidiaries 806 — — 52,072 488,512 610,172

Operating loss (23,583) (252,133) (290,456)Other income (expense)

Interest expense (10,904) (106,632) (178,983)Write-off of deferred financing costs — — (30,846)Reorganization items (1,300) (1,799,664) (6,474)Interest income 1,008 3,148 2,717Other income (expense) 526 (1,904) (8,261)

Loss before income taxes (34,253) (2,157,185) (512,303)Income tax expense (benefit) (6,769) (2,308) 12,863

Net loss $ (27,484) $ (2,154,877) $ (525,166)

Revenues. During the year ended December 31, 2018, revenues were $264.9 million. The decrease in revenues for the yearended December 31, 2018, as compared to the year ended December 31, 2017 resulted primarily from lower

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operating revenues from the Pacific Bora working for only a part of the year, the Pacific Scirocco being offhire for the entire yearand lower amortization of deferred revenue for the Pacific Santa Ana.

During the year ended December 31, 2018, we achieved an average revenue efficiency of 97.8%, as compared to 98.3%during the year ended December 31, 2017.

Contract drilling revenue for the years ended December 31, 2018 and 2017 also included amortization of deferred revenueof $20.2 million and $46.8 million, respectively, and reimbursable revenues of $6.5 million and $6.0 million, respectively. Thedecrease in the amortization of deferred revenue was primarily due to lower amortization resulting from the Pacific Santa Anacompleting its contract with Chevron in January 2017.

Operating expenses. The following table summarizes operating expenses:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 through through Year Ended December 31, 2018 November 19, 2018 December 31, 2017(in thousands) Direct rig related operating expenses $ 17,149 $ 136,815 $ 192,918Integrated services — 15,529 3,670Reimbursable costs 647 4,656 4,197Shore-based and other support costs 1,820 18,724 31,615Amortization of deferred costs 128 13,882 11,689

Total $ 19,744 $ 189,606 $ 244,089

During the year ended December 31, 2018, direct rig related operating expenses were $153.8 million. The decrease indirect rig related operating expenses resulted primarily from the Pacific Scirocco being idle in the year ended December 31, 2018as compared to the year ended December 31, 2017 when the rig incurred higher costs while on standby and then operating for aclient.

Integrated services represent costs incurred by the Pacific Santa Ana for subcontractors to perform integrated services forPhase I of the plug and abandonment project with Petronas that was completed on May 7, 2018.

The decrease in shore-based and other support costs per day for the year ended December 31, 2018, as compared to theyear ended December 31, 2017, was primarily due to lower headcount.

General and administrative expenses. The decrease in general and administrative expenses for the year ended December31, 2018, as compared to the year ended December 31, 2017, was primarily due to the classification of legal and advisoryexpenses related to our debt restructuring efforts as reorganization items subsequent to the Petition Date and lower accruals foremployee incentive programs.

Depreciation and amortization expense. The decrease in depreciation and amortization expense for the year endedDecember 31, 2018, as compared to the year ended December 31, 2017, was primarily due to Fresh Start Accounting.

Interest expense. The decrease in interest expense for the year ended December 31, 2018, as compared to the year endedDecember 31, 2017, was primarily due to no interest accruing on the 2017 Notes, the 2020 Notes and the Term Loan B during theChapter 11 proceedings as well as the elimination of amortization of deferred financing costs beginning in the fourth quarter of2017. The decrease was partially offset by accrued default interest on the 2013 Revolving Credit Facility and SSCF that was paidin accordance with our Plan of Reorganization.

Write-off of deferred financing costs. During the year ended December 31, 2017, we expensed $30.8 million of deferredfinancing costs previously recorded within our consolidated balance sheets as a result of the filing of the Bankruptcy Petitions.

Reorganization items. During 2017 after the Petition Date and through the 2018 Predecessor period, we classified allincome, expenses, gains or losses that were incurred or realized subsequent to the Petition Date and as a result of the Chapter 11proceedings as reorganization items. See Note 2 to our consolidated financial statements.

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Other expense. During the year ended December 31, 2017, we recognized an other-than-temporary impairment in ourHyperdynamics available-for-sale securities of $6.8 million. The remaining change was due to currency exchange fluctuations.

Income taxes. During the year ended December 31, 2018, income tax benefit was $9.1 million, compared to an income taxexpense of $12.9 million for the year ended December 31, 2017. The income tax benefit for the year ended December 31, 2018was primarily the result of internal restructuring in 2018 allowing recognition of the tax benefits of net operating losses. Taxexpense from ongoing operations for the year ended December 31, 2018 decreased due to a lower level of drilling operations.

The relationship between our provision for or benefit from income taxes and our pre-tax book income can varysignificantly from period to period considering, among other factors, (a) the overall level of pre-tax book income, (b) changes inthe blend of income that is taxed based on gross revenues or at high effective tax rates versus pre-tax book income or at loweffective tax rates and (c) our rig operating structures. Consequently, our income tax expense does not necessarily changeproportionally with our pre-tax book income. Significant decreases in our pre-tax book income typically result in higher effectivetax rates, while significant increases in pre-tax book income can lead to lower effective tax rates, subject to the other factorsimpacting income tax expense noted above. Additionally, pre-tax book losses typically result in negative effective tax rates due towithholding taxes, local taxation on profitable operations, and deemed profit tax based on revenue even while reportingoperational losses. During the years ended December 31, 2018 and 2017, our effective tax rate was 0.4% and (2.5)%,respectively.

Liquidity and Capital Resources

We centrally manage our funding and treasury activities in accordance with corporate policies that have objectives ofensuring appropriate levels of liquidity, maintaining adequate levels of insurance and balancing exposures to market risks. Cashand cash equivalents are held mainly in United States dollars. Most of our contract drilling revenues are received monthly inarrears in United States dollars and most of our operating costs are paid on a monthly basis.

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Sources and Uses of Cash

Year ended December 31, 2019 compared to Year ended December 31, 2018

The following table presents our net cash used in operating activities for the years ended December 31, 2019 and 2018:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 Year Ended through through December 31, 2019 December 31, 2018 November 19, 2018(in thousands) Cash flow from operating activities:

Net loss $ (556,465) $ (27,484) $ (2,154,877)Depreciation and amortization expense 193,128 27,277 248,302Amortization of deferred revenue (1,931) — (20,212)Amortization of deferred costs 1,692 128 13,882Amortization of deferred financing costs — — 1,639Amortization of debt (premium) discount, net (476) (38) —Interest paid-in-kind 34,875 3,732 4,933Deferred income taxes 8,783 (6,507) 4,103Share-based compensation expense 7,071 599 2,543Loss from unconsolidated subsidiaries 220,152 806 —Reorganization items — — 1,746,764Changes in operating assets and liabilities, net 25,988 (40,265) (27,979)

Net cash used in operating activities $ (67,183) $ (41,752) $ (180,902)

The reduction in net cash used in operating activities for the year ended December 31, 2019 resulted primarily from lowerpayments for reorganization items, lower cash interest, the release of cash collateral held as credit support for customs bonds andbank guarantees, cost savings from headcount and other spending reductions and lower legal and advisory costs related to ourChapter 11 proceedings and the arbitration proceedings related to the Pacific Zonda.

The following table presents our net cash used in investing activities for the years ended December 31, 2019 and 2018:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 Year Ended through through December 31, 2019 December 31, 2018 November 19, 2018

(in thousands) Cash flow from investing activities:

Capital expenditures $ (35,110) $ (2,697) $ (18,624)Deconsolidation of Zonda Debtors — — (4,910)

Net cash used in investing activities $ (35,110) $ (2,697) $ (23,534)

The increase in capital expenditures for the year ended December 31, 2019 primarily resulted from purchases related to rigenhancement equipment, including a managed pressure drilling system.

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The following table presents our net cash provided by (used in) financing activities for the years ended December 31, 2019and 2018:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 Year Ended through through December 31, 2019 December 31, 2018 November 19, 2018(in thousands) Cash flow from financing activities:

Payments for shares issued under share-basedcompensation plan $ (81) $ (126) $ (4)

Proceeds from debtor-in-possession financing — — 50,000Payments for debtor-in-possession financing — — (50,000)Proceeds from long-term debt — — 1,000,000Payments on long-term debt — — (1,136,478)Proceeds from equity offerings — — 500,000Payments for financing costs (1,340) (13,525) (29,355)Purchases of treasury shares (652) — —

Net cash provided by (used in) financingactivities $ (2,073) $ (13,651) $ 334,163

During the year ended December 31, 2019, we paid the remaining professional fees related to the issuance of the First Lien

Notes and Second Lien PIK Notes prior to our emergence from bankruptcy. During the year ended December 31, 2018, we drew$50.0 million from debtor-in-possession financing and issued $750.0 million of First Lien Notes and $273.6 million of SecondLien PIK Notes. We also issued $500.0 million of common shares in an equity rights offering and private placement. Inconnection with the above transactions, we paid $42.9 million in financing costs in 2018. Upon our emergence from bankruptcy,we repaid in full the 2013 Revolving Credit Facility of $475.0 million, the SSCF of $661.5 million and debtor-in-possessingfinancing of $50.0 million.

Year ended December 31, 2018 compared to Year ended December 31, 2017

The following table presents our net cash used in operating activities for the years ended December 31, 2018 and 2017:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 through through Year Ended December 31, 2018 November 19, 2018 December 31, 2017(in thousands) Cash flow from operating activities:

Net loss $ (27,484) $ (2,154,877) $ (525,166)Depreciation and amortization expense 27,277 248,302 278,949Amortization of deferred revenue — (20,212) (46,829)Amortization of deferred costs 128 13,882 11,689Amortization of deferred financing costs — 1,639 24,889Amortization of debt (premium) discount, net (38) — 940Interest paid-in-kind 3,732 4,933 —Write-off of deferred financing costs — — 30,846Deferred income taxes (6,507) 4,103 7,409Share-based compensation expense 599 2,543 6,819Other-than-temporary impairment of available-for-sale

securities — — 6,829Loss from unconsolidated subsidiaries 806 — —Reorganization items — 1,746,764 5,315Changes in operating assets and liabilities, net (40,265) (27,979) 83,437

Net cash used in operating activities $ (41,752) $ (180,902) $ (114,873)

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The reduction in net cash used in operating activities for the year ended December 31, 2018 resulted primarily from cashcollections in 2017 on the Pacific Scirocco subsequent to completing its contract with Total in December 2016. In addition, thedecrease was due to higher legal and advisory costs in 2018 related to our emergence from Chapter 11 proceedings andsubcontractor payments made in 2018 in connection with the Pacific Santa Ana to perform Phase I of the integrated servicesproject with Petronas.

The following table presents our net cash used in investing activities for the years ended December 31, 2018 and 2017:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 through through Year Ended December 31, 2018 November 19, 2018 December 31, 2017(in thousands) Cash flow from investing activities:

Capital expenditures $ (2,697) $ (18,624) $ (36,645)Deconsolidation of Zonda Debtors — (4,910) —Purchase of available-for-sale securities — — (6,000)

Net cash used in investing activities $ (2,697) $ (23,534) $ (42,645)

The decrease in capital expenditures for the year ended December 31, 2018 primarily resulted from a final milestonepayment of $16.3 million for a fleet spare blowout preventer in 2017. As a result of deconsolidation of the Zonda Debtors,consolidated cash balances decreased by $4.9 million. In addition, the change in net cash from investing activities resulted fromthe $6.0 million purchase of available-for-sale securities in the prior period.

The following table presents our net cash provided by (used in) financing activities for the years ended December 31, 2018and 2017:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 through through Year Ended December 31, 2018 November 19, 2018 December 31, 2017(in thousands) Cash flow from financing activities:

Payments for shares issued under share-basedcompensation plan $ (126) $ (4) $ (199)

Proceeds from debtor-in-possession financing — 50,000 —Payments for debtor-in-possession financing — (50,000) —Proceeds from long-term debt — 1,000,000 —Payments on long-term debt — (1,136,478) (146,473)Proceeds from equity offerings — 500,000 —Payments for financing costs (13,525) (29,355) (4,530)

Net cash provided by (used in) financing activities $ (13,651) $ 334,163 $ (151,202)

During the year ended December 31, 2018, we drew $50.0 million from debtor-in-possession financing and issued $750.0million of First Lien Notes and $273.6 million of Second Lien PIK Notes. We also issued $500.0 million of common shares in anequity rights offering and private placement. In connection with the above transactions, we paid $42.9 million in financing costsin 2018. Upon our emergence from bankruptcy, we repaid in full the 2013 Revolving Credit Facility of $475.0 million, the SSCFof $661.5 million and debtor-in-possessing financing of $50.0 million.

During the year ended December 31, 2017, (i) we made a $76.0 million prepayment of the SSCF in accordance with our

obligation to maintain the loan to rig value covenant in the facility, (ii) we applied cash collateral of $31.7 million to the principalinstallments due in May 2017 under the SSCF and (iii) we permanently repaid $25.0 million under the 2013 Revolving CreditFacility.

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Liquidity

Our liquidity fluctuates depending on a number of factors, including, among others, our contract backlog, our revenueefficiency and the timing of accounts receivable collection as well as payments for operating costs and other obligations. Marketconditions in the offshore drilling industry in recent years have led to materially lower levels of spending for offshore explorationand development by our current and potential clients on a global basis, which in turn has negatively affected our revenue,profitability and cash flows.

Primary sources of funds for our short-term liquidity needs are expected to be our existing cash and cash equivalents andavailability under our $50.0 million, first lien superpriority Revolving Credit Facility. See Note 23 to our consolidated financialstatements in this annual report. As of March 6, 2020, we had $248.3 million of cash and cash equivalents and $6.1 million ofrestricted cash. Based on our cash flow forecast, we expect to generate aggregate negative cash flows for 2020. We believe thatour sources of cash, including our ability to draw on the Revolving Credit Facility, will provide sufficient liquidity over at leastthe next 12 months to fund our cash needs.

The first scheduled principal payment due on our outstanding long-term debt is October 1, 2023, when our First Lien Notes

mature. Our Second Lien Notes mature April 1, 2024, and we may pay interest in kind. Our ability to continue to meet ouranticipated obligations and pay or refinance our long-term debt at maturity will depend on market conditions, our operatingperformance and cash flow.

Share Repurchase Program

On February 22, 2019, our shareholders approved a share repurchase program for a total expenditure of up to $15.0 millionfor a two-year period. We may purchase shares in one or several transactions on the open market or otherwise; however, we arenot obligated to repurchase any specific number or dollar value of our common shares under the program. We anticipate thatfuture repurchases, if any, will be funded with cash on hand. As of March 6, 2020, we have repurchased a total of 44,710 of ourcommon shares on the open market with the last repurchase occurring in May 2019 and had approximately $14.3 millionremaining available under the program.

Capital Expenditures

We have no material commitments for capital expenditures related to the construction of a newbuild drillship. We do,however, expect to incur capital expenditures for purchases in the ordinary course of business. Such capital expenditurecommitments are included in purchase obligations presented in Item 7 “Contractual Obligations.”

Description of Indebtedness

See Notes 7 and 23 to our consolidated financial statements for additional information.

Bank Guarantee

As of December 31, 2019, we were contingently liable under a certain bank guarantee totaling approximately $5.4 millionissued as security in the normal course of our business.

Derivative Instruments and Hedging Activities

We may enter into derivative instruments from time to time to manage our exposure to fluctuations in interest rates andforeign exchange rates. We do not enter into derivative transactions for speculative purposes; however, for accounting purposes,certain transactions may not meet the criteria for hedge accounting. See Note 14 to our consolidated financial statements.

Off-Balance Sheet Arrangements

As of March 6, 2020, we do not have any off-balance sheet arrangements.

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Contractual Obligations

The table below sets forth our contractual obligations as of December 31, 2019:

Contractual Obligations 2020 2021-2022 2023-2024 Thereafter Total (in thousands)Long-term debt $ — $ — $ 1,023,614 $ — $ 1,023,614Interest on long-term debt 62,813 125,625 309,417 — 497,855Operating leases 1,654 3,140 2,731 — 7,525Purchase obligations 32,087 — — — 32,087

Total contractual obligations $ 96,554 $ 128,765 $ 1,335,762 $ — $ 1,561,081

(a) Amounts are based on the aggregate outstanding principal balances of the First Lien Notes and the original principal amountof the Second Lien PIK Notes.

(b) Interest payments are based on our outstanding borrowings under the First Lien Notes and the Second Lien PIK Notes attheir respective interest rates of 8.375% and 12.0%, which assumes the interest on the Second Lien PIK Notes will be paidin-kind. Accrued paid in-kind interest is assumed to be settled in cash at the date of maturity of the Second Lien PIK Notes.The original principal amount of the Second Lien PIK Notes was $273.6 million, and we project that if no cash interest ispaid on the Second Lien PIK Notes throughout their term, the total amount we would owe the holders of such notes uponmaturity on the notes on April 1, 2024 is approximately $520.2 million.

(c) Purchase obligations are agreements to purchase goods and services that are enforceable and legally binding, that specify allsignificant terms, including the quantities to be purchased, price provisions and the approximate timing of the transactions,which includes our purchase orders for goods and services entered into in the normal course of business.

(d) Contractual obligations do not include approximately $43.5 million of liabilities from unrecognized tax benefits related touncertain tax positions, inclusive of interest and penalties, included on our consolidated balance sheets as of December 31,2019. We are unable to specify with certainty the future periods in which we may be obligated to settle such amounts.

Some of the figures included in the table above are based on estimates and assumptions about these obligations, includingtheir duration and other factors. The contractual obligations we will actually pay in future periods may vary from those reflectedin the tables.

Critical Accounting Estimates and Policies

The preparation of consolidated financial statements in conformity with GAAP requires management to make certainestimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities, the disclosuresof contingent assets and liabilities at the balance sheet date and the amounts of revenues and expenses recognized during thereporting period. On an ongoing basis, we evaluate our estimates and assumptions, including those related to allowance fordoubtful accounts, financial instruments, obsolescence for materials and supplies, depreciation of property and equipment,deferred costs, impairment of long-lived assets, income taxes, share-based compensation and contingencies. We base ourestimates and assumptions on historical experience and on various other factors we believe are reasonable under thecircumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that arenot readily apparent from other sources. Actual results could differ from such estimates.

Our critical accounting estimates are important to the portrayal of both our financial position and results of operations andrequire us to make difficult, subjective or complex assumptions or estimates about matters that are uncertain. We would reportdifferent amounts in our consolidated financial statements, which could be material, if we used different assumptions or estimates.We have discussed the development and selection of our critical accounting estimates with our board of directors and the board ofdirectors has reviewed the disclosure presented below. During the past three fiscal years, we have not made any material changesin accounting methodology.

We believe that the following is a summary of the critical accounting policies used in the preparation of our consolidatedfinancial statements.

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(a)

(b)

(c)

(d)

Fresh start accounting. On the Plan Effective Date, we adopted and applied the relevant guidance with respect to theaccounting and financial reporting for entities that have emerged from bankruptcy proceedings, or “Fresh StartAccounting.” Under Fresh Start Accounting, our balance sheet on the Plan Effective Date reflects all of our assets and liabilitiesat fair value. Our emergence from bankruptcy and the adoption of Fresh Start Accounting resulted in a new reporting entity,referred to herein as the “Successor,” for financial reporting purposes. To facilitate discussion and analysis of our financialcondition and results of operations herein, we refer to the reorganized Debtors as the Successor for periods subsequent toNovember 19, 2018 and as the “Predecessor” for periods on or prior to November 19, 2018. As a result of the adoption of FreshStart Accounting and the effects of the implementation of the Plan of Reorganization, our consolidated financial statementssubsequent to November 19, 2018 may not be comparable to our consolidated financial statements on or prior to November 19,2018, and as such, “black-line” financial statements are presented to distinguish between the Predecessor and Successorcompanies.

Revenues from contracts with clients. Contract drilling revenues are recognized consistent with the contractual rateinvoiced for the services provided during the period. In connection with drilling contracts, we may receive fees for preparationand mobilization of equipment and personnel or for capital improvements to rigs. We record a contract liability for upfront feesreceived for mobilization, contract preparation and capital upgrade, which are amortized ratably to contract drilling revenue asservices are rendered over the initial term of the related drilling contract. Demobilization revenue expected to be received uponcontract completion is estimated as part of the overall transaction price at contract inception. We record demobilization revenue inearnings ratably over the expected term of the contract with an offset to an accretive contract asset. We record reimbursablerevenue at the gross amount billed to the client in the period the corresponding goods and services are to be provided.

Property and equipment. As of December 31, 2019, property and equipment was $1.8 billion, which represented 81.7% ofour total assets. The carrying value of our property and equipment consisted primarily of our high-specification drillships thatwere recorded at cost less accumulated depreciation.

We estimate useful lives and salvage values by applying judgments and assumptions that reflect both historical experienceand expectations regarding future operations and asset performance. Upon the adoption of Fresh Start Accounting, the estimateduseful lives of our drillships and their related equipment generally range from 8 to 32 years. Applying different judgments andassumptions to useful lives and salvage values would likely result in materially different net carrying amounts and depreciationexpense for our drillships.

We review property and equipment for impairment when events or changes in circumstances indicate that the carryingamounts of our assets held and used may not be recoverable. Potential impairment indicators include steep declines in commodityprices and related market conditions, significant actual or expected declines in rig utilization, increases in idle time or substantialdamage to the property and equipment that adversely affects the extent and manner of its use. We assess impairment usingestimated undiscounted cash flows for the property and equipment being evaluated by applying assumptions regarding futureoperations, market conditions, dayrates, utilization and idle time. An impairment loss is recorded in the period if the carryingamount of the asset is not recoverable. During the Successor periods in 2019 and 2018 and the Predecessor periods in 2018 and2017, there were no long-lived asset impairments.

Contingencies. We record liabilities for estimated loss contingencies when we believe a loss is probable and the amount ofthe probable loss can be reasonably estimated. Once established, we adjust the estimated contingency loss accrual for changes infacts and circumstances that alter our previous assumptions with respect to the likelihood or amount of loss.

Income taxes. Income taxes are provided based upon our interpretation of the tax laws and rates in the countries in whichour subsidiaries are registered and where their operations are conducted and income and expenses are earned and incurred,respectively. This requires significant judgment and the use of estimates and assumptions regarding future events, such as theamount, timing and character of income, deductions and tax credits. Our tax liability in any given year could be affected bychanges in tax laws, regulations, agreements, and treaties or our level of operations or profitability in each jurisdiction. Althoughour annual tax provision is based on the best information available at the time, a number of years may elapse before the ultimatetax liabilities in the various jurisdictions are determined.

We recognize deferred tax assets and liabilities for the anticipated future tax effects of temporary differences between thefinancial statement basis and the tax basis of our assets and liabilities using the applicable enacted tax rates in effect in the year inwhich the asset is realized or the liability is settled. Estimates, judgments and assumptions are

50

required in determining whether deferred tax assets will be fully or partially realized. When it is estimated to be more likely thannot that all or some portion of certain deferred tax assets, such as net operating loss carryforwards, will not be realized, weestablish a valuation allowance for the amount of the deferred tax assets that is considered to be unrealizable.

We recognize tax benefits from an uncertain tax position only if it is more likely than not that the position will be sustainedupon examination by taxing authorities based on the technical merits of the position. The amount recognized is the largest benefitthat we believe has greater than a 50% likelihood of being realized upon settlement. In determining if a tax position is likely to besustained upon examination, we analyze relevant tax laws and regulations, case law, and administrative practices. Actual incometaxes paid may vary from estimates depending upon various factors, including changes in income tax laws, settlement of auditswith taxing authorities, or expiration of statutes of limitations.

Recently Issued Accounting Pronouncements

Please refer to Note 2 to our consolidated financial statements in this annual report for a discussion of recent accountingpronouncements and their anticipated impact.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to certain market risks arising from the use of financial instruments in the ordinary course of business.These risks arise primarily as a result of potential changes in the fair market value of financial instruments that would result fromadverse fluctuations in interest rates and foreign currency exchange rates as discussed below. We have entered, and in the futuremay enter, into derivative financial instrument transactions to manage or reduce market risk, but we do not enter into derivativefinancial instrument transactions for speculative or trading purposes. We had no outstanding derivatives as of December 31, 2019and 2018.

Interest Rate Risk. We had no variable interest debt as of December 31, 2019. We may be exposed to changes in interestrates on any outstanding balance drawn on the Revolving Credit Facility in the future.

Foreign Currency Exchange Rate Risk. We use the U.S. dollar as our functional currency because the substantialmajority of our revenues and expenses are denominated in U.S. dollars. Accordingly, our reporting currency is also U.S. dollars.However, there is a risk that currency fluctuations could have an adverse effect on us as we do earn revenue and incur expenses inother currencies. We utilize the payment structure of client contracts to selectively reduce our exposure to exchange ratefluctuations in connection with monetary assets, liabilities and cash flows denominated in certain foreign currencies. Due tovarious factors, including client acceptance, local banking laws, other statutory requirements, local currency convertibility and theimpact of inflation on local costs, actual local currency needs may vary from those anticipated in the client contracts, resulting inpartial exposure to foreign exchange risk. Fluctuations in foreign currencies have not had a material impact on our overalloperating results or financial position.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of DirectorsPacific Drilling S.A.: Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Pacific Drilling S.A. and subsidiaries (the Company) as ofDecember 31, 2019 and 2018, the related consolidated statements of operations, comprehensive income (loss), shareholders’equity, and cash flows for the year ended December 31, 2019 (Successor), for the periods of November 20, 2018 to December 31,2018 (Successor), January 1, 2018 to November 19, 2018 (Predecessor), and for the year ended December 31, 2017(Predecessor), and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financialstatements present fairly, in all material respects, the financial position of the Company as of December 31, 2019 (Successor) and2018 (Successor), and the results of its operations and its cash flows for the year ended December 31, 2019 (Successor), for theperiods of November 20, 2018 to December 31, 2018 (Successor), January 1, 2018 to November 19, 2018 (Predecessor), and forthe year ended December 31, 2017 (Predecessor), in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)(PCAOB), the Company’s internal control over financial reporting as of December 31, 2019, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the TreadwayCommission, and our report dated March 12, 2020 expressed an unqualified opinion on the effectiveness of the Company’sinternal control over financial reporting.

Basis of Presentation

As discussed in Note 3 to the consolidated financial statements, on November 2, 2018, the United States Bankruptcy Court for theSouthern District of New York entered an order confirming the Company’s plan for reorganization under Chapter 11, whichbecame effective on November 19, 2018. Accordingly, the accompanying consolidated financial statements have been prepared inconformity with Accounting Standards Codification 852-10, Reorganizations, for the Successor as a new entity with assets,liabilities and a capital structure having carrying amounts not comparable with prior periods as described in Note 4.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express anopinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with thePCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws andthe applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of theconsolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Suchprocedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financialstatements. Our audits also included evaluating the accounting principles used and significant estimates made by management, aswell as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide areasonable basis for our opinion.

/s/ KPMG LLP

We have served as the Company’s auditor since 2008.

Houston, Texas

March 12, 2020

52

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of DirectorsPacific Drilling S.A.:

Opinion on Internal Control Over Financial Reporting

We have audited Pacific Drilling S.A. and subsidiaries’ (the Company) internal control over financial reporting as of December31, 2019, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of SponsoringOrganizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internalcontrol over financial reporting as of December 31, 2019, based on criteria established in Internal Control – IntegratedFramework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)(PCAOB), the consolidated balance sheets of the Company as of December 31, 2019 and 2018, the related consolidatedstatements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for the year ended December 31,2019 (Successor), for the periods of November 20, 2018 to December 31, 2018 (Successor), January 1, 2018 to November 19,2018 (Predecessor), and for the year ended December 31, 2017 (Predecessor), and the related notes (collectively, the consolidatedfinancial statements), and our report dated March 12, 2020 expressed an unqualified opinion on those consolidated financialstatements. Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for itsassessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s AnnualReport on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internalcontrol over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are requiredto be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules andregulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in allmaterial respects. Our audit of internal control over financial reporting included obtaining an understanding of internal controlover financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as weconsidered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions ofthe assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles, and that receipts and expenditures ofthe company are being made only in accordance with authorizations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use,or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherentlimitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluationof effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, orthat the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Houston, Texas

March 12, 2020

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Consolidated Statements of Operations(in thousands, except per share information)

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 Year Ended through through Year Ended December 31, 2019 December 31, 2018 November 19, 2018 December 31, 2017Revenues

Contract drilling $ 229,777 $ 28,489 $ 236,379 $ 319,716Costs and expenses

Operating expenses 228,143 19,744 189,606 244,089General and administrative expenses 38,293 4,245 50,604 87,134Depreciation and amortization expense 193,128 27,277 248,302 278,949Loss from unconsolidated subsidiaries 220,152 806 — —

679,716 52,072 488,512 610,172Operating loss (449,939) (23,583) (252,133) (290,456)Other income (expense)

Interest expense (97,698) (10,904) (106,632) (178,983)Write-off of deferred financing costs — — — (30,846)Reorganization items (1,975) (1,300) (1,799,664) (6,474)Interest income 6,292 1,008 3,148 2,717Other income (expense) (729) 526 (1,904) (8,261)

Loss before income taxes (544,049) (34,253) (2,157,185) (512,303)Income tax expense (benefit) 12,416 (6,769) (2,308) 12,863

Net loss $ (556,465) $ (27,484) $ (2,154,877) $ (525,166)Loss per common share, basic $ (7.42) $ (0.37) $ (100.89) $ (24.64)Weighted-average shares outstanding,

basic 75,011 75,010 21,359 21,315Loss per common share, diluted $ (7.42) $ (0.37) $ (100.89) $ (24.64)Weighted-average shares outstanding,

diluted 75,011 75,010 21,359 21,315 See accompanying notes to consolidated financial statements.

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PACIFIC DRILLING S.A. AND SUBSIDIARIESConsolidated Statements of Comprehensive Income (Loss)

(in thousands)

Successor Predecessor Period From Period From

November 20, 2018 January 1, 2018 Year Ended through through Year Ended December 31, 2019 December 31, 2018 November 19, 2018 December 31, 2017

Net loss $ (556,465) $ (27,484) $ (2,154,877) $ (525,166)Other comprehensive income (loss):

Unrealized loss on available-for-sale securities — — — (485)Reclassification adjustment for other-than-

temporary impairment on available-for-salesecurities realized in net income — — — 485

Unrecognized loss on derivative instruments — — — (565)Reclassification adjustment for loss on

derivative instruments realized in netincome — — 643 5,265

Total other comprehensive income — — 643 4,700Total comprehensive loss $ (556,465) $ (27,484) $ (2,154,234) $ (520,466)

See accompanying notes to consolidated financial statements.

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Consolidated Balance Sheets(in thousands, except par value)

December 31, 2019 2018Assets:

Cash and cash equivalents $ 278,620 $ 367,577Restricted cash 6,089 21,498Accounts receivable, net 29,252 40,549Other receivable — 28,000Materials and supplies 43,933 40,429Deferred costs, current 16,961 482Prepaid expenses and other current assets 15,732 8,667

Total current assets 390,587 507,202Property and equipment, net 1,842,549 1,915,172Receivable from unconsolidated subsidiaries — 204,790Intangible asset — 85,053Investment in unconsolidated subsidiaries — 11,876Other assets 23,423 24,120

Total assets $ 2,256,559 $ 2,748,213Liabilities and shareholders’ equity:

Accounts payable $ 24,223 $ 14,941Accrued expenses 27,924 25,744Accrued interest 15,703 16,576Deferred revenue, current 7,567 —

Total current liabilities 75,417 57,261Long-term debt 1,073,734 1,039,335Payable to unconsolidated subsidiaries — 4,400Other long-term liabilities 38,577 28,259

Total long-term liabilities 1,112,311 1,071,994Total liabilities 1,187,728 1,129,255

Commitments and contingencies Shareholders’ equity:

Common shares, $0.01 par value per share, 82,500 shares authorized andissued and 75,007 and 75,031 shares outstanding as ofDecember 31, 2019 and December 31, 2018, respectively 751 750

Additional paid-in capital 1,652,681 1,645,692Treasury shares, at cost (652) —Accumulated deficit (583,949) (27,484)

Total shareholders’ equity 1,068,831 1,618,958Total liabilities and shareholders’ equity $ 2,256,559 $ 2,748,213

See accompanying notes to consolidated financial statements.

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PACIFIC DRILLING S.A. AND SUBSIDIARIESConsolidated Statements of Shareholders’ Equity

(in thousands)

Accumulated Retained Additional Other Earnings/ Total Common Shares Paid-In Treasury Shares Comprehensive (Accumulated Shareholders’ Shares Amount Capital Shares Amount Loss Deficit) EquityPredecessor Balance at January 1, 2017 21,184 $ 212 $ 2,360,398 1,367 $ — $ (19,193) $ 324,783 $ 2,666,200

Shares issued under share-based compensation plan 155 1 (200) (155) — — — (199)

Modification of unvestedawards from equity toliability — — (553) — — — — (553)

Share-based compensation — — 6,819 — — — — 6,819Other comprehensive income — — — — — 4,700 — 4,700Net loss — — — — — — (525,166) (525,166)

Balance at December 31, 2017 21,339 213 2,366,464 1,212 — (14,493) (200,383) 2,151,801Shares issued under share-

based compensation plan 29 1 (5) (29) — — — (4)Share-based compensation — — 2,543 — — — — 2,543Other comprehensive income — — — — — 643 — 643Net loss — — — — — — (2,154,877) (2,154,877)

Balance at November 19, 2018 21,368 214 2,369,002 1,183 — (13,850) (2,355,260) 106Reverse stock split (21,366) (214) 214 (1,183) — — — —Elimination of Predecessor

equity balances — — (2,369,110) — — 13,850 2,355,260 —Equity conversion 24,416 244 1,152,199 — — — — 1,152,443Equity offerings 50,582 506 492,914 — — — — 493,420Issuance of shares reserved for

share-based compensationplan — — — 7,500 — — — —

Balance at November 20, 2018 75,000 750 1,645,219 7,500 — — — 1,645,969Successor

Shares issued under share-based compensation plan 31 — (126) (31) — — — (126)

Share-based compensation — — 599 — — — — 599Net loss — — — — — — (27,484) (27,484)

Balance at December 31, 2018 75,031 750 1,645,692 7,469 — — (27,484) 1,618,958Shares repurchased (44) — — 44 (652) — — (652)Shares issued under share-

based compensation plan 20 1 (82) (20) — — — (81)Share-based compensation — — 7,071 — — — — 7,071Net loss — — — — — — (556,465) (556,465)

Balance at December 31, 2019 75,007 $ 751 $ 1,652,681 7,493 $ (652) $ — $ (583,949) $ 1,068,831 See accompanying notes to consolidated financial statements.

57

PACIFIC DRILLING S.A. AND SUBSIDIARIESConsolidated Statements of Cash Flows

(in thousands)

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 Year Ended through through Year Ended December 31, 2019 December 31, 2018 November 19, 2018 December 31, 2017Cash flow from operating activities:

Net loss $ (556,465) $ (27,484) $ (2,154,877) $ (525,166)Adjustments to reconcile net loss to net cash

provided by (used in) operating activities: Depreciation and amortization expense 193,128 27,277 248,302 278,949Amortization of deferred revenue (1,931) — (20,212) (46,829)Amortization of deferred costs 1,692 128 13,882 11,689Amortization of deferred financing costs — — 1,639 24,889Amortization of debt (premium) discount, net (476) (38) — 940Interest paid-in-kind 34,875 3,732 4,933 —Write-off of deferred financing costs — — — 30,846Deferred income taxes 8,783 (6,507) 4,103 7,409Share-based compensation expense 7,071 599 2,543 6,819Other-than-temporary impairment of available-for-

sale securities — — — 6,829Loss from unconsolidated subsidiaries 220,152 806 — —Reorganization items — — 1,746,764 5,315

Changes in operating assets and liabilities: Accounts receivable 39,297 (11,670) 12,028 53,713Materials and supplies (3,504) (122) 3,532 6,187Deferred costs (25,553) (1,030) (5,220) (12,200)Prepaid expenses and other assets (7,393) (10,953) (27,742) (8,257)Accounts payable and accrued expenses 13,643 (16,490) (10,096) 38,214Deferred revenue 9,498 — (481) 5,780

Net cash used in operating activities (67,183) (41,752) (180,902) (114,873)Cash flow from investing activities:

Capital expenditures (35,110) (2,697) (18,624) (36,645)Deconsolidation of Zonda Debtors — — (4,910) —Purchase of available-for-sale securities — — — (6,000)

Net cash used in investing activities (35,110) (2,697) (23,534) (42,645)Cash flow from financing activities:

Payments for shares issued under share-basedcompensation plan (81) (126) (4) (199)

Proceeds from debtor-in-possession financing — — 50,000 —Payments for debtor-in-possession financing — — (50,000) —Proceeds from long-term debt — — 1,000,000 —Payments on long-term debt — — (1,136,478) (146,473)Proceeds from equity offerings — — 500,000 —Payments for financing costs (1,340) (13,525) (29,355) (4,530)Purchases of treasury shares (652) — — —

Net cash provided by (used in) financingactivities (2,073) (13,651) 334,163 (151,202)

Net increase (decrease) in cash and cash equivalents (104,366) (58,100) 129,727 (308,720)Cash, cash equivalents and restricted cash, beginning of

period 389,075 447,175 317,448 626,168Cash, cash equivalents and restricted cash, end of period $ 284,709 $ 389,075 $ 447,175 $ 317,448 See accompanying notes to consolidated financial statements.

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Note 1—Nature of Business

Pacific Drilling S.A. and its subsidiaries (“Pacific Drilling,” the “Company,” “we,” “us” or “our”) is an internationaloffshore drilling contractor committed to exceeding client expectations by delivering the safest, most efficient and reliabledeepwater drilling services in the industry.

Note 2—Significant Accounting Policies

Principles of Consolidation—Our consolidated financial statements include the accounts of Pacific Drilling S.A. andconsolidated subsidiaries that we control by ownership of a majority voting interest and entities that meet the criteria for variableinterest entities for which we are deemed to be the primary beneficiary for accounting purposes. We eliminate all intercompanytransactions and balances in consolidation.

We are party to a Nigerian joint venture, Pacific International Drilling West Africa Limited (“PIDWAL”), with DerotechOffshore Services Limited (“Derotech”), a privately-held Nigerian registered limited liability company. Derotech owns 51% ofPIDWAL and we own 49% of PIDWAL. Pacific Scirocco Ltd. (“PSL”) and Pacific Bora Ltd. (“PBL”), which own the PacificScirocco and Pacific Bora, respectively, are owned 49.9% by our wholly-owned subsidiary Pacific Drilling Limited (“PDL”) and50.1% by Pacific Drillship Nigeria Limited (“PDNL”). PDNL is owned 0.1% by PDL and 99.9% by PIDWAL. Derotech will notaccrue the economic benefits of its interest in PIDWAL unless and until it satisfies certain outstanding obligations to us and acertain pledge is cancelled by us. Likewise, PIDWAL will not accrue the economic benefits of its interest in PDNL unless anduntil it satisfies certain outstanding obligations to us and a certain pledge is cancelled by us. PIDWAL and PDNL are variableinterest entities for which we are the primary beneficiary. Accordingly, we consolidate all interests of PIDWAL and PDNL in ourconsolidated financial statements and no portion of their operating results is allocated to the noncontrolling interest. See Note 19.

Fresh Start Accounting—Upon the Company’s emergence from Chapter 11 bankruptcy on November 19, 2018, weadopted fresh start accounting (“Fresh Start Accounting”) in accordance with the provisions of Accounting StandardsCodification (“ASC”) 852, Reorganizations, (“ASC 852”) issued by the Financial Accounting Standards Board (“FASB”), whichresulted in the Company becoming a new entity for financial reporting purposes.

References to “Successor” relate to the financial position and results of operations of the reorganized Company as of andsubsequent to November 19, 2018. References to “Predecessor” relate to the financial position of the Company prior to, andresults of operations through and including, November 19, 2018. As a result of the adoption of Fresh Start Accounting and theeffects of the implementation of our Plan of Reorganization (as defined in Note 3), the Company’s consolidated financialstatements subsequent to November 19, 2018, are not comparable to its consolidated financial statements on and prior toNovember 19, 2018.

Our consolidated financial statements as of December 31, 2019 and for the Successor period in 2018 exclude the ZondaDebtors (as defined in Note 3), our wholly-owned subsidiaries, which filed a separate plan of reorganization (see Note 3). Weaccounted for our investment in the Zonda Debtors using the equity method of accounting for the Successor periods in 2018 and2019. As of December 31, 2019, we discontinued applying the equity method on the Zonda Debtors. See Note 16.

Accounting Estimates—The preparation of consolidated financial statements in conformity with generally acceptedaccounting principles in the United States (“GAAP”) requires management to make certain estimates and assumptions. Theseestimates and assumptions affect the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilitiesat the balance sheet date and the amounts of revenues and expenses recognized during the reporting period. On an ongoing basis,we evaluate our estimates and assumptions, including those related to allowance for doubtful accounts, financial instruments,obsolescence for materials and supplies, depreciation of property and equipment, deferred costs, impairment of long-lived assets,income taxes, share-based compensation and contingencies. We base our estimates and assumptions on historical experience andon various other factors we believe are reasonable under the circumstances, the results of which form the basis for makingjudgments about the carrying

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from such estimates.

Revenue from Contracts with Clients—We earn revenue primarily by (i) providing our drillship, work crews, relatedequipment, services and supplies necessary to operate the rig, (ii) delivering the rig by mobilizing to and demobilizing from thedrill location and (iii) performing certain pre-operating activities, including rig preparation activities or equipment modificationsrequired for the contract.

Dayrate Drilling Revenue. Our drilling contracts provide for payment on a dayrate basis, with higher rates for periodswhen the drillship is operating and lower rates or zero rates for periods when drilling operations are interrupted or restricted. Thedayrate invoices billed to the client are determined based on the varying rates applicable to the specific activities performed on anhourly basis. Such dayrate consideration is attributed to the distinct hourly increment to which it relates within the contract term.Therefore, we record dayrate drilling revenue consistent with the contractual rate invoiced for the services provided during therespective period.

Mobilization/Demobilization Revenue. We may receive fees for the mobilization and demobilization of our rigs. Theseactivities are not considered to be distinct within the context of the contract and therefore, the associated revenue is allocated tothe overall performance obligation and recognized ratably over the initial term of the related drilling contract. We record acontract liability for mobilization fees received, which is amortized ratably to contract drilling revenue as services are renderedover the initial term of the related drilling contract. Demobilization revenue expected to be received upon contract completion isestimated as part of the overall transaction price at contract inception. We record demobilization revenue in earnings ratably overthe expected term of the contract with an offset to an accretive contract asset.

Contract Preparation Revenue. Some of our drilling contracts require downtime before the start of the contract to preparethe rig to meet client requirements. At times, we may be compensated by the client for such work. These activities are notconsidered to be distinct within the context of the contract. We record a contract liability for contract preparation fees received,which is amortized ratably to contract drilling revenue over the initial term of the related drilling contract.

Capital Upgrade Revenue. From time to time, we may receive fees from our clients for capital improvements or upgradesto our rigs to meet contractual requirements. These activities are not considered to be distinct within the context of our contracts.We record a contract liability for such fees and recognize them ratably as contract drilling revenue over the initial term of therelated drilling contract.

Revenues Related to Reimbursable Expenses. We generally receive reimbursements from our clients for the purchase ofsupplies, equipment, personnel services and other services provided at their request in accordance with a drilling contract or otheragreement. Such reimbursable revenue is variable and subject to uncertainty, as the amounts received and timing thereof arehighly dependent on factors outside of our control. Accordingly, reimbursable revenue is not included in the total transactionprice until the uncertainty is resolved, which typically occurs when the related costs are incurred on behalf of a client. We aregenerally considered a principal in such transactions. Therefore, we record the associated revenue at the gross amount billed tothe client in the period the corresponding goods and services are to be provided.

Contract Fulfillment Costs. Certain direct and incremental costs incurred for upfront preparation and initial mobilization ofcontracted rigs represent costs of fulfilling a contract as they relate directly to a contract, enhance resources that will be used tosatisfy our performance obligations in the future and are expected to be recovered. Such costs are deferred as a current ornoncurrent asset depending on the length of the initial contract term and amortized ratably to operating expenses as services arerendered over the initial term of the related drilling contract. Deferred contract costs are impaired in the period if the carryingamount is not recoverable. During the Successor periods in 2019 and 2018 and the Predecessor period in 2018, there wasno impairment of deferred contract costs. See Note 9.

Cash and Cash Equivalents—Cash equivalents are highly liquid investments with original maturities of three months orless that are readily convertible to known amounts of cash.

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

Restricted Cash—As of December 31, 2019, our restricted cash balance was primarily held as credit support for a bankguarantee. As of December 31, 2018, our restricted cash balance consisted of $8.5 million cash collateral under our treasurymanagement services agreement with a financial institution and $13.0 million escrow funds remaining to settle professional feesincurred upon or prior to our emergence from our Chapter 11 proceedings.

Accounts Receivable—We record trade accounts receivable at the amount we invoice our clients. We provide anallowance for doubtful accounts, as necessary, based on a review of outstanding receivables, historical collection information andexisting economic conditions. We do not generally require collateral or other security for receivables.

Other Receivable—As of December 31, 2018, other receivable on our consolidated balance sheets was $28.0 million ofcash collateral held in the name of a financial institution as credit support for customs bonds issued in favor of a subsidiary of theCompany.

Materials and Supplies—Materials and supplies held for consumption are carried at average cost if acquired after theadoption of Fresh Start Accounting or at fair value if already outstanding upon the adoption of Fresh Start Accounting. Materialsand supplies balances were presented net of allowances for excess or obsolete materials and supplies of $1.1 million and $0 as ofDecember 31, 2019 and 2018, respectively.

Property and Equipment—Upon the adoption of Fresh Start Accounting, high-specification drillships and other propertyand equipment consisting of purchased software systems, furniture, fixtures and other equipment are recorded at fair value.Capital expenditures made subsequent to the adoption of Fresh Start Accounting, including any major capital improvements, arerecorded at cost. Ongoing maintenance, routine repairs and minor replacements are expensed as incurred.

Property and equipment are depreciated to their salvage value on a straight-line basis over the estimated useful lives ofeach class of assets. The estimated useful lives of property and equipment for the Successor are as follows:

YearsDrillships and related equipment 8-32Other property and equipment 1-6

We review property and equipment for impairment when events or changes in circumstances indicate that the carryingamounts of our assets held and used may not be recoverable. Potential impairment indicators include steep declines in commodityprices and related market conditions, cold stacking of rigs or significant damage to the property and equipment that adverselyaffects the extent and manner of its use. We assess impairment using estimated undiscounted cash flows for the property andequipment being evaluated by applying assumptions regarding future operations, market conditions, dayrates, utilization and idletime. An impairment loss is recorded in the period if the carrying amount of the asset is not recoverable. During the Successorperiods in 2019 and 2018 and the Predecessor periods in 2018 and 2017, there were no long-lived asset impairments.

Intangible Asset—We amortized our client-related intangible asset to depreciation and amortization expense within ourconsolidated statements of operations over its remaining drilling contract term on a straight-line basis.

Deferred Certification and Major Maintenance Costs—We are required to obtain certifications from various regulatorybodies in order to operate our drilling rigs and maintain such certifications through periodic inspections and surveys. The costsincurred in connection with maintaining such certifications, including inspections, tests, surveys and drydock, as well as remedialstructural work and other compliance costs, are deferred and amortized on a straight-line basis over the correspondingcertification periods. We also perform periodic disassembly, inspection and applicable overhaul of our drilling and marineequipment based on manufacturers guidelines outside of our normal maintenance. These major maintenance costs incurred aredeferred and amortized on a straight-line basis over the corresponding inspection periods. As of December 31, 2019 and 2018,deferred certification and major maintenance costs were $9.8 million and $0.5 million respectively, included in deferred costs,current and other assets on our consolidated balance sheets.

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

Deferred Financing Costs—Deferred financing costs associated with long-term debt are carried at cost and are amortizedto interest expense using the effective interest rate method over the term of the applicable long-term debt.

Foreign Currency Transactions—The consolidated financial statements are stated in U.S. dollars. We have designatedthe U.S. dollar as the functional currency for our foreign subsidiaries in international locations because we contract with clients,purchase equipment and finance capital using the U.S. dollar. Transactions in other currencies have been translated into U.S.dollars at the rate of exchange on the transaction date. Any gain or loss arising from a change in exchange rates subsequent to thetransaction date is included as an exchange gain or loss. Monetary assets and liabilities denominated in currencies other than U.S.dollars are reported at the rates of exchange prevailing at the end of the reporting period. During the Successor periods in 2019and 2018, foreign exchange losses were $0.7 million and $0.1 million and recorded in other expense in our consolidatedstatements of operations. During the Predecessor periods in 2018 and 2017, foreign exchange losses were $0.1 million and $0.7million, respectively, and recorded in other expense in our consolidated statements of operations.

Earnings per Share—Basic earnings per common share (“EPS”) is computed by dividing the net income by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution from securities thatcould share in the earnings of the Company. Anti-dilutive securities are excluded from diluted EPS.

Fair Value Measurements—We estimate fair value at the price that would be received to sell an asset or paid to transfer aliability in an orderly transaction between market participants in the principal market for the asset or liability. Our valuationtechniques require inputs that are categorized using a three-level hierarchy as follows: (1) unadjusted quoted prices for identicalassets or liabilities in active markets (“Level 1”), (2) direct or indirect observable inputs, including quoted prices or other marketdata, for similar assets or liabilities in active markets or identical assets or liabilities in less active markets (“Level 2”) and(3) unobservable inputs that require significant judgment for which there is little or no market data (“Level 3”). When multipleinput levels are required for a valuation, we categorize the entire fair value measurement according to the lowest level input that issignificant to the measurement even though we may have also utilized significant inputs that are more readily observable.

Share-Based Compensation—The grant date fair value of share-based awards granted to employees is recognized as anemployee compensation expense over the requisite service period on a straight-line basis. The amount of compensation expenseultimately recognized is based on the number of awards that meet the vesting conditions at the vesting date. For the Successor,any adjustments to the compensation cost recognized in our consolidated statement of operations for awards that are forfeited arerecognized in the period in which the forfeitures occur. For the Predecessor, the amount of compensation expense recognized isadjusted to reflect the number of awards for which the related vesting conditions are expected to be met using estimatedforfeitures.

Leases—We recognize a right-of-use asset and a lease liability on our consolidated balance sheets for leases under whichwe are the lessee, after applying the short-term lease exemption. Operating lease right-of-use assets and liabilities are recognizedbased on the present value of future minimum lease payments over the lease term at commencement date. For discount rate, weuse our incremental borrowing rate based on information available at commencement date if the rate implicit in the lease cannotbe readily determined. For our drilling contracts, which contain a lease component, we apply the practical expedient to recognizerevenues based on the service component, which we determined to be predominant. See Note 10.

Derivatives—We apply cash flow hedge accounting to interest rate swaps that are designated as hedges of the variabilityof future cash flows. The derivative financial instruments are recorded on our consolidated balance sheets at fair value as eitherassets or liabilities. Changes in the fair value of derivatives designated as cash flow hedges, to the extent the hedge is effective,are recognized in accumulated other comprehensive income until the hedged item is recognized in earnings.

Hedge effectiveness is measured on an ongoing basis to ensure the validity of the hedges based on the relative cumulativechanges in fair value between the derivative contract and the hedged item over time. Hedge accounting is discontinuedprospectively if it is determined that the derivative is no longer effective in offsetting changes in the cash flows of the hedgeditem.

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

For the Predecessor, other comprehensive income was released to earnings as the asset was depreciated over its useful lifefor interest rate hedges related to interest capitalized in the construction of fixed assets. For all other interest rate hedges, othercomprehensive income was released to earnings as interest expense was accrued on the underlying debt.

Contingencies—We record liabilities for estimated loss contingencies when we believe a loss is probable and the amountof the probable loss can be reasonably estimated. Once established, we adjust the estimated contingency loss accrual for changesin facts and circumstances that alter our previous assumptions with respect to the likelihood or amount of loss. We recognize legalfees related to loss contingencies as incurred.

Income Taxes—Income taxes are provided based upon the tax laws and rates in the countries in which our subsidiaries areregistered and where their operations are conducted and income and expenses are earned and incurred, respectively. We recognizedeferred tax assets and liabilities for the anticipated future tax effects of temporary differences between the financial statementbasis and the tax basis of our assets and liabilities using the applicable enacted tax rates in effect the year in which the asset isrealized or the liability is settled. A valuation allowance for deferred tax assets is established when it is more likely than not thatsome portion or all of the deferred tax assets will not be realized.

We recognize tax benefits from an uncertain tax position only if it is more likely than not that the position will be sustainedupon examination by taxing authorities based on the technical merits of the position. The amount recognized is the largest benefitthat we believe has greater than a 50% likelihood of being realized upon settlement. Actual income taxes paid may vary fromestimates depending upon changes in income tax laws, actual results of operations and the final audit of tax returns by taxingauthorities. We recognize interest and penalties related to uncertain tax positions in income tax expense.

Reclassifications—Certain reclassifications of previously reported information have been made to conform to the currentyear presentation.

Recently Adopted Accounting Standards

Leases—Effective January 1, 2019, we adopted the accounting standards update for Leases (Topic 842) that requireslessees to recognize a right‑of‑use asset and lease liability for virtually all leases and updates previous accounting standards forlessors to align certain requirements with the updates to lessee accounting standards and revenue recognition accountingstandards. We applied the transition method that required us to recognize right‑of‑use assets and lease liabilities as of the date ofour adoption with no adjustment to prior periods. We applied the package of practical expedients that permitted us to carryforward historical lease classifications. For leases under which we are the lessee, we have recognized a right-of-use asset of $6.9million, recorded in other assets, and a corresponding lease liability, recorded in accrued expenses and other long-term liabilitiesupon adoption. Our adoption did not have and is not expected in the future to have a material effect on our consolidatedstatements of financial position, operations or cash flows.

Recently Issued Accounting Standards

Measurement of Credit Losses on Financial Instruments—On June 16, 2016, the FASB issued ASU 2016-13,Financial Instruments – Credit Losses (Topic 326), which introduces a new model for recognizing credit losses based on anestimate of expected lifetime credit loss on financial assets ranging from short-term trade accounts receivable to long-termfinancings. In April 2019, the FASB issued codification improvements to Topic 326 to clarify all expected recoveries should beincluded in the estimate of the allowance for credit losses. This update is effective for annual and interim periods beginning afterJanuary 1, 2020. We do not expect our adoption to have a material effect on our consolidated financial statements and relateddisclosures.

Simplifications to Income Tax Accounting—On December 18, 2019, the FASB issued ASU 2019-12, Simplifying theAccounting for Income Taxes, which removes certain exceptions for investments, intra-period allocations and interimcalculations, and adds guidance to reduce complexity in accounting for income taxes. This update is

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

effective for annual and interim periods beginning after January 1, 2021. We are currently evaluating the effect the standard mayhave on our consolidated financial statements and related disclosures.

Note 3—Emergence from Bankruptcy Proceedings

By order entered on November 2, 2018, the United States Bankruptcy Court for the Southern District of New York (the“Bankruptcy Court”) confirmed the Company’s Modified Fourth Amended Joint Plan of Reorganization, dated October 31, 2018(the “Plan of Reorganization”) that had been filed with the Bankruptcy Court in connection with the filing by the Company andcertain of its subsidiaries (the “Initial Debtors”) of petitions (the “Bankruptcy Petitions”) on November 12, 2017 (the “PetitionDate”) with the Bankruptcy Court seeking relief under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”).On November 19, 2018 (the “Plan Effective Date”), the Company and the Initial Debtors other than the Zonda Debtors (describedbelow) (the “Debtors”) emerged from bankruptcy after successfully completing their reorganization pursuant to the Plan ofReorganization. The Company’s two subsidiaries involved in the arbitration with Samsung Heavy Industries Co. Ltd. (“SHI”)related to the Pacific Zonda, Pacific Drilling VIII Limited and Pacific Drilling Services, Inc. (together, the “Zonda Debtors”),filed a separate plan of reorganization that was confirmed by order of the Bankruptcy Court on January 30, 2019 (the “ZondaPlan”) and are not Debtors under the Plan of Reorganization.

During the bankruptcy proceedings, the Debtors operated as “debtors-in-possession” in accordance with applicableprovisions of the Bankruptcy Code.

Upon emergence of the Company from bankruptcy on November 19, 2018 in accordance with the Plan of Reorganization:

The Company’s pre-petition 2013 senior secured revolving credit facility (the “2013 Revolving Credit Facility”) and asenior secured credit facility (the “SSCF”), and post-petition debtor-in-possession financing were repaid in full;

Holders of the Company’s loans under a 2018 senior secured institutional term loan facility (the “Term Loan B”), 2017senior secured notes (the “2017 Notes”) and 2020 senior secured notes (the “2020 Notes”) received an aggregate of24,416,442 common shares (or, approximately 32.6% of the outstanding shares) in exchange for their claims;

The Company issued an aggregate of 44,174,136 common shares (or, approximately 58.9% of the outstanding shares)to holders of Term Loan B, 2017 Notes and 2020 Notes who subscribed in the Company’s $460.0 million equity rightsoffering;

The Company issued 3,841,229 common shares (or, approximately 5.1% of the outstanding shares) to Quantum PacificGibraltar Limited (“QP”) in a $40.0 million private placement;

The Company issued 2,566,056 common shares (or, approximately 3.4% of the outstanding shares) to members of anad hoc group of holders of the Term Loan B, 2017 Notes and 2020 Notes (the “Ad Hoc Group”) in payment of their feefor backstopping the equity rights offering;

The Company issued approximately 7.5 million common shares to Pacific Drilling Administrator Limited, a whollyowned subsidiary of the Company that serves as administrator of the Company’s 2018 Omnibus Stock Incentive Plan(the “2018 Stock Plan”), adopted by the board of directors, and which shares were reserved for issuance under the 2018Stock Plan;

Existing holders of the Company’s common shares received no recovery and were diluted by the issuances of commonshares under the Plan of Reorganization such that they held in the aggregate less than 0.003% of the Company’scommon shares outstanding upon emergence from bankruptcy; and

The undisputed claims of other unsecured creditors such as clients, employees and vendors were paid in full in theordinary course of business.

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

Prior to the issuance of the shares described above, the Company effected a 1-for-10,000 reverse stock split (the “ReverseStock Split”).

As a result of the Reverse Stock Split and the issuances of common shares described above, the Company had issued andoutstanding on the Plan Effective Date approximately 75.0 million common shares, and approximately 7.5 million shares werereserved for issuance pursuant to the 2018 Stock Plan.

In addition, pursuant to the Plan of Reorganization, on September 26, 2018 bankruptcy-remote subsidiaries of theCompany issued, and on November 19, 2018 such subsidiaries merged with the Company and the Company assumed (the “NotesAssumption”):

$750.0 million in aggregate principal amount of 8.375% First Lien Notes due 2023, secured by first-priority liens onsubstantially all assets of the Debtors (the “First Lien Notes”); and

$273.6 million in aggregate principal amount of 11.0% / 12.0% Second Lien PIK Notes due 2024, secured by second-priority liens on substantially all assets of the Debtors (the “Second Lien PIK Notes”). Approximately $23.6 millionaggregate principal amount was issued as a commitment fee to the Ad Hoc Group for their agreement to backstop theissuance of the Second Lien PIK Notes.

Concurrent with the Notes Assumption, all of the Company’s subsidiaries other than the Zonda Debtors, certain immaterialsubsidiaries and PIDWAL guaranteed on a senior secured basis the First Lien Notes and Second Lien PIK Notes. If the ZondaDebtors are successful in their appeal of the Tribunal’s award, they will guarantee the First Lien Notes and Second Lien PIKNotes and the Revolving Credit Facility (see Note 23) upon their emergence from bankruptcy pursuant to the terms of the ZondaPlan. If the Zonda Debtors are unsuccessful in the appeal, the Company expects that the Zonda Debtors will be liquidated inaccordance with the terms of the Zonda Plan and the Zonda Debtors would not guarantee the First Lien Notes, Second Lien PIKNotes or the Revolving Credit Facility. See Note 16 for further discussion.

We have classified all income, expenses, gains or losses that were incurred or realized as a result of the Chapter 11

proceedings as reorganization items in our consolidated statements of operations. The components of reorganization items are asfollows:

Successor Predecessor Period From Period From Year Ended November 20, 2018 January 1, 2018 Year Ended December 31, through through December 31, 2019 December 31, 2018 November 19, 2018 2017(in thousands) Professional fees $ 1,975 $ 1,300 $ 82,787 $ 6,447Gain on the settlement of liabilities subjectto compromise — — (794,218) —Discharge of claims upon emergence frombankruptcy — — (80) —Revision of estimated claims — — — 27Escrow interest income — — (2,940) —Fresh start accounting adjustments — — 2,514,115 —

Total reorganization items $ 1,975 $ 1,300 $ 1,799,664 $ 6,474

Note 4—Fresh Start Accounting

Fresh Start Accounting In accordance with ASC 852, the Company was required to adopt Fresh Start Accounting upon its emergence from

Chapter 11 on November 19, 2018 because (i) the holders of the then existing common shares of the Predecessor received lessthan 50% of the new common shares of the Successor outstanding upon emergence and (ii) the

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

reorganization value of the Company’s assets immediately prior to confirmation of the Plan of Reorganization was less than thetotal of all postpetition liabilities and allowed claims.

Upon adoption of Fresh Start Accounting, the reorganization value derived from the enterprise value as disclosed in thePlan of Reorganization was allocated to the Company’s assets and liabilities based on their fair values (except for deferredincome taxes) in accordance with ASC 805, Business Combinations. The amount of deferred income taxes recorded wasdetermined in accordance with ASC 740, Income Taxes.

The Plan Effective Date fair values of the Company’s assets and liabilities differed materially from their recorded values as

reflected on the historical balance sheet. The effects of the Plan of Reorganization and the application of Fresh Start Accountingwere reflected on the consolidated balance sheet as of November 19, 2018 and the related adjustments thereto were recorded inthe consolidated statements of operations for the period January 1, 2018 through November 19, 2018.

The Company’s consolidated financial statements and related footnotes are presented with a “black line” division, whichdelineates the lack of comparability between amounts presented after November 19, 2018 and amounts presented on or prior toNovember 19, 2018. The Company’s financial results for future periods following the application of Fresh Start Accounting willbe different from historical trends and the differences may be material.

Reorganization Value

Under ASC 852, the Successor determined a value to be assigned to the equity of the emerging entity as of the date ofadoption of Fresh Start Accounting. The Plan of Reorganization confirmed by the Bankruptcy Court estimated a range ofenterprise values between $1,650 million and $2,500 million, with a midpoint of $2,075 million plus the fair value of assetsassociated with the arbitration with SHI related to the Pacific Zonda. The Company deemed it appropriate to use the midpointbetween the low end and high end of the range to determine the final enterprise value of $2,075 million plus the estimated fairvalue of the assets associated with the arbitration with SHI of $204.7 million for Fresh Start Accounting.

The following table reconciles the enterprise value to the estimated fair value of our Successor common shares as of the

Plan Effective Date (in thousands):

Enterprise value $ 2,075,000Plus: Cash and cash equivalents (excludes funds held in professional fee escrow of $50.2 million) 401,910Plus: Estimated fair value of the assets associated with the Zonda Arbitration 204,700Less: Fair value of debt (1,035,641)

Fair value of Successor common shares $ 1,645,969

The following table reconciles the enterprise value to the reorganization value of the Successor’s assets to be allocated tothe Company’s individual assets as of the Plan Effective Date (in thousands):

Enterprise value $ 2,075,000Plus: Cash and cash equivalents (excludes funds held in professional fee escrow of $50.2 million) 401,910Plus: Estimated fair value of the assets associated with the Zonda Arbitration 204,700Plus: Current liabilities 83,663Plus: Non-current liabilities excluding long-term debt 29,266

Reorganization value of Successor’s assets to be allocated $ 2,794,539

With the assistance of financial advisors, we determined the enterprise and corresponding equity value of the Successorusing various valuation methods, including: (i) a calculation of the present value of future cash flows based on our financialprojections, and (ii) a peer group trading analysis with peer values evaluated on a dollar value per drillship basis. The enterprisevalue and corresponding equity value are dependent upon achieving the future financial results set forth in our valuations, as wellas the realization of certain other assumptions. All estimates, assumptions, valuations and

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

financial projections, including the fair value adjustments, the financial projections, the enterprise value and equity valueprojections, are inherently subject to significant uncertainties and the resolution of contingencies beyond our control.Accordingly, we cannot assure you that the estimates, assumptions, valuations or financial projections will be realized, and actualresults could vary materially.

Valuation Process The fair values of the Company’s principal assets, drillships and related equipment, were estimated with the assistance of

third party valuation advisors. The reorganization value was allocated to the Company’s individual assets and liabilities based ontheir fair values as described further as follows:

Drillships and related equipment The fair value of the drillships and related equipment was determined using a combination of the discounted cash flow

method (income approach), that we discounted at a rate of approximately 14%, and the cost approach. The income approach wasutilized to estimate the fair value of drillships that generated positive returns on projected cash flows over the remainingeconomic useful life of the drillships and compared to the fair value utilizing the cost approach, adjusted as needed for asset type,age, physical deterioration and obsolescence.

Materials and Supplies The fair value of the materials and supplies were determined by the direct and indirect cost approaches. They were

analyzed on a line-by-line basis and each asset was adjusted for age, physical depreciation and obsolescence.

Intangible Asset

We applied the income approach to estimate the value of the client-related intangible asset of our drilling contracts. Wedetermined the value by comparing the contractual day rates to the estimated comparable market day rates, and applying adiscount rate of 2.9% to the amounts by which contractual revenue exceeded market. The discount rate reflects the correspondingcredit rating of the client related to the contract and the remaining term.

Assets associated with the Zonda Arbitration

We applied a probability weighted approach to estimate the value of assets associated with the Zonda Arbitration, which

was presented within receivable from unconsolidated subsidiaries upon the deconsolidation of the Zonda Debtors. The analysisincluded estimating probabilities of success for the various outcomes and expected cash flows associated with each outcome. Theprobability weighted cash flows were discounted to the balance sheet date using market data. The analysis utilized certainunobservable inputs that require significant judgment for which there is little or no market data, which represent Level 3 fairvalue measurements. These included, but were not limited to, probability and timing of successfully recovering the advancepayments and purchased equipment.

Long-term Debt The fair value of the debt was estimated using quoted market prices to the extent available and significant other observable

inputs, which represent Level 2 fair value measurements. See below under “Fresh Start Adjustments” for additional information regarding assumptions used in the valuation of the

Company’s various other significant assets and liabilities.

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

Consolidated Balance Sheet

The adjustments included in the following fresh start consolidated balance sheet reflect the effects of the transactionscontemplated by the Plan of Reorganization and executed by the Company on the Plan Effective Date (reflected in the column“Reorganization Adjustments”), the deconsolidation of Zonda Debtors (reflected in the column “Deconsolidation of ZondaDebtors”) and fair value and other required accounting adjustments resulting from the adoption of Fresh Start Accounting(reflected in the column “Fresh Start Adjustments”). The explanatory notes provide additional information with regard to theadjustments recorded, the methods used to determine the fair values and significant assumptions.

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

As of November 19, 2018

Predecessor ReorganizationAdjustments (1)

Deconsolidationof Zonda Debtors

(14)

Fresh StartAccounting

Adjustments SuccessorAssets:

Cash and cash equivalents $ 154,238 $ 239,172 (2) $ (4,910) $ — $ 388,500Restricted cash 1,034,470 (975,795)(3) — — 58,675Accounts receivable, net 28,881 — (2) — 28,879Other receivable 28,000 — — — 28,000Materials and supplies 83,800 — — (43,493)(15) 40,307Deferred costs, current 11,371 — — (11,371)(16) —Prepaid expenses and other

current assets 13,281 (958)(4) (815) (693)(17) 10,815Total current assets 1,354,041 (737,581) (5,727) (55,557) 555,176

Property and equipment, net 4,422,709 — (68,102) (2,434,133)(18) 1,920,474Long-term receivable 202,575 — (202,575) — —Receivable from

unconsolidatedsubsidiaries — — 262,925 (58,135)(19) 204,790

Intangible asset — — — 100,000 (20) 100,000Investment in

unconsolidatedsubsidiaries — — 5,774 (742)(19) 5,032

Other assets 27,279 (1,356)(5) (1,845) (15,011)(21) 9,067Total assets $ 6,006,604 $ (738,937) $ (9,550) $ (2,463,578) $ 2,794,539

Liabilities andshareholders’ equity:

Accounts payable $ 14,161 $ 1,247 (6) $ (3,261) $ — $ 12,147Accrued expenses 56,817 11,264 (7) (5,987) — 62,094Debtor-in-possession

financing 50,000 (50,000)(2) — — —Accrued interest 45,770 (36,348)(8) — — 9,422Deferred revenue, current 16,246 — — (16,246)(22) —

Total current liabilities 182,994 (73,837) (9,248) (16,246) 83,663Long-term debt 969,158 — — 66,483 (23) 1,035,641Payable to unconsolidated

subsidiaries — — 1,725 — 1,725Other long-term liabilities 30,253 1,782 (9) (1,539) (2,955)(24) 27,541

Total liabilities not subjectto compromise 1,182,405 (72,055) (9,062) 47,282 1,148,570

Liabilities subject tocompromise 3,084,874 (3,084,386)(10) (488) — —

Commitments andcontingencies

Shareholders’ equity: Common shares 214 536 (11) — — 750Additional paid-in capital 2,368,232 1,646,097 (12) — (2,369,110)(25) 1,645,219Accumulated other

comprehensive loss (13,850) — — 13,850 (25) —Accumulated deficit (615,271) 770,871 (13) — (155,600)(25) —

Total shareholders’ equity 1,739,325 2,417,504 — (2,510,860) 1,645,969Total liabilities and

shareholders’ equity $ 6,006,604 $ (738,937) $ (9,550) $ (2,463,578) $ 2,794,539

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

Reorganization Adjustments

(1) Represent amounts recorded as of the Plan Effective Date for the implementation of the Plan of Reorganization,including, among other items, settlement of the Predecessor’s liabilities subject to compromise, repayment ofcertain of the Predecessor’s debt, issuances of the Successor’s common shares, proceeds received from theSuccessor’s equity offerings and transfer of restricted cash for the issuance of the Successor’s debt.

(2) Changes in cash and cash equivalents include the following (in thousands):

Transfer of restricted cash - escrow funds from the issuance of the First Lien Notes $ 767,578Transfer of restricted cash - escrow funds from the issuance of the Second Lien PIK Notes 258,160Proceeds from the equity offerings 500,000Payment of 2013 Revolving Credit Facility (475,000)Payment of SSCF (661,478)Payment of debtor-in-possession financing (including $354 of accrued interest) (50,354)Payment of accrued interest on 2013 Revolving Credit Facility and SSCF (35,994)Funding of professional fee escrow (50,175)Payment of professional fees (13,557)Payment of bank fees (8)Net change in cash and cash equivalents $ 239,172

(3) Changes in restricted cash includes the following (in thousands):

Transfer of restricted cash - escrow funds from the issuance of the First Lien Notes $ (767,578)Transfer of restricted cash - escrow funds from the issuance of the Second Lien PIK Notes (258,160)Funding of professional fee escrow 50,175Payment of bank fees (232)Net change in restricted cash $ (975,795)

(4) Reflects the elimination of prepaid directors and officers insurance policies related to the Predecessor.

(5) Reflects the elimination of deferred tax asset related to the implementation of the Plan of Reorganization.

(6) Reflects the reinstatement of liabilities subject to compromise to be paid.

(7) Changes in accrued expenses includes the following (in thousands):

Accrual of professional fees $ 9,450Accrual of equity issuance costs 6,580Accrual of other fees 1,593Payment of professional fees (6,342)Reduction in income taxes related to the implementation of the Plan (17)Net change in accrued expenses $ 11,264

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

(8) Reflects the payment of accrued interest (in thousands):

Payment of accrued interest on 2013 Revolving Credit Facility and SSCF $ (35,994)Payment of accrued interest on debtor-in-possession financing (354)Net change in accrued interest $ (36,348)

(9) Reflects the recognition of a deferred tax liability related to the implementation of the Plan of Reorganization.

(10) Liabilities subject to compromise settled in accordance with the Plan of Reorganization and the resulting gain weredetermined as follows (in thousands):

Liabilities subject to compromise $ 3,084,874Less liabilities subject to compromise related to unconsolidated subsidiaries remaining in

bankruptcy

(488)Payment of 2013 Revolving Credit Facility (475,000)Payment of SSCF (661,478)Reinstatement of claims that are expected to be paid (1,247)Issuance of Successor common shares to the holders of the 2017 Notes, Term Loan B and

the 2020 Notes

(1,152,443)Gain on settlement of liabilities subject to compromise $ 794,218

(11) The increase in common shares reflects (in thousands):

Issuance of Successor common shares to the holders of the 2017 Notes, Term Loan B andthe 2020 Notes at par

$ 244

Equity offerings at par 506Reduction of share capital for reverse stock split (214)Net change in common shares $ 536

(12) The increase in additional paid-in capital reflects (in thousands):

Issuance of Successor common shares to the holders of the 2017 Notes, Term Loan B andthe 2020 Notes

$ 1,152,199

Equity offerings - additional paid-in capital 499,494Reduction of share capital for reverse stock split 214Cancellation of Predecessor share based compensation awards 770Accrual of equity issuance costs (6,580)Net change in additional paid-in-capital $ 1,646,097

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

(13) The decrease in accumulated deficit reflects (in thousands):

Gain on settlement of liabilities subject to compromise $ 794,218Accrued professional fees (9,450)Accrued other fees (1,593)Elimination of prepaid directors and officers insurance policies related to the Predecessor (958)Cancellation of predecessor share based compensation awards (770)Professional and success fees paid on Plan Effective Date (7,215)Payment of bank fees (240)Elimination of deferred tax asset related to the implementation of the Plan (1,356)Recognition of a deferred tax liability related to the implementation of the Plan (1,782)Reduction in income tax related to the implementation of the Plan 17Net change in accumulated deficit $ 770,871

Deconsolidation of Zonda Debtors

(14) Represents the deconsolidation of Zonda Debtors as of November 19, 2018. The Zonda Debtors filed a separate

plan of reorganization and did not emerge from bankruptcy on the Plan Effective Date. Therefore, the ZondaDebtors were deconsolidated as of November 19, 2018.

Fresh Start Adjustments

(15) Reflects the fair value adjustment of $43.5 million to the Company's materials and supplies due to the adoption of

Fresh Start Accounting.

(16) Reflects the elimination of current deferred costs of $11.4 million due to the adoption of Fresh Start Accounting.

(17) Reflects the fair value adjustment to the Company's prepaid fuel due to the adoption of Fresh Start Accounting.

(18) Reflects the fair value adjustment to the Company's property and equipment, net due to the adoption of Fresh StartAccounting (in thousands):

Successor PredecessorDrillships and related equipment $ 1,919,791 $ 5,928,887Other property and equipment 683 20,737

Total property and equipment 1,920,474 5,949,624Accumulated depreciation — (1,526,915)

Property and equipment, net $ 1,920,474 $ 4,422,709

(19) Reflects fair value adjustment to receivable from unconsolidated subsidiaries due to asset revaluation of the ZondaDebtors.

(20) Reflects the recognition of an asset for the fair value of the client-related intangible asset of our drilling contracts,

where contract rates are in excess of current market rates.

(21) Reflects the elimination of deferred costs of $15.1 million, offset by an increase in deferred tax balances of $0.1million due to the adoption of Fresh Start Accounting.

(22) Reflects the elimination of deferred revenue due to the adoption of Fresh Start Accounting.

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Notes to Consolidated Financial Statements—Continued

(23) Reflects the elimination of unamortized deferred financing costs $59.4 million and fair value adjustment of $7.1million to the Company's debt due to the adoption of Fresh Start Accounting.

(24) Represents the adjustment to deferred tax balances of $3.0 million as a result of adopting Fresh Start Accounting.

(25) Reflects the cumulative impact of Fresh Start Accounting adjustments discussed above and the elimination of

Predecessor accumulated other comprehensive loss and accumulated deficit. Note 5—Property and Equipment

Property and equipment consists of the following:

December 31, 2019 2018 (in thousands)Drillships and related equipment $ 1,962,211 $ 1,926,773Other property and equipment 259 682

Property and equipment, cost 1,962,470 1,927,455Accumulated depreciation (119,921) (12,283)

Property and equipment, net $ 1,842,549 $ 1,915,172

During the Successor periods in 2019 and 2018 and the Predecessor periods in 2018 and 2017, depreciation expense was$108.1 million, $12.3 million, $247.7 million and $278.2 million, respectively. Note 6—Intangible Asset

Intangible asset consists of the following:

December 31, 2019 2018 (in thousands)Client-related intangible asset $ 100,000 $ 100,000Accumulated amortization (100,000) (14,947)

Intangible asset, net $ — $ 85,053

During the Successor periods in 2019 and 2018, amortization expense of intangible asset was $85.1 million and $14.9million, based on an amortization period of 0.8 year. The intangible asset was fully amortized through the end of the initial termof the related drilling contract in August 2019.

Note 7—Debt

Debt, net of debt premium (discount), consists of the following:

December 31, 2019 2018 (in thousands)Debt Obligations: First Lien Notes $ 747,910 $ 747,400Second Lien PIK Notes 325,824 291,935

Total long-term debt $ 1,073,734 $ 1,039,335

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

First Lien Notes

On September 26, 2018, Pacific Drilling First Lien Escrow Issuer Limited (the “First Lien Escrow Issuer”), a privatecompany limited by shares incorporated in the British Virgin Islands and wholly owned subsidiary of the Company, entered intoan indenture (the “First Lien Notes Indenture”) with Wilmington Trust, National Association, as trustee (the “Trustee”) andcollateral agent, relating to the issuance by the First Lien Escrow Issuer of $750.0 million aggregate principal amount of 8.375%First Lien Notes due 2023 (the “First Lien Notes”).

Upon the emergence of the Company from the Chapter 11 proceedings on November 19, 2018, the First Lien EscrowIssuer merged into the Company and the Company assumed all obligations of the First Lien Escrow Issuer under the First LienNotes Indenture.

The First Lien Notes accrue interest at a rate of 8.375% per annum, payable semi-annually in arrears on April 1 andOctober 1 of each year beginning on April 1, 2019. The First Lien Notes will mature on October 1, 2023, unless earlier redeemedor repurchased.

The First Lien Notes are jointly and severally and fully and unconditionally guaranteed on a senior secured basis by all ofthe Company’s subsidiaries other than the Zonda Debtors, certain immaterial subsidiaries and PIDWAL. If the Zonda Debtors aresuccessful in their appeal of the Tribunal’s award, they will guarantee the First Lien Notes and Second Lien PIK Notes upon theiremergence from bankruptcy pursuant to their separate plan of reorganization. See Note 16 for further discussion. If the ZondaDebtors are unsuccessful in the appeal, the Company expects that the Zonda Debtors will be liquidated in accordance with theterms of the Zonda Plan and the Zonda Debtors would not guarantee the First Lien Notes and Second Lien PIK Notes.

The First Lien Notes are secured by first-priority liens on substantially all assets of the Company and the guarantors (otherthan certain excluded property), including (i) vessels, (ii) books and records, (iii) certain deposit accounts and the amountscontained therein, (iv) assignments of proceeds of hull and machinery and loss of hire insurance, (v) assignments of earnings fromdrilling contracts, and (vi) equity interests owned by the Company and the guarantors, in each case, subject to certain exceptions,including that such first-priority liens will be subject to payment priority in favor of future holders, if any, of certain superpriorityfirst lien debt of up to $50.0 million (see Note 23).

The First Lien Notes Indenture contains covenants limiting the ability of the Company, and any restricted subsidiary to,among other things, (i) incur or guarantee additional indebtedness and issue preferred stock, (ii) pay dividends on or redeem orrepurchase capital stock, make certain investments, make certain payments on or with respect to subordinated and junior debt(including making cash interest or principal payments on the Second Lien PIK Notes (as defined below)), (iii) create or incurcertain liens, (iv) impose restrictions on the ability of restricted subsidiaries to pay dividends, (v) merge or consolidate with otherentities, (vi) enter into certain transactions with affiliates, (vii) impair the security interests in the collateral for the First LienNotes, and (viii) engage in certain lines of business. These covenants are subject to a number of important exceptions andqualifications and certain of them will be suspended with respect to the First Lien Notes in the event that the First Lien Notesobtain an investment grade rating.

The Company may be required to offer to purchase the First Lien Notes at 101.0% percent of the principal amount thereof,plus accrued and unpaid interest, upon the occurrence of a Change of Control (as defined in the First Lien Notes Indenture), andat 100.0% of the principal amount, plus accrued and unpaid interest, under certain other circumstances. In addition, the Companywill be required to offer to purchase First Lien Notes at 100.0% of the principal amount thereof, plus accrued and unpaid interest,with any cash proceeds from a settlement or award in connection with the arbitration relating to the Pacific Zonda with such offerto be for an aggregate principal amount of First Lien Notes equal to the lesser of (x) 50.0% of such cash proceeds and (y) $75.0million.

At any time prior to October 1, 2020, (i) the Company may redeem the First Lien Notes, in whole or in part, at aredemption price equal to 100.0% of the principal amount thereof, plus a “make-whole” premium, (ii) the Company may redeemup to 35.0% of the original principal amount of the First Lien Notes with proceeds from certain equity offerings at a redemptionprice equal to 108.375% of the principal amount thereof, and (iii) not more than once in any twelve-

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Notes to Consolidated Financial Statements—Continued

month period, the Company may redeem up to 10.0% of the original principal amount of the First Lien Notes at a redemptionprice equal to 103.0% of the principal amount thereof, in each case plus accrued and unpaid interest.

At any time on or after October 1, 2020, the Company may redeem the First Lien Notes, in whole or in part, at thefollowing redemption prices (expressed as a percentage of the principal amount), plus accrued and unpaid interest, during thetwelve-month period beginning on October 1 of the years indicated: 2020 – 104.188%; 2021 – 102.094%; 2022 and thereafter –100.0%.

The First Lien Notes Indenture contains customary events of default, including, among other things, (i) failure to makerequired payments; (ii) failure to comply with certain agreements or covenants; (iii) failure to pay certain other indebtedness; (iv)certain events of bankruptcy and insolvency; and (v) failure to pay certain judgments. An event of default under the First LienNotes Indenture will allow either the Trustee or the holders of at least 25% in aggregate principal amount of the then-outstandingFirst Lien Notes to accelerate, or in certain cases will automatically cause the acceleration of, the amounts due under the FirstLien Notes.

Intercreditor Agreement

The relationship between holders of First Lien Notes (and any future first lien debt), on the one hand, and Second Lien PIKNotes (and any future junior lien debt), on the other hand, is governed by an intercreditor agreement. Pursuant to the intercreditoragreement, the liens securing first lien debt are effectively senior in priority to the liens securing junior lien debt. If the Companyincurs any future first lien debt, the relationship between holders of such debt and First Lien Notes will be governed by acollateral agency agreement. Such agreements will allow for payment priority in favor of holders of up to $50.0 million of futuresuperpriority first lien debt (see Note 23).

Second Lien PIK Notes

On September 26, 2018, Pacific Drilling Second Lien Escrow Issuer Limited (the “Second Lien Escrow Issuer”), a privatecompany limited by shares incorporated in the British Virgin Islands and wholly owned subsidiary of the Company, entered intoan indenture (the “Second Lien PIK Notes Indenture”) with the Trustee, as trustee and junior lien collateral agent, relating to theissuance by the Second Lien Escrow Issuer of approximately $273.6 million aggregate principal amount of 11.0% / 12.0% SecondLien PIK Notes due 2024 (the “Second Lien PIK Notes”), of which (i) $250.0 million aggregate principal amount was issuedpursuant to the Second Lien PIK Notes Offering (as defined below), and (ii) approximately $23.6 million aggregate principalamount was issued as a commitment fee to the Ad Hoc Group for their agreement to backstop the issuance of the Second LienPIK Notes.

Upon the emergence of the Company from the Chapter 11 proceedings on November 19, 2018, the Second Lien EscrowIssuer merged into the Company and the Company assumed all obligations of the Second Lien Escrow Issuer under the SecondLien PIK Notes Indenture.

For each interest period, interest is payable, at the option of the Company, (i) entirely in cash (“Cash Interest”), (ii) entirelythrough the issuance of additional Second Lien PIK Notes having the same terms and conditions as the Second Lien PIK Notesissued in the Second Lien PIK Notes Offering in a principal amount equal to the amount of interest then due and payable or byincreasing the then outstanding aggregate principal amount of Second Lien PIK Notes (“PIK Interest”) or (iii) 50% as CashInterest and 50% as PIK Interest. If the Company elects to pay interest for an interest period entirely in the form of Cash Interest,interest will accrue at a rate of 11.0% per annum for such interest period. If the Company elects to pay interest for an interestperiod entirely in the form of PIK Interest, interest will accrue at a rate of 12.0% per annum for such interest period. If theCompany elects to pay 50% in Cash Interest and 50% in PIK Interest for an interest period, (i) interest in respect of the CashInterest portion will accrue at 11.0% and (ii) interest in respect of the PIK Interest portion will accrue at 12.0% for such interestperiod.

Interest on the Second Lien PIK Notes is payable semi-annually in arrears on April 1 and October 1 of each year beginningon April 1, 2019. The Second Lien PIK Notes will mature on April 1, 2024, unless earlier redeemed or repurchased. As ofDecember 31, 2019, the Company has made the following payments in the form of PIK Interest:

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

Payment Date PIK Interest (in thousands)April 1, 2019 $ 16,873October 1, 2019 17,429

The Second Lien PIK Notes are jointly and severally and fully and unconditionally guaranteed on a senior secured basis byall of the Company’s subsidiaries that guarantee the Company’s First Lien Notes and are secured by second-priority liens on all ofthe assets of the Company and the guarantors that also serve as collateral for the Company’s First Lien Notes.

The Second Lien PIK Notes Indenture contains covenants limiting the ability of the Company, and any restrictedsubsidiary to, among other things, (i) incur or guarantee additional indebtedness and issue preferred stock, (ii) pay dividends on orredeem or repurchase capital stock, make certain investments, make certain payments on or with respect to subordinated andjunior debt, (iii) create or incur certain liens, (iv) impose restrictions on the ability of restricted subsidiaries to pay dividends, (v)merge or consolidate with other entities, (vi) enter into certain transactions with affiliates, (vii) impair the security interests in thecollateral for the Second Lien PIK Notes, and (viii) engage in certain lines of business. These covenants are subject to a numberof important exceptions and qualifications and certain of them will be suspended with respect to the Second Lien PIK Notes in theevent that the Second Lien PIK Notes obtain an investment grade rating.

The Company may be required to offer to purchase the Second Lien PIK Notes at 101.0% percent of the principal amountthereof, plus accrued and unpaid interest, upon the occurrence of a Change of Control (as defined in the Second Lien PIK NotesIndenture) (a “Change of Control Offer”), and at 100.0% of the principal amount, plus accrued and unpaid interest, under certainother circumstances. In addition, the Company will be required to offer to purchase Second Lien PIK Notes at 100.0% of theprincipal amount thereof, plus accrued and unpaid interest, with the cash proceeds, if any, from a settlement or award inconnection with the arbitration with SHI related to the Pacific Zonda, with such offer to be for an aggregate principal amount ofthe Second Lien PIK Notes equal to the lesser of (x) 50.0% of such cash proceeds and (y) $75.0 million, provided, that if theCompany is required to offer to purchase the First Lien Notes with such cash proceeds, the Company shall only be required tooffer to purchase the Second Lien PIK Notes with the portion thereof that has been declined by the holders of First Lien Notes.

At any time prior to April 1, 2020, (i) the Company may redeem the Second Lien PIK Notes, in whole or in part, at aredemption price equal to 100.0% of the principal amount thereof, plus a “make-whole” premium, and (ii) the Company mayredeem up to 35.0% of the original principal amount of the Second Lien PIK Notes with the proceeds from certain equityofferings at a redemption price equal to 112.0%, in each case plus accrued and unpaid interest.

At any time on or after April 1, 2020, the Company may redeem the Second Lien PIK Notes, in whole or in part, at thefollowing redemption prices (expressed as a percentage of principal amount), plus any accrued and unpaid interest, during the six-month period beginning on the dates indicated below:

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

Date PriceApril 1, 2020 112.0%October 1, 2020 109.0%April 1, 2021 106.0%October 1, 2021 103.0%April 1, 2022 and thereafter 100.0%

At any time after a Change of Control occurs, the Company may redeem all, but not less than all, of theSecond Lien PIK Notes at the following redemption prices (expressed as a percentage of principal amount), plus any accrued andunpaid interest, during the six-month period beginning on the dates indicated below:

Date PriceApril 1, 2020 106.0%October 1, 2020 109.0%April 1, 2021 106.0%October 1, 2021 103.0%April 1, 2022 and thereafter 100.0%

If the Company exercises this Change of Control redemption right, it may elect not to make the Change of Control Offerdescribed above.

The Second Lien PIK Notes Indenture contains customary events of default, including, among other things, (i) failure tomake required payments; (ii) failure to comply with certain agreements or covenants; (iii) failure to pay certain otherindebtedness; (iv) certain events of bankruptcy and insolvency; and (v) failure to pay certain judgments. An event of default underthe Second Lien PIK Notes Indenture will allow either the Trustee or the holders of at least 25.0% in aggregate principal amountof the then-outstanding Second Lien PIK Notes to accelerate, or in certain cases, will automatically cause the acceleration of, theamounts due under the Second Lien PIK Notes.

Pre-Petition Secured Debt

On November 12, 2017, the Debtors filed the Bankruptcy Petitions for relief under Chapter 11 of the Bankruptcy Code.Prior to the Petition Date, the Company had outstanding the 2017 Notes, Term Loan B, 2013 Revolving Credit Facility, SSCF and2020 Notes (collectively, the “Pre-Petition Secured Debt”).

The filing of the Bankruptcy Petitions constituted an event of default with respect to the Pre-Petition Secured Debt. As aresult, the corresponding Pre-Petition Debt became immediately due and payable and any efforts to enforce such paymentobligations were automatically stayed as a result of the Chapter 11 proceedings.

On November 19, 2018, the Company emerged from the Chapter 11 proceedings, and repaid in full the 2013 RevolvingCredit Facility and SSCF and issued common shares in satisfaction of the claims under the 2017 Notes, Term Loan B and 2020Notes. As a result, the Pre-Petition Secured Debt is no longer outstanding.

Maturities of Long-Term Debt

Excluding net unamortized premium of $6.6 million, the aggregate maturities of our debt including the Second Lien PIKinterest incurred through December 31, 2019 were as follows:

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Notes to Consolidated Financial Statements—Continued

(in thousands)Years ending December 31, 2020 $ —2021 —2022 —2023 750,0002024 317,154 Total $ 1,067,154

Note 8—Income Taxes

Pacific Drilling S.A., a holding company and Luxembourg resident, is subject to Luxembourg corporate income tax andmunicipal business tax at a combined rate of 24.9% for the year ended December 31, 2019, 26.0% for the year ended December31, 2018, and 27.1% for the year ended December 31, 2017. Qualifying dividend income and capital gains on the sale ofqualifying investments in subsidiaries are exempt from Luxembourg corporate income tax and municipal business tax.Consequently, the Company expects dividends from its subsidiaries and capital gains from sales of investments in its subsidiariesto be exempt from Luxembourg corporate income tax and municipal business tax.

Under the Plan of Reorganization, the Term Loan B, 2020 Notes, and 2017 Notes were cancelled and extinguished inexchange for common shares of Pacific Drilling S.A., resulting in cancellation of debt income (“CODI”) for Pacific Drilling S.A.of $863.1 million as calculated under Luxembourg accounting and tax principles. Article 52 of Luxembourg Income Tax Lawgenerally provides for an exemption from income tax for CODI that remains after the utilization of net operating losses. As partof the Plan of Reorganization, certain intercompany debt was extinguished, resulting in bad debt losses for Pacific Drilling S.A.,which together with its available net operating losses, is sufficient to fully offset CODI of Pacific Drilling S.A. that resulted fromthe Plan of Reorganization.

Income taxes have been provided based on the laws and rates in effect in the countries in which our operations areconducted or in which our subsidiaries are considered residents for income tax purposes. Our income tax expense or benefit arisesfrom our mix of pretax earnings or losses, respectively, in the international tax jurisdictions in which we operate. Because thecountries in which we operate have different statutory tax rates and tax regimes with respect to one another, there is no expectedrelationship between the provision for income taxes and our income or loss before income taxes.

Loss before income taxes consists of the following:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 Year Ended through through Year Ended December 31, 2019 December 31, 2018 November 19, 2018 December 31, 2017(in thousands) Luxembourg $ (83,322) $ (9,738) $ (500,317) $ 349United States (933) 3,558 (10,467) 1,301Other jurisdictions (459,794) (28,073) (1,646,401) (513,953)

Loss before income taxes $ (544,049) $ (34,253) $ (2,157,185) $ (512,303)

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Notes to Consolidated Financial Statements—Continued

The components of income tax provision (benefit) consist of the following:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 Year Ended through through Year Ended

December 31, 2019 December 31, 2018 November19, 2018 December 31, 2017

(in thousands) Current income tax expense (benefit): Luxembourg $ 1,906 $ (292) $ 866 $ 2,287United States 1,323 90 641 3,202Other foreign 404 (60) 288 (35)

Total current $ 3,633 $ (262) $ 1,795 $ 5,454Deferred tax expense (benefit): Luxembourg $ 7,914 $ (6,454) $ (6,924) $ (321)United States (274) 15 1,902 6,145Other foreign 1,143 (68) 919 1,585

Total deferred $ 8,783 $ (6,507) $ (4,103) $ 7,409Income tax expense (benefit) $ 12,416 $ (6,769) $ (2,308) $ 12,863

A reconciliation between the Luxembourg statutory rate of 24.9% for the year ended December 31, 2019, 26.0% for the

year ended December 31, 2018 and 27.1% for the year ended December 31, 2017 and our effective tax rate is as follows:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 Year Ended through through Year Ended December 31, 2019 December 31, 2018 November 19, 2018 December 31, 2017Statutory rate 24.9 % 26.0 % 26.0 % 27.1 %Effect of tax rates different from the

Luxembourg statutory tax rate (22.1)% (25.3)% (18.7)% (19.2)%Change in valuation allowance (1.1)% 18.7 % (4.3)% (8.0)%Changes in unrecognized tax benefits (0.2)% (1.0)% (0.2)% (0.8)%Equity based compensation shortfall — % — % (0.1)% (1.2)%Change in enacted statutory tax rates (3.9)% — % — % (0.5)%Adjustments related to prior years 0.1 % 1.3 % — % 0.1 %Fresh start accounting — % — % (2.6)% — %Effective tax rate (2.3)% 19.7 % 0.1 % (2.5)%

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

The components of deferred tax assets and liabilities consist of the following:

December 31, 2019 2018 (in thousands)Deferred tax assets:

Net operating loss carryforwards $ 550,119 $ 549,107Depreciation and amortization 187,288 188,161Accrued payroll expenses 3,073 2,307Deferred revenue 981 42Interest expense limitation carryforward 2,033 —Other 336 307

Deferred tax assets 743,830 739,924Less: valuation allowance (733,047) (701,727)Total deferred tax assets $ 10,783 $ 38,197

Deferred tax liabilities:

Depreciation and amortization $ — $ (22,134)Deferred expenses (2,433) —Other (47) (5)

Total deferred tax liabilities $ (2,480) $ (22,139)

Net deferred tax assets $ 8,303 $ 16,058

As of December 31, 2019 and 2018, the Company had gross deferred tax assets of $550.1 million and $549.1 million,respectively, related to loss carry forwards in various worldwide tax jurisdictions. The majority of the loss carry forwards are inLuxembourg and have a related gross deferred tax asset of $501.6 million that expire starting in 2034. The remaining loss carryforwards have no expiration.

A valuation allowance for deferred tax assets is established when it is more likely than not that some portion or all of thedeferred tax assets will not be realized. As of December 31, 2019 and 2018, the valuation allowance for deferred tax assets was$733.0 million and $701.7 million, respectively.

We consider the earnings of certain of our subsidiaries to be indefinitely reinvested. Accordingly, we have not provided fortaxes on these unremitted earnings. Should we make distributions from the unremitted earnings of these subsidiaries, we would besubject to taxes payable in certain jurisdictions. As of December 31, 2019, the amount of indefinitely reinvested earnings wasapproximately $22.2 million, and if all of these indefinitely reinvested earnings were distributed, we would be subject toestimated taxes of approximately $1.1 million.

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

We recognize tax benefits from an uncertain tax position only if it is more likely than not that the position will be sustainedupon examination by taxing authorities based on the technical merits of the position. The amount recognized is the largest benefitthat we believe has greater than a 50% likelihood of being realized upon settlement. As of December 31, 2019, we had $43.5million of unrecognized tax benefits which were included in other long-term liabilities on our consolidated balance sheets andwould impact our consolidated effective tax rate if realized. To the extent we have income tax receivable balances available toutilize against amounts payable for unrecognized tax benefits, we have presented such receivable balances as a reduction to otherlong-term liabilities on our consolidated balance sheets. A reconciliation of the beginning and ending amounts of unrecognizedtax benefits for the Successor periods in 2019 and 2018 and for the Predecessor period in 2018 is as follows:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 Year Ended through through December 31, 2019 December 31, 2018 November 19, 2018(in thousands) Balance, beginning of period $ 42,457 $ 41,831 $ 38,860

Increases in unrecognized tax benefits as a result of taxpositions taken during current year 1,028 626 2,971

Balance, end of period $ 43,485 $ 42,457 $ 41,831

As of December 31, 2019 and 2018, we have no accrued interest and penalties related to uncertain tax positions on ourbalance sheet as such payments would not be required by law.

The Company is subject to taxation in various U.S., foreign, and state jurisdictions in which it conducts business. Taxyears as early as 2011 remain subject to examination. As of December 31, 2019, the Company has ongoing tax audits in Nigeriaand Brazil.

Note 9—Revenue from Contracts with Clients

Contract Assets and Liabilities

Accounts receivable are recognized when the right to consideration becomes unconditional based upon contractual billingschedules. Payment terms on invoiced amounts are typically 30 days. As of December 31, 2019 and 2018, there were noallowances for doubtful accounts.

Contract assets consist of demobilization revenue that we expect to receive and is recognized ratably throughout thecontract term but invoiced upon completion of the demobilization activities. Once the demobilization revenue is invoiced, thecorresponding contract asset is transferred to accounts receivable.

Contract liabilities include payments received for mobilization, contract preparation and capital upgrade activities, whichare allocated to the overall performance obligation and recognized ratably over the initial term of the contract.

Contract assets and liabilities are netted at a contract level, such that deferred revenue for mobilization, contractpreparation and capital upgrade (contract liabilities) is netted with any accrued demobilization revenue (contract asset) for eachapplicable contract. Any net current contract asset and liability balances are included in “Prepaid expenses and other currentassets” and “Deferred revenue, current,” respectively, and any net noncurrent contract asset and liability balances are included in“Other assets” and “Deferred revenue,” respectively, on our consolidated balance sheets.

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

The following table provides information about trade receivables, contract assets and contract liabilities:

December 31, 2019 2018 (in thousands)Trade receivables, net $ 28,926 $ 40,144Current contract liabilities (deferred revenue) 7,567 —

Significant changes in contract assets and contract liabilities for the year ended December 31, 2019 are as follows:

Contract Assets Contract Liabilities (in thousands)Balance at December 31, 2018 $ — $ —Decrease due to amortization of deferred revenue — (1,931)Increase due to billings related to client capital upgrades — 9,511Increase due to demobilization revenue recognized 13 —Transfers between balances (13) (13)Balance at December 31, 2019 $ — $ 7,567

Contract Fulfillment Costs

As of December 31, 2019 and 2018, contract fulfillment costs were $14.9 million and $0.4 million, respectively, andreported in “Deferred costs, current” on our consolidated balance sheets. During the Successor periods in 2019 and 2018 and thePredecessor period in 2018, amortization of such costs was $0.8 million, $0.1 million and $7.5 million, respectively.

Costs incurred for the demobilization of rigs at contract completion are recognized as incurred during the demobilizationprocess. Costs incurred for capital upgrades for a contract are capitalized as property and equipment and depreciated over theestimated useful life of the asset.

Future Amortization of Contract Liabilities

The following table reflects revenue expected to be recognized in the future related to unsatisfied performance obligationsas of December 31, 2019:

For the years ending December 31,

2020 2021 2022 andthereafter Total

(in thousands)Amortization of contract liabilities $ 7,580 $ — $ — $ 7,580

The expected timing for recognition of such revenue is based on the estimated start date and duration of each respectivecontract as of December 31, 2019. The actual timing of recognition of such amounts may vary due to factors outside of ourcontrol. We have applied the optional exemption in Topic 606 and have not disclosed the variable consideration related to ourestimated future dayrate revenue.

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

Note 10—Leases

Our leasing activities primarily consist of operating leases for corporate offices, regional shorebase offices and officeequipment. The components and other information related to leases are as follows:

Year Ended December 31, 2019 (in thousands)Lease Expense Operating lease cost $ 6,690 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases 1,445Right-of-use assets obtained in exchange for lease obligations: Operating leases 6,935

Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. We account for lease

and non‑lease components of our operating leases as a single component except for agreements with our integrated servicessubcontractors, which we account for the components separately. During the Successor period in 2018 and the Predecessorperiods in 2018 and 2017, operating lease costs were $0.3 million, $14.7 million and $6.5 million respectively.

December 31, 2019Weighted Average Remaining Lease Term (in years) Operating leases 4.8 Weighted Average Discount Rate Operating leases 8.1%

Future minimum lease payments for our leases as of December 31, 2019 and a reconciliation to lease liabilities recorded on

our condensed consolidated balance sheet are as follows:

Operating LeasesYears Ending December 31, (in thousands)2020 $ 1,4722021 1,4992022 1,5252023 1,5522024 1,179Total future minimum lease payments 7,227Less imputed interest (1,220)

Total $ 6,007 Reported as of December 31, 2019 Accrued expenses $ 1,033Other long-term liabilities 4,974

Total lease liabilities $ 6,007

Note 11—Shareholders’ Equity

In accordance with the Plan of Reorganization, effective November 19, 2018, by shareholder approval at an ExtraordinaryGeneral Meeting, the Company effectuated, among other things, the 1-for-10,000 Reverse Stock Split of its existing commonshares. On the effective date of the Reverse Stock Split, the Company’s shareholders received one

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Notes to Consolidated Financial Statements—Continued

new common share for every 10,000 common shares they owned. No fractional shares were issued in connection with the ReverseStock Split; instead, holders of fractional shares were paid in cash, which amount was not material in the aggregate.

In addition, at an Extraordinary General Meeting, the Company’s shareholders approved the increase in the Company’s

share capital to $825,000, or 82.5 million shares, of which approximately 75.0 million shares were issued and are outstanding inconnection with emergence and the remaining approximately 7.5 million authorized shares were issued to Pacific DrillingAdministrators Limited and reserved for issuance pursuant to the 2018 Stock Plan.

On February 22, 2019, our shareholders approved a share repurchase program for a total expenditure of up to $15.0 million

for a two-year period. We may purchase shares in one or several transactions on the open market or otherwise; however, we arenot obligated to repurchase any specific number or dollar value of our common shares under the program. During the year endedDecember 31, 2019, we repurchased a total of 44,710 of our common shares on the open market at an aggregate cost of $0.7million. Repurchased shares of our common stock are held as treasury shares until they are reissued or retired.

As of December 31, 2019, the Company’s share capital consisted of 82.5 million common shares authorized, $0.01 par

value per share, of which 75.0 million common shares were issued and outstanding.

Note 12—Share-Based Compensation

We recorded share-based compensation expense and related tax benefit within our consolidated statements of operations asfollows:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 Year Ended through through Year Ended December 31, 2019 December 31, 2018 November 19, 2018 December 31, 2017(in thousands) Operating expenses $ 1,460 $ — $ 177 $ 416General and administrative expenses 5,611 599 2,366 6,403

Share-based compensation expense 7,071 599 2,543 6,819Tax benefit (1,098) (126) — (1,147)

Total $ 5,973 $ 473 $ 2,543 $ 5,672

(a) The effects of tax benefits from share-based compensation expense are included within income tax expense in ourconsolidated statements of operations. As a result of the cancellation of all equity and equity-based awards grantedunder the Pacific Drilling S.A. 2011 Omnibus Stock Incentive Plan (the “2011 Stock Plan”), there was no tax benefitfrom share-based compensation expense during the Predecessor period in 2018.

On November 28, 2018, the board of directors approved the 2018 Stock Plan pursuant to which the Company may issue upto 7.5 million common shares to 2018 Stock Plan participants using various types of stock-based incentive awards, includingstock options, restricted shares, restricted share units and other equity-based awards. The compensation committee of the board ofdirectors determines, subject to board approval, the terms and conditions of equity awards made to participants under the 2018Stock Plan.

Prior to the adoption of the 2018 Stock Plan, the 2011 Stock Plan provided for the grant of equity-based or equity-relatedawards to directors, officers, employees and consultants. In connection with our emergence from bankruptcy on November 19,2018, all equity and equity-based awards granted under the 2011 Stock Plan were cancelled and are no longer outstanding.

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Notes to Consolidated Financial Statements—Continued

Time-Based Restricted Share Units (“RSUs”)

Pursuant to the 2018 Stock Plan, in December 2018, the board of directors granted an aggregate of 0.3 million time-basedRSUs to our Chairman of the Board, our Chief Executive Officer and our two other Class A directors. The fair value of time-based RSUs is determined using the market value of our shares on the date of grant. These time-based RSUs vest over periodsranging from two to four years from the grant date.

During the year ended December 31, 2019, the board of directors approved the issuance of 1.0 million time-based RSUs tocertain members of senior management and employees. The RSUs generally vest in equal annual installments over three years,starting on January 1, 2020.

A summary of time-based RSU activity for the year ended December 31, 2019 is as follows:

Number ofRestricted

ShareUnits

Weighted-Average

Grant-Date Fair Value

(in thousands) (per share)Nonvested — January 1, 2019 290 $ 13.00

Granted 1,044 14.50Vested (35) 13.93Cancelled or forfeited (76) 14.70

Nonvested — December 31, 2019 1,223 $ 14.15

The total grant-date fair value of the time-based RSUs vested was $0, $2.0 million and $5.2 million for the Successorperiod in 2018 and the Predecessor periods in 2018 and 2017, respectively.

As of December 31, 2019, total compensation costs related to nonvested time-based RSUs not yet recognized was $13.0million and is expected to be recognized over a weighted-average period of 2.3 years.

Performance-Based Restricted Share Units (“RSUs”) and Performance Share Units (“PSUs”)

Pursuant to the 2018 Stock Plan, in December 2018, the board of directors granted an aggregate of 0.3 millionperformance-based RSUs to our Chairman of the Board and our Chief Executive Officer. The performance-based RSUs vest onlyupon a change of control based on an internal rate of return calculation on such date, and do not meet the threshold for expenserecognition under GAAP until they vest.

During the year ended December 31, 2019, the board of directors approved the issuance of 0.4 million PSUs to certainmembers of our senior management. The PSUs are subject to achievement of a relative total shareholder return performance goalas compared to a specified peer group. These PSUs vest on December 31, 2021 and the number of shares issued on that date, ifany, is dependent upon the level of achievement of the performance goal. To measure the fair value of the PSUs, we used a MonteCarlo simulation model. The fair value of the PSUs is amortized on a straight-line basis to expense over the vesting period.During the year ended December 31, 2019, the fair value of the PSUs granted was calculated using the following weighted-average assumptions:

2019 PSUsExpected volatility 49.0 %Expected dividends — Risk-free interest rate 2.3 %

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Notes to Consolidated Financial Statements—Continued

A summary of PSU activity for the year ended December 31, 2019 is as follows:

Number of Performance

Share Units

Weighted-Average

Grant-Date FairValue

(in thousands) (per share)Nonvested — January 1, 2019 — $ —

Granted 375 15.43Vested — —Cancelled or forfeited — —

Nonvested — December 31, 2019 375 $ 15.43

As of December 31, 2019, total compensation costs related to nonvested PSUs not yet recognized were $4.2 million andare expected to be recognized over a weighted average period of 2.0 years.

Stock Bonus Awards

In December 2018, our board of directors approved the issuance of an aggregate of 39,614 common shares to 269participants as stock bonus awards under the 2018 Stock Plan, of which 8,061 shares were withheld for the payment of taxesresulting in a net issuance of 31,553 common shares.

Note 13—Earnings per Share

The following reflects the income and the share data used in the basic and diluted EPS computations:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 Year Ended through through Year Ended December 31, 2019 December 31, 2018 November 19, 2018 December 31, 2017(in thousands, except per share information) Numerator: Net loss, basic and diluted $ (556,465) $ (27,484) $ (2,154,877) $ (525,166)Denominator: Weighted-average shares outstanding, basic 75,011 75,010 21,359 21,315Weighted-average shares outstanding, diluted 75,011 75,010 21,359 21,315Loss per share: Basic $ (7.42) $ (0.37) $ (100.89) $ (24.64)Diluted $ (7.42) $ (0.37) $ (100.89) $ (24.64)

The following table presents the share effects of share-based compensation awards that were excluded from ourcomputations of diluted EPS as their effect would have been anti-dilutive for the periods presented:

Successor Predecessor Period From Period From Year Ended November 20, 2018 January 1, 2018 Year Ended December 31, through through December 31, 2019 December 31, 2018 November 19, 2018 2017(in thousands) Share-based compensation awards 797 161 314 349

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Notes to Consolidated Financial Statements—Continued

Note 14—Derivatives

We are exposed to market risk from changes in interest rates and foreign exchange rates. From time to time, we haveentered into a variety of derivative financial instruments in connection with the management of our exposure to fluctuations ininterest rates and foreign exchange rates. We do not enter into derivative transactions for speculative purposes; however, foraccounting purposes, certain transactions may not meet the criteria for hedge accounting.

In 2013, we entered into an interest rate swap as a cash flow hedge against future fluctuations in LIBOR with a notionalvalue of $712.5 million. The interest rate swap did not amortize and had a scheduled maturity on December 3, 2017. On aquarterly basis, we paid a fixed rate of 1.56% and received the maximum of 1% or three-month LIBOR. As of September 30,2017, we discontinued hedge accounting of the interest rate swap. The interest rate swap was terminated shortly after the PetitionDate.

In 2013, we also entered into an interest rate swap as a cash flow hedge against future fluctuations in LIBOR with anotional value of $400.0 million. The interest rate swap did not amortize and had a scheduled maturity on July 1, 2018. On aquarterly basis, we paid a fixed rate of 1.66% and received three-month LIBOR. As of the Petition Date, we discontinued hedgeaccounting of the interest rate swap. The interest rate swap was terminated shortly after the Petition Date.

We had no outstanding derivatives as of December 31, 2019 and 2018.

The following table summarizes the cash flow hedge gains and losses:

Gain (Loss) Recognized

in Other Comprehensive Income (“OCI”)

Loss Reclassified from Accumulated OCI into

Income Successor Predecessor Successor Predecessor Period From Period From Period From Period From

November 20,

2018 January 1,

2018 November 20,

2018 January 1,

2018 Year Ended through through Year Ended Year Ended through through Year Ended Derivatives in Cash Flow December 31, December 31, November 19, December 31, December 31, December 31, November 19, December 31,Hedging Relationships 2019 2018 2018 2017 2019 2018 2018 2017

(in thousands) Interest rate swaps $ — $ — $ 643 $ 4,700 $ — $ — $ 643 $ 5,265

For the Predecessor period ended November 19, 2018 and the year ended December 31, 2017, we reclassified $0 and $4.5

million to interest expense and $0.6 million and $0.8 million to depreciation from accumulated other comprehensive loss,respectively.

Note 15—Fair Value Measurements

We estimated fair value by using appropriate valuation methodologies and information available to management as ofDecember 31, 2019 and 2018. Considerable judgment is required in developing these estimates, and accordingly, estimated valuesmay differ from actual results.

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

The estimated fair value of cash and cash equivalents, restricted cash, accounts receivable, other receivable, accountspayable and accrued expenses approximated their carrying value due to their short-term nature. The following table presents thecarrying value and estimated fair value of our cash and cash equivalents and debt:

December 31, 2019 2018 Carrying Estimated Carrying Estimated Value Fair Value Value Fair Value(in thousands) Cash and cash equivalents $ 278,620 $ 278,620 $ 367,577 $ 367,577First Lien Notes 747,910 682,500 747,400 714,953Second Lien PIK Notes 325,824 183,949 291,935 285,548

Our cash equivalents are primarily invested in money market instruments with original maturities of three months or less.We estimate the fair values of our debt using quoted market prices to the extent available and significant other observable inputs,which represent Level 2 fair value measurements.

Note 16—Commitments and Contingencies

Commitments—As of December 31, 2019, we had no material commitments.

Bank Guarantee—As of December 31, 2019, we were contingently liable under a certain bank guarantee totalingapproximately $5.4 million issued as security in the normal course of our business.

Contingencies—It is to be expected that we will routinely be involved in litigation and disputes arising in the ordinarycourse of our business.

In January 2013, the Zonda Debtors entered into, and/or guaranteed the Construction Contract with SHI for theconstruction of the Pacific Zonda, with a purchase price of approximately $517.5 million and original delivery date of March 31,2015. On October 29, 2015, the Zonda Debtors exercised their right to rescind the Construction Contract due to SHI’s failure totimely deliver the drillship in accordance with the contractual specifications. The carrying value of the newbuild at the date ofrescission was $315.7 million, consisting of (i) advance payments in the aggregate of $181.1 million paid by the Zonda Debtors toSHI, (ii) purchased equipment, (iii) internally capitalized construction costs and (iv) capitalized interest. SHI rejected therescission, and on November 25, 2015, formally commenced an arbitration proceeding against the Zonda Debtors in Londonunder the Arbitration Act 1996 before a tribunal of three arbitrators (as specified in the Construction Contract) (the “Tribunal”).SHI claims that the Zonda Debtors wrongfully rejected their tendered delivery of the drillship and seeks the final installment ofthe purchase price under the Construction Contract. On November 30, 2015, the Zonda Debtors made demand under the third-party refund guarantee accompanying the Construction Contract for the amount of the advance payments made under theConstruction Contract, plus interest. Any payment under the refund guarantee is suspended until an award in the Zonda Debtors’ favor under the arbitration is obtained. In addition to seeking repayment of the advance payments made under the ConstructionContract, the Zonda Debtors made a counterclaim for the return of their purchased equipment, or the value of such equipment,and damages for wasted expenditures. The Zonda Debtors owned $75.0 million in purchased equipment for the Pacific Zonda, amajority of which remained on board the Pacific Zonda. As part of our “first day” relief in the Chapter 11 proceedings, theBankruptcy Court granted us a modification of the automatic stay provisions of the Bankruptcy Code to allow us to proceed withthis arbitration.

An evidentiary hearing was held in London before the Tribunal from February 5 through March 2, 2018. Written closingsubmissions and short replies to such submissions were filed with the Tribunal in May 2018. Oral closing submissions were heardby the Tribunal in early August 2018.

In our bankruptcy proceedings, SHI has asserted claims against the Zonda Debtors, secured by the Pacific Zonda, for

approximately $387.4 million, for the remaining unpaid purchase price, interest and costs. The Zonda Debtors filed the ZondaPlan which was confirmed by order of the Bankruptcy Court on January 30, 2019 and are not Debtors under the Plan ofReorganization. On the date the Zonda Plan was confirmed, the Zonda Debtors had $4.6 million in cash and

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

no other material assets after accounting for post-petition administrative expenses (other than the value of their claims againstSHI) for SHI to recover against on account of its claims.

On November 19, 2018, the Debtors emerged from bankruptcy after successfully completing their reorganization pursuant

to the Plan of Reorganization. As of that date, we deconsolidated the Zonda Debtors, which filed a separate plan of reorganizationand are not Debtors under the Plan of Reorganization. See Note 3. As a result of adopting Fresh Start Accounting, we estimatedthe receivable related to the Zonda Arbitration at $204.7 million, included within receivable from unconsolidated subsidiaries onour consolidated balance sheet as of December 31, 2018.

On January 15, 2020, the Tribunal awarded SHI approximately $320 million with respect to its claims against the Zonda

Debtors. The award does not include approximately $100 million in interest and costs sought by SHI, on which the Tribunalreserved making a decision to a later date. On February 11, 2020, the Zonda Debtors filed an application with the High Court inLondon seeking permission to appeal the Tribunal’s award. There can be no assurance that the Zonda Debtors will receivepermission to appeal, or that if such permission is granted, that any such appeal will be successful in reversing the Tribunal’saward.

If the Zonda Debtors are successful in their appeal of the Tribunal’s award, the Zonda Debtors will emerge from

bankruptcy pursuant to the terms of the Zonda Plan. If the Zonda Debtors are unsuccessful in the appeal, the Company expectsthat the Zonda Debtors will be liquidated in accordance with the terms of the Zonda Plan.

As a result of the Tribunal’s decision, we have eliminated our investment and net receivable balances related to the Zonda

Debtors as of December 31, 2019. We recognized a loss of $216.7 million, recorded in loss from unconsolidated subsidiaries, dueto the write-off of the $204.7 million receivable related to the Zonda Arbitration and other asset balances associated with theZonda Debtors. As of December 31, 2019, we had no cost basis in our investment in the Zonda Debtors and discontinued theequity method of accounting.

On December 20, 2018, after the Company and its subsidiaries other than the Zonda Debtors had completed the Plan of

Reorganization and emerged from bankruptcy, SHI filed with the Bankruptcy Court an untimely secured contingency claimagainst Pacific Drilling S.A., our parent company, in the amount of approximately $387.4 million. We have filed an objection tothe claim on the basis that the claim should be disallowed due to its being filed long after the May 1, 2018 claims bar dateestablished by order of the Bankruptcy Court. In addition, we believe SHI has no basis for a claim against Pacific Drilling S.A.because, among other things, Pacific Drilling S.A. was not a party to the Construction Contract nor the guaranty. Note 17—Concentrations of Credit and Market Risk

Financial instruments that potentially subject the Company to credit risk are primarily cash equivalents, restricted cash andaccounts receivable. At times, cash equivalents and restricted cash may be in excess of FDIC insurance limits.

With regard to accounts receivable, we have an exposure from our concentration of clients within the oil and natural gasindustry. This industry concentration has the potential to impact our exposure to credit and market risks as our clients could beaffected by similar changes in economic, industry or other conditions. However, we believe that the credit risk posed by thisindustry concentration has been largely offset by the creditworthiness of our client base and receipt of advanced payments beforeproviding services to certain clients.

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Notes to Consolidated Financial Statements—Continued

During the years ended December 31, 2019, 2018 and 2017, the percentage of revenues earned from our clients was asfollows:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 Year Ended through through Year Ended December 31, 2019 December 31, 2018 November 19, 2018 December 31, 2017Chevron 70.8 % 82.1 % 84.0 % 81.6 %Eni 16.1 % 17.9 % — % — %Petronas 3.3 % — % 14.2 % 1.0 %Total 8.0 % — % — % 0.1 %Other 1.8 % — % 1.8 % 17.3 %

Note 18—Segments and Geographic Areas

Our drillships are part of a single, global market for contract drilling services and can be redeployed globally in response tochanging demands. We consider the operations of each of our drillships to be an operating segment. We evaluate the financialperformance of each of our drillships and our overall fleet based on several factors, including revenues from clients and operatingprofit. The consolidation of our operating segments into one reportable segment is attributable to how we manage our fleet,including the nature of our services provided, type of clients we serve and the ability of our drillships to operate in a single, globalmarket. The accounting policies of our operating segments are the same as those described in the summary of significantaccounting policies. See Note 2.

As of December 31, 2019, the Pacific Bora was mobilizing to Oman, the Pacific Santa Ana was located offshoreMauritania, and the Pacific Sharav and the Pacific Khamsin were located offshore the United States. As of December 31, 2019,the Pacific Scirocco, the Pacific Mistral and the Pacific Meltem were anchored at Las Palmas.

During the years ended December 31, 2019, 2018 and 2017, the percentage of revenues earned by geographic area, basedon drilling location, is as follows:

Successor Predecessor Period From Period From November 20, 2018 January 1, 2018 Year Ended through through Year Ended

December 31, 2019 December 31, 2018 November 19,

2018 December 31, 2017United States 72.5 % 82.1 % 84.0 % 81.6 %Nigeria 16.1 % 17.9 % 1.8 % 11.2 %Other 11.4 % — % 14.2 % 7.2 %

Note 19—Variable Interest Entities

The carrying amounts associated with our consolidated variable interest entities, after eliminating the effect ofintercompany transactions, were as follows:

December 31, 2019 2018 (in thousands)Assets $ 350 $ 2,381Liabilities (528) (1,037)

Net carrying amount $ (178) $ 1,344

PIDWAL is a joint venture formed to provide drilling services in Nigeria. PIDWAL has a 50.1% ownership interest in twoof our rig holding subsidiaries, Pacific Bora Ltd. and Pacific Scirocco Ltd., and we own 49.9% of such entities through ourwholly-owned subsidiary Pacific Drilling Limited (“PDL”). PIDWAL’s interest in the rig holding

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

subsidiaries is held through a holding company, Pacific Drillship Nigeria Limited (“PDNL”), of which it owns 99.9%, and PDLowns the remaining 0.1%. We determined that each of these companies met the criteria of a variable interest entity for accountingpurposes because its equity at risk was insufficient to permit it to carry on its activities without additional subordinated financialsupport from us. We also determined that we were the primary beneficiary for accounting purposes since (a) for PIDWAL, wehad the power to direct the day-to-day management and operations of the entity, and for PDNL we had the power to secure anddirect its equity investment, which are the activities that most significantly impact each entity’s economic performance, and (b)we had the obligation to absorb losses or the right to receive a majority of the benefits that could be potentially significant to thevariable interest entities. As a result, we consolidate PIDWAL and PDNL in our consolidated financial statements.

During the Successor periods in 2019 and 2018 and the Predecessor periods in 2018 and 2017, we provided financialsupport to PIDWAL to enable it to operate as a going concern by funding its working capital via intercompany loans andpayables.

During the Successor periods in 2019 and 2018 and the Predecessor periods in 2018 and 2017, we provided financialsupport to PDNL to fund its equity investment in our rig-owning entities operating in Nigeria via intercompany loans. Both theequity investment and intercompany loans of PDNL are eliminated upon consolidation.

Note 20—Retirement Plans

We sponsor a defined contribution retirement plan covering substantially all U.S. employees and an international savingsplan covering international employees. During the Successor periods in 2019 and 2018 and the Predecessor periods in 2018 and2017, our total employer contributions to both plans amounted to $2.7 million, $0.3 million, $2.3 million and $2.8 million,respectively.

Note 21—Supplemental Cash Flow Information

During the Successor periods in 2019 and 2018 and the Predecessor periods in 2018 and 2017, we paid $63.7 million, $0, $97.2 million and $120.8 million of interest, respectively. During the Successor periods in 2019 and 2018 and the Predecessorperiods in 2018 and 2017, we paid income taxes of $6.4 million, $0.2 million, $3.9 million and $4.9 million, respectively.

During the Successor periods in 2019 and 2018 and Predecessor period in 2018, we paid $4.5 million, $36.0 million and$56.0 million in reorganization items, respectively.

During the Predecessor period in 2018, the following non-cash financing activities occurred:

We converted $1.2 billion of liabilities subject to compromise into equity when holders of the Company’s Term LoanB, 2017 Notes and 2020 Notes received an aggregate of 24,416,442 common shares in exchange for their claims.

We issued approximately $23.6 million aggregate principal amount of Second Lien PIK Notes as a commitment fee tothe Ad Hoc Group for their agreement to backstop the issuance of the Second Lien PIK Notes.

We issued an aggregate of 2,566,056 common shares as a fee to the Ad Hoc Group for their agreement to backstop theequity rights offering.

We incurred approximately $14.6 million in debt and equity financing costs that were unpaid as of November 19, 2018.

Within our consolidated statements of cash flows, capital expenditures represent expenditures for which cash paymentswere made during the period. These amounts exclude accrued capital expenditures, which are capital expenditures that wereaccrued but unpaid. During the Successor periods in 2019 and 2018 and the Predecessor periods in 2018 and 2017, changes inaccrued capital expenditures were $0.5 million, $4.3 million, $1.1 million and $(18.5) million, respectively.

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

Note 22—Related Party Transactions

We have determined that Abrams Capital Management, L.P., Avenue Capital Management II, L.P., Strategic ValuePartners, LLC and certain of their affiliates (the “Principal Shareholders”) meet the definition of related parties under U.S. GAAP.As of December 31, 2019 and 2018, the Principal Shareholders held $59.8 million and $36.1 million of our Second Lien PIKNotes, respectively.

During the Predecessor period in 2018 and 2017, the following related party transactions occurred:

Pursuant to the Global Settlement entered into in August 2018 with QP, and as approved by the Bankruptcy Court, theCompany agreed to reimburse QP up to $13.0 million for fees and out-of-pocket expenses incurred in connection with theDebtors’ Chapter 11 proceedings, of which $12.0 million was recorded in reorganization items in our consolidated statements ofoperations.

In September 2018, QP purchased $20.0 million in principal amount of our Second Lien PIK Notes in our offering of suchnotes.

During 2018, we paid QP an aggregate of $0.7 million in director fees for services provided by directors affiliated with QP.

In August 2017, we executed an agreement with QP for the reimbursement or payment of certain legal and advisory feesincurred by QP and related to its participation in the negotiation of our debt restructuring. During the year ended December 31,2017, we incurred fees of $3.2 million under such agreement. This agreement expired by its terms upon our filing of theBankruptcy Petitions.

Note 23—Subsequent Events

Zonda Arbitration. On January 15, 2020, the Tribunal awarded SHI approximately $320 million with respect to its claims against the Zonda

Debtors. See Note 16. Revolving Credit Facility. On February 7, 2020, the Company, as borrower, Angelo, Gordon Energy Servicer, LLC (“Angelo Gordon”), as

administrative agent and the lenders party thereto, entered into a revolving credit agreement that provides a $50.0 million first liensuperpriority revolving credit facility (the “Revolving Credit Facility”). As of March 6, 2020, no amounts were drawn on thefacility.

All borrowings under the Revolving Credit Facility are expected to be incurred at the Company level. The Revolving

Credit Facility will mature on April 1, 2023. New borrowings may be limited if, at the time of such borrowing, the ratio of (i) the sum of (a) eligible accounts receivable

and (b) unrestricted cash to (ii) total commitments is less than 1.3 to 1 or if the effective availability period has not been extendedbeyond August 7, 2021 pursuant to a scheduled redetermination by the administrative agent.

The Company’s obligations under the Revolving Credit Facility are guaranteed by all of the subsidiaries that guaranty the

Company’s First Lien Notes and Second Lien PIK Notes. The Revolving Credit Facility is secured by a sole first-priority lien on the Company’s and the guarantors’ accounts

receivable and a shared first-priority lien (with holders of the First Lien Notes), on all assets serving as collateral under such FirstLien Notes, with a superpriority right to repayment ahead of other first lien holders in an enforcement action.

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PACIFIC DRILLING S.A. AND SUBSIDIARIES

Notes to Consolidated Financial Statements—Continued

Borrowings under the Revolving Credit Facility will be used to finance working capital and capital expenditure needs ofthe Company and its subsidiaries.

Borrowings under the Revolving Credit Facility will bear interest at a LIBO rate determined by reference to the then

effective three-month LIBO rate, with a 1.5% floor, adjusted for statutory reserve requirements, plus an applicable percentage of7.5%, payable quarterly. The Company will pay a quarterly commitment fee at a 1.5% annual rate for unused commitments.

The Company may voluntarily prepay amounts outstanding under the Revolving Credit Facility, in whole or in part,

without premium or penalty (except as described below) in minimum amounts of $5.0 million. The Company will be required to pay a “prepayment premium” in connection with prepayments resulting in commitment

reductions or commitment termination and termination of the Revolving Credit Facility equal to a percentage of the principalamount of such commitments reduced or terminated (the “Yield Maintenance Amount”):

During the first 12 months following the closing date – 2.0%; and During months 13-24 following the closing date – 1.0%.

The Company will be required to prepay amounts borrowed under the Revolving Credit Facility with any net proceeds

from asset sales or insurance proceeds, and permanently reduce commitments in a corresponding amount, in the event the VesselFleet Value is less than $500.0 million. The “Vessel Fleet Value” means, at any time of determination, the lesser of (a) the netbook value of the vessels described as Collateral Vessels under the Revolving Credit Facility at such time or (b) the fair marketvalue of the vessels described as Collateral Vessels under the Revolving Credit Facility pursuant to the most recent appraisal(using the lowest value in the range if a range is provided in such appraisal).

The Revolving Credit Facility contains covenants substantially similar to those set forth in the indenture governing the

First Lien Notes except that certain provisions related to (i) the ability to make restricted payments and permitted investments, (ii)the permitted application of net proceeds from asset sales and (iii) the ability to incur additional indebtedness are subject toadditional restrictions if the Vessel Fleet Value is less than $500.0 million.

In addition, the Revolving Credit Facility contains customary events of default, including among other things, (i) failure to

make required payments; (ii) failure to comply with certain agreements or covenants; (iii) failure to pay certain otherindebtedness; (iv) the occurrence of a Change of Control; (v) certain events of bankruptcy and insolvency; and (vi) failure to paycertain judgments. Upon an event of default, the lenders party to the Revolving Credit Facility are entitled, subject to certainlimitations, to declare any obligations of the Company or its subsidiaries to the lenders immediately due and payable and to takeall actions permitted to be taken by a secured creditor.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURES

Not Applicable.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

In accordance with Exchange Act Rules 13a-15 and 15d-15, our management, with the participation of our ChiefExecutive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the endof the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concludedthat our disclosure controls and procedures as of the end of the period covered by this report have been designed and are effectiveat the reasonable assurance level so that the information required to be disclosed by us in our periodic SEC filings is recorded,processed, summarized and reported within the time periods specified in the SEC’s rules, regulations and forms and have beenaccumulated and communicated to our management, including executive and financial officers, as appropriate, to allow timelydecisions regarding required disclosures.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting for theCompany as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Our internal control system was designed toprovide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles.

Internal control over financial reporting includes the controls themselves, monitoring (including internal auditingpractices), and actions taken to correct deficiencies as identified.

There are inherent limitations to the effectiveness of internal control over financial reporting, however well designed,including the possibility of human error and the possible circumvention or overriding of controls. The design of an internalcontrol system is also based in part upon assumptions and judgments made by management about the likelihood of future events,and there can be no assurance that an internal control will be effective under all potential future conditions. As a result, even aneffective system of internal controls can provide no more than reasonable assurance with respect to the fair presentation offinancial statements and the processes under which they were prepared.

Management assessed the effectiveness of our internal control over financial reporting as of December 31, 2019. In makingthis assessment, management used the criteria for internal control over financial reporting described in Internal Control -Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of theoperating effectiveness of its internal control over financial reporting.

Management reviewed the results of its assessment with the Audit Committee of our board of directors. Based on thisassessment, management has concluded that, as of December 31, 2019, our internal control over financial reporting was effective.

Attestation Report of the Registered Public Accounting Firm

Our independent registered public accounting firm, KPMG LLP, has issued an attestation report on the effectiveness of ourinternal control over financial reporting which is set forth under the heading “Report of Independent Public Accounting Firm”included in Item 8 of this annual report.

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Changes in Internal Control over Financial Reporting

There were no changes in internal control over financial reporting during the fourth quarter of 2019 that have materiallyaffected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors

Our Articles of Association (“Articles”) provide that all powers not expressly reserved to the shareholders by law or theArticles fall within the competence of the Board of Directors (the “Board”), which has full power to carry out and approve all actsand operations consistent with the Company’s corporate object as set forth in the Articles. The total number of directorsconstituting our Board is seven. The Board is currently divided into two classes, designated Class A (composed of four directors)and Class B (composed of three directors). Both Class A and B directors are elected to terms of one year in length, except that ourClass B directors were appointed to serve an initial two-year term following November 19, 2018, the Plan of ReorganizationEffective Date, and ending at the 2020 annual general meeting of the shareholders of the Company. Commencing with our 2020annual general meeting, each of the Class A directors and Class B directors will be elected to serve one-year terms. Members ofour Board are elected by simple majority of the votes validly cast at any general meeting of shareholders and have one vote eachat all meetings of the Board.

The Company has entered into a Governance Agreement dated as of November 19, 2018 with certain holders of its shares,defined therein as the Avenue Parties, the SVP Parties, and the Other Lenders. Pursuant to the Governance Agreement, until theNomination Termination Time (as defined in the Governance Agreement), the Avenue Parties have the right to nominate oneClass B director, the SVP Parties have the right to nominate one Class B director and the Other Lenders have the right tonominate one Class B director. Each of such parties also has the right to fill a vacancy with respect to its Class B Directornominee. As defined in the Governance Agreement, the “Nomination Termination Time” means the first such time that itbecomes known to the Company that any of (i) the Avenue Parties (collectively and in the aggregate with each other), (ii) theSVP Parties (collectively and in the aggregate with each other) or (iii) the Other Lenders (collectively and in the aggregate witheach other), hold, beneficially or of record, and have the power to vote or direct the voting of, 10% or less of the then issued andoutstanding shares of the Company. For additional information regarding the Governance Agreement, see Item 13. “CertainRelationships and Related Transactions, and Director Independence.”

As defined in the Governance Agreement, the Other Lenders are the Abrams Parties (certain holders related to AbramsCapital Management, L.P.), Fidelity Parties (certain holders related to FMR LLC), Highbridge Parties (certain parties related toHighbridge Capital Management, LLC) and Whitebox Parties (certain parties related to Whitebox Advisors LLC). The Class Bdirector nominee of the Other Lenders is determined by the plurality of the voting power of the respective shares of the Companyheld, beneficially or of record, by the Other Lenders. As of March 6, 2020, based on information provided to the Company byeach of such Other Lenders, the Abrams Parties held 7,414,537 shares, the Fidelity Parties held 5,420,912 shares, the HighbridgeParties held 3,125,587 shares and the Whitebox Parties held 4,311,334 shares.

From and after the Nomination Termination Time, the Board will cease to be classified and each director then in officepreviously designated as a Class A director or Class B director will remain in office as a director until his or her term expires oruntil his or her earlier death, resignation or removal by the shareholders. Any director may be removed with or without cause by asimple majority vote at any general meeting of shareholders. If the office of a director becomes vacant, our Articles provide thatthe other directors, acting by a simple majority, may fill the vacancy on a provisional basis until a new director is appointed at thenext general meeting of shareholders.

Pursuant to the Plan of Reorganization, as of November 19, 2018, W. Matt Ralls (Chairman), Bernie G. Wolford Jr. andDavid Weinstein joined our Board as Class A directors, and Daniel Han, Donald Platner, and Kiran Ramineni joined our Board asClass B directors. Pursuant to the Governance Agreement, Mr. Ramineni was nominated for election as a Class B director by theAvenue Parties, Mr. Han was nominated for election as a Class B director by the SVP Parties, and Mr. Platner was nominated forelection as a Class B director by the Other Lenders. Messrs. Ralls, Ramineni, Han and Platner were elected as directors at anextraordinary general meeting of shareholders on November 19, 2018. Messrs. Wolford and Weinstein were appointed by ourBoard on November 19, 2018 to fill vacancies. John V. Simon was appointed by our Board as a Class A director as ofDecember 14, 2018 to fill the remaining vacancy on our Board. At our 2019 annual general meeting, our shareholders (i)confirmed the appointments of Messrs. Simon, Weinstein and Wolford to fill vacancies, and (ii) re-appointed Messrs. Ralls,Simon, Weinstein and Wolford to our Board for a term ending at the 2020 annual general meeting.

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On November 21, 2019, Daniel Han tendered his resignation as a Class B director, and, pursuant to the GovernanceAgreement, the SVP Parties nominated Edward H. Burdick to fill the vacancy created by Mr. Han’s resignation. On November21, 2019, the Board appointed Mr. Burdick to fill the vacancy on the Board created by Mr. Han’s resignation and to serve as aClass B director for the remainder of Mr. Han’s term of office, ending at the Company’s 2020 annual general meeting. OnFebruary 13, 2020, Mr. Burdick tendered his resignation as a Class B director with effect as of February 18, 2020, and, pursuantto the Governance Agreement, the SVP Parties nominated Bouk van Geloven to fill the vacancy resulting from Mr. Burdick’sresignation. On February 18, 2020, the Board appointed Mr. van Geloven to fill the vacancy on the Board resulting from Mr.Burdick’s resignation and to serve as a Class B director for the remainder of Mr. Burdick’s term of office, ending at theCompany’s 2020 annual general meeting.

The Board is authorized to delegate the day-to-day management, and the power to represent the Company in this respect,to one or more directors, officers, managers or other agents, whether shareholders or not, acting either individually or jointly,provided that, prior to the Nomination Termination Time any appointment, delegation or power-of-attorney granted in respect ofany Acquisition Proposal Matters (as defined in our Articles), or any revocation of the foregoing, shall only be effective if a ClassB Majority (as defined below) votes in favor of such appointment, delegation or power-of-attorney, or revocation of theforegoing, as the case may be.

Pursuant to our Articles and the Governance Agreement, prior to the Nomination Termination Time, any two Class Bdirectors acting in their capacities as such (a “Class B Majority”) have broad authority to act on the Company’s behalf inconnection with any Acquisition Proposal or Acquisition (as such terms are defined in the Articles), including but not limited tothe authority to solicit prospective Acquisition Proposals, to retain, at the Company’s expense such consultants, legal counsel andother advisors as a Class B Majority may from time to time deem appropriate to assist the Class B directors in the performance oftheir duties with respect to Acquisition Proposals, and subject to specified conditions, to execute and deliver on behalf of theCompany definitive documentation providing for the consummation of an Acquisition.

Under Luxembourg law, one or more shareholders together holding at least 10% of our subscribed capital may require thatone or more items appropriate for consideration by our shareholders be put on the agenda of any general meeting of shareholders.Notice of such agenda item or items must be sent to our registered office by registered mail at least five days prior to the date ofthe meeting.

There are no family relationships between any director or executive officer, and other than pursuant to the GovernanceAgreement, there are no arrangements or understandings between any of the directors and any other person pursuant to which hewas or is to be selected as a director. For additional information, see Item 13. “Certain Relationships and Related Transactions,and Director Independence.”

Pacific Drilling’s Board consists of the following seven members:

Name Age PositionW. Matt Ralls 70 Chairman of the Board and Class A DirectorBouk van Geloven 33 Class B DirectorDonald Platner 35 Class B DirectorKiran Ramineni 40 Class B DirectorJohn V. Simon 66 Class A DirectorDavid Weinstein 60 Class A DirectorBernie G. Wolford Jr. 60 Chief Executive Officer and Class A Director

Certain biographical information regarding the directors is summarized below.

W. Matt Ralls. Mr. Ralls joined our Board on November 19, 2018 and serves as Chairman of the Board and of theNominating and Corporate Governance Committee, and as a member of the Audit and Compensation Committees. Mr. Rallsserved as President of the Rowan Companies from January 2009 to March 2013, as Chief Executive Officer from January 2009 toApril 2014, as a director from 2009 and as Executive Chairman of the Board from April 2014 until his retirement from thecompany in April 2016. He served as Executive Vice President and Chief Operating Officer of GlobalSantaFe Corporation fromJune 2005 until November 2007 and as Senior Vice President and Chief Financial

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Officer of that company from 2001 to 2005. Mr. Ralls has held various other management and financial roles with other oildrilling and production companies. Mr. Ralls also serves as a director of Superior Energy Services, Inc. (where he serves asChairman of the Compensation Committee and a member of the Nominating and Corporate Governance Committee), Cabot Oiland Gas Corporation (where he serves as Chairman of the Corporate Governance and Nominating Committee and as a member ofthe Compensation Committee) and NCS Multistage Holdings, Inc. (where he serves on the Audit Committee and theCompensation, Nominating and Governance Committee).

Bouk van Geloven. Mr. van Geloven joined our Board on February 18, 2020 to fill the vacancy created by the resignation

of Mr. Burdick. Mr. van Geloven joined SVP in November 2014 and is currently a Director of the European investment team atSVPGlobal with a focus on Infrastructure, Packaging, Industrials, Financials and Oil & Gas. From 2011 to 2014, Mr. van Gelovenwas an associate at J.P. Morgan Cazenove in their Strategic M&A Advisory and Equity and Debt Financing team where heperformed complex valuation analysis, credit analysis and ratings advisory on multiple debt financing transactions. Mr. vanGeloven received a BS in Econometrics from Vrije Universiteit in Amsterdam in 2008 and two Master of Science degrees; one inEconometrics and the other in Quantitative Finance in 2010. He currently serves on the Boards of Klöckner Pentaplast andDolphin Drilling Holdings Ltd.

Donald Platner. Mr. Platner joined our Board on November 19, 2018. Mr. Platner is an Investment Analyst at AbramsCapital, which he joined in 2013. Prior to joining Abrams Capital, he was at Goldman, Sachs & Co. from 2006 to 2013, where hewas a vice president in the Americas Special Situations Group. At Goldman Sachs, he was responsible for investments in both thepublic and private markets, primarily in the energy and industrials sectors. He previously served as a director of Louis BergerGroup (where he served as Chairman of the Compensation Committee and as a member of the Audit Committee). He alsopreviously served as a director of Opal Resources LLC.

Kiran Ramineni. Mr. Ramineni joined our Board on November 19, 2018. Mr. Ramineni joined Avenue Capital Group as aVice President in 2014 and was appointed as Senior Vice President in January 2019. He is responsible for identifying, analyzingand modeling investment opportunities for Avenue’s U.S. Strategy, with a focus on energy and utility investments. Prior tojoining Avenue Capital Group, Mr. Ramineni was a Senior Vice President of strategy and finance at U.S. Power GeneratingCompany from 2007 to 2014. Previously, Mr. Ramineni worked for Hold Brothers Capital as an Equity Trader. Prior to that, hewas an Equity Trader at AJ Capital.

John V. Simon. Mr. Simon joined our Board on December 14, 2018 and serves as Chairman of our CompensationCommittee and as a member of our Audit and Nominating and Corporate Governance Committees. Mr. Simon has over 40 yearsof experience in the oil and gas industry, specializing in engineering, project management and leadership roles in the U.S. andinternationally. From 2013 to 2016 he served as Chief Executive Officer of Bennu Oil and Gas, a company formed to acquireATP Oil & Gas Corp.’s Gulf of Mexico assets out of bankruptcy. Prior to Bennu, Mr. Simon served in a series of increasinglysenior roles at Hess Corporation, most recently as SVP, Global E&P Services (2010-2013) and SVP, Production, Americas andAfrica (2007-2010). Mr. Simon began his career as an engineer with Tenneco Oil Co., where he spent 12 years in a variety ofengineering roles. Mr. Simon also serves as Chairman of the board of directors of Nine Point Energy, a private exploration andproduction company focused on best-in-class development, operation and acquisition of oil and gas assets within the WillistonBasin, where he serves as Risk Committee Chair and on the Audit and Nominating and Corporate Governance Committees.Mr. Simon was a director of Ocean Rig UDW Inc. from November 2017 until its acquisition on December 5, 2018 by TransoceanLtd.

David Weinstein. Mr. Weinstein joined our Board on November 19, 2018 and serves as Chairman of our Audit Committeeand as a member of our Compensation and Nominating and Corporate Governance Committees. Mr. Weinstein also currentlyserves as Deputy Chairman of the Board and a member of the Audit Committee of TORM plc., and as a director of Alex Brands. He has also served on the board of directors of TRU Taj Finance Inc., an operating subsidiary of Toys “R” Us Inc. from August2017 to January 2019, and as Chairman of the Board of The Oneida Group Inc. from June 2015 through September 2018. FromJanuary 2017 through July 2018, Mr. Weinstein served in various executive leadership roles at Seadrill Limited, including as adirector and as Chair of Seadrill’s Refinancing Committee. He also served as a director and as Chair of the CompensationCommittee of Stone Energy Corporation from March 2017 through May 2018. Mr. Weinstein previously served in variousexecutive leadership roles with Horizon Lines, Inc., from November 2011 until June 2015, including as a director and asChairman of its board of directors. He has also served on a number of other boards and in executive leadership roles in variousprivate and public companies within, among others, the oil and gas and chemical industries, including most recently as a directorof DeepOcean Group Holdings AS from June 2011 until January 2017. From September 2009 through August 2016,Mr. Weinstein served as

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Chairman of the Finance Committee and as a member of the Compensation Committee of Axiall Corporation. Prior to that,Mr. Weinstein served from March 2007 through August 2008 as Managing Director and Group Head, Debt Capital Markets—High Yield and Leverage Finance at Calyon Securities Inc., and from March 2000 through February 2002 as Managing Directorand Head of High Yield Origination and Capital Markets at BNP Paribas. Previously, Mr. Weinstein was a Managing Directorand Head of High Yield Capital Markets for BankBoston Securities and Chase Securities, Inc., and head of the Capital MarketsGroup in the High Yield Department at Lehman Brothers.

Bernie G. Wolford Jr. Mr. Wolford joined our Board and was appointed as our Chief Executive Officer on November 19,2018. Prior to joining our Company, from February 3, 2012, Mr. Wolford served as Senior Vice President—Operations at NobleCorporation (“Noble”). He served as Vice President—Operational Excellence of Noble from March 2010 to February 2012. FromJanuary 2003 until March 2010, Mr. Wolford was self-employed. During that time, he provided consulting services to Noble as acontractor on the construction of the Noble Dave Beard from March 2009 to December 2009. Mr. Wolford is also a significantshareholder of Mass Technology Corporation, an independent service provider to the downstream refining and storage sector, andhe supported the operations of that company from February 2007 to February 2009. Mr. Wolford began his career in the offshoredrilling industry with Transworld Drilling in 1981, which was acquired by Noble in 1991. From 1981 through December 2002, heserved in various roles in engineering, project management and operations with Transworld and Noble.

Information about our Executive Officers

Our executive officers are responsible for the day-to-day management of our operations and are appointed from time totime by the Board. There are no arrangements or understandings related to the selection of any of our executive officers. Ourcurrent executive officers are:

Name Age PositionBernie G. Wolford Jr. 60 Chief Executive OfficerMichael D. Acuff 49 Senior Vice President, CommercialLisa Manget Buchanan 59 Senior Vice President, General Counsel and SecretaryJames W. Harris 61 Senior Vice President and Chief Financial OfficerAmy L. Roddy 39 Senior Vice President, Corporate ServicesAnthony C. Seeliger 52 Senior Vice President, OperationsRichard E. Tatum 42 Senior Vice President, Chief Accounting Officer

Bernie G. Wolford Jr. Biographical information about Mr. Wolford appears above under the heading “Directors.”

Michael D. Acuff. Mr. Acuff joined Pacific Drilling in June 2014 as our Senior Vice President of Sales and BusinessDevelopment and was appointed Senior Vice President, Commercial in November 2016. Mr. Acuff is responsible formanagement and administration of our sales and contract acquisition, strategic planning activities and procurement and supplychain. Mr. Acuff has more than 20 years of industry experience, and prior to joining Pacific Drilling, was Senior Vice Presidentof Contracts and Marketing at Diamond Offshore Drilling, Inc., where he worked from 2010 to 2013. From 1999 to 2010Mr. Acuff held various management positions of increasing responsibility in Marketing, Corporate Planning, Operations andHuman Resources with Transocean Ltd. Prior to joining Transocean Ltd., Mr. Acuff served in the U.S. Army from 1993 to 1997as Battery Executive Officer, Battalion Personnel Officer and Platoon Leader. Mr. Acuff holds a Bachelor of Science in CivilEngineering from the University of Tennessee and an MBA in Finance from Rice University.

Lisa Manget Buchanan. Ms. Buchanan joined Pacific Drilling in August 2015 as our Senior Vice President, GeneralCounsel and Secretary. Ms. Buchanan has over 30 years of legal experience, most recently serving as Executive Vice President,General Counsel and Secretary and Chief Administrative Officer at Cal Dive International, Inc. from June 2006 to July 2015. OnMarch 3, 2015, Cal Dive and certain of its subsidiaries filed voluntary petitions for relief under the provisions of Chapter 11 ofthe United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. Prior to Cal Dive,Ms. Buchanan was a partner at the law firm of Jones Walker LLP, which she joined as an associate in 1987 and became a partnerin January 1994. Ms. Buchanan holds a Bachelor of Science degree in commerce from the McIntire School of Commerce,University of Virginia and a Juris Doctorate from the Louisiana State University Law Center.

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James W. Harris. Mr. Harris joined Pacific Drilling in July 2019 as our Senior Vice President and Chief FinancialOfficer, responsible for the Company’s global accounting, treasury, financing, audit, tax, corporate planning and investorrelations activities. Mr. Harris has over 30 years of experience in the energy industry, in a variety of financial leadership,strategic and business planning roles. Before joining Pacific Drilling, Mr. Harris served as Executive Vice President and ChiefFinancial Officer of Forum Energy Technologies, Inc. from December 2005 to March 2018. He also served Forum as ExecutiveVice President, Drilling & Subsea from September 2017 until July 2018, following which he continued to serve Forum as anadvisor until April 2019. Prior to that, Mr. Harris served VeriCenter, Inc. as Vice President and Controller and General Managerof the company’s AppSite Hosting business unit from January 2004 to November 2005. He served in various roles, including asVice President - Tax, Vice President - Finance and Contractor, for Enron Energy Services and Enron Corp. from August 1999 toDecember 2003. From February 1994 to May 1999, Mr. Harris served in various roles of increasing responsibility for BakerHughes Incorporated, serving as Vice President, Tax and Controller from 1998. From 1990 to 1994, Mr. Harris served as SeniorTax Manager for PricewaterhouseCoopers LLP, having joined the firm in 1985. Mr. Harris holds a Bachelor of Science inAccounting and a Masters in Accounting from Brigham Young University and an MBA from Rice University.

Amy L. Roddy. Ms. Roddy joined Pacific Drilling in 2011 as our Director of Investor Relations. She subsequently servedin management positions in corporate communications and human resources before being appointed Senior Vice President,Corporate Services in May 2016. Ms. Roddy has more than 15 years of oil and gas industry experience, including time atTransocean, where she held management positions in investor relations and corporate planning. Prior to joining Transocean, Ms.Roddy worked as a process engineer for Fluor Corp. Ms. Roddy holds a Bachelor of Science degree in chemical engineering fromTexas A&M University and a Master of Engineering Management and an MBA from Northwestern University.

Anthony C. Seeliger. Mr. Seeliger joined Pacific Drilling in 2012 and was named Senior Vice President of Operations in2015. He was most recently Vice President of the Americas since July 2012. Mr. Seeliger provides overall direction and guidanceto the Company’s operational, operations excellence and technical support and Quality-Health-Safety-Environment functionswith the objective of maximizing health, safety, environmental and operational performance, growth and profitability, as well asday-to-day leadership and management of the global operations activities. Mr. Seeliger brings over 25 years of industryexperience, including an extensive background in operations management. Prior to joining Pacific Drilling, he spent nine yearswith Pride International, Inc., acquired by Ensco plc in 2011, most recently as vice president of Middle East and Africa operationsbased in Dubai, United Arab Emirates, and previously in similar management positions based in Europe, Brazil and the Gulf ofMexico. Prior to Ensco/Pride, Mr. Seeliger held positions of increasing responsibility at industry-related companies includingSanta Fe International, Hess Corporation, Gulf Publishing and IBM Global Services. Mr. Seeliger holds a Bachelor of Sciencedegree in business administration from the University of Southern California and an MBA from Southern Methodist University.

Richard E. Tatum. Mr. Tatum joined Pacific Drilling in October 2010 as our Director of Financial Reporting and wasappointed Senior Vice President and Chief Accounting Officer in August 2017. Prior to that, Mr. Tatum served as our VicePresident Controller from March 2014 until August 2017. Mr. Tatum has over 15 years of experience in offshore drilling andpublic accounting. Prior to joining Pacific Drilling in October 2010, Mr. Tatum served at Frontier Drilling from 2009 until itsmerger with Noble Corp. in 2010. Mr. Tatum began his career as an auditor with Grant Thornton LLP where he held a variety ofroles with increasing responsibilities, his most recent position being a Manager in Grant Thornton’s National ProfessionalStandards Group. Mr. Tatum received a Bachelor of Science degree in business administration and a Master of professionalaccounting degree from the University of Texas at Austin and is a CPA.

Pacific Drilling Bankruptcy Proceedings. On November 12, 2017, Pacific Drilling and certain of its subsidiaries filedvoluntary petitions for relief under the provisions of Chapter 11 of the United States Bankruptcy Code in the United StatesBankruptcy Court for the Southern District of New York. On November 19, 2018, the Debtors emerged from bankruptcy aftersuccessfully completing their reorganization pursuant to the Plan of Reorganization. Messrs. Acuff and Tatum and Ms. Buchananwere executive officers of Pacific Drilling at the time the petitions were filed. Ms. Roddy and Mr. Seeliger were not named asexecutive officers of Pacific Drilling until February 2019, Mr. Wolford joined Pacific Drilling on November 19, 2018 and Mr.Harris joined Pacific Drilling on July 22, 2019.

Committees of the Board

Our Board has established an Audit Committee, a Compensation Committee and a Nominating and Corporate GovernanceCommittee, which comply with applicable requirements of the SEC and NYSE and may create such other

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committees as the Board shall determine from time to time. Each of the standing committees of our Board has the compositionand responsibilities described below.

Audit Committee

The members of our Audit Committee are Messrs. Weinstein (as Chairman), Ralls and Simon. Our Board has determinedthat each of the members of our Audit Committee is “independent” under the standards of the NYSE and SEC. In addition, ourBoard has determined that Mr. Weinstein is an “audit committee financial expert,” as defined by the SEC.

The Audit Committee’s primary responsibilities are to assist the Board in its oversight of: our accounting practices; theintegrity of our financial statements; our compliance with legal and regulatory requirements; the qualifications, selection,independence and performance of our independent registered public accounting firm; and the internal audit function. The AuditCommittee has adopted a charter that is available on our website.

Compensation Committee

The members of our Compensation Committee are Messrs. Simon (as Chairman), Ralls and Weinstein. Our Board hasdetermined that each of the members of our Compensation Committee is “independent” under the standards of the NYSE andSEC. The primary purpose of this committee is to oversee and make recommendations to our Board relating to, the compensationof our executive officers and directors. The Compensation Committee has adopted a charter that is available on our website.

No member of our Compensation Committee has been at any time an employee of ours. None of our executive officersserves on the board of directors or compensation committee of a company that has an executive officer that serves on our Boardor Compensation Committee. No member of our Board is an executive officer of a company in which one of our executiveofficers serves as a member of the board of directors or compensation committee of that company.

Nominating and Corporate Governance Committee

Our Board has established a Nominating and Corporate Governance Committee, the members of which are Messrs. Ralls(as Chairman), Simon and Weinstein. Our Board has determined that each of the members of our Nominating and CorporateGovernance Committee is “independent” under the standards of the NYSE.

The primary purpose of the Nominating and Corporate Governance Committee is to assist the Board in identifying

individuals qualified to become members of the Board and to provide advice to the Board regarding its composition andcommittees. The Committee also reviews and recommends Corporate Governance Guidelines, and any amendments, to ourBoard. The Nominating and Corporate Governance Committee has adopted a charter that is available on our website.

Code of Ethics; Corporate Governance Guidelines

We have a Global Code of Conduct applicable to our employees, directors and officers, including our Chief ExecutiveOfficer, Chief Financial Officer, Chief Accounting Officer and other senior financial officers, that meets the standards anddefinitions of the NYSE and SEC. Any changes to, or waivers from, the Global Code of Conduct will be made only by the Board,or a committee thereof, and appropriate disclosure will be made promptly on our website at www.pacificdrilling.com, inaccordance with the rules of the SEC. Our Nominating and Corporate Governance Committee has adopted CorporateGovernance Guidelines applicable to our directors.

We have posted a copy of each of our Global Code of Conduct and our Corporate Governance Guidelines on our website

at www.pacificdrilling.com in the Investor Relations section and will provide a copy of either without charge upon request sent topdcompliance@pacificdrilling.com.

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ITEM 11. EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis, or CD&A, describes and analyzes our executive compensation philosophyand program in the context of the compensation paid during the last fiscal year to our chief executive officer, each of our currentand former chief financial officer and our next three most highly-compensated executive officers during 2019 (collectivelyreferred to as our “named executive officers” or “NEOs”). Our named executive officers for 2019 are:

NEO Title(s)Bernie G. Wolford Jr. Chief Executive Officer

James W. Harris Senior Vice President and Chief Financial Officer

Michael D. Acuff Senior Vice President Commercial

Lisa Manget Buchanan. Senior Vice President, General Counsel and Secretary

Anthony C. Seeliger Senior Vice President Operations

Johannes P. Boots Former Senior Vice President and Chief Financial Officer Executive Summary

We are an international offshore drilling contractor committed to exceeding client expectations by delivering the safest,most efficient and reliable deepwater drilling services in the industry. Our primary business is to contract our high-specificationdrillship fleet to drill wells for our clients.

Impact of Emergence from Bankruptcy on Executive Compensation Programs

On November 12, 2017, Pacific Drilling and certain of its subsidiaries filed voluntary petitions for relief under the

provisions of Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District ofNew York. On November 19, 2018, the Company and certain of its subsidiaries emerged from bankruptcy after successfullycompleting their reorganization pursuant to the Plan of Reorganization. In connection with (or shortly following) its emergencefrom bankruptcy, the Company:

Appointed a new Board of Directors; Appointed Bernie G. Wolford Jr. as our new chief executive officer and entered into an employment agreement with

him; Adopted the 2018 Omnibus Stock Incentive Plan (the “2018 Plan”), under which 7.5 million common shares were

reserved for future issuance of equity-based or equity-related awards to directors, officers, employees and consultants; Cancelled all equity and equity-based awards granted under the 2011 Omnibus Stock Incentive Plan; Adopted a goal-driven annual incentive plan for 2019, based on both financial and operational goals (described in

more detail below); and Granted upfront long-term incentive awards under the 2018 Plan, payable in our common shares, that were intended to

replace multiple years of future grants, create strong alignment with shareholder interests and serve as a managementretention tool due to the limited retentive value provided by our executive compensation programs established prior toand during bankruptcy.

2019 Business Highlights

Following our emergence from bankruptcy in November 2018, our management team focused on cost control and processoptimization while delivering safe, efficient and reliable services to our clients. At the beginning of 2019, we had three rigsworking, and four rigs smart-stacked. Although market conditions continued to be challenging at the start of 2019, through theyear we saw a steady improvement in market conditions demonstrated by stable oil prices and a stronger demand for deepwaterrigs. This resulted in a tightening of the deepwater drillship supply in many regions,

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leading to higher utilization and day rates, an increase in the pace of contracting activity and longer contract durations. During2019, despite our recent emergence from bankruptcy, we successfully reactivated one of our smart-stacked rigs, won work from anew client and entered into a commitment letter for a new $50 million Revolving Credit Facility that we closed in early2020. Specifically, we accomplished the following:

Reactivated our fourth working rig, the Pacific Khamsin, investing in a significant upgrade to this seventh-generationrig with the addition of a managed pressure drilling system. The rig commenced work with a new client, Equinor, inDecember 2019 in the U.S. Gulf of Mexico providing positive confirmation of the benefits of our smart-stacking andreactivation process.

Successfully extended the contract for the Pacific Sharav with Chevron in the U.S. Gulf of Mexico and the contract forthe Pacific Bora with Eni in Nigeria.

Commenced Phase II of the plug and abandonment project for the Pacific Santa Ana for Petronas in Mauritania andmobilized the Pacific Bora for work under a contract with Eni in Oman to drill the first deepwater well in that country.

Added $145 million of additional backlog with a diverse group of national and major international oil companies. Achieved revenue efficiency of 97.4%, exceeding our target for the measure. Reduced general and administrative expenses while improving productivity and our supply chain performance. Managed capital and major maintenance spend to less than budget. Achieved our stretch goals for multiple HSE targets, including:

- Reduced Total Recordable Injury Frequency by 23%, including an 84% reduction in hand/finger injuries;

- Successfully delivered new hire HSE training to prepare two full crews of new staff;

- Attained significant prolonged periods of incident free operations fleet-wide, including the Pacific Sharav withfive years without a Lost Time Injury;

- Reduced environmental incidents by 33%; and

- Optimized operational, technical and HSE-related management system documentation including fleet-wideintroduction of industry-based Life Saving Rules program.

Added new members into our senior management team, including a new CEO in November 2018 and a new CFO inJuly 2019.

Compensation Governance and Best Practices

Our executive compensation program is designed and managed by the independent Compensation Committee of our

Board, referred to in this CD&A as the “Committee.” The Committee annually reviews the components and structure of ourcompensation program to ensure that the program supports our business objectives and is aligned with the interests of ourshareholders and makes recommendations to the full board regarding all compensation decisions. As part of this review, theCommittee seeks input from its independent compensation consultant to provide an outside perspective and evaluation of ourprogram. The Committee and our Board also value our shareholders’ views on our program. Notably, as a result of theGovernance Agreement, holders of approximately 79% of our common shares currently have direct input into our executivecompensation program through their director nominees on our Board. See Item 13 – “Certain Relationships and RelatedTransactions, and Director Independence.”

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We believe the following compensation governance practices and policies promote the accountability of our executivesand strengthen the alignment of our executive and shareholder interests:

Compensation Best Practices

Performance-Based, At-Risk Compensation – awards under our short-term and long-term incentive programsare based on the achievement of performance objectives and the performance objectives differ under the twoprograms; additionally, a substantial portion of each executive’s compensation is variable and at-risk.

Clawback Policy – awards under our incentive programs are subject to clawback in connection with anaccounting restatement or detrimental executive conduct; additionally, the employment agreements with Messrs.Wolford and Harris provide for clawback of severance payments in connection with certain detrimental conduct.

Anti-Hedging and Pledging Policies – we prohibit our executive officers and directors from entering intohedging arrangements with respect to our securities or pledging our securities.

Robust Stock Ownership Guidelines – we require our executive officers to maintain ownership of our securitiesthrough our use of equity-based awards and stock ownership guidelines.

Engagement of Independent Compensation Consultant – the Committee retains an independent compensationconsultant to evaluate our compensation programs.

No Tax Gross-Ups – we do not provide our executive officers with any tax gross-ups.

How We Determine and Assess Executive Compensation

Role of Independent Compensation Consultant

To assist in evaluating our compensation practices and the level of compensation provided to our executives, theCommittee has retained an independent compensation consultant to provide advice and ongoing recommendations on thesematters consistent with our business goals and pay philosophy. We believe that this input and advice produces more informeddecision-making and assures that an objective perspective is considered in this important governance process. The Committeehas retained Frederic W. Cook & Co., Inc. (“FW Cook”) as its executive compensation consultant. The Committee assessed FWCook’s independence and concluded that FW Cook’s work does not raise any conflicts of interest.

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Market Data and Peer Group

In 2019, FW Cook was asked to benchmark the compensation of our executive officers as a reference for our Committee instructuring our executive compensation program following our emergence from bankruptcy. In screening for potential peers, theCommittee and FW Cook used a number of factors, including industry classification, size, and labor market for executive talent.We used assets as the primary measure of size to reflect the asset intensive nature of the offshore drilling industry and usedrevenue and market capitalization as secondary measures. Following this analysis, the Committee selected the following peergroup (the “peer group”), which the Committee referred to in order to evaluate our compensation programs following ouremergence from bankruptcy and set 2019 compensation:

Archrock, Inc. Oceaneering International, Inc.

Diamond Offshore Drilling, Inc. Oil States International, Inc.

Ensco plc Patterson-UTI Energy, Inc.

Forum Energy Technologies, Inc. Rowan Companies plc

Helix Energy Solutions Group, Inc. Superior Energy Services, Inc.

Helmerich & Payne, Inc. Tidewater Inc.

Noble Corporation plc Vantage Drilling International

Peer Group

Peer GroupTotal Assets

Latest 4Quarters ($ in

millions)

Peer GroupMarket

Capitalization asof 12/31/2018 ($ in

millions)

Peer GroupRevenueLatest 4

Quarters ($ inmillions)

25 Percentile $2,222 $721 $846

50 Percentile $2,963 $1,017 $1,052

75 Percentile $6,178 $1,271 $1,946

Pacific Drilling S.A. $2,857 $1,001 $270

Estimated Percentile Rank 45 49 3

Role of Chief Executive Officer

Our chief executive officer makes recommendations to the Committee regarding the base salary and incentivecompensation awards for our other executive officers based on his qualitative judgment regarding each officer’s individualperformance, although the Committee, with the approval of the Board, makes all final compensation decisions regarding ourexecutive officers. Our chief executive officer is not present when the Committee or the Board discusses or determines any aspectof his compensation. Objectives of Our Compensation Program

The Committee, subject to approval of the Board, is responsible for designing, implementing, and administering ourexecutive compensation program. The Committee seeks to increase shareholder value by:

rewarding past performance and incentivizing future performance;

providing competitive levels of total compensation that will enable the Company to attract and retain talentedexecutive officers to execute the Company’s business strategy; and

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th

th

th

promoting sound compensation governance practices that encourage prudent decision-making.

The Committee believes compensation should reward achievement of business objectives, recognize individual initiativeand leadership and link the interests of the executives and shareholders. 2019 Executive Compensation Program

Following our emergence from bankruptcy, the Committee, with the assistance of FW Cook, re-evaluated our executivecompensation program, including:

the compensation earned over the last four years by our executive officers;

the estimated future value of any long-term compensation arrangements that remained outstanding following ouremergence; and

the executive compensation design practices of our peer group and how our programs are positioned with respect toeach element of direct compensation.

Following that review, the Committee approved the 2019 executive compensation program, which included three primary

components: base salary; an annual incentive award payable in cash; and long-term incentive awards in the form of time-basedrestricted stock units (“RSUs”) and performance share units (“PSUs”), all of which settle in our common shares. With respect toMessrs. Wolford and Harris, each executive entered into an employment agreement upon joining the Company, and theseagreements govern many aspects of their compensation arrangements, as discussed below.

Base Salaries

The Committee believes that base salaries, which provide fixed compensation, should meet the objective of attracting andretaining the executive officers needed to manage our business successfully. Actual individual salary amounts reflect theCommittee’s judgment with respect to each executive officer’s responsibility, performance, work experience and the individual’shistorical salary level.

The Committee evaluated our executive officers’ base salaries in early 2019. Based on a review of base salary levels of

similar officers in our peer group, the Committee determined that the base salaries of our executive officers were in line with themarket median. Accordingly, the Committee did not make any adjustments to the base salaries of our executive officers for2019. With respect to Messrs. Wolford and Harris, their respective employment agreements provide for annual base salaries of$700,000 for Mr. Wolford and $450,000 for Mr. Harris.

Annual Incentive Program

Our annual incentive program, or AIP, represents a variable component of compensation designed to reward our executiveofficers if the Company achieves the pre-established performance goals approved by the Committee for the applicable year. InFebruary 2019, the Committee, with approval of the Board, established the framework for the 2019 AIP awards. Under theprogram, each executive officer was assigned a target AIP award based on a percentage of his or her base salary. Pursuant to theterms of their employment agreements, the target award percentages for Messrs. Wolford and Harris may not be less than 100%for Mr. Wolford and 75% for Mr. Harris. For 2019, 80% of the AIP award for our NEOs could be earned based on our level ofachievement of six operational and financial metrics, and the remaining 20% could be earned in the Committee’s discretion basedon its assessment of individual performance. With respect to the operational and financial metrics, the Committee establishedthreshold, target and stretch goals, and the executives could earn between 50% and 150% of the applicable target AIP awardbased on the level of achievement of the goal between the threshold and stretch levels. Generally, the target goals align with theCompany’s budget for the year. Our annual budget includes expectations for strong operational performance, cost managementand incremental backlog. As such, we believe achieving the target goals requires management to perform at a high level. Thestretch goals require even further significant achievement.

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$ $$ $$ $$ $$ $

The following table describes the 2019 target AIP awards for each named executive officer who participated in theprogram for 2019. Mr. Boots, who left the Company in June 2019, did not participate in the AIP.

NameAnnual Base

Salary

Target AIPAward as a % of

Base Salary

80% of TargetBased

onOperational

and FinancialGoals

20% of TargetBased on

DiscretionTotal Target

AwardMr. Wolford 700,000 100% $560,000 $140,000 700,000Mr. Harris 450,000 75% $270,000 $67,500 337,500Mr. Acuff 400,000 70% $224,000 $56,000 280,000Ms. Buchanan 450,000 75% $270,000 $67,500 337,500Mr. Seeliger 400,000 70% $224,000 $56,000 280,000

2019 AIP Metrics:

The performance metrics chosen by the Committee to evaluate the operational and financial component of the AIP for2019 are set forth in the table below. The table also sets forth the weighting of each metric, the specific goals with respect to eachmetric, and the Company’s actual performance against those goals for 2019.

PerformanceMetrics Weighting Threshold Target Stretch

ActualPerformance

WeightedPayout as a %

of TargetAdjusted EBITDA,less other G&A ($ in millions)

25% $(33.7) $(23.7) $(13.7) ($37.1) 0.0%

Contract Drilling Costs(per day)($ in thousands)

10% $78.2 $75.2 $72.2 $75.2 10%

Corporate Overheadand OperationsSupport Costs($ in millions)

5% $47.7 $45.4 $40.9 $46.8 3.5%

Incremental Backlog($ in millions) 25% $75.9 $108.3 $167.0 $201.3 37.5%

Revenue Efficiency 15% 92.0% 94.3% 98.0% 97.4% 20.3%

Health, Safety andEnvironment (HSE) 20% Index Score 89.8% 18.0%

Operational and Financial Performance Result Total 89.3%

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(1)

(2)

$ $ $$ $ $$ $ $$ $ $$ $ $

(1) Adjusted EBITDA, less other G&A, is a non-GAAP measure. Our calculation of Adjusted EBITDA for purposes ofestablishing our Adjusted EBITDA AIP performance target and determining our results is detailed below:

2019

(in thousands)Adjusted EBITDA (deconsolidated) $ (31,335)Add: negative impact of Zonda Debtors (1,002)Subtract: interest income of consolidated company (6,302)Add: Other operations support 1,461Add: Other G&A 10,221Subtract: Additional adjustments (10,120)Target EBITDA (consolidated) $ (37,077)

(2) The HSE Index is comprised of metrics relevant to areas of health and safety and environmental concerns.

2019 AIP Results:

Based on the Company’s performance relative to the performance goals in 2019, the Committee recommended, and theBoard approved the following AIP awards to the NEOs:

Name

% ofTarget Earned

(Op/Fin)

AIP AwardBased onOp/Fin

% ofTarget Earned(Discretionary)

AIP Award Basedon Discretionary

Total 2019AIP Award

EarnedMr. Wolford 89.3% 500,080 20.0% 140,000 640,080Mr. Harris 89.3% 107,674 20.0% 30,144 137,818Mr. Acuff 89.3% 200,032 20.0% 56,000 256,032Ms. Buchanan 89.3% 241,110 5.0% 16,875 257,985Mr. Seeliger 89.3% 200,032 20.0% 56,000 256,032

(1) Pursuant to the terms of his employment agreement, Mr. Harris, who joined the Company on July 22, 2019, received a pro ratapayout of his earned 2019 AIP award. In addition to the pro rata AIP bonus, given Mr. Harris’ performance in 2019, the Boardapproved an additional $100,000 bonus for Mr. Harris, which is reflected in the summary compensation table.

2019 Long-Term Incentive Program

Our long-term incentive, or LTI, program represents another variable component of compensation with a dualpurpose. The LTI program is intended to reward our executive officers if the Company achieves certain pre-establishedperformance goals measured over a longer period of time, and also to encourage retention by requiring the executive officers toperform services for a period of time in excess of a single year in order to receive the full benefits of the award. As describedbelow, the initial LTI awards granted to Messrs. Wolford and Harris were set forth in their employment agreements and differfrom the awards granted to our other executive officers. All of our LTI awards granted since our emergence from bankruptcysettle in our common shares.

In early 2019, the Committee reviewed FW Cook’s analysis of the compensation arrangements in place following our

emergence from bankruptcy, noting that:

All prior equity awards granted to our executive officers had been cancelled as a result of the bankruptcy; and

For all NEOs other than Mr. Seeliger (whose 2016 and 2017 cash awards did not contain performance measures), alloutstanding long-term cash awards had below target payout expectations (see summary chart below under “Status ofPreviously Awarded Long-Term Incentives”).

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(1)

Based on these findings, the Committee determined that the primary emphasis of the LTI program at this time should be toattract and retain talent. As a result, the Company implemented an LTI program for the NEOs that was comprised primarily oftime-based equity-based awards vesting over a three-year period with grant date award values equivalent to three times the valueof peer group median annual LTI awards. As a result of these “front-loaded” awards, the Committee and Board do not intend tomake annual LTI awards at this time but will continue to evaluate the appropriate timing of future LTI awards to effectivelyincentivize and compensate our executive officers. In December 2019, due to the substantial decrease in our stock price and toenhance the retentive value of our program, the Committee, with the approval of the Board, granted the executive officers time-based cash awards (the “Retention Awards”) that will vest and pay out on December 31, 2020, provided the executive officerremains employed as of such date. These awards are equivalent to 50% of each officer’s base salary.

Under the 2019 LTI program, the Committee assigned each executive officer, other than Messrs. Wolford, Harris and

Boots, an LTI target award value, which was expressed as three times the peer group median LTI value for each executiveofficer’s equivalent position. The LTI target award value was then divided by the per share closing price of our common shareson the day prior to the grant date ($15.50 per share), with each executive officer receiving a combination of RSUs and PSUs. TheRSUs vest one-third per year over three years, and the PSUs utilize a three-year performance period ending December 31, 2021,and, except for limited circumstances, require continued employment throughout the performance period or portions thereof inorder to earn the award. Both awards are settled in our common shares. The terms of the LTI awards are summarized as follows:

PSUs – between 0% and 200% of the award may vest following the end of a three-year performance period based on

our relative total shareholder return measured against the following peer companies: Diamond Offshore Drilling, Inc.,Ensco plc, Noble Corporation plc, Seadrill Ltd., and Transocean Ltd. The PSUs represent 33% of the LTI target awardvalue. The starting benchmark share price for the performance period was based on the average closing share price ofthe Company’s common shares over the nine trading days in December starting on December 18, 2018 (the day theCompany’s common shares were relisted on the NYSE following its emergence from bankruptcy) and all trading daysin January 2019, or $14.09 per share.

RSUs – vest in three substantially equal annual installments on January 1, 2020, 2021 and 2022. The RSUs represent

67% of the LTI target award value.

The LTI awards granted to our NEOs in February 2019 were as follows:

Name LTI Target Value Total LTI Awards # of RSUsTarget

# of PSUsMr. Acuff $2,533,000 164,710 110,356 54,354Ms. Buchanan $3,786,000 244,259 163,654 80,605Mr. Seeliger $2,886,000 186,194 124,750 61,444

With respect to Messrs. Wolford, Harris and Boots, the LTI program structure differs as a result of the uniquecircumstances applicable to each, as described below:

Mr. Wolford: In connection with his appointment as Chief Executive Officer upon our emergence from bankruptcy

on November 19, 2018, and pursuant to the terms of his employment agreement with the Company, Mr. Wolfordreceived 400,000 RSUs in December 2018, with a deemed grant date value of $20.00 per share. The terms of theseRSUs are as follows: 200,000 represent a time-based award, which will vest in equal installments on the second, thirdand fourth anniversaries of the date of grant, and the other 200,000 represent a performance-based target award. Thevesting of the performance-based RSUs is only triggered by a change of control, with the number of RSUs vesting(between 0% and 100%, referred to as the “earned RSUs”) determined by reference to an IRR calculation on the dateof the change of control. The IRR is determined by the actual annual pre-tax return of specified percentages,compounded annually, on a specified deemed share price. In March 2020, Mr. Wolford and the Company amended hisperformance-based RSU award, which will now expire if a change of control does not occur on or before December 31,2020.

Mr. Harris: In connection with his appointment as Chief Financial Officer and pursuant to the terms of his

employment agreement with the Company, in July 2019 Mr. Harris received 101,775 RSUs and 101,775 PSUs with anaggregate grant date fair value of $1,618,223. These awards generally have the same terms and

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conditions as the RSUs and PSUs granted to our other executive officers under the 2019 LTI program described above,except that Mr. Harris’ RSUs vest 20% on January 1, 2020, and 40% on each of January 1, 2021 and 2022.

Mr. Boots: In March 2019 Mr. Boots received an award of 54,550 RSUs. This award differed from those made to the

other NEOs in light of his anticipated separation from the Company and was intended to help facilitate a smoothtransition in the chief financial officer role. The RSUs were scheduled to vest on December 31, 2019, but the terms ofthe agreement provided for earlier, pro-rata vesting if Mr. Boots’ separation from the Company occurred prior to thatdate. See the section titled “Executive Compensation – Potential Payments Upon Termination or Change of Control –Separation Agreement with Mr. Boots” for more information.

Status of Previously Awarded Long-Term Incentives

In connection with our emergence from bankruptcy on November 19, 2018, all equity and equity-based awards werecancelled. The following were the only outstanding long-term awards held by our executive officers as of our emergence date, allof which settle in cash: (i) the unvested portions of the long-term incentive cash (“LTIC”) awards granted during 2016 and 2017,with potential vesting dates through 2020 provided applicable service and performance conditions are met, and (ii) the awardsapproved by the bankruptcy court in August 2018 under the Key Employee Incentive Plan (the “KEIP”), pursuant to whichmembers of senior management were granted cash-settled awards that vested in part upon our emergence from bankruptcy, and inpart upon the achievement of certain revenue performance goals for 2018 and 2019.

As of December 31, 2019, the only, pre-emergence long-term incentive awards with continuing performance periods werethe remaining unvested amounts under the 2017 LTIC awards. These awards, other than Mr. Seeliger’s, are performance-basedawards that will be forfeited unless certain free cash flow targets are achieved by December 31, 2020. The Board does not expectthat these targets will be achieved by such date. Mr. Seeliger, who was not an executive officer at the time of the grant, receiveda time-based award that fully vested on January 1, 2020. The table below summarizes the LTIC and KEIP awards granted tocertain of our NEOs, and the value of each that has been forfeited or earned as of December 31, 2019.

Executive Award Type

Target Valueof Award at

Grant

Value Forfeited asof

December 31, 2019

Value Earned asof

December 31,2019

OutstandingUnvested Award as

ofDecember 31, 2019

Mr. Acuff LTICKEIP

$540,000$400,000

$90,000$78,800

$270,000$321,200

$180,000-

Ms. Buchanan LTICKEIP

$870,000$900,000

$90,000$177,300

$380,000$722,700

$400,000-

Mr. Seeliger LTICKEIP

$815,738$800,000

-$157,600

$633,825$642,400

$181,913-

Mr. Boots LTICKEIP

$317,813$450,000

$52,500$113,850

$158,437$336,150

$106,876-

Total $5,093,551 $700,050 $3,464,712 $868,789 ________________

(1) Expected to be forfeited on December 31, 2020.

(2) This award fully vested on January 1, 2020.

Limited Executive Perquisites and No Special Retirement Benefits

We seek to maintain a cost-conscious culture, including in connection with the benefits provided to our executive officers.As a result, we provide limited perquisites to our executive officers. Please see “Executive Compensation —2019 SummaryCompensation Table” for a description of the perquisites provided in 2019.

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(1)

(1)

(2)

(1)

Retirement benefits fulfill an important role within our overall executive compensation objectives by providing a level offinancial security, which in turn promotes retention. However, our executive officers do not receive any retirement benefits thatare not generally available to our other full-time employees. We maintain a 401(k) plan, which is a tax-qualified definedcontribution retirement plan in which our executive officers are eligible to participate. Under the 401(k) plan, we match 100% ofemployee contributions up to 3%, and 50% of the next 2% of eligible compensation per participant. We do not maintain anyexcess benefit plans, defined benefit or pension plans, or any deferred compensation plans.

Cash Severance and Change of Control Benefits

We provide each of our current named executive officers with contractual protections in the event of a termination of

employment by the Company without cause or by the executive for good reason, whether such termination of employmenthappens prior to or in connection with a change of control. We believe that severance protections, particularly in connection witha change of control transaction, can play a valuable role in attracting and retaining key executive officers by providing protectionscommonly provided in the market. In addition, we believe these benefits also serve the Company’s interest by promoting acontinuity of management in the context of an actual or threatened change of control transaction.

Specifically, Messrs. Wolford and Harris are entitled to severance benefits under their Executive Employment Agreements,

and our other executive officers are entitled to severance benefits under their Severance and Change of Control Agreements. Theboard determined that it is appropriate to provide our executives with severance benefits under these circumstances in light oftheir critical positions with the Company and as part of their overall compensation packages. In addition, we acknowledge thatthe occurrence, or potential occurrence, of a change of control transaction would create uncertainty regarding the continuedemployment of our executive officers, particularly at the senior executive level. In order to encourage these executive officers toremain employed with the Company during a critical time when their prospects for continued employment following a transactionare often uncertain, the agreements provide them with enhanced severance benefits if their employment is terminated by theCompany without cause in connection with a change of control. In addition, because a termination by the executive for goodreason may be conceptually the same as a termination by the Company without cause, and because we believe that in the contextof a change of control, potential acquirers would otherwise have an incentive to constructively terminate the executive’semployment to avoid paying severance, we believe it is appropriate to provide severance benefits in these circumstances. We donot provide excise tax gross-up protections under any change of control arrangements with our executive officers.

In addition, the terms of our outstanding incentive awards provide for accelerated vesting under certain circumstances

related to a termination of employment and/or the occurrence of a qualifying change of control. For more information regardingall of these severance and change of control benefits, see the section titled “Executive Compensation – Potential Payments UponTermination or Change of Control.”

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Compensation Policies and Considerations

Clawback Policy

The Company’s compensation recovery, or “clawback,” policy applies to incentive compensation paid to an executiveofficer and certain other designated employees (whether paid in cash or in equity) that was based wholly or in part on financialreporting measures. Under the policy, the Company may recover excess incentive compensation paid during the three completedfiscal years immediately preceding the date on which the Company is required to prepare an accounting restatement if the Boarddetermines that the covered employee’s intentional misconduct or gross negligence materially contributed to such restatement. Inconnection with a restatement, the compensation shall be adjusted, if necessary, so that the covered employee will have receivedno more and no less than the amount that he or she would have received had the incentive award been calculated based on therestated financial results. The Company may also recover incentive compensation paid to a covered employee who has beenfound to engage in detrimental conduct. If the Board determines that a covered employee has engaged in detrimental conduct (asdefined in the policy), then the Board may require the covered employee to (a) reimburse the Company all or a portion of anyincentive compensation previously vested or paid during the one completed fiscal year immediately preceding the Board ofDirector’s discovery, and (b) forfeit any unpaid or unvested incentive compensation.

Compensation Risk Assessment

After considering the components of our compensation program, the Committee believes that the risks arising from our

compensation policies and practices for our employees, including our executive officers, are not reasonably likely to have amaterial adverse effect on the Company. Further, the Committee believes that certain features of our compensation programserve to mitigate any compensation-related risk, including (i) our clawback, anti-hedging and anti-pledging policies, and our stockownership guidelines, (ii) the balance between fixed and variable pay, cash- and equity-based awards, and short- and long-termincentives, and (iii) the administration of the program by a committee consisting entirely of independent directors.

Stock Ownership Guidelines

We encourage stock accumulation because we believe that it is important for our executive officers to align their interests

with the long-term interests of our shareholders. Accordingly, in May 2019 our Board adopted stock ownership guidelinesapplicable to our officers. Under the guidelines, each of our officers is encouraged to maintain ownership of our common sharesvalued at four times (for our CEO), three times (for our senior vice presidents) and one time (for our vice presidents) his or herannual base salary. Common shares owned individually or jointly, shares held indirectly, such as through members of theofficer’s immediate family, as well as shares subject to unvested restricted stock and RSUs are counted for purposes of the stockownership guidelines, but shares underlying unearned performance awards are not counted.

Our officers have five years from the date of their respective appointments (or from May 20, 2019, the date the guidelines

were adopted, whichever is later) to attain these ownership levels. Until the specified ownership levels are met, our officers areexpected to retain 50% of the net shares issued upon the vesting of equity awards granted by the Company, after deducting anyshares used to pay applicable taxes. Each of our executive officers (other than Mr. Harris) has until May 20, 2024 to reach his orher target ownership level, and Mr. Harris has until July 22, 2024. As of December 31, 2019 and based on the average closingprice of our common shares for the year ended December 31, 2019 of $9.68, Mr. Seeliger and Ms. Buchanan have met the stockownership guidelines applicable to him or her.

Prohibition on Hedging and Pledging Transactions

Each of our named executive officers is subject to our Insider Trading Standard, an internal company policy adopted by

our Board. This policy includes a blanket prohibition on engaging in hedging or monetization transactions, such as prepaidvariable forward contracts, equity swaps, collars, and exchange funds with respect to our securities, regardless of whether thosesecurities were received as compensation. This prohibition applies to all directors, officers and employees of the Company. Inaddition, the Insider Trading Standard includes a blanket prohibition on insiders holding Company securities in a margin accountor otherwise pledging Company securities.

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Tax and Accounting Considerations

The accounting and tax treatment of compensation generally has not been a factor in determining the amounts ofcompensation awarded to our executive officers. However, the Committee and management do consider the accounting and taximpact of various program designs to balance the potential cost to the Company with the benefit or value to the executive officer.

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REPORT OF THE COMPENSATION COMMITTEE ONFISCAL 2019 EXECUTIVE COMPENSATION

The Compensation Committee has reviewed and discussed with management the “Compensation Discussion and Analysis”to be included in the Company’s 2019 Annual Report on Form 10-K, filed with the SEC pursuant to the Exchange Act. Based onthat review and discussion, the Committee recommends to the Board that the Compensation Discussion and Analysis be includedin the Company’s 2019 Annual Report on Form 10-K.

COMPENSATION COMMITTEE:John V. Simon, Chairman David N. WeinsteinW. Matt Ralls

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EXECUTIVE COMPENSATION

2019 Summary Compensation Table

The following table summarizes the compensation for the last three fiscal years, or such shorter period as the executivewas employed by us, for each of the Named Executive Officers.

Name and Principal Position YearSalary

($)

Bonus($)

Stock

Awards($)

Non-EquityIncentive Plan

Compensation($)

All Other

Compensation($)

Total($)

Bernie G. Wolford Jr. 2019 700,000 - - 640,080 12,400 1,352,480 Chief Executive Officer 2018 81,667 200,000 2,600,000 - - 2,881,667 James W. Harris 2019 199,219 100,000 1,618,223 137,818 275 2,055,535 Senior Vice President and Chief Financial Officer Michael D. Acuff 2019 400,000 - 2,709,001 345,632 11,200 3,465,833 Senior Vice President 2018 400,000 - 2,297 345,900 11,000 759,197 Commercial 2017 376,667 - - 579,000 10,800 966,467 Lisa Manget Buchanan 2019 450,000 - 4,017,351 459,585 12,400 4,939,336 Senior Vice President, 2018 450,000 - 2,297 692,550 11,500 1,156,347 General Counsel and Secretary 2017 420,833 - - 843,500 14,706 1,279,039 Anthony C. Seeliger 2019 400,000 - 3,062,351 707,145 11,200 4,180,696 Senior Vice President 2018 400,000 - 2,418 849,412 11,000 1,262,830 Operations 2017 378,898 - - 399,000 10,800 788,698 Johannes P. Boots 2019 225,000 71,250 773,519 75,600 725,721 1,871,090 Former Senior Vice President 2018 450,000 71,250 2,418 432,000 156,638 1,112,306 and Chief Financial Officer 2017 353,750 - - 621,937 165,389 1,141,076

______________________(1) For Mr. Wolford, reflects a discretionary bonus received for 2018 pursuant to the terms of his Employment Agreement

dated November 19, 2018, for Mr. Harris reflects a discretionary bonus received for 2019 performance, and for Mr.Boots, reflects payments of cash retention bonuses.

(2) As discussed in the Compensation Discussion and Analysis, the 2019 LTI awards were “front-loaded” awards. For2019, the amounts reflect the aggregate grant date fair value of restricted stock units (“RSUs”) and performance shareunits (“PSUs”) awarded to the NEOs, as applicable, computed in accordance with Financial Accounting StandardsBoard Accounting Standards Codification (“ASC”) 718, as detailed in the table below. The grant date fair value of theRSUs was determined based on the closing price of our common shares on the day prior to the date of grant, and thegrant date fair value of the PSUs was determined using a Monte Carlo simulation model to estimate the probableoutcome of the conditions. The Monte Carlo model utilizes multiple inputs to produce distributions of TSR for theCompany and each of the applicable peer companies to calculate the fair value. The grant date fair value of the PSUsassuming maximum payout of the award for each NEO is as follows: for Mr. Harris – $768,401; for Mr. Acuff –$998,483; for Ms. Buchanan – $1,480,714; and for Mr. Seeliger – $1,128,726. See the “Compensation Discussion andAnalysis” and the “2019 Grants of Plan-Based Awards” table for more information about these awards.

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(1) (2) (3) (4)

(5)

(6)

(7)

2019 AwardsName RSUs ($) PSUs ($)James W. Harris 849,821 768,401Michael D. Acuff 1,710,518 998,483Lisa Manget Buchanan 2,536,637 1,480,714Anthony C. Seeliger 1,933,625 1,128,726Johannes P. Boots 773,519 --

For 2018, the amounts reflect the grant date fair value of common shares issued to each of the named executiveofficers in December 2018 in connection with the Company’s emergence from Chapter 11 proceedings, and the time-based RSUs and performance-based RSUs received by Mr. Wolford in December 2018 in connection with joining theCompany in November 2018. For the stock awards and the time-based RSUs, the grant date fair value wasdetermined based on the closing price of our common stock on the date of grant, and for the performance-based RSUsgranted to Mr. Wolford, which will vest only upon a change of control occurring on or before December 31, 2020, thegrant date fair value was determined to be $0, given that this performance condition is not viewed as probable underASC 718. There were no stock awards made to the NEOs in 2017.

(3) The amounts reflect (i) the annual incentive plan (“AIP”) cash payments earned based on the achievement of the pre-established goals for each year, (ii) payments made under the Key Employee Incentive Plan (“KEIP”) cash awardsgranted on August 24, 2018, and (iii) payments made under the Long-Term Incentive Cash (“LTIC”) awards grantedduring 2016 and 2017, as follows:

Name Year AIP ($) KEIP ($) LTIC ($)Bernie G. Wolford Jr. 2019 640,080 - -

2018 - - -

James W. Harris 2019 137,818 - -

Michael D. Acuff 2019 256,032 89,600 - 2018 114,300 231,600 -2017 309,000 - 270,000

Lisa Manget Buchanan 2019 257,985 201,600 - 2018 171,450 521,100 -2017 463,500 - 380,000

Anthony C. Seeliger 2019 256,032 179,200 271,9132018 114,300 463,200 271,9122017 309,000 - 90,000

Johannes P. Boots 2019 - 75,600 -2018 171,450 260,550 -

2017 463,500 - 158,437

(4) For 2019, consists of (i) matching amounts paid under our 401(k) Plan, and (ii) for Mr. Boots, also includes severance

benefits pursuant to the terms of his Separation Agreement with the Company ($694,122), a payment for earnedvacation days ($19,712) and expatriate benefits ($2,887). See “Potential Payments Upon Termination or Change inControl – Separation Agreement with Mr. Boots” for more information.

(5) Mr. Wolford joined the Company on November 19, 2018.

(6) Mr. Harris joined the Company on July 22, 2019.

(7) Mr. Boots resigned from the Company effective June 30, 2019.

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2019 Grants of Plan-Based Awards

The following table sets forth certain information with respect to grants of plan-based awards during the fiscal year endedDecember 31, 2019 to each of our Named Executive Officers.

Estimated Possible Payouts UnderNon-Equity Incentive Plan Awards

($)

Estimated Future Payouts UnderEquity Incentive Plan Awards

(#)

All OtherStock

Awards:Number ofShares ofStock or

Units (#)

GrantDate FairValue of

Stock andOption

Awards ($)Name Grant Date Threshold Target Maximum Threshold Target Maximum Bernie G. Wolford Jr. AIP 350,000 700,000 1,050,000 - - - - -James W. Harris AIP 168,750 337,500 506,250 - - - - -RSUs 7/22/2019 - - - - - - 101,775 849,821PSUs 7/22/2019 - - - 0 101,775 203,550 - 768,401Michael D. Acuff AIP 140,000 280,000 420,000 - - - - -RSUs 2/26/2019 - - - - - - 110,356 1,710,518PSUs 2/26/2019 - - - 0 54,354 108,708 998,483Lisa Manget Buchanan AIP 168,750 337,500 506,250 - - - - -RSUs 2/26/2019 - - - - - - 163,654 2,536,637PSUs 2/26/2019 - - - 0 80,605 161,210 1,480,714Anthony C. Seeliger AIP 140,000 280,000 420,000 - - - - -RSUs 2/26/2019 - - - - - - 124,750 1,933,625PSUs 2/26/2019 - - - 0 61,444 122,888 1,128,726Johannes P. Boots RSUs 3/26/2019 - - - - - - 54,550 773,519

_______________________

(1) Under the AIP, each executive had a target award based on a multiple of salary, with the amount to be earned based onthe Company’s performance relative to defined goals established by the Compensation Committee and approved bythe Board. The amounts reported represent the estimated threshold, target and maximum possible annual cashincentive payments that could have been received by each NEO pursuant to the AIP for 2019. The estimated amountsin the “Target” column reflect 100% of base salary for Mr. Wolford, 75% of base salary for Mr. Harris (although hisaward will be prorated) and Ms. Buchanan and 70% of base salary for Messrs. Acuff and Seeliger. For 2019, 80% ofthe AIP award for our NEOs could be earned based on our level of achievement of six operational and financialmetrics, and the remaining 20% reflected a discretionary component. With respect to the operational and financialmetrics, the Committee established threshold, target and stretch goals, and the executives could earn between 50% and150% of the applicable target AIP award based on the level of achievement of the goal between the threshold andstretch levels. See the “Compensation Discussion and Analysis” for more information.

(2) These awards represent PSUs awarded as part of our long-term incentive program during 2019. Each of the NEOs,

except Messrs. Wolford, Harris and Boots, received 33% of his or her target long-term award value in the form ofPSUs. Mr. Harris received 50% of his target long-term award value in the form of PSUs and Mr. Boots did not receivePSUs. Mr. Wolford did not receive PSUs during 2019. In December 2018, in connection with joining the Company inNovember 2018, he received 400,000 RSUs, 200,000 of which represent a performance-based target award, which willvest and pay out between 0% and 100% of the target award in connection with a change of control of the Companyoccurring on or before December 31, 2020, based on the Company’s meeting certain performance targets on the dateof such change of control. For the other NEOs, each PSU granted in 2019 is intended to be a three-year front-loadedaward and represents a contingent right to receive a common share, with the final number of shares to be issued to ourNEOs based on the Company’s relative total shareholder return measured against a peer group of companies over thethree-year performance period ending on December 31, 2021. The NEOs (other than Mr. Wolford) may earn between0% and 200% of the target PSU award based on achievement of the applicable performance goal. See the“Compensation Discussion and Analysis” for more information.

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(1) (2) (3)

(3) Except for the RSUs granted to Messrs. Wolford and Boots, these awards represent RSUs awarded as part of our long-term incentive program during 2019, which settle in our common shares and are intended to be front-loadedawards. Each of the NEOs, other than Messrs. Wolford, Harris and Boots, received 67% of his or her target long-termaward value in the form of RSUs. Mr. Harris received 50% of his target long-term award value in the form of RSUs.The RSUs vest over a three-year period but will vest in full on the earlier of (i) the first anniversary of theconsummation of a change of control, as defined in the 2018 Plan, based on continued employment or (ii) the date theNEO is terminated by the Company without cause or by the NEO with good reason on or after a change of control. Asnoted above, Mr. Wolford did not receive RSUs in 2019, having received 200,000 RSUs in December 2018 which willvest in equal installments on the second, third and fourth anniversaries of the date of grant. Mr. Boots received a grantof only RSUs as a retention award in connection with his Separation Agreement.

Outstanding Equity Awards at December 31, 2019

The following table sets forth certain information with respect to the value of all unvested RSUs, PSUs and performance-based RSUs previously awarded to the NEOs as of the end of the fiscal year ended December 31, 2019. There were no optionsoutstanding at December 31, 2019.

Stock Awards

Name

No. of Shares orUnits of StockThat Have Not

Vested (#)

Market Value ofShares or Units ofStock That HaveNot Vested ($)

Equity IncentivePlan Awards:

Number ofUnearned Shares,

Units or OtherRights That HaveNot Vested (#)

Equity Incentive

Plan Awards:Market or PayoutValue of Unearned

Shares, Units orOther Rights ThatHave Not Vested

($)Bernie G. Wolford Jr. 200,000 816,000 200,000 816,000 James W. Harris 101,775 415,242 101,775 415,242 Michael D. Acuff 110,356 450,252 54,354 221,764 Lisa Manget Buchanan 163,654 667,708 80,605 328,868 Anthony C. Seeliger 124,750 508,980 61,444 250,692 Johannes P. Boots -- -- -- --

_______________________(1) Represents RSUs held by our NEOs, which will vest and pay out in our common shares as follows: (i) with respect to

200,000 of the RSUs held by Mr. Wolford, 1/3 on each of December 20, 2020, 2021 and 2022, (ii) with respect to theRSUs held by Mr. Harris, 20% on January 1, 2020 and 40% on each of January 1, 2021 and 2022, and (iii) withrespect to all of the RSUs held by each of our other NEOs, 1/3 on each of January 1, 2020, 2021 and 2022.

(2) The market value of the unvested RSUs, PSUs and performance-based RSUs reflected in this table is based on the$4.08 closing market price per share of our common shares on December 31, 2019.

(3) Represents target PSUs held by the NEOs. The PSUs (other than those held by Mr. Wolford) will pay out in ourcommon shares based on the Company’s relative total shareholder return measured against a peer group of companiesover the three-year performance period ending December 31, 2021. The executives may earn between 0% and 200%of the target PSU award. In addition, Mr. Wolford’s total represents 200,000 performance-based RSUs, which vest andpay out in our common shares in connection with a change of control of the Company occurring on or beforeDecember 31, 2020. Mr. Wolford may earn between 0% and 100% of the performance-based RSUs based on theCompany meeting certain performance targets on the

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(1) (2) (3) (2)

date of such change of control. See the “Compensation Discussion and Analysis” for more information about theseawards.

Stock Vested During 2019

The following table sets forth certain information regarding the vesting of RSUs during the fiscal year ended December 31,2019. There were no stock options exercised during 2019.

Stock Awards

Name No. of Shares Acquired

On Vesting (#) Value Realized

On Vesting ($)Bernie G. Wolford Jr. James W. Harris Michael D. Acuff Lisa Manget Buchanan Anthony C. Seeliger Johannes P. Boots 27,275 $343,665

_______________________(1) The value realized on vesting of the RSUs is based on the closing sale price on the date of vesting or, if there were no

reported sales on such date, on the last preceding date on which any reported sale occurred.

Potential Payments Upon Termination or Change of Control

Employment Agreement with Chief Executive Officer -- On November 19, 2018, the Company entered into an employmentagreement with Mr. Wolford. Pursuant to the agreement, Mr. Wolford will remain employed until he resigns or his employment isterminated by the Company in accordance with the terms of the agreement. Under the employment agreement, Mr. Wolfordreceives an annual base salary of $700,000 and an annual target bonus opportunity of no less than 100% of annual base salary anda maximum value of 150% of annual base salary. He also received certain sign-on time-based RSUs and performance-basedRSUs, which were granted in December 2018. The employment agreement includes a 12-month post-employmentnoncompetition covenant and a 24-month post-employment non-solicitation covenant with respect to employees, contractors,clients and suppliers. Mr. Wolford’s employment agreement provides for severance payments and benefits if the Companyterminates his employment other than for cause or he terminates his employment for good reason, as defined in the agreement,subject to Mr. Wolford’s execution and non-revocation of a release of claims in favor of the Company, its subsidiaries andaffiliates.

Under the terms of the employment agreement, if Mr. Wolford’s employment is terminated other than for cause (as definedin the employment agreement) or he terminates his employment for good reason (as defined in the employment agreement) otherthan during the 12-month period following the date of any change of control (the “Protection Period”), he will be entitled to thefollowing:

a payment of (a) $4.0 million if such termination occurs prior to January 1, 2021, or (b) an amount equal to one andone-half times the sum of: (A) his base salary in effect immediately prior to the termination date, and (B) his targetbonus established for the year in which the termination occurs, if such termination occurs on or after January 1, 2021,which payment shall be paid in installments over an 18-24-month period; and

automatic acceleration of the portion of the outstanding time-based RSUs that were granted to him in 2018 that arescheduled to vest on the next regularly scheduled vesting date following the termination date; and

reimbursement for up to 18 months for the difference between his COBRA premiums and the monthly employeecontribution amount that active similarly situated employees of the Company pay for the same or similar coverage.

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— —

— —

— —

— —

— —

If Mr. Wolford’s employment is terminated during the Protection Period other than for cause or he terminates hisemployment for good reason regardless of whether such Protection Period occurs before or after January 1, 2021, he will beentitled to the following:

a payment of an amount equal to two times the sum of (A) his base salary in effect for the year of the date oftermination, and (B) his target bonus established for the year in which the termination occurs, which payment shall bepaid in installments over a 24-month period; and

automatic acceleration of all outstanding time-based RSUs that have been granted to him and acceleration of the payoutof any earned performance-vested RSUs; and

reimbursement for up to 18 months for the difference between his COBRA premiums and the monthly employeecontribution amount that active similarly situated employees of the Company pay for the same or similar coverage.

For purposes of the employment agreement, “good reason” includes a material reduction of the executive’s base salary, a

material diminution in the executive’s duties and status, changes in the location at which the executive is based and certainbreaches of the agreement. The definition of a “change of control” for purposes of the agreement would be deemed to occur uponthe acquisition by any person or group of 60% or more of our outstanding shares, consummation of a reorganization, merger,consolidation or sale or other disposition of all or substantially all of our assets. Finally, for purposes of the agreement, “cause”includes the executive’s breach of the agreement or certain policies of the Company, felony conviction, knowing falsification ofreports filed with the SEC or any exchange on which our shares are listed, or failure to perform his or her duties as instructed bythe board.

Employment Agreement with Chief Financial Officer -- On July 22, 2019, the Company entered into an employment agreementwith Mr. Harris. The agreement has an initial term of two years, which term is automatically extended for successive two-yearterms unless either party gives written notice to the other not later than 90 days prior to the expiration of the then-currentterm. Under the employment agreement, Mr. Harris receives an annual base salary of $450,000 and an annual target bonusopportunity of no less than 75% of annual base salary and a maximum value of 112.5% of annual base salary. He also receivedcertain sign-on equity awards consisting of the RSUs and PSUs, which were generally consistent with awards granted to our otherexecutive officers during 2019. The employment agreement includes a 12-month post-employment noncompetition covenant anda 12-month post-employment non-solicitation covenant with respect to employees, contractors, clients and suppliers. Mr. Harris’employment agreement provides for severance payments and benefits if the Company terminates his employment other than forcause or he terminates his employment for good reason, as defined in the agreement, subject to Mr. Harris’ execution and non-revocation of a release of claims in favor of the Company, its subsidiaries and affiliates.

Under the terms of the employment agreement, if Mr. Harris’ employment is terminated other than for cause (as defined inthe employment agreement) or he terminates his employment for good reason (as defined in the employment agreement) otherthan during the 12-month period following the date of any change of control (the “Protection Period”), he will be entitled to thefollowing:

a lump sum payment equal to the sum of (i) an amount equal to one and one-half times the sum of: (A) his base salaryin effect immediately prior to the termination date, and (B) his target bonus established for the year in which thetermination occurs, and (ii) an amount equal to the Company contributions that would be made for 12 months ofbenefits.

If Mr. Harris’ employment is terminated during the Protection Period other than for cause or he terminates his employmentfor good reason, he will be entitled to the following:

If a change of control occurs prior to July 22, 2020, a lump sum payment of an amount equal to the sum of (i) his basesalary in effect immediately prior to the termination date, (ii) his target bonus established for the year in which thetermination occurs, and (iii) an amount equal to the Company contributions that would be made for 12 months ofbenefits;

If a change of control occurs on or after July 22, 2020 but prior to July 22, 2021, a lump sum payment of an amountequal to (i) one and one-half times the sum (A) his base salary in effect immediately prior to the termination date, and(B) his target bonus established for the year in which the termination occurs, and (ii) an

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amount equal to the Company contributions that would be made for 18 months of benefits; and

If a change of control occurs on or after July 22, 2021, a lump sum payment of an amount equal to (i) two times thesum (A) his base salary in effect immediately prior to the termination date, and (B) his target bonus established for theyear in which the termination occurs, and (ii) an amount equal to the Company contributions that would be made for 24months of benefits.

For purposes of the employment agreement, “good reason” includes a material reduction of the executive’s base salary, amaterial diminution in the executive’s duties and status, changes in the location at which the executive is based and certainbreaches of the agreement. The definition of a “change of control” for purposes of the agreement would be deemed to occur uponthe acquisition by any person or group of 60% or more of our outstanding shares, consummation of a reorganization, merger,consolidation or sale or other disposition of all or substantially all of our assets. Finally, for purposes of the agreement, “cause”includes the executive’s breach of the agreement or certain policies of the Company, felony conviction, knowing falsification ofreports filed with the SEC or any exchange on which our shares are listed, or failure to perform his or her duties as instructed bythe board.

Severance and Change of Control Agreements with Other NEOs -- We have entered into severance and change of controlagreements with each current Named Executive Officer other than Messrs. Wolford and Harris (the “Severance Agreements”). Inconnection with our Chapter 11 bankruptcy proceedings, each such executive waived his or her right to claim that our emergencefrom bankruptcy triggered a change of control of the Company (as defined in the Severance Agreements.) Other than as subject tothe waivers, under the terms of the Severance Agreements and the applicable award agreements, if at any time prior to a changeof control of the Company (as defined in the Severance Agreements), the Company terminates the executive’s employment otherthan for cause (as defined in the Severance Agreements) or the executive terminates his or her employment for good reason (asdefined in the Severance Agreements), the executive will be entitled to the following:

a lump sum payment equal to the sum of (i) an amount equal to one year of the executive’s annual base salary in effectfor the year of the date of termination, (ii) an amount equal to a pro-rated portion of the target bonus established for theexecutive for the year in which the termination occurs calculated through the date of termination, and (iii) an amountequal to the Company contributions that would be made for 12 months of benefits; and

retention of the LTIC awards and awards under the KEIP, which awards will pay out a pro-rated portion if and whenthe applicable performance conditions are satisfied; and

automatic acceleration of the vesting of any stock options, restricted stock, RSUs or PSUs that may be granted to theofficer that are scheduled to vest within one year following the date of termination.

If a change of control of the Company occurs and the Company terminates the executive’s employment other than for

cause, or the executive terminates his or her employment for good reason, during the 18-month period following the date of thechange of control, the executive will be entitled to the following:

a lump sum payment equal to the sum of (i) an amount equal to two times the sum of: (A) the executive’s base salary ineffect for the year of the date of termination, and (B) the target bonus established for the executive for the year inwhich the termination occurs, and (ii) an amount equal to the contributions that would be made for 24 months ofbenefits; and

automatic acceleration of the vesting of all unvested stock options, restricted stock, RSUs, PSUs, LTIC awards ortarget awards under the KEIP that were granted to the executive.

The Severance Agreements also include standard non-competition and non-solicitation language for a period of six months

following termination of employment, as well as customary confidentiality and non-disparagement covenants.

For purposes of the Severance Agreements, “good reason” includes a material reduction of the executive’s base salary, amaterial diminution in the executive’s duties and status, changes in the location at which the executive is based and certainbreaches of the agreement. The definition of a “change of control” for purposes of the agreements would be deemed to occurupon the acquisition by any person or group of 50% or more of our outstanding shares, consummation

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of a reorganization, merger, consolidation or sale or other disposition of all or substantially all of our assets, or upon theindividuals constituting our Board ceasing to constitute at least a majority of the Board. Finally, for purposes of the agreements,“cause” includes the executive’s breach of the agreement or certain policies of the Company, felony conviction, knowingfalsification of reports filed with the SEC or any exchange on which our shares are listed, or failure to perform his or her duties asinstructed by the board.

The agreements have an initial term of two years, which terms are automatically extended for successive two-year termsunless either party gives written notice to the other not later than 90 days prior to the expiration of the then-current term. Thecurrent term of the Severance Agreements will end on December 31, 2021 subject to the automatic renewal provision describedabove. Notwithstanding any non-extension notice given by the Company, (a) if a change of control occurs during the term of theSeverance Agreement, the agreement shall continue in effect through the second anniversary of the change of control, and (b) theexecutive will continue to be entitled to the benefits of the agreement if a termination by the Company without “cause” or by theexecutive with “good reason” occurs during the two-year period beginning with January 1 of the year following the date of thenon-extension notice.

No tax gross-ups. Neither of the employment agreements nor any of the Severance Agreements contain “gross-up” provisions inthe event that any payment to one of the covered executives would be subject to any excise tax under Section 4999 of the InternalRevenue Code.

Incentive Award Agreements – Impact of Termination of Employment and Change of Control. The terms of our outstandingequity- and cash-based incentive award agreements (which include RSUs, PSUs, performance-based RSUs, and LTIC awards)generally provide for the following in connection with an award recipient’s termination of employment or a change of control (asdefined in the stock incentive plan).

RSUs – Upon a change of control, any unvested RSUs shall continue to vest in accordance with the original vestingschedule but will become 100% vested upon the earlier of (i) the first anniversary of the change of control, or (ii) theaward recipient’s termination of employment if he or she is terminated without cause or if he or she terminates for goodreason on or after the change of control. Upon an award recipient’s termination of employment without cause or if heor she terminates for good reason prior to a change of control, any unvested RSUs scheduled to vest within 12 monthswill immediately vest. Upon an award recipient’s termination of employment under any other circumstances, anyunvested RSUs are immediately forfeited.

PSUs – Upon a change of control occurring prior to December 31, 2021, the performance period applicable to the PSUswill end and the level of achievement of the performance goal and the percentage of earned PSUs will be determined asof the date of the change of control. The earned PSUs will vest and pay out as follows: 75% shall vest and be settledwithin 30 days after the date of a change of control and the remaining 25% will become fully vested (subject tocontinued employment except as otherwise provided herein) on the earlier of (i) December 31, 2021, (ii) the firstanniversary of the change of control, or (iii) the award recipient’s termination of employment if he or she is terminatedwithout cause or if he or she terminates for good reason on or after the change of control.

Mr. Wolford’s Sign on RSUs and Performance-Based RSUs – Mr. Wolford’s RSUs and performance-based RSUsgranted in December 2018 in connection with the execution of his employment agreement provide for the following:

o RSUs: Upon a change of control, any unvested RSUs shall continue to vest in accordance with the originalvesting schedule but will become 100% vested upon the earlier of (i) the first anniversary of the change ofcontrol, or (ii) Mr. Wolford’s termination of employment by the Company without cause or if he terminates forgood reason on or after the change of control. If Mr. Wolford’s employment is terminated by the Companywithout cause or if he terminates for good reason prior to a change of control, any unvested RSUs scheduled tovest within 12 months will immediately vest. Upon Mr. Wolford’s termination of employment under any othercircumstances, any unvested RSUs are immediately forfeited.

o Performance-Based RSUs: The vesting of the performance-based RSUs is only triggered by a change ofcontrol, occurring on or before December 31, 2020 with the number of RSUs vesting (between 0% and 100%,referred to as the “earned RSUs”) determined by reference to an IRR calculation on the date of the change ofcontrol. The IRR is determined by the actual annual pre-tax return of specified

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percentages, compounded annually, on a specified deemed share price. The earned PSUs will vest and pay outas follows: 75% shall vest and be settled within 30 days after the date of the change of control and theremaining 25% will become fully vested on the earlier of (i) the first anniversary of the consummation of thechange of control, or (ii) Mr. Wolford’s termination of employment if he is terminated without cause or heterminates for good reason on or after the change of control.

Cash Awards:

o 2017 LTIC Awards: Upon a change of control, the performance metrics will be considered to be met and theunvested cash award will become fully vested on the effective date of the change of control, with payout asfollows: 50% of each outstanding tranche will be paid within 5 days of the change of control and the remaining50% of each outstanding tranche to be paid on the remaining “earliest payment date” applicable to such trancheas outlined in the award agreement, or, if earlier, on the award recipient’s termination date if he or she isterminated without cause or terminates for good reason prior to the sixth month anniversary of such change ofcontrol. Upon an award recipient’s termination of employment without cause or if he or she terminates forgood reason prior to a change of control, then the portion of any unvested LTIC award that is earned will vestupon the Committee’s certification of the applicable performance metrics, if achieved by the outside date underthe agreement. Upon an award recipient’s termination of employment under any other circumstances, anyunvested portions of the LTIC award are immediately forfeited.

o 2019 Retention Awards: Upon a change of control, the Retention Awards shall continue to vest in accordancewith the original vesting schedule but will become 100% vested upon the award recipient’s termination ofemployment if he or she is terminated without cause or if he or she terminates for good reason within sixmonths after the change of control. Any other termination of employment will result in forfeiture of theunvested Retention Awards.

___________________________

The following table quantifies the potential payments to our current NEOs under the contracts, arrangements or plansdiscussed above for various scenarios involving a change of control or termination of employment.

In accordance with SEC rules, the information below assumes a change of control or termination date of December 31,2019 and reflects the arrangements in effect at that time. We have used the closing price of our common shares of $4.08 onDecember 31, 2019, as reported on the NYSE, for purposes of calculating the value of the unvested and accelerated RSUs, PSUsand performance-based RSUs.

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POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL

B. Wolford J. Harris M. Acuff L. Buchanan A. SeeligerChange in Control

Accelerated RSUs $ Accelerated PSUs 816,000 311,432 166,323 246,651 188,019

Total $ 816,000 311,432 166,323 246,651 188,019

Involuntary Termination without Cause orTermination by Executive with Good Reasonprior to Change in Control

Cash severance payment $ 4,000,000 1,181,250 680,000 787,500 861,913Accelerated RSUs 272,001 83,048 150,083 222,568 169,659Accelerated PSUs Continued health, disability and life insurance

benefits 31,766 22,771 22,771

14,909 22,771Total $ 4,303,767 1,287,069 852,854 1,024,977 1,054,343

Involuntary Termination without Cause orTermination by Executive with Good Reasonfollowing Change in Control

Cash severance payment $ 2,800,000 787,500 1,360,000 1,575,000 1,541,913Accelerated RSUs 816,000 415,242 450,252 667,708 508,980Accelerated PSUs 816,000 415,242 221,764 328,868 250,692Continued health, disability and life insurance

benefits 31,766 22,771 45,542

29,819 45,542Total $ 4,463,766 1,640,755 2,077,558 2,601,395 2,347,127

Separation Agreement with Mr. Boots. Mr. Boots departed from the Company effective June 30, 2019. On March 26, 2019, Mr.Boots and the Company entered into a Separation Agreement to provide for the orderly transition of Mr. Boots’ departure.Pursuant to the terms of the Separation Agreement, upon his termination of employment and execution of a waiver and release infavor of the Company, Mr. Boots received the following severance benefits: (a) a severance payment of $694,122, (b) vesting of27,275 RSUs, which vested upon his termination pursuant to the terms of the RSU agreement, (c) retention of a pro-rata portionof his KEIP award granted in 2018 and his LTIC awards granted in 2016 and 2017, which remained subject to the applicableperformance conditions, and (d) payment of the final installment of his 2017 retention bonus due in 2019. For six monthsfollowing his termination, Mr. Boots remained subject to certain nondisclosure, noncompetition, nonsolicitation and assistancewith claims obligations.

CEO Pay Ratio

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) ofRegulation S-K, we are providing the following information about the relationship of the annual total compensation of ouremployees and the annual total compensation of our CEO, Mr. Wolford. For 2019:

the annual total compensation of the employee identified at median of our Company (other than our CEO) was$145,330; and

the annual total compensation of Mr. Wolford, as reflected in the 2019 Summary Compensation Table above, was$1,352,480.

Based on this information, for 2019 the ratio of the annual total compensation of Mr. Wolford to the median of the annual

total compensation of all employees was estimated to be approximately 9 to 1.

This pay ratio is a reasonable estimate calculated in accordance with SEC rules based on our payroll and employmentrecords and the methodology described below. The SEC rules for identifying the median compensated employee and calculatingthe pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to applycertain exclusions and to make reasonable estimates and assumptions that reflect their particular compensation practices. As such,the pay ratio reported by other companies may not be comparable to the pay

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— — —— —

— — —— —

ratio reported above, as other companies may have different employment and compensation practices and may utilize differentmethodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

To identify the median of the annual total compensation of all our employees, as well as to determine the annual totalcompensation of Mr. Wolford and our median employee, we used the following methodology, material assumptions, adjustmentsand estimates:

We identified our median-compensated employee from all full-time, part-time and temporary workers (with theexception of our non-U.S., local, shore-based employees as described below) who were included as employees on ourpayroll records as of December 31, 2019, based on actual base salary, overtime and bonuses paid for calendar year2019. We believe the use of such cash compensation for all employees is a consistently-applied compensation measurebecause we do not widely distribute equity awards to employees.

We determined that, as of December 31, 2019, our employee population for purposes of this pay ratio calculationconsisted of approximately 756 individuals globally.

Compensation for newly-hired employees who worked less than a full year was annualized. We did not make any costof living adjustments in identifying the median employee.

We excluded our non-U.S., local, shore-based employees as permitted under SEC’s 5% “de minimis exemption.”Pursuant to this exemption, we have excluded two (2) employees in Luxembourg, one (1) employee in Brazil and four(4) employees in Nigeria.

After identifying the median employee based on total cash compensation, we calculated annual total compensation forsuch employee using the same methodology we use for our named executive officers as set forth in the 2019 SummaryCompensation Table.

DIRECTOR COMPENSATION

Upon our emergence from our Chapter 11 proceedings in November 2018, our Board members were classified as Class Adirectors (comprised of four directors) and Class B directors (comprised of three directors). Our Class B directors are chosen bycertain of our shareholders pursuant to the Governance Agreement and do not receive any compensation from the Company fortheir service on our Board. In December 2018, the Board approved the following compensation program for the non-employeeClass A directors (other than our Chairman): (i) an annual retainer for Board service of $75,000, (ii) an annual retainer for theAudit Committee chair (inclusive of the committee member annual retainer) of $35,000, (iii) an annual retainer for theCompensation Committee chair (inclusive of the committee member annual retainer) of $25,000, and (v) an annual retainer forcommittee membership of $15,000. Cash fees are paid quarterly on the last day of each calendar quarter. The Company also paysthe reasonable out-of-pocket expenses incurred by each director in connection with attending Board and committee meetings.

Mr. Ralls, our Chairman of the Board, who is a Class A director and also serves as chair of our Nominating and CorporateGovernance Committee, receives no cash compensation for his service on our Board. In December 2018, the Board approved aone-time grant of 150,000 RSUs to Mr. Ralls, which represents the entirety of his compensation for service on our Board. Theaward, which was made pursuant to the terms of the 2018 Plan, is comprised 50% time-based RSUs that vest one-third over threeyears commencing on the second anniversary of the grant date, and 50% performance-based RSUs that vest only in connectionwith a change of control of the Company based on the Company meeting a certain performance target on the date of such changeof control. The vesting of the performance-based RSUs is only triggered by a change of control, with the number of RSUs vesting(between 0% and 100%, referred to as the “earned RSUs”) determined by an IRR calculation on the date of the change ofcontrol. The IRR is determined by the actual annual pre-tax return of specified percentages, compounded annually, on a specifieddeemed share price. The earned PSUs will vest and pay out within 30 days after the date of the change of control.

Under our current director compensation program, upon joining the Board and annually thereafter, each non-employeeClass A director (other than the Chairman) receives a grant of RSUs. All such grants of RSUs are made pursuant to the terms ofthe 2018 Plan and the annual grants are generally made in December of each year. For the RSUs granted in 2018, the RSUs settlein shares and vest one-half per year over two years, subject to immediate vesting on the occurrence of a change of control. InDecember 2019, in light of the substantial drop in our stock price and to

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prevent excessive dilution, the Compensation Committee approved the following changes to our director compensation program:

the number of RSUs granted each year will be based on a fixed number of shares, which for the 2019 grant was set at3,750, and which award will fully vest on the first anniversary of the grant date; and

in addition to the stock award, the non-employee Class A directors will receive a time-based cash award of $50,000,which will vest and pay out on December 31, 2020, provided the director remains a member of the Board on that date.

In May 2019, the Board adopted stock ownership guidelines requiring our non-employee Class A directors to accumulateour common shares worth five times the annual cash retainer paid to the non-employee Class A directors within a five-yearperiod. Although the Chairman does not receive a cash retainer, his ownership requirement is based on the amount of the annualcash retainer paid to the other non-employee Class A directors for Board service. Vested and unvested RSUs issued to thedirectors are counted toward these stock ownership guidelines; however, unearned performance-based RSUs are not countedtoward the guidelines. Each of our non-employee Class A directors has until May 20, 2024 to reach his target ownershiplevel. Until the ownership levels are met, our non-employee Class A directors are expected to retain 50% of the shares issuedupon the vesting of equity awards granted by the Company. As of December 31, 2019 and based on the average closing price ofour common shares for the year ended December 31, 2019 of $4.08, Mr. Ralls has met the stock ownership guidelines applicableto him.

2019 Director Compensation

The table below summarizes the compensation paid by us to our non-employee Class A directors for their service duringthe year ended December 31, 2019:

Name

Fees Earned or Paid in Cash ($)

Stock Awards

($) Total

($)W. Matt Ralls - - 0John V. Simon 127,833 11,213 139,046David N. Weinstein 137,667 11,213 148,880

_______________________(1) Mr. Ralls receives no cash compensation for his service on our Board and received a one-time grant of RSUs in

December 2018, as described above.

(2) On December 12, 2019, each non-employee Class A director was granted 3,750 RSUs. The amounts reflect theaggregate grant date fair value of the RSUs, which are valued on the date of grant, or the previous trading day if nosales occur on that date, at the closing sale price per share of our common shares. As of December 31, 2019, our non-employee Class A directors held the following unvested RSUs: Mr. Ralls: 75,000 RSUs and 75,000 performance-based RSUs, Mr. Simon: 7,500 RSUs, and Mr. Weinstein: 7,500 RSUs.

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(2)

(1)

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATEDSHAREHOLDER MATTERS

The table below shows the number and percentage of our outstanding common shares beneficially owned by each of ourcurrent directors and Named Executive Officers and all of our directors and executive officers as a group as of March 6, 2020.Common shares do not differ in voting rights.

Beneficially Owned Common Shares Number of Directors and Executive Officers shares Percentage Directors

W. Matt Ralls 0 * Bouk van Geloven 0 * Donald Platner 0 * Kiran Ramineni 0 * John V. Simon 26,250 * David Weinstein 3,750 * Bernie G. Wolford Jr. 30,000 *

Named Executive Officers Michael D. Acuff 36,901 * Lisa Manget Buchanan 54,665 * James W. Harris 40,355 * Anthony C. Seeliger 41,704 * Johannes P. Boots 35,000 *

All executive officers and directors as a group (13 persons) 285,731 *

* Less than 1%.(a) Based on issued and outstanding shares of 75,198,547 as of March 6, 2020.(b) Information for Mr. Wolford appears above under “Directors.”(c) Mr. Boots resigned from the Company effective June 30, 2019.

The following table sets forth information as of March 6, 2020 for each person known to us to beneficially own fivepercent or more of our outstanding common shares. Each common share entitles the holder thereof to one vote at a generalmeeting of our shareholders; common shares do not differ in voting rights:

Beneficially Owned

Common Shares Number of Name shares PercentageStrategic Value Partners, LLC 19,986,519 26.6 %Avenue Capital Management II, L.P. 19,259,574 25.6 Abrams Capital Management, L.P. 7,414,537 9.9 FMR LLC 5,420,912 7.2 Tor Asia Credit Master Fund LP 4,513,814 6.0 Whitebox Advisors LLC 4,311,334 5.7 Quantum Pacific (Gibraltar) Limited 3,842,729 5.1

(1) Based on issued and outstanding shares of 75,198,547 as of March 6, 2020.

(2) (a) Based on a Schedule 13G/A Report dated February 13, 2020 that this investor filed with the SEC and informationprovided to the Company by this investor. This investor indicated that it shares voting and dispositive power withrespect to all of the above-listed shares. In addition, in this report, the investor indicated that the above-listed sharesconsist of: (i) 2,651,578 shares directly held by Kings Forest S.à r.l., (ii) 5,488,433

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(a)

(b)

(c)

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

shares directly held by Queens Gate S.à r.l., (iii) 6,204,597 shares directly held by Rathgar S.à r.l., (iv) 5,641,911 sharesdirectly held by Yellow Sapphire S.à r.l. (each an “SVP Fund” and collectively, the “SVP Funds”).

(b) In addition, the report indicates: (i) Strategic Value Partners, LLC is the investment manager of, and exercisesinvestment discretion over Strategic Value Master Fund, Ltd., a Cayman Islands exempted company, which has anownership interest in Field Point (Europe) II, LLC, a Delaware limited liability company, which has an ownershipinterest in Field Point IV, S.à r.l., a Luxembourg limited liability company, which has an ownership interest in QueensGate, S.à r.l., a Luxembourg limited liability company, and Strategic Value Partners, LLC is indirectly majority ownedand controlled by Mr. Khosla; (ii) SVP Special Situations III LLC (“Special Situations III”) is the investment managerof, and exercises investment discretion over Strategic Value Special Situations Master Fund III, L.P., a Cayman Islandsexempted limited partnership, which has an ownership interest in Blue Sapphire, S.à r.l., a Luxembourg limited liabilitycompany, which has an ownership interest in Yellow Sapphire, S.à r.l., a Luxembourg limited liability company, andStrategic Value Partners, LLC is the managing member of Special Situations III, and Strategic Value Partners, LLC andSpecial Situations III are both indirectly majority owned and controlled by Mr. Khosla; (iii) SVP Special Situations IVLLC (“Special Situations IV”) is the investment manager of, and exercises investment discretion over Strategic ValueSpecial Situation Master Fund IV, L.P., a Cayman Islands exempted limited partnership, which has an ownershipinterest in Ranelagh, S.à r.l., a Luxembourg limited liability company, which has an ownership interest in Rathgar,S.à.r.l., a Luxembourg limited liability company, and Strategic Value Partners, LLC is the managing member of SpecialSituations IV, and Strategic Value Partners, LLC and Special Situations IV are both indirectly majority owned andcontrolled by Mr. Khosla; and (iv) SVP Special Situations III-A LLC (“Special Situations III-A”) is the investmentmanager of, and exercises investment discretion over Strategic Value Opportunities Fund, L.P., a Cayman Islandsexempted limited partnership, which has an ownership interest in Kings Valley, S.à r.l., a Luxembourg limited liabilitycompany, which has an ownership interest in Kings Forest, S.à r.l., a Luxembourg limited liability company, andStrategic Value Partners, LLC is the managing member of Special Situations III-A, and Strategic Value Partners, LLCand Special Situations III-A are both indirectly majority owned and controlled by Mr. Khosla.

(c) Except for Mr. Khosla, each “Reporting Person” listed in the report disclaimed beneficial ownership of all commonshares owned directly by the SVP Funds. Mr. Khosla is the sole member of Midwood Holdings, LLC, which is themanaging member of Strategic Value Partners, LLC and is also the indirect majority owner and control person ofStrategic Value Partners, LLC, Special Situations III and Special Situations III-A. Mr. Khosla is also the ChiefInvestment Officer of Strategic Value Partners, LLC. As such, he may be deemed to control the voting and dispositivedecisions with respect to the above-listed common shares made by Strategic Value Partners, LLC, Special Situations III,Special Situations IV and Special Situations III-A and may therefore be deemed to be the beneficial owner of thecommon shares reported above.

(d) Pursuant to the Governance Agreement, the SVP Funds and certain funds affiliated with Avenue Capital Group, LLC(the “Avenue Holders”) have agreed with one another to vote their common shares to elect members of the PacificDrilling Board of Directors as set forth therein. Because of the relationship between the SVP Funds and the AvenueHolders as a result of the Governance Agreement, Strategic Value Partners, LLC, Special Situations III, SpecialSituations IV, Special Situations III-A and Mr. Khosla may be deemed pursuant to Rule 13d-3 under the Exchange Actto beneficially own 39,246,093 Pacific Drilling common shares (inclusive of the above-reported shares for StrategicValue Partners, LLC), which represents 52.19% of the total number of outstanding common shares of Pacific Drilling asof March 6, 2020. The address for each of the foregoing entities is c/o Strategic Value Partners, LLC, 100 West PutnamAvenue, Greenwich, CT 06830.

(3) (a) Based on a Schedule 13G/A Report dated February 12, 2020 that this investor filed with the SEC. In this report, thisinvestor indicated that it shared voting and dispositive power with respect to all of the above-listed shares. In addition,in this report, this investor indicated that the above-listed shares are held directly by: (i) Avenue Energy OpportunitiesFund, L.P., Avenue Energy Opportunities Fund II, L.P., Avenue PPF Opportunities Fund, L.P., Avenue SpecialOpportunities Fund II, L.P. and Avenue Strategic Opportunities Fund, L.P. (the “U.S. Funds”) and (ii) Avenue ASRSEurope Opportunities Fund, L.P., Avenue Europe Opportunities Master Fund, L.P., Avenue Europe Special SituationsFund III (Euro), L.P. and Avenue Europe Special Situations Fund III (U.S.), L.P. (the “Europe Funds” and together withthe U.S. Funds, the “Avenue Funds”).

(b) Avenue Capital Management II, L.P. is the investment manager of the U.S. Funds and may be deemed to have votingand dispositive power over the 13,973,624 common shares owned by such entities. Avenue Europe

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International Management, L.P. is the investment manager of the Europe Funds and may be deemed to have voting anddispositive power over the 5,285,950 common shares owned by such entities. Avenue Capital Management II GenPar,LLC is the general partner of Avenue Capital Management II, L.P., and Avenue Europe International ManagementGenPar, LLC is the general partner of Avenue Europe International Management, L.P. Mr. Marc Lasry is the managingmember of Avenue Capital Management II GenPar, LLC and Avenue Europe International Management GenPar,LLC. In this report, except for Mr. Lasry, each “Reporting Person” disclaimed beneficial ownership of all commonshares owned directly by the Avenue Funds. Mr. Lasry is deemed to be the indirect beneficial owner of the sharesreported by the Avenue Funds by reason of his ability to direct the vote and/or disposition of such securities, and hispecuniary interest in such shares (within the meaning of Rule 16a-1(a)(2) under the Exchange Act) is a fractional interestin such amount.

(c) Pursuant to the Governance Agreement, the Avenue Funds and certain funds affiliated with Strategic Value Partners,LLC (the “SVP Funds”) have agreed with one another to vote their common shares to elect members of the PacificDrilling Board of Directors as set forth therein. Because of the relationship between the Avenue Funds and the SVPFunds as a result of the Governance Agreement, Avenue Capital Management II, L.P., Avenue Capital Management IIGenPar, LLC, Avenue Europe International Management, L.P., Avenue Europe International Management GenPar, LLCand Marc Lasry may be deemed, pursuant to Rule 13d-3 under the Exchange Act to beneficially own 39,246,093 PacificDrilling common shares (inclusive of the above-reported shares for Avenue Capital Management II, L.P.), whichrepresents 52.19% of the total number of outstanding common shares of Pacific Drilling as of March 6, 2020. Theaddress of each of the foregoing entities is c/o Avenue Capital Management II, L.P., 11 West 42nd Street, 9th Floor,New York, NY 10036.

(4) (a) Based on a Schedule 13G/A Report dated February 13, 2020 that Abrams Capital Management, L.P. (“Abrams CMLP”) filed with the SEC. In this report, Abrams CM LP indicated that it: (i) shared voting and dispositive power withrespect to all of the above-listed shares with each of Mr. David Abrams and Abrams Capital Management, LLC(“Abrams CM LLC”), (ii) shared voting and dispositive power with respect to 5,974,140 shares with Abrams CapitalPartners II, L.P. (“ACP II”), and (iii) shared voting and dispositive power with respect to 7,019,436 shares with AbramsCapital, LLC (“Abrams Capital”).

(b) Shares reported herein for Abrams Capital represent shares beneficially owned by ACP II and other privateinvestment funds for which Abrams Capital serves as general partner. Shares reported herein for Abrams CM LP andAbrams CM LLC represent the above-referenced shares beneficially owned by ACP II and shares beneficially owned byother private investment funds, for which Abrams CM LP serves as investment manager. Abrams CM LLC is thegeneral partner of Abrams CM LP. Shares reported herein for Mr. Abrams represent the above referenced sharesreported for Abrams Capital and Abrams CM LLC. Mr. Abrams is the managing member of Abrams Capital andAbrams CM, LLC. In this report, each “Reporting Person” disclaimed beneficial ownership of the common sharesreported, except to the extent of its or his pecuniary interest therein. The address for each of the foregoing entities is c/oAbrams Capital Management, L.P., 222 Berkeley Street, 21st Floor, Boston, MA 02116.

(5) Based on a Schedule 13G/A Report dated February 7, 2020 that this investor filed with the SEC. In this report, thisinvestor indicated that it held sole voting power with respect to 2,421,468 of the common shares reported, and soledispositive power with respect to all of the above-listed shares. Ms. Abigail P. Johnson is a Director, the Chairman andthe Chief Executive Officer of FMR LLC. Members of the Johnson family, including Abigail P. Johnson, are thepredominant owners, directly or through trusts, of Series B voting common shares of FMR LLC, representing 49% ofthe voting power of FMR LLC. The Johnson family group and all other Series B shareholders have entered into ashareholders’ voting agreement under which all Series B voting common shares will be voted in accordance with themajority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares andthe execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under theInvestment Company Act of 1940, to form a controlling group with respect to FMR LLC. Neither FMR LLC nor AbigailP. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investmentcompanies registered under the Investment Company Act (“Fidelity Funds”) advised by Fidelity Management &Research Company (“FMR Co”), a wholly owned subsidiary of FMR LLC, which power resides with the FidelityFunds’ Boards of Trustees. FMR Co carries out the voting of the shares under written guidelines established by theFidelity Funds’ Boards of Trustees. The address of FMR LLC is 245 Summer Street, Boston, MA 02210.

(6) Based on a Schedule 13G/A Report dated as of January 24, 2020 that this investor filed with the SEC. In this report, theinvestor indicated that Tor Investment Management (Hong Kong) Limited (“Tor”) may be deemed the beneficial ownerof the shares held by Tor Asia Credit Master Fund LP (the “Master Fund”). In addition,

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Messrs. Patrik Lennart Edsparr and Christopher Louis Mikosh are the majority owners of Tor. By virtue of theirrelationship with Tor, Messrs. Edsparr and Mikosh may be deemed to beneficially own the common shares owneddirectly by the Master Fund. In this report, the investor further indicated that, as of December 31, 2019, Tor, the MasterFund and Messrs. Edsparr and Mikosh share voting and dispositive power with respect to all of the above-listedshares. The address of the Master Fund is c/o Intertrust Corporate Services (Cayman) Limited, 190 Elgin Avenue,George Town, Grand Cayman KY1-9005, Cayman Islands. The address of Tor and Messrs. Edsparr and Mikosh isHenley Building 19/F, 5 Queen’s Road Central, Hong Kong.

(7) Based on a Schedule 13G/A Report dated as of February 14, 2020 that this investor filed with the SEC and informationprovided to the Company by this investor. In the Schedule 13G Report, the investor indicated that, as of December 31,2019, all of the above-listed common shares reported for Whitebox Advisors LLC were held in the accounts ofWhitebox Advisors LLC’s clients, none of which individually own more than 5% of the Company’s common shares. Inaddition, as of December 31, 2019, Whitebox Advisors LLC shared with Whitebox General Partner LLC voting anddispositive power with respect to all of the above-listed shares. The address of each of the foregoing entities is 3033Excelsior Boulevard, Suite 500, Minneapolis, MN 55416.

(8) Based on a Schedule 13G Report dated as of January 17, 2019 that this investor filed with the SEC. In this report, theinvestor indicated that, as of December 31, 2018, it shared voting and dispositive power with respect to all of the above-listed shares. Quantum Pacific (Gibraltar) Limited is a Gibraltar company and wholly-owned indirect subsidiary ofQuantum Pacific International Limited, the indirect ultimate owner of which is a discretionary trust in which Mr. IdanOfer is the beneficiary. The address for Quantum Pacific (Gibraltar) Limited is 57/63 Line Wall Road, Gibraltar GX111AA and for Quantum Pacific International Limited is c/o Quantum Pacific Monaco SARL, 7 Avenue de GrandeBretagne, MC 98000, Monaco.

To our knowledge, as of March 6, 2020, there were no arrangements the operation of which may at a subsequent date

result in a change of control of the Company. Pursuant to our Articles, any two Class B directors may enter into AcquisitionContracts (as defined in the Articles) on behalf of the Company, subject to certain conditions.

Equity Compensation Plan Information

The table below provides information relating to our equity compensation plans as of December 31, 2019:

Number of Number of Securities to Be Weighted-Average Securities Issued upon Exercise Exercise Price of Remaining Available of Outstanding Outstanding for Future

Options, Warrants Options, Warrants Issuance underPlan Category and Rights and Rights Compensation Plans

Equity compensation plansapproved by security holders

—

—

—

Equity compensation plans notapproved by security holders

2,255,548

—

5,170,063

Total 2,255,548 — 5,170,063 _______________________(1) Reflects awards under our 2018 Omnibus Stock Incentive Plan (the “2018 Plan”).(2) Includes our common shares issuable upon the vesting of 1,880,725 time-based RSUs, performance-based RSUs, and

performance share units (PSUs) at maximum performance levels. These awards are not reflected in the middle columnabove because they do not have an exercise price. The 2018 Plan was approved by our Board on November 28, 2018. Because we qualified as a “foreign private issuer”

through December 31, 2019, we were exempt from the requirements of Section 303A of the NYSE’s listing standards requiringshareholder approval of equity plans. The 2018 Plan provides for the award of equity-based incentives to our officers, employees,consultants and directors. The 2018 Plan is administered by our Board, which may delegate some of its authority to theCompensation Committee or one or more officers or directors, subject to certain exceptions. The Board may make awards ofqualified or nonqualified stock options with a maximum term of 10 years, restricted stock or restricted stock units, stockappreciation rights, and other equity-based awards. An aggregate 7.5 million common shares may be issued under the 2018Plan. Shares subject to awards that are forfeited, expired or

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(1) (2)

terminated shall again be available to be delivered pursuant to awards under the 2018 Plan, but shares surrendered in payment ofthe exercise price of options or stock appreciation rights or in payment of withholding taxes are not eligible for reissuance underthe 2018 Plan. The 2018 Plan may be amended or terminated at any time by the Board, subject to any shareholder approval thatmay be required under applicable laws or NYSE listing requirements. In addition, no amendment may materially impair anaward previously granted without the consent of the award recipient. Unless sooner terminated, no award may be granted underthe 2018 Plan after November 28, 2028. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Related Party Transactions Policies and Procedures

The Board has adopted written policies and procedures with respect to related party transactions, which provide that anytransaction, arrangement or relationship in which the Company is or will be a participant and in which a director, executiveofficer or other related person has or will have a direct or indirect interest, with limited exceptions, must be reviewed andapproved, or ratified, by the Audit Committee, or in certain circumstances, the Chair of the Audit Committee. Any such relatedparty transactions will only be approved or ratified if the Audit Committee, or Chair as applicable, determines that suchtransaction is in the best interests of the Company and its shareholders. The Chair of the Audit Committee reports to the AuditCommittee at its next meeting any approval under the policy given pursuant to the authority delegated to the Chair under thepolicy. The Audit Committee will also, on an annual basis, review and assess ongoing relationships with each related person toensure that they continue to be in compliance with such policy.

Governance Agreement

The Company has entered into a Governance Agreement dated as of November 19, 2018 with certain holders of its shares,defined therein as the Avenue Parties, the SVP Parties, and the Other Lenders.

Nomination Provisions. Pursuant to the Governance Agreement, until the Nomination Termination Time, defined below,the Avenue Parties have the right to nominate one Class B Director, the SVP Parties have the right to nominate one Class BDirector and the Other Lenders have the right to nominate one Class B Director. Each of such parties also has the right to fill avacancy with respect to its Class B director nominee.

The “Nomination Termination Time” means the first such time that it becomes known to the Company that any of (i) theAvenue Parties (collectively and in the aggregate with each other), (ii) the SVP Parties (collectively and in the aggregate witheach other) or (iii) the Other Lenders (collectively and in the aggregate with each other), hold, beneficially or of record, and havethe power to vote or direct the voting of, 10% or less (the “Ownership Threshold”) of the then issued and outstanding shares ofthe Company. Whichever of the Avenue Parties, SVP Parties or Other Lenders, as applicable, whose holdings of shares of theCompany first becomes known to the Company to cease to exceed the Ownership Threshold is referred to as the “TriggeringParty.”

During the period beginning at the Nomination Termination Time and ending at the convening of the first general meetingafter the Nomination Termination Time, if the Board requests in writing the resignation of the former Class B director who wasnominated by the Triggering Party, then each of the Avenue Parties, SVP Parties and Other Lenders has agreed to take allnecessary actions to cause such director to resign or otherwise be removed from office as a director.

Each of the Avenue Parties and the SVP Parties agreed with one another to cooperate in facilitating the actions and rightsin the Governance Agreement, including voting their Company common shares in favor of their respective Class B directornominees. The Company agreed to cooperate in facilitating the actions and rights in the Governance Agreement, includingproviding the highest level of support for the election of the Class B director nominees as it provides to any other individualstanding for election as part of the Company’s slate of directors.

Board Observer Rights. The parties to the Governance Agreement (each, an “Observer Shareholder”) each have the rightto designate a Board observer until the first such time that it becomes known to the Company that an Observer Shareholder(together with its Permitted Transferees as defined in the agreement) ceases to hold beneficially or of record and have the powerto vote or direct the voting of, at least such Observer Shareholder’s Original Percentage Threshold. “Original PercentageThreshold” means, with respect to any Observer Shareholder, the lesser of (a) five percent (5%) of the issued and outstandingshares of the Company or (b) fifty percent (50%) of the shares of the Company such Observer

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Shareholder together with its Permitted Transferees collectively held, beneficially or of record, and had the power to vote ordirect the voting of, at the close of business on the date of the Governance Agreement. The SVP Parties have exercised this rightand have designated a Board observer to our Board.

Additional Share Capital Authorization. Each of the Company, the Avenue Parties and the SVP Parties has agreed withone another that it will take all necessary actions to cause the Articles to be amended as promptly as practicable, following arequest therefor by any of the Company, the Avenue Parties or the SVP Parties, to provide for the authority of the Board toincrease the Company’s then current share capital once or more up to $1.0 million (represented by up to an aggregate of100.0 million authorized shares) (such amount including the current share capital of the Company of $825,000) by the issue ofnew shares having the same rights as the existing shares, or without any such issue.

Waiver of Corporate Opportunity. The agreement contains a broad corporate opportunity waiver by the Company in favorof the shareholders party to the agreement and certain related persons as described in the agreement.

Confidential Information. The Class B directors and Board observers may, upon request of the party that designated them,share Company confidential information with the designating party, subject to the designating party entering into a confidentialityagreement with the Company.

The foregoing description of the Governance Agreement is only a summary, does not purport to be complete, and isqualified in its entirety by reference to the Governance Agreement, which is incorporated by reference as an Exhibit to this annualreport.

Registration Rights Agreement

The Company entered into a Registration Rights Agreement, dated as of November 19, 2018 with Quantum Pacific(Gibraltar) Limited and the shareholders party to the Governance Agreement, with respect to the Registrable Securities (asdefined in the Registration Rights Agreement). Pursuant to the agreement, the Company filed a registration statement on Form F-1, declared effective on December 26, 2018, and included in it the Registrable Securities of each holder who requested inclusiontherein of some or all of such holder’s Registrable Securities. In March 2019, the Company filed a registration statement on FormF-3, declared effective on March 22, 2019, which combined the unsold common shares previously registered with an additionalnumber of shares entitled to be registered, to enable an aggregate of 54,772,274 common shares to be offered pursuant to thecombined prospectus contained in the registration statement on Form F-3. In connection with the Company no longer qualifyingto report under the U.S. federal securities laws as a foreign private issuer effective January 1, 2020, promptly after filing thisannual report on Form 10-K, the Company intends to file a post-effective amendment to the Form F-3 on Form S-3.

The shelf registration statement may be amended, among other things, under the circumstances specified in the agreement,to register Registrable Securities that were not previously included in the shelf registration statement and must be amended orreplaced by an automatic shelf registration statement if and after the Company becomes eligible to use one. The Company willuse its reasonable best efforts to keep the shelf registration statement continuously effective. The agreement also containsprovisions permitting underwritten shelf resale transactions with an anticipated aggregate offering price to the public of at least$150.0 million.

In addition, the agreement grants certain demand registration rights to parties beneficially owning at least 10% of theCompany’s shares, provided that the anticipated aggregate offering price to the public is at least $150.0 million or at least 20% ofthe then-outstanding Registrable Securities (for the party exercising the demand registration right along with other holders entitledto have their shares registered along with the initiating holder). The agreement also contains customary “piggyback” registrationrights if the Company proposes to file a registration statement with respect to an offering of its shares.

The agreement contains customary conditions, restrictions, suspension periods, blackout periods and ancillaryrequirements and customary indemnification and contribution provisions. The Company will generally pay all registrationexpenses other than underwriting fees, discounts, commissions, transfer taxes or similar taxes or charges. The agreementterminates with respect to any holder when the holder ceases to hold Registrable Securities (except with respect to certainindemnification and information rights).

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The foregoing description of the Registration Rights Agreement is only a summary, does not purport to be complete, and isqualified in its entirety by reference to the Registration Rights Agreement, which is incorporated by reference as an Exhibit to thisannual report.

Director Independence

The Company’s Board has determined that all of our directors other than our Chief Executive Officer Mr. Wolford Jr. areindependent as defined under the standards of the NYSE, namely, Donald Platner, W. Matt Ralls, Kiran Ramineni, John V.Simon, David Weinstein and Bouk van Geloven. In addition, our Board determined that Daniel Han and Edward H. Burdick,who resigned from our Board in November 2019 and February 2020, respectively, were independent. Members of our AuditCommittee, Compensation Committee, and Nominating and Corporate Governance Committee all meet the independencerequirements of the NYSE.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The following table sets forth the aggregate fees by categories specified below in connection with certain professionalservices rendered by KPMG LLP, an independent registered accounting firm and our principal external auditors, for the periodsindicated.

Years ended December 31, 2019 2018 (in thousands)Audit fees $ 1,778 $ 2,146Audit-related fees — —Tax fees — —All other fees — —Total $ 1,778 $ 2,146

(a) Audit fees represent professional services rendered for the audit of our annual consolidated financial statements and servicesprovided by the principal accountant in connection with statutory and regulatory filings or engagements.

(b) Audit-related fees consist of assurance and related services rendered by the principal accountant related to the performanceof the audit or review of our consolidated financial statements, which have not been reported under audit fees above.

(c) Tax fees represent fees for professional services rendered by the principal accountant for tax compliance, tax advice and taxplanning.

(d) All other fees include services other than audit fees, audit-related fees and tax fees set forth above.

Audit Committee’s Pre-Approval Policies and Procedures

In order to monitor the continued independence of the Company’s independent auditor, the Audit Committee has adoptedin its charter a policy requiring that the Committee pre-approve all audit and permissible non-audit services provided by theCompany’s independent auditors, with the pre-approval to be given by the Committee or pursuant to a policy approved by theCommittee. The Committee has adopted a pre-approval policy. Under the policy, the Audit Committee annually retains anindependent auditor and pre-approves the scope of all audit services and specified services related to the audit, such as reviews ofthe Company’s financial statements included in its quarterly reports on Form 10-Q. The Chair or the full Committee must pre-approve the independent auditor firm’s engagement with respect to registration statements and comfort letters. Non-audit servicesmay be pre-approved by the Chair of the Committee after the Company’s chief accounting officer and the independent audit firmdetermine that a project is appropriate and permissible. Any decision of the Audit Committee Chair pursuant to the pre-approvalpolicy must be reported to the full Audit Committee at its next scheduled meeting.

All services provided by the principal external auditors for the years ended December 31, 2019, 2018 and 2017 wereapproved by the Audit Committee pursuant to its charter and the pre-approval policy.

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Index to Financial Statements, Financial Statement Schedules and Exhibits (1) Index to Financial Statements

Pacific Drilling S.A. PageConsolidated Financial Statements Report of Independent Registered Public Accounting Firm 52Consolidated Statements of Operations 54Consolidated Statements of Comprehensive Income (Loss) 55Consolidated Balance Sheets 56Consolidated Statements of Shareholders’ Equity 57Consolidated Statements of Cash Flows 58Notes to Consolidated Financial Statements 5959

129

(a)

(b)

(c)

(d)

(2) Financial Statement Schedules All schedules are omitted because they are not applicable, not required, or the information is included in the consolidatedfinancial statements.

(3) Exhibits

The following documents are the exhibits to this Form 10-K. We will furnish to any eligible shareholder, upon written request, acopy of any exhibit listed below upon payment of a fee equal to the Company’s reasonable expenses in furnishing such exhibit.Such requests should be addressed to: Pacific Drilling S.A., Attention: Investor Relations, 11700 Katy Freeway, Suite 175,Houston, Texas 77079.

Filed orFurnished

with Exhibit this Incorporated by ReferenceNumber Exhibit Title Form 10-K Form File No. Date Filed

2.1 Modified Fourth Amended Joint Plan of Reorganization for PacificDrilling S.A. and Certain of Its Affiliates Pursuant to Chapter 11 ofthe Bankruptcy Code [Docket No. 746], dated October 31, 2018

6-K 001-35345 11/5/18

2.2 Order Confirming the Debtors’ Modified Fourth Amended JointPlan of Reorganization, as entered by the Bankruptcy Court onNovember 2, 2018 [Docket No. 746]

6-K 001-35345 11/5/18

2.3 Amended Joint Plan of Liquidation/Reorganization for PacificDrilling Services, Inc. and Pacific Drilling VIII Limited Pursuantto Chapter 11 of the Bankruptcy Code [Docket No. 30], dated as ofJanuary 22, 2019 20-F 001-35345 3/12/19

2.4 Order Confirming the Debtors’ Amended Joint Plan ofLiquidation/Reorganization, as entered by the Bankruptcy Court onJanuary 30, 2019 [Docket No. 881] 20-F 001-35345 3/12/19

3.1 Coordinated Articles of Association of Pacific Drilling S.A., datedJune 4, 2019

6-K 001-35345 8/13/19

4.1 Indenture, dated September 26, 2018, between Pacific DrillingFirst Lien Escrow Issuer Limited and Wilmington Trust, NationalAssociation as Trustee and Collateral Agent relating to theCompany’s 8.375% First Lien Notes due 2023

6-K 001-35345 9/28/18

4.2 Form of 8.375% First Lien Note due 2023 6-K 001-35345 9/28/18

4.3 First Supplemental Indenture, dated November 19, 2018, betweenPacific Drilling S.A. and Wilmington Trust, National Associationas Trustee and Collateral Agent relating to the Company’s 8.375%First Lien Notes due 2023

6-K 001-35345 11/20/18

4.4 Second Supplemental Indenture, dated November 19, 2018,between Pacific Drilling S.A., the Guarantors named therein andWilmington Trust, National Association as Trustee and CollateralAgent relating to the Company’s 8.375% First Lien Notes due 2023

6-K 001-35345 11/20/18

4.5 Indenture, dated September 26, 2018, between Pacific DrillingSecond Lien Escrow Issuer Limited and Wilmington Trust,National Association as Trustee and Junior Lien Collateral Agentrelating to the Company’s 11.000% / 12.000% Second Lien PIKNotes due 2024

6-K 001-35345 9/28/18

4.6 Form of 11.000% / 12.000% Second Lien PIK Note due 2024 6-K 001-35345 9/28/18

130

Filed orFurnished

with Exhibit this Incorporated by ReferenceNumber Exhibit Title Form 10-K Form File No. Date Filed

4.7 First Supplemental Indenture, dated November 19, 2018, betweenPacific Drilling S.A. and Wilmington Trust, National Associationas Trustee and Junior Lien Collateral Agent relating to theCompany’s 11.000% / 12.000% Second Lien PIK Notes due 2024

6-K 001-35345 11/20/18

4.8 Second Supplemental Indenture, dated November 19, 2018,between Pacific Drilling S.A., the Guarantors named therein andWilmington Trust, National Association as Trustee and Junior LienCollateral Agent relating to the Company’s 11.000% / 12.000%Second Lien PIK Notes due 2024

6-K 001-35345 11/20/18

4.9 Intercreditor Agreement, dated as of November 19, 2018, betweenWilmington Trust, National Association, in its capacity as FirstLien Collateral Agent, and Wilmington Trust, NationalAssociation, in its capacity as Junior Lien Collateral Agent, andacknowledged and agreed to by the Company and the Grantorsnamed therein

6-K 001-35345 11/20/18

4.10 Description of the Registrant’s securities registered under Section12 of the Securities Exchange Act of 1934

X

10.1 Governance Agreement by and among Pacific Drilling S.A. andcertain shareholders party thereto, dated as of November 19, 2018

6-K 001-35345 11/20/18

10.2 Registration Rights Agreement, dated as of November 19, 2018, byand among the Company and the shareholders party thereto

6-K 001-35345 11/20/18

10.3 Revolving Credit Agreement, dated as of February 7, 2020,between Pacific Drilling S.A., Angelo Gordon Energy Services,LLC, as administrative agent, and the lenders party thereto

8-K 001-35345 2/11/20

10.4* Form of Notice of Long Term Incentive Cash Award for executiveofficers for 2017 grants

X

10.5* Pacific Drilling S.A. 2018 Omnibus Stock Incentive Plan S-8 333-228582 11/28/18

10.6* Form of Restricted Stock Unit Agreement between Pacific DrillingS.A. and each of its executive officers (other than Mr. Wolford) for2019 grants

X

10.7* Form of Performance Share Unit Agreement between PacificDrilling S.A. and each of its executive officers (other than Mr.Wolford) for 2019 grants

X

10.8* Restricted Stock Unit Agreement between Pacific Drilling S.A. andBernie G. Wolford Jr. dated December 20, 2018

X

10.9*+ Performance-Based Restricted Stock Unit Agreement betweenPacific Drilling S.A. and Bernie G. Wolford Jr. dated December20, 2018

X

10.10* Restricted Stock Unit Agreement between Pacific Drilling S.A. andW. Matt Ralls dated December 20, 2018

X

131

Filed orFurnished

with Exhibit this Incorporated by ReferenceNumber Exhibit Title Form 10-K Form File No. Date Filed

10.11*+ Performance-Based Restricted Stock Unit Agreement betweenPacific Drilling S.A. and W. Matt Ralls dated December 20, 2018

X

10.12* Form of Restricted Stock Unit Agreement between Pacific DrillingS.A. and each of its Class A directors (other than Mr. Ralls) for2018 grants

X

10.13* Form of Restricted Stock Unit Agreement between Pacific DrillingS.A. and each of its Class A directors (other than Mr. Ralls) for2019 grants

X

10.14* Form of Notice of Long Term Incentive Cash Awards for executiveofficers granted December 12, 2019

X

10.15* Form of Notice of Long Term Incentive Cash Awards for Class Adirectors (other than Mr. Ralls) granted December 12, 2019

X

10.16* Pacific Drilling S.A. Annual Incentive Plan X

10.17* Employment Agreement by and between Pacific DrillingManpower, Inc. and Bernie G. Wolford Jr. dated November 19,2018

X

10.18* Employment Agreement by and between Pacific DrillingManpower, Inc. and James W. Harris dated July 22, 2019

X

10.19* Form of Severance and Change of Control Agreement by andbetween Pacific Drilling Manpower, Inc. and each of theCompany’s executive officers (other than Messrs. Wolford andHarris)

X

10.20* Form of Indemnity Agreement by and between Pacific DrillingS.A. and each of its directors

X

10.21* Form of Indemnity Agreement by and between Pacific DrillingS.A. and each of its non-director executive officers

X

10.22* Separation Agreement between Pacific Drilling S.A. and JohannesBoots dated March 26, 2019

X

21.1 Subsidiaries of Pacific Drilling S.A. X

23.1 Consent of Independent Registered Public Accounting Firm X

31.1 Rule 13a-14(a)/15d-14(a) Certification of Principal ExecutiveOfficer

X

31.2 Rule 13a-14(a)/15d-14(a) Certification of Principal FinancialOfficer

X

32.1♦ Certificate of Chief Executive Officer pursuant to Section 906 ofSarbanes-Oxley Act of 2002

X

32.2♦ Certificate of Chief Financial Officer pursuant to Section 906 ofSarbanes-Oxley Act of 2002

X

101.INS XBRL Instance Document. X

101.SCH XBRL Taxonomy Extension Schema Document. X

132

Filed orFurnished

with Exhibit this Incorporated by ReferenceNumber Exhibit Title Form 10-K Form File No. Date Filed

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document. X

101.DEF XBRL Taxonomy Extension Definition Linkbase Document. X

101.LAB XBRL Taxonomy Extension Label Linkbase Document. X

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document. X

* Indicates management contract or compensatory plan or arrangement.+ Certain confidential information contained in this agreement has been omitted because it is both not material and

would likely cause competitive harm to the registrant if publicly disclosed.♦ Furnished herewith.

ITEM 16. FORM 10-K SUMMARY

Not applicable.

133

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly causedthis report to be signed on its behalf by the undersigned, thereunto duly authorized.

PACIFIC DRILLING S.A. Date: March 12, 2020 By: /s/ Bernie G. Wolford Jr. Name: Bernie G. Wolford Jr. Title: Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the followingpersons on behalf of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ Bernie G. Wolford Jr. Chief Executive Officer and Director Bernie G. Wolford Jr. (Principal Executive Officer) March 12, 2020

/s/ James W. Harris Senior Vice President and Chief Financial Officer James W. Harris (Principal Financial Officer) March 12, 2020

/s/ Richard E. Tatum Senior Vice President and Chief Accounting Officer Richard E. Tatum (Principal Accounting Officer) March 12, 2020

/s/ W. Matt Ralls Chairman of the Board W. Matt Ralls March 12, 2020

/s/ Bouk van Geloven Director Bouk van Geloven March 12, 2020

/s/ Donald Platner Director Donald Platner March 12, 2020

/s/ Kiran Ramineni Director Kiran Ramineni March 12, 2020

/s/ John V. Simon Director John V. Simon March 12, 2020

/s/ David N. Weinstein Director David N. Weinstein March 12, 2020

134

EXHIBIT 4.10

PACIFIC DRILLING S.A.DESCRIPTION OF SECURITIES REGISTERED

UNDER SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934

The following description of Pacific Drilling S.A.’s common shares is based on and qualified by our CoordinatedArticles of Association, which are incorporated by reference as an exhibit to this Annual Report on Form 10-K.

General

Pacific Drilling S.A. is registered with the Luxembourg Registry of Trade and Companies under the Number

B159658. Our Company is formed for an unlimited period and is not to be dissolved by reason of the death, suspension ofcivil rights, incapacity, insolvency, bankruptcy or any similar event affecting one or more shareholders.

Our corporate purpose, as stated in Article 3 (Corporate object) of our Articles, is as follows: Our object is buying and selling, the chartering in and the chartering out, and the management of seagoing

ships, as well as the financial and commercial operations that relate directly or indirectly to such activities.

We may also charter, hold, lease, operate and provide vessels and equipment used in contract drillingservices in oil and gas drilling operations; acquire, hold, manage, sell or dispose of any such relatedequipment, and enter into, assist or participate in financial, commercial and other transactions relating tocontract drilling services.

In addition, we may acquire participations, in Luxembourg or abroad, in any company or enterprise in anyform whatsoever, and the management of those participations. We may in particular acquire, by subscription,purchase and exchange or in any other manner, any stock, shares and other participation securities, bonds,debentures, certificates of deposit and other debt instruments and, more generally, any securities andfinancial instruments issued by any public or private entity. We may participate in the creation, development,management and control of any company or enterprise. Further, we may invest in the acquisition andmanagement of a portfolio of patents or other intellectual property rights of any nature or origin.

We may borrow in any form. We may issue notes, bonds and any kind of debt and equity securities. We maylend funds, including, without limitation, the proceeds of any borrowings, to our subsidiaries, affiliatedcompanies and any other companies. We may also give guarantees and pledge, transfer, encumber orotherwise create and grant security over some or all of our assets to guarantee our own obligations and thoseof any other company, and, generally, for our own benefit and that of any other company or person. We maynot carry out any regulated financial sector activities without having obtained the requisite authorization.

We may use any techniques, legal means and instruments to manage our investments efficiently and protectourselves against credit risks, currency exchange exposure, interest rate risks and other risks.

We may carry out any commercial, financial or industrial operation and any transaction with respect to realestate or movable property, which directly or indirectly, favors or relates to our corporate object.

Share Capital

We are authorized to issue up to 82.5 million common shares (including those shares which have already been

issued), par value of $0.01 per share, and our share capital is $825,000. As of March 1, 2020, an aggregate of 82.5 millioncommon shares were issued, of which approximately 75.2 million shares were outstanding, and approximately 7.3 millionshares are reserved for issuance under the Pacific Drilling S.A. 2018 Omnibus Stock Incentive Plan and held by one of ourwholly-owned subsidiaries.

Our Articles provide that we may not issue non-voting equity securities (which shall not be deemed to include any

warrants or options to purchase our shares). Our Articles also provide that no fractional shares may be issued. Holders of ourcommon shares have no conversion or redemption rights, and there are no sinking fund provisions applicable to our commonshares. We cannot subscribe for our own shares. We may redeem or repurchase our own shares using a method approved byour board of directors which is in accordance with Luxembourg law and the rules of any stock exchange(s) on which ourshares are listed from time to time.

All issued shares are fully paid. A shareholder in a Luxembourg société anonyme holding fully paid shares is not

liable, solely because of his, her or its shareholder status, for additional payments to us or our creditors.

To our knowledge, as of March 1, 2020, there were no shareholders’ arrangements or agreements, theimplementation or performance of which could, at a later date, result in a change in the control of us in favor of a thirdperson. For information regarding the rights of certain shareholders to nominate directors, see “Governance Agreement,”below.

Our common shares are governed by Luxembourg law and our Articles. More information concerning shareholders’

rights can be found in the Luxembourg law on commercial companies dated August 10, 1915, as amended from time to time,and our Articles.

Form and Transfer of Shares

Our common shares are issued in registered form only and are freely transferable, subject to any restrictions in our

Articles and pursuant to applicable securities laws. Luxembourg law does not impose any limitations on the rights ofLuxembourg or non-Luxembourg residents to hold or vote our shares.

Issuance of Shares; Capital Increase/Reduction

Our Articles provide that the share capital may be increased or reduced, subject to the approval by the shareholdersat a general meeting acting in accordance with the conditions prescribed for the amendment of our Articles.

Pursuant to Luxembourg law, our shareholders may approve an authorized share capital and authorize our board of

directors to issue shares up to the maximum amount of such approved share capital for a maximum period of five years fromthe date of publication in the Luxembourg official gazette of the amendments of the Articles or the minutes of the relevantgeneral meeting. The shareholders may amend, renew or extend such authorized share capital and authorization to the boardof directors to issue shares.

Under Luxembourg law, existing shareholders benefit from a preferential subscription right on the issuance of

common shares. When authorizing the board of directors to issue common shares out of the authorized capital, theshareholders may also authorize the board of directors to withdraw or limit the preferential subscription right, subject tocompliance with certain notice and information requirements under Luxembourg law.

Our Articles provide that the board of directors was authorized, for a period of five years from

2

November 19, 2018, without prejudice to any renewals, to: (a) increase the share capital once or more up to $825,000 (suchamount including the current share capital of the Company) by the issue of new shares having the same rights as the existingshares, or without any such issue; (b) determine the conditions of any such capital increase including through contributionsin cash or in kind, by the incorporation of reserves, issue/share premiums or retained earnings, with or without issue of newshares to current shareholders or third parties (non-shareholders) or following the issue of any instrument convertible intocommon shares or any other instrument carrying an entitlement to, or the right to subscribe for, common shares; (c) limit orwithdraw the shareholders’ preferential subscription rights to the new common shares, if any, and determine the persons whoare authorized to subscribe to the new common shares; and (d) record each share capital increase by way of a notarial deedand amend the share register accordingly. The board of directors was expressly authorized to increase the Company’s sharecapital by incorporation of reserves, issue/share premiums or retained earnings and to issue the additional common sharesresulting from such capital increase to a beneficiary under any stock incentive plan as agreed by the Company (suchbeneficiary being a shareholder of the Company or not, or, to an entity appointed by the Company as an administrator inconnection with such plan) or under any equity rights offering, private placements or backstop fees. The Company reservedthe right to place transfer and other restrictions on such common shares as determined by the Company pursuant to suchstock incentive plan from time to time.

Given that the available authorized capital has been completely used pursuant to Article 5.3 of our Articles, our

board of directors is not authorized to increase our share capital without further authorization of our shareholders. See“Governance Agreement” below for a discussion of certain circumstances under which our authorized share capital may beincreased. General Meeting of Shareholders

In accordance with Luxembourg law and our Articles, any regularly constituted general meeting of shareholders

represents the entire body of shareholders of the Company. At a general meeting, the shareholders have full power to adoptand ratify all acts and operations that are consistent with our corporate object.

Under our Articles, the annual general meeting of our shareholders is held in Luxembourg, on the fourth Tuesday of

May of each year, at 10:00 a.m. (Luxembourg time). If that day is a public holiday or the day following a public holiday inthe United States, the meeting will be held on Tuesday of the following week. Other general meetings of shareholders maybe convened at any time.

Each of our common shares entitles the holder of record thereof to attend our general meeting of shareholders, either

in person or by proxy, to address the general meeting of shareholders, and to exercise voting rights, subject to the provisionsof our Articles. There is no minimum shareholding required to be able to attend or vote at a general meeting of shareholders.

Luxembourg law provides that our board of directors is obligated to convene a general meeting of shareholders if

shareholders representing in the aggregate 10% of the issued share capital so request in writing with an indication of theagenda. In such case, the general meeting of shareholders must be held within one month of the request. If the requestedgeneral meeting of shareholders is not held within one month of the request, shareholders representing in the aggregate 10%of the issued share capital may petition the competent president of the district court in Luxembourg to have a court appointeeconvene the meeting. Luxembourg law provides that shareholders representing in the aggregate 10% of the issued sharecapital may request that additional items be added to the agenda of a general meeting of shareholders. Such a request must bemade by registered mail sent to our registered office at least five days prior to the holding of the general meeting ofshareholders.

Voting Rights

Each common share entitles the holder thereof to one vote at a general meeting of

3

shareholders. Neither Luxembourg law nor our Articles contain any restrictions as to the voting of our common shares bynon-Luxembourg residents.

Luxembourg law distinguishes between “ordinary” general meetings of shareholders and “extraordinary” general

meetings of shareholders. Ordinary General Meetings of Shareholders. Ordinary general meetings of our shareholders may be convened, and a

vote may be held, without a quorum requirement. Resolutions brought before such ordinary general meetings of ourshareholders require the approval of a simple majority of the votes validly cast, irrespective of the number of shares presentor represented. Abstentions will not be counted as “votes” at ordinary general meetings of our shareholders.

Extraordinary General Meetings of Shareholders. Extraordinary general meetings of our shareholders may be

convened to amend our Articles and to address certain other limited matters. An extraordinary general meeting ofshareholders convened for the purpose of (a) an increase or decrease of the issued share capital, (b) a limitation or exclusionof preemptive rights, (c) approving a statutory merger or de-merger of the Company, (d) dissolution of the Company or (e)an amendment of our Articles, must have a quorum of at least one half of our issued share capital, and such actions requireapproval of at least two-thirds of the votes validly cast at such extraordinary general meeting of shareholders. If such aquorum is not reached, the extraordinary general meeting of shareholders may be reconvened at a later date, pursuant toappropriate notification procedures, which reconvened meeting shall not require a quorum. Abstentions will not be countedas “votes” at extraordinary general meetings of our shareholders.

Appointment and Removal of Directors; Vacancies. Members of our board of directors may be elected by simple

majority of the votes validly cast at any general meeting of shareholders. Any director may be removed with or withoutcause by a simple majority vote at any general meeting of shareholders. If the office of a director becomes vacant, ourArticles provide that the remaining directors, acting by simple majority, may fill such vacancy on a provisional basis until anew director is elected at the next general meeting of shareholders. See “Governance Agreement” below for a discussion ofcertain provisions pursuant to which our Class B directors are nominated prior to the Nomination Termination Time (asdefined therein).

Minority Action Right. Luxembourg law provides that the shareholders holding in the aggregate 10% of the issued

share capital who have a right to vote at the general meeting may act on our behalf to discharge the members of the board ofdirectors for misconduct against our interests, a violation of the law, or a violation of our Articles.

Board of Directors

All powers not expressly reserved to the shareholder(s) by law or the Articles fall within the competence of the board

of directors, which has full power to carry out and approve all acts and operations consistent with the Company’s corporateobject.

The board of directors is authorized to delegate the day-to-day management and the power to represent the Company

in this respect, to one or more directors, officers, managers or other agents, whether shareholders or not, acting eitherindividually or jointly, provided that, prior to the Nomination Termination Time (as defined in the Governance Agreement)any appointment, delegation or power-of-attorney granted in respect of any Acquisition Proposal Matters (as defined below),or any revocation of the foregoing, shall only be effective if a Class B Majority (as defined below) votes in favor of suchappointment, delegation or power-of-attorney, or revocation of the foregoing, as the case may be.

Except as otherwise provided by an amendment to our Articles, the total number of directors constituting the board

of directors shall be seven directors, who need not be shareholders.

4

From and after November 19, 2018 (the “Plan Effective Date”) until the occurrence of the Nomination Termination

Time (as defined in the Governance Agreement described below), the board of directors shall be divided into two classes,designated Class A (composed of four directors) and Class B (composed of three directors), with all Class A directors andClass B directors elected to terms of one year in length; provided, that the initial term of office of the Class A directorsfollowing the Plan Effective Date shall expire at the general meeting of the shareholders of the Company at which the annualaccounts for the 2018 financial year will be approved and the initial term of office of the Class B directors following the PlanEffective Date shall expire at the general meeting of the shareholders of the Company at which the annual accounts for the2019 financial year will be approved. All directors, whether assigned to Class A or Class B, shall be elected by theshareholders at the general meeting in accordance with law and shall have one vote each at all meetings of the board ofdirectors. From and after the Nomination Termination Time (as defined in the Governance Agreement), the board ofdirectors shall cease to be classified and each director then in office previously designated as a Class A director or Class Bdirector shall remain in office as a director until his or her term expires or until his or her earlier death, resignation orremoval by the shareholders.

The board of directors meets at the request of the chairperson or the majority of the board of directors. A director

may grant another director a power of attorney in order to be represented at any meeting of the board of directors. A quorumof the board of directors is a majority of its members present or represented and resolutions are adopted by a majority of themembers of the board of directors voting in their favor, except as otherwise provided in the Articles. In the event of a tievote, the chairman has the right to cast the deciding vote. The board of directors may also act by means of resolutions inwriting signed by all directors. There is no mandatory retirement age for directors under Luxembourg law.

A director who has a financial interest in a transaction carried out other than in the ordinary course of business which

conflicts with the interests of the Company must advise the board of directors accordingly and have the statement recorded inthe minutes of the meeting. The director concerned may not take part in the deliberations concerning that transaction. Aspecial report on the relevant transaction is submitted to the shareholders at the next general meeting, before any vote on thematter. Authority of Class B Directors Regarding Acquisition Proposals Prior to Nomination Termination Time

Until the Nomination Termination Time (as defined in the Governance Agreement described below), the following

provisions of our Articles apply, and after the Nomination Termination Time, these provisions shall have no further force oreffect:

(1) Representative Authority of the Class B Directors Regarding Acquisition Proposals. Any two Class B

directors acting in their capacities as such (a “Class B Majority”) shall have the authority to act on theCompany’s behalf (including to bind the Company with respect to clauses (e) through (g)) with respect to thefollowing matters: (a) to review and evaluate the terms and conditions of any Acquisition Proposal (definedbelow), (b) to negotiate with any party the Class B Majority deems appropriate with respect to anyAcquisition Proposal; (c) to solicit prospective Acquisition Proposals and/or explore the ability to obtain onbehalf of the Company prospective Acquisition Proposals, (d) to determine whether any AcquisitionProposal is beneficial to the Company and its shareholders, (e) to make recommendations to the board ofdirectors and shareholders as to what actions, if any, should be taken with respect to any Acquisition (definedbelow), Acquisition Contract (defined below) or Acquisition Proposal, including to recommend that theboard of directors or the shareholders, as applicable, approve any Acquisition, Acquisition Contract orAcquisition Proposal, (f) to retain, at the Company’s expense, such consultants, legal counsel and otheradvisors as a Class B Majority may from time to time deem appropriate to assist the Class B directors in theperformance of their duties with respect to Acquisition Proposals, (g) subject to paragraph (2) below, toexecute and deliver on behalf of the Company

5

definitive documentation providing for the consummation of an Acquisition (an “Acquisition Contract”) and(h) to take, or to cause the Company to take, any and all actions ancillary or related to any actual orprospective Acquisition Proposal or the other matters referred to in the preceding clauses (a)-(g), includingwithout limitation to authorize and enter into contracts of any nature (other than an Acquisition Contractexcept in accordance with paragraph (2) below) (the foregoing clauses (a)-(h), “Acquisition ProposalMatters”). As used in our Articles: (x) “Acquisition Proposal” means a proposal received by the Company,any of its subsidiaries, or any of its or their respective directors, officers or outside consultants, counsel orother advisors providing for an Acquisition; and (y) “Acquisition” means a transaction or series of relatedtransactions resulting in the acquisition (whether by merger, consolidation, sale or transfer of the Company’sshares, other equity interests or assets or otherwise) by any natural or legal person or group of such persons,directly or indirectly, (i) of a majority of (A) the outstanding shares of the Company or (B) the assets of theCompany and its subsidiaries determined on a consolidated basis and (ii) upon the consummation of which,the shareholders of the Company immediately prior to such acquisition collectively do not own (beneficiallyor of record) a majority of the voting power of such person or the ultimate parent entity of such person (or, inthe case of a group of such persons, a majority of the voting power of the largest member of such group,determined by reference to the respective equity financing contributions of such members, or ultimate parententity of such largest member).

(2) Approval of Acquisition Contracts. No Class B director, acting singularly or with any one or more otherClass B directors, shall have the power to cause the Company to enter into any Acquisition Contract orotherwise consummate an Acquisition unless such Acquisition Contract (a) provides by its terms thatconsummation of the Acquisition that is the subject thereof is conditioned upon either (I) the shareholdervote, under the conditions of quorum and vote, required by law or other provision of the Articles for suchAcquisition or (II) shareholder approval by the vote of a majority of the outstanding share capital, whichevervoting standard in the foregoing clauses (I) or (II) is higher (such condition, as applicable, a “ShareholderApproval Condition”) and (b) does not impose any obligations or penalties on the Company if theShareholder Approval Condition is not obtained by the conclusion of the general meeting or extraordinarygeneral meeting, as applicable, convened to vote on such Acquisition Contract or Acquisition other thanreimbursement of the reasonable expenses incurred by the counterparty thereto (provided, that, for avoidanceof doubt, this clause (b) shall not preclude the imposition of any obligation or penalty on the Company due toany cause or event other than the failure in and of itself to satisfy the Shareholder Approval Condition atsuch general meeting or extraordinary general meeting). If a proposed Acquisition Contract satisfies clauses(a) and (b) of the immediately preceding sentence, then a Class B Majority shall be authorized to representthe Company by executing and delivering, or causing any person authorized by the Class B Majority toexecute and deliver, on the Company’s behalf, such Acquisition Contract, to convene a general meeting or anextraordinary general meeting, as applicable, to seek shareholder approval of the Acquisition in accordancewith the Shareholder Approval Condition, and, if such shareholder approval is obtained, to carry out all otherpowers vested under paragraph (1) above with respect to such Acquisition Contract (including to cause theCompany to consummate the Acquisition and the other transactions contemplated thereby or, subject to theterms of the Acquisition Contract, terminate such Acquisition Contract and abandon such Acquisition).

(3) Limitation on Representative Authority of the Class A Directors Regarding Acquisition Proposals. No ClassA director, acting singularly or with any one or more other directors, in his or her capacity as such, shall haveany representative authority to bind the Company or otherwise act on the Company’s behalf, nor shall theboard of directors take any action, in either case with respect to any Acquisition, Acquisition

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Contract or Acquisition Proposal Matters, except with the prior approval of a Class B Majority.Notwithstanding the immediately prior sentence, this paragraph (3) shall not be interpreted to limit the rightsof the Class A directors to attend meetings of the Class B directors, receive information received by the ClassB directors or to provide ongoing input to the Class B directors, in each case, regarding Acquisitions,Acquisition Contracts, Acquisition Proposals or other Acquisition Proposal Matters, and the Class Bdirectors shall so extend such rights to the Class A directors.

(4) Amendments. The board of directors shall not propose to the shareholders or recommend that theshareholders approve any amendment to provisions to the Articles described in this section “Authority ofClass B Directors Regarding Acquisition Proposals Prior to Nomination Termination Time” and/or any otherprovisions of the Articles directly or indirectly amending or limiting the application of the provisionsdescribed in this section, without the favorable vote of a Class B Majority.

Committees of the Board of Directors

Under our Articles, our board of directors may establish committees for certain specific purposes, which mayinclude, but are not limited to, an audit committee and a compensation committee. Our board of directors has established anAudit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee.

Amendment to our Articles

Under Luxembourg law, we are required to convene an extraordinary general meeting of shareholders to amend our

Articles. The proposed amendments to our Articles must be included in the agenda of the extraordinary general meeting ofshareholders. Any resolutions to amend our Articles must be taken before a Luxembourg notary and such amendments mustbe published in accordance with Luxembourg law.

Merger and De-Merger

Our shareholders must approve any merger by absorption involving the Company at an extraordinary general

meeting of shareholders, which must be held before a notary. Similarly, the de-merger of the Company is generally subject tothe approval of our shareholders at an extraordinary general meeting of shareholders.

Liquidation

In the event of our liquidation, dissolution or winding-up, the assets remaining after allowing for the payment of all

liabilities will be paid out to the shareholders pro rata to their respective shareholdings. The decision to voluntarily liquidate,dissolve or windup requires the approval of our shareholders at an extraordinary general meeting of shareholders to be heldbefore a notary.

No Appraisal Rights

Neither Luxembourg law nor our Articles provide for any appraisal rights of dissenting shareholders. Distributions

Subject to Luxembourg law, each share is entitled to participate equally in distributions if, and when, declared by

shareholders out of funds legally available for such purposes. Pursuant to our Articles, at a general meeting, our shareholdersmay approve distributions, and our board of directors may declare interim distributions, to the extent permitted byLuxembourg law.

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Declared and unpaid distributions held by us for the account of the shareholders will not bear interest. Under

Luxembourg law, claims for unpaid distributions will lapse in our favor five years after the date such distribution is declared.

Limitation of Liability; Indemnification

Pursuant to our Articles, the members of our board of directors cannot be held personally liable by reason of theirmandate for any commitment validly made in the Company’s name, provided such commitments comply with the Articlesand Luxembourg law.

Pursuant to our Articles, we must, to the fullest extent permitted by Luxembourg law, indemnify any director or

officer, as well as any former director or officer, against any damages and/or compensation to be paid and any costs, chargesand expenses, reasonably incurred by him in connection with the defense or settlement of any civil, criminal oradministrative action, suit or proceeding to which he may be made a party by reason of his being or having been a director orofficer of the Company, if (a) he acted honestly and in good faith, and (b) in the case of criminal or administrativeproceedings, he had reasonable grounds for believing that conduct was lawful. Notwithstanding the foregoing, the current orformer director or officer will not be entitled to indemnification in case of an action, suit or proceeding brought against himby the Company or in case he shall be finally adjudged in an action, suit or proceeding to be liable for gross negligence,willful misconduct, fraud, dishonesty or any other criminal offense.

Furthermore, in case of settlement, the current or former director or officer will only be entitled to indemnification

under our Articles, provided that (a) the board of directors shall have determined in good faith that the defendant’s actionsdid not constitute willful and deliberate violations of the law and shall have obtained the relevant legal advice to that effect;and (b) notice of the intention of settlement of such action, suit or proceeding is given to us at least 10 business days prior tosuch settlement.

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended may be permitted to

our directors, officers and controlling persons, we have been informed that in the opinion of the U.S. Securities andExchange Commission (the “SEC”) such indemnification is against public policy as expressed in the Securities Act of 1933,as amended, and is, therefore, unenforceable. Annual Accounts; Auditors

Our Articles provide that our financial year begins on January 1 and ends on December 31 each year. Each year our

board of directors must prepare annual accounts of the Company, including an inventory of our assets and liabilities, and abalance sheet and a profit and loss account. Our board of directors must also prepare a consolidated management report eachyear on the consolidated financial statements of the Company. The annual accounts, the consolidated financial statements ofthe Company, the consolidated management report and the auditor’s reports must be available for inspection by shareholdersat our registered office at least 15 calendar days prior to the date of the annual general meeting of shareholders.

Luxembourg law requires that the operation of the Company be supervised by one or more statutory auditors. The

general meeting of shareholders must appoint the statutory auditor(s) and determine the term of their office, which may notexceed six years, without prejudice to any renewals. However, because the Company has exceeded certain thresholds, it isrequired to have its accounts audited by an independent auditor, which is responsible for advising whether the managementreport is in line with the financial statements for the year and has been prepared in accordance with legal requirements. Theappointment of the independent auditor follows the same rules as the appointment of the statutory auditor, and a statutoryauditor is no longer required if an independent auditor has been appointed. After approval by the shareholders at an annualgeneral meeting, the annual accounts must be filed within one month after their approval or seven months of the close of thefinancial year with the Luxembourg Registry of Trade and Companies.

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Information Rights

Luxembourg law gives shareholders limited rights to inspect certain corporate records eight calendar days prior to

the date of the annual general meeting of shareholders, including the annual accounts, the consolidated financial statementsof the Company, a list of directors and independent auditors, a list of shareholders whose shares are not fully paid-up, themanagement consolidated report and the auditor’s reports.

The annual accounts, the consolidated financial statements of the Company, the consolidated management report and

the auditor’s reports are sent to registered shareholders at the same time as the convening notice for the annual generalmeeting of shareholders. In addition, any registered shareholder is entitled to receive a copy of these documents free ofcharge eight calendar days prior to the date of the annual general meeting of shareholders upon request.

Under Luxembourg law, it is generally accepted that a shareholder has the right to receive responses to questions

concerning items on the agenda for a general meeting of shareholders if such responses are necessary or useful for ashareholder to make an informed decision concerning such agenda item, unless a response to such questions could bedetrimental to our interests. Transfer Agent and Registrar

The transfer agent and registrar for our common shares is American Stock Transfer & Trust Company, LLC. Governance Agreement

The Company has entered into a Governance Agreement dated as of November 19, 2018 with certain holders of its

shares, defined therein as the Avenue Parties, the SVP Parties, and the Other Lenders.

Nomination Provisions. Pursuant to the Governance Agreement, until the Nomination Termination Time, definedbelow, the Avenue Parties have the right to nominate one Class B Director, the SVP Parties have the right to nominate oneClass B Director and the Other Lenders have the right to nominate one Class B Director. Each of such parties also has theright to fill a vacancy with respect to its Class B Director nominee.

The “Nomination Termination Time” means the first such time that it becomes known to the Company that any of (i)

the Avenue Parties (collectively and in the aggregate with each other), (ii) the SVP Parties (collectively and in the aggregatewith each other) or (iii) the Other Lenders (collectively and in the aggregate with each other), hold, beneficially or of record,and have the power to vote or direct the voting of, 10% or less (the “Ownership Threshold”) of the then issued andoutstanding shares of the Company. Whichever of the Avenue Parties, SVP Parties or Other Lenders, as applicable, whoseholdings of shares of the Company first becomes known to the Company to cease to exceed the Ownership Threshold isreferred to as the “Triggering Party.”

During the period beginning at the Nomination Termination Time and ending at the convening of the first general

meeting after the Nomination Termination Time, if the board of directors requests in writing the resignation of the formerClass B Director who was nominated by the Triggering Party, then each of the Avenue Parties, SVP Parties and OtherLenders has agreed to take all necessary actions to cause such director to resign or otherwise be removed from office as adirector.

Each of the Avenue Parties and the SVP Parties agreed with one another to cooperate in facilitating the actions and

rights in the Governance Agreement, including voting their Company common shares in favor of their respective Class BDirector nominees. The Company agreed to

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cooperate in facilitating the actions and rights in the Governance Agreement, including providing the highest level of supportfor the election of the Class B Director nominees as it provides to any other individual standing for election as part of theCompany's slate of directors.

Board Observer Rights. The parties to the Governance Agreement (each, an “Observer Shareholder”) each have the

right to designate a board of directors observer until the first such time that it becomes known to the Company that anObserver Shareholder (together with its Permitted Transferees as defined in the agreement) ceases to hold beneficially or ofrecord, and have the power to vote or direct the voting of, at least such Observer Shareholder’s Original PercentageThreshold. “Original Percentage Threshold” means, with respect to any Observer Shareholder, the lesser of (a) five percent(5%) of the issued and outstanding shares of the Company or (b) fifty percent (50%) of the shares of the Company suchObserver Shareholder together with its Permitted Transferees collectively held, beneficially or of record, and had the powerto vote or direct the voting of, at the close of business on the date of the Governance Agreement.

Additional Share Capital Authorization. Each of the Company, the Avenue Parties and the SVP Parties has agreed

with one another that it will take all necessary actions to cause the Articles to be amended as promptly as practicable,following a request therefor by any of the Company, the Avenue Parties or the SVP Parties, to provide for the authority ofthe board of directors to increase the Company’s then current share capital once or more up to $1.0 million (represented byup to an aggregate of 100.0 million authorized shares) (such amount including the current share capital of the Company of$825,000) by the issue of new shares having the same rights as the existing shares, or without any such issue.

Waiver of Corporate Opportunity. The agreement contains a broad corporate opportunity waiver by the Company in

favor of the shareholders party to the agreement and certain related persons as described in the agreement.

Confidential Information. The Class B Directors and Observers may, upon request of the party that designated them,share Company confidential information with the designating party, subject to the designating party entering into aconfidentiality agreement with the Company.

The foregoing description of the Governance Agreement is only a summary, does not purport to be complete, and is

qualified in its entirety by reference to the Governance Agreement, which is incorporated by reference as an exhibit to thisAnnual Report on Form 10-K. Registration Rights Agreement

The Company entered into a Registration Rights Agreement, dated as of November 19, 2018 with Quantum Pacific

Gibraltar Ltd. and the shareholders party to the Governance Agreement, with respect to the Registrable Securities (as definedin the Registration Rights Agreement). Pursuant to the agreement, the Company has filed a shelf registration statement, andincluded in it the Registrable Securities of each holder who requested inclusion therein of some or all of such holder’sRegistrable Securities. The shelf registration statement may be amended, among other things, under the circumstancesspecified in the agreement, to register Registrable Securities that were not previously included in the shelf registrationstatement and must be amended or replaced by an automatic shelf registration statement if and after the Company becomeseligible to use one. The Company will use its reasonable best efforts to keep the shelf registration statement continuouslyeffective. The agreement also contains provisions permitting underwritten shelf resale transactions with an anticipatedaggregate offering price to the public of at least $150.0 million.

In addition, the agreement grants certain demand registration rights to parties beneficially owning at least 10% of the

Company’s shares, provided that the anticipated aggregate offering price to the public is at least $150.0 million or at least20% of the then-outstanding Registrable Securities (for the party exercising the demand registration right along with otherholders entitled to have their shares registered along with the initiating holder). The agreement also contains customary

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“piggyback” registration rights if the Company proposes to file a registration statement with respect to an offering of itsshares.

The agreement contains customary conditions, restrictions, suspension periods, blackout periods and ancillary

requirements and customary indemnification and contribution provisions. The Company will generally pay all registrationexpenses other than underwriting fees, discounts, commissions, transfer taxes or similar taxes or charges. Upon the Companybecoming aware that it fails to qualify as a foreign private issuer on the last business day of a second fiscal quarter, theCompany must so notify the holders no later than 10 business days thereafter. The agreement terminates with respect to anyholder when the holder ceases to hold Registrable Securities (except with respect to certain indemnification and informationrights).

The foregoing description of the Registration Rights Agreement is only a summary, does not purport to be complete,

and is qualified in its entirety by reference to the Registration Rights Agreement, which is incorporated by reference as anexhibit to this Annual Report on Form 10-K.

Material Luxembourg Tax Considerations for U.S. Holders of Common Shares

The following is a summary discussion of certain Luxembourg tax considerations that may be applicable to U.S.Holders (defined below) as a result of owning or disposing of our common shares. This does not purport to be acomprehensive description of all of the tax considerations that may be relevant to any of our common shares, and does notpurport to include tax considerations that arise from rules of general application or that are generally assumed to be known toholders. This discussion is not a complete analysis or listing of all of the possible tax consequences of such transactions anddoes not address all tax considerations that might be relevant to particular holders in light of their personal circumstances orto persons that are subject to special tax rules.

It is not intended to be, nor should it be construed to be, legal or tax advice. The summary is not exhaustive and westrongly encourage shareholders to consult their own tax advisors as to the Luxembourg tax consequences of the ownershipand disposition of our common shares. The summary applies only to U.S. Holders who will own our common shares ascapital assets and does not apply to other categories of shareholders, such as dealers in securities, trustees, insurancecompanies, collective investment schemes and shareholders who have, or who are deemed to have, acquired their commonshares in the capital of our common shares by virtue of an office or employment.

This discussion is based on the laws of the Grand-Duchy of Luxembourg, including the Income Tax Act ofDecember 4, 1967, as amended, the Municipal Business Tax Act of December 1, 1936, as amended, and the Net Wealth TaxAct of October 16, 1934, as amended (Vermögenssteuergesetz), and the Law of October 16, 1934 on the valuation of assets(Bewertungsgesetz) (the “Valuation Law”), to which we jointly refer to as the laws of the Grand-Duchy of Luxembourg,including the regulations promulgated thereunder, and published judicial decisions and administrative pronouncements, eachas in effect on March 1, 2020 or with a known future effective date and is subject to any change in law or regulations orchanges in interpretation or application thereof (and which may possibly have a retroactive effect). However, there can beno assurance that the Luxembourg tax authorities will not challenge any of the Luxembourg tax considerations describedbelow; in particular, changes in law and/or administrative practice, as well as changes in relevant facts and circumstances,may alter the tax considerations described below. Prospective investors are encouraged to consult their own professionaladvisors as to the effects of state, local or foreign laws and regulations, including Luxembourg tax law and regulations, towhich they may be subject.

For purposes of this summary, a “U.S. Holder” means any investor in our common shares who is a United States(“U.S.”) resident within the meaning of Article 4 of the double tax treaty of 3 April 1996 concluded between Luxembourgand the United States (the “Treaty”) and the Company is a Luxembourg resident within the meaning of Article 4 of theTreaty and entitled to all the benefits of the Treaty pursuant to Article 24 of the Treaty.

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Tax Regime Applicable to Realized Capital Gains

U.S. Holders will be subject to the following Luxembourg tax treatment in relation to capital gains in the casesdescribed below (among others):

An individual who is a U.S. Holder of common shares (and who does not have a permanent establishment, apermanent representative or a fixed place of business in Luxembourg to which the common shares areattributable) will not be subject to Luxembourg taxation on capital gains arising upon disposal of such commonshares pursuant to Article 14(5) of the Treaty.

A corporate U.S. Holder, which has a permanent establishment, a permanent representative or a fixed place ofbusiness in Luxembourg to which our common shares are attributable, will be required to recognize capital gains(or losses as the case may be) on the sale of such common shares, which will be subject to Luxembourgcorporate income tax and municipal business tax. However, gains realized on the sale of the common sharesmay benefit under certain conditions from the exemption provided for by Article 166 of the Luxembourg IncomeTax and the Grand-Ducal Decree of December 21, 2001 (as amended) provided that at the time of the disposal ofthe common shares, among other things, (a) the corporate U.S. Holder (acting through its permanentrepresentative or fixed place of business in Luxembourg) of common shares holds a stake representing at least10% of our total share capital or a cost price of at least 6.0 million Euros (“€”) and (b) such qualifyingshareholding has been held for an uninterrupted period of at least 12 months or the corporate U.S. Holder (actingthrough its permanent representative or fixed place of business in Luxembourg) undertakes to continue to ownsuch qualifying shareholding until such time as the corporate U.S. Holder (acting through its permanentrepresentative or fixed place of business in Luxembourg) has held at least 10% our common shares for anuninterrupted period of at least 12 months. In certain circumstances, the exemption may not apply in part or infull; for example, the capital gains exemption (for gains arising on an alienation of the common shares) does notapply up to the aggregate amount of previously tax deducted expenses and write-offs related to these commonshares.

A corporate U.S. Holder, which has no permanent establishment or a permanent representation in Luxembourgto which the common shares are attributable, will not be subject to Luxembourg taxation on capital gains arisingupon disposal of such common shares pursuant to Article 14 (5) of the Treaty.

Tax Regime Applicable to Distributions

Luxembourg Withholding Tax. A Luxembourg withholding tax of 15% (17.65% if the dividend tax is not withheldfrom the shareholder) is due on dividends and similar distributions to U.S. Holders (subject to the exceptions discussed under“—Exemption from Luxembourg Withholding Tax” and “—Reduction of Luxembourg Withholding Tax” below). Absentan exception, we will be required to withhold at such rate from distributions to U.S. Holders and pay such withheld amountsto the Luxembourg tax authorities.

Exemption from Luxembourg Withholding Tax. Dividends and similar distributions paid to U.S. Holders may undercertain conditions be exempt from Luxembourg dividend withholding tax including, among other things, if: (a) the U.S.Holder is a qualifying corporate entity holding a stake representing at least 10% of our total share capital or which acquiredthe common shares for at least €1.2 million (or its equivalent amount in a foreign currency); and (b) the U.S. Holder haseither held this qualifying stake in our capital for an uninterrupted period of at least 12 months at the time of the payment ofthe dividend or undertakes to continue to own such qualifying shareholding until such time as it has held the common sharesfor an uninterrupted period of at least 12 months. Based on the

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above, the U.S. Holder will be a qualifying corporate entity for the exemption if it is a collective entity fully subject to a taxin the U.S. that corresponds to Luxembourg corporate income tax.

Under current Luxembourg tax law, payments to shareholders in relation to a reduction of share capital or sharepremium are not subject to Luxembourg dividend withholding tax if certain conditions are met, including, for example, thecondition that we do not have distributable reserves or profits. If we have, at the time of the payment to U.S. Holders withrespect to their common shares, distributable reserves or profits, a distribution of share capital or share premium will berecharacterized for Luxembourg tax purposes as a distribution of such reserves or earnings subject to withholding tax. Basedon this treatment under Luxembourg law, if certain conditions are met, it can be expected that a substantial amount ofpotential future payments to be made by us to U.S. Holders may not be subject to Luxembourg withholding tax.

Reduction of Luxembourg Withholding Tax. Corporate U.S. Holders may claim application of a reducedLuxembourg dividend withholding tax at a rate of 5% under Article 10(2)(a)(i) of the Treaty, if such U.S. Holdersbeneficially own at least 10% of our voting stock without any minimum holding period.

Net Wealth Tax

Luxembourg net wealth tax will not be levied on a U.S. Holder with respect to the common shares unless thecommon shares are attributable to an enterprise or part thereof that is carried on through a permanent establishment, a fixedplace of business or a permanent representative in Luxembourg, in which case an exemption may apply based onParagraph 60 of the Valuation Law.

Registration Tax/Stamp Duty

No registration tax or stamp duty will be payable by a U.S. Holder of common shares in Luxembourg solely upon thedisposal of common shares by sale or exchange.

Estate and Gift Taxes

No estate or inheritance tax is levied on the transfer of common shares upon the death of a U.S. Holder of commonshares in cases where the deceased was not a resident of Luxembourg for inheritance tax purposes, and no gift tax is leviedupon a gift of common shares if the gift is not passed before a Luxembourg notary or recorded in a deed registered inLuxembourg.

The Luxembourg tax considerations summarized above are for general information only. Each PacificDrilling S.A. shareholder is encouraged to consult his, her or its tax advisor as to the particular consequences thatmay apply to such shareholder.

Material U.S. Federal Income Tax Considerations for Holders of Common Shares

The following is a discussion of the material U.S. federal income tax considerations relating to the purchase,ownership and disposition of our common shares. This discussion is based upon the provisions of the Internal RevenueCode of 1986, as amended (the “Code”), existing and proposed Treasury Regulations thereunder, judicial authority andadministrative interpretations, as of March 1, 2020, all of which are subject to change, possibly with retroactive effect, or aresubject to different interpretations. There can be no assurance that the Internal Revenue Service (“IRS”) will take a similarview of such consequences, and we have not obtained, nor do we intend to obtain, a ruling from the IRS with respect to theU.S. federal income tax consequences of the purchase, ownership and disposition of the common shares. This discussion islimited to beneficial owners that hold our common shares as “capital assets” (generally, property held for investment).

This discussion does not address all U.S. federal income tax considerations that may be relevant to a particularholder based on its particular circumstances, and you are encouraged to consult your own independent tax advisor regardingyour specific tax situation. For example, the discussion

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does not address the tax considerations that may be relevant to U.S. Holders (defined below) in special tax situations, suchas:

dealers in securities or currencies;

insurance companies;

regulated investment companies and real estate investment trusts;

tax-exempt organizations;

brokers or dealers in securities or currencies and traders in securities that elect to mark to market;

certain financial institutions;

partnerships or other pass-through entities and holders of interests therein;

holders whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;

U.S. expatriates;

individual retirement accounts and other tax deferred accounts;

holders that acquired our common shares in compensatory transactions;

holders that hold our common shares as part of a hedge, straddle or conversion or other integrated transaction; or

holders that own, directly, indirectly, or constructively, 10% or more of the total combined voting power of theCompany.

This discussion does not address the alternative minimum tax consequences of holding common shares. Moreover,this discussion does not address the state, local or non-U.S. tax consequences of holding our common shares, or any aspectof U.S. federal tax law other than U.S. federal income taxation.

You are a “U.S. Holder” if you are a beneficial owner of our common shares and you are, for U.S. federal incometax purposes:

an individual who is a citizen or resident of the U.S.;

a corporation, or any other entity taxable as a corporation, created or organized in or under the laws of the U.S.or any State thereof, including the District of Columbia;

an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

a trust (a) if a court within the U.S. is able to exercise primary supervision over its administration and one ormore U.S. persons (as defined in the Code) have the authority to control all of its substantial decisions or (b) thathas a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

You are a “Non-U.S. Holder” for purposes of this discussion if you are a beneficial owner of our common shares thatis an individual, corporation, estate or trust that is not a U.S. Holder.

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If a partnership (or an entity or arrangement treated as a partnership for U.S. federal income tax purposes) holds our

common shares, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities ofthe partnership. A partner of a partnership considering the purchase, ownership or disposition of our common shares isencouraged to consult its own independent tax advisor.

You are encouraged to consult your own independent tax advisor regarding the U.S. federal, state, local and non-U.S. income and other tax consequences of purchasing, owning and disposing of our common shares in your particularcircumstances.

U.S. Holders

Passive Foreign Investment Company Rules; Generally. A U.S. Holder generally will be subject to a special,adverse tax regime that would differ in certain respects from the tax treatment described below if we are, at any time duringthe U.S. Holder’s holding period with respect to our common shares, a passive foreign investment company (“PFIC”) forU.S. federal income tax purposes. A U.S. Holder of a PFIC is also subject to special reporting requirements.

In general, we will be a PFIC for any taxable year if either (i) at least 75% of our gross income for the taxable year is“passive income” or (ii) at least 50% of the average value of all our assets (determined on the basis of a quarterly average)produce or are held for the production of passive income. For this purpose, passive income generally includes, among otherthings, dividends, interest, certain rents and royalties, annuities and gains from assets that produce passive income. If aforeign corporation owns at least 25% by value of the stock of another corporation, the foreign corporation is treated forpurposes of the PFIC tests as owning its proportionate share of the assets of the other corporation, and as receiving directlyits proportionate share of the other corporation’s income.

Based on our operations as of March 1, 2020, we believe that we will not be a PFIC in the current taxable year andthat we will not become a PFIC in any future taxable year. However, this involves a facts and circumstances analysis and it ispossible that the IRS would not agree with this conclusion. Further, the determination of whether a corporation is a PFIC ismade annually and thus may be subject to change. Therefore, we can give investors no assurance as to our PFIC status. U.S.Holders are encouraged to consult their own independent tax advisors about the PFIC rules, including the availability ofcertain elections and reporting requirements.

Our position that we will not be treated as a PFIC is premised on the conclusion that income from our drillingcontracts should not constitute passive income for purposes of the relevant PFIC rules. However, this conclusion is not freefrom doubt. While there is legal authority supporting this conclusion, including IRS pronouncements concerning thecharacterization of income derived from time charters as services income, the United States Court of Appeals for the FifthCircuit (the “Fifth Circuit”) held in Tidewater Inc. v. United States, 565 F.3d 299 (5th Cir. 2009), that income derived fromcertain timechartering activities should be treated as rental income rather than services income for purposes of a provision ofthe Code relating to foreign sales corporations. In that case, the Fifth Circuit did not address the definition of passive incomeor the PFIC rules; however, the reasoning of the case could have implications as to how the income from our drillingcontracts would be classified under such rules. If the reasoning of this case were extended to our drilling contracts in a PFICcontext, the gross income we derive or are deemed to derive from such drilling contracts may be treated as rental income,and we could potentially be treated as a PFIC. In published (but non-precedential) guidance, the IRS has stated that itdisagreed with the holding in Tidewater and specified that time charters similar to those at issue in the case should be treatedas service contracts.

There is no legal authority under the PFIC rules addressing our specific method of operation, and any determinationas to whether our method of operation and the composition of our assets generates nonpassive services income must be basedon all applicable facts and circumstances. Conclusions in this area therefore remain matters of interpretation. We are notseeking a ruling from

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the IRS on the treatment of income generated from our drilling operations. Thus, it is possible that the IRS or a court coulddisagree with this position.

As discussed more fully below, if we were to be treated as a PFIC for any taxable year, a U.S. Holder would besubject to different U.S. federal income taxation rules depending on whether the U.S. Holder makes an election to treat us asa “Qualified Electing Fund,” which election we refer to as a “QEF election.” As an alternative to making a QEF election, aU.S. Holder may be able to make a “mark-to-market” election with respect to our common shares, as discussed below. Inaddition, if we were to be treated as a PFIC for any taxable year a U.S. Holder would be required to file an annual report withthe IRS for that year with respect to such U.S. Holder’s common shares.

Passive Foreign Investment Company Rules; Taxation of U.S. Holders Making and Maintaining a Timely QEFElection. If a U.S. Holder makes and maintains a timely QEF election, which U.S. Holder we refer to as an “ElectingHolder,” the Electing Holder must report each year for U.S. federal income tax purposes his pro rata share of our ordinaryearnings and our net capital gain, if any, for our taxable year that ends with or within the taxable year of the Electing Holder,regardless of whether or not distributions were received from us by the Electing Holder. No portion of any such inclusions ofordinary earnings will be treated as “qualified dividend income.” However, net capital gain inclusions of certainnon‑corporate U.S. Holders would be eligible for preferential capital gains tax rates.

The Electing Holder’s adjusted tax basis in the common shares would be increased to reflect taxed but undistributedearnings and profits. Distributions of earnings and profits that have been previously taxed can result in a correspondingreduction in the adjusted tax basis in the common shares and would not be taxed again once distributed. An Electing Holderwould not, however, be entitled to a deduction for its pro rata share of any losses that we incur with respect to any taxableyear. An Electing Holder would generally recognize capital gain or loss on the sale or other taxable disposition of ourcommon shares, computed as discussed above using such Electing Holder’s tax basis in our shares, as adjusted.

A U.S. Holder can make a QEF election with respect to any taxable year during which we are a PFIC by filing avalid IRS Form 8621 in accordance with the relevant instructions and related U.S. Treasury Regulations with such U.S.Holder’s U.S. federal income tax return for the taxable year, which requires access to certain information from us. If we takethe position that we are not a PFIC for any taxable year, and it is later determined that we were a PFIC for such taxable year,it may be possible for a U.S. Holder to make a retroactive QEF election effective for such year. If we were aware that we orany of our subsidiaries were to be treated as a PFIC for any taxable year, we may or may not provide each U.S. Holder withall necessary information in order to make the QEF election described above. If we were to be treated as a PFIC, a U.S.Holder would be treated as owning his proportionate share of stock in each of our subsidiaries which is treated as a PFIC anda separate QEF election would be necessary with respect to each subsidiary. It should be noted that we may not be able toprovide such information if we did not become aware of our status as a PFIC in a timely manner.

Passive Foreign Investment Company Rules; Taxation of U.S. Holders Making a “Mark-to-Market”Election. Alternatively, if we were to be treated as a PFIC for any taxable year and our common shares are treated as“marketable stock” for purposes of these rules (i.e., because our common shares may be considered regularly traded on anational securities exchange registered with the SEC (including the NYSE) or other qualifying exchange or market inaccordance with applicable U.S. Treasury Regulations), a U.S. Holder would be allowed to make a “mark-to-market”election with respect to our common shares, provided the U.S. Holder completes and files a valid IRS Form 8621 inaccordance with the relevant instructions and related U.S. Treasury Regulations. The “mark-to-market” election will not beavailable for any of our subsidiaries.

If a “mark-to-market” election is made, the U.S. Holder generally would include as ordinary income in each taxableyear the excess, if any, of the fair market value of the common shares at the

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end of the taxable year over such holder’s adjusted tax basis in the common shares. The U.S. Holder would also be permittedan ordinary loss in respect of the excess, if any, of the U.S. Holder’s adjusted tax basis in the common shares over their fairmarket value at the end of the taxable year, but only to the extent of the net amount previously included in income as a resultof the mark-to-market election. A U.S. Holder’s tax basis in his common shares would be adjusted to reflect any suchincome or loss recognized. Gain realized on the sale or other taxable disposition of our common shares would be treated asordinary income, and any loss realized on the sale or other taxable disposition of the common shares would be treated asordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included as ordinaryincome by the U.S. Holder.

Passive Foreign Investment Company Rules; Taxation of U.S. Holders Not Making a Timely QEF or Mark-to-Market Election. Finally, if we were to be treated as a PFIC for any taxable year, a U.S. Holder who does not make either aQEF election or a “mark-to-market” election for that year, whom we refer to as a “Non-Electing Holder,” would be subjectto special rules with respect to (1) any excess distribution (i.e., the portion of any distributions received by the Non-ElectingHolder on our common shares in a taxable year in excess of 125% of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder’s holding period for the commonshares), and (2) any gain realized on the sale or other taxable disposition of our common shares. Under these special rules:

the excess distribution or gain would be allocated ratably over the Non-Electing Holders’ aggregate holdingperiod for the common shares;

the amount allocated to the current taxable year and any taxable year before we became a PFIC would be taxed

as ordinary income; and the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect

for the applicable class of taxpayer for that year, and an interest charge for the deemed deferral benefit would beimposed with respect to the resulting tax attributable to each such other taxable year.

These penalties may not apply to a pension or profit-sharing trust or other tax-exempt organization that did notborrow funds or otherwise utilize leverage in connection with its acquisition of our common shares. If a Non-Electing Holderwho is an individual dies while owning our common shares, such Non-Electing Holder’s successor generally would notreceive a step-up in tax basis with respect to such common shares.

U.S. Holders should consult their own tax adviser about the potential application of the PFIC rules to an investmentin the common shares. The remainder of this discussion assumes that we will not be a PFIC for the current taxable year or forany future taxable year.

Taxation of Dividends. Any distributions made with respect to our common shares (including amounts withheld onaccount of foreign taxes) will, to the extent made from current or accumulated earnings and profits as determined under U.S.federal income tax principles, constitute dividends for U.S. federal income tax purposes. To the extent that any distributionexceeds the amount of our current and accumulated earnings and profits, it will be treated as a non-taxable return of capitalto the extent of the U.S. Holder’s adjusted tax basis in the common shares, and thereafter as capital gain. Such dividendsgenerally would be treated as foreign-source income for U.S. foreign tax credit purposes.

Dividends (including amounts withheld on account of foreign taxes) paid with respect to our common sharesgenerally will be includible in the gross income of a U.S. Holder as ordinary income on the day on which the dividends arereceived by the U.S. Holder. A non-corporate U.S. Holder would be entitled to a preferential rate of U.S. federal incometaxation (with the applicable rate based on the income and filing status of the U.S. Holder) with respect to any dividends paidon our common shares only if we are a “qualified foreign corporation.” We will be treated as a qualified foreign

17

corporation if the common shares are readily tradable on an established securities market or if we are eligible for the benefitsof a comprehensive income tax treaty with the U.S. If our common shares are traded on an established securities market(such as the NYSE) or Pacific Drilling S.A. is eligible for the benefits of a comprehensive income tax treaty with the U.S.,we will be a qualified foreign corporation and therefore non-corporate U.S. Holders will be eligible for a preferential tax rateif the holders meet certain holding period and other requirements.

The determination of whether we are a qualified foreign corporation will be made at the time of the dividendpayment, and will be made based on the facts and circumstances at that time. There is no guarantee that we will be treated asa qualified foreign corporation at the time of paying dividends and that dividends will be subject to preferential tax rates fornon-corporate U.S. Holders. A preferential tax rate will not apply to amounts that the U.S. Holder takes into account as“investment income,” which may be offset by investment expense. Dividends on our common shares will not be eligible forthe dividends-received deduction generally allowed to U.S. corporations under the Code. You are encouraged to consultyour independent tax advisor regarding qualification for a preferential rate on dividend income and the rules related toinvestment income.

Subject to limitations under U.S. federal income tax law concerning credits or deductions for foreign taxes, aLuxembourg withholding tax imposed on dividends described above under “Material Luxembourg Tax Considerations forU.S. Holders of Common Shares—Tax Regime Applicable to Distributions—Luxembourg Withholding Tax” generallywould be treated as a foreign income tax eligible for credit against a U.S. Holder’s U.S. federal income tax liability (or at aU.S. Holder’s election, may be deducted in computing taxable income if the U.S. Holder has elected to deduct all foreignincome taxes for the taxable year). The rules with respect to foreign tax credits are complex and U.S. Holders areencouraged to consult their independent tax advisors regarding the availability of the foreign tax credit under their particularcircumstances.

Taxation of Capital Gains. Gain or loss realized by a U.S. Holder on the sale, exchange or other taxable dispositionof common shares will be subject to U.S. federal income taxation as capital gain or loss in an amount equal to the differencebetween the amount realized (including the gross amount of the proceeds before the deduction of any foreign tax) on thesale, exchange or other taxable disposition and such U.S. Holder’s adjusted tax basis in the common shares. The capitalgains of a U.S. Holder that is an individual, estate or trust currently will be subject to a reduced rate of U.S. federal incometax (with the applicable rate based on the income and filing status of the U.S. Holder) if the holder’s holding period for thecommon shares exceeded one year as of the time of the disposition. The deductibility of capital losses is subject to certainlimitations. Capital gain or loss, if any, realized by a U.S. Holder on the sale, exchange or other taxable disposition ofcommon shares generally will be treated as U.S. source income or loss for U.S. foreign tax credit purposes. Consequently, inthe case of a disposition of shares that is subject to Luxembourg or other foreign income tax imposed on the gain, the U.S.Holder may not be able to benefit from the foreign tax credit for that foreign income tax (i.e., because gain on the dispositionwould be U.S. source). Alternatively, the U.S. Holder may take a deduction for the foreign income tax if such holder doesnot take a credit for any foreign income tax during the taxable year.

Reporting Requirements Regarding Foreign Financial Accounts. Certain U.S. Holders who are individuals and whohold “specified foreign financial assets” (as defined in section 6038D of the Code) with values in excess of certain dollarthresholds, as prescribed by applicable U.S. Treasury Regulations, are required to report such assets on IRS Form 8938 withtheir U.S. federal income tax returns. Specified foreign financial assets include stock of a non-U.S. corporation (such as ourcommon shares) that is not held in an account maintained by a “financial institution” (as defined in section 1471(d)(5) of theCode). An individual who fails to timely furnish the required information may be subject to a penalty. Additionally, in theevent a U.S. Holder does not file the required information, the statute of limitations may not close until three years after suchinformation is filed. Under certain circumstances, an entity may be treated as an individual for purposes of the foregoingrules. Investors are urged to consult their tax advisor regarding these reporting requirements and any other reportingrequirements that may be applicable to their particular circumstances.

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Additional Medicare Tax on Net Investment Income. An additional 3.8% Medicare tax is imposed on the “net

investment income” of certain U.S. citizens and resident aliens and on the undistributed “net investment income” of certainestates and trusts. Among other items, “net investment income” generally includes dividends and certain net gain from thedisposition of property, less certain deductions. Investors are encouraged to consult their independent tax advisors withrespect to this additional tax.

Foreign Account Tax Compliance Act. Pursuant to the Foreign Account Tax Compliance Act (“FATCA”), a 30%withholding tax will be imposed on certain payments to U.S. Holders (or to certain foreign financial institutions, investmentfunds, and other non-U.S. persons receiving such payments on a U.S. Holder’s behalf) and certain non-U.S. financialinstitutions that fail to comply with certain information-reporting, account identification, withholding, certification and otherFATCA-related requirements in respect of their direct and indirect U.S. shareholders and/or U.S. accountholders. Amountsthat a U.S. Holder receives could be subject to withholding under FATCA if such U.S. Holder holds the common sharesthrough another person (e.g., a foreign bank or broker) that is subject to withholding under FATCA because it fails tocomply with these requirements (even if such U.S. Holder would not otherwise have been subject to withholding).

To avoid becoming subject to FATCA withholding, we and other non-U.S. financial institutions may be required toreport information to the IRS regarding the holders of our common shares and to withhold on a portion of payments underthe common shares to certain holders that fail to comply with the relevant information reporting requirements (or the holdersof the common shares directly or indirectly through certain non-compliant intermediaries).

Prospective investors should consult their tax advisors regarding the potential impact of FATCA, the LuxembourgIntergovernmental Agreement and any non-U.S. legislation implementing FATCA on the investment in our common shares.

Non-U.S. Holders

Dividends. A Non-U.S. Holder generally will not be subject to U.S. federal income tax on dividends received on ourcommon shares, unless the dividends are effectively connected with the holder’s conduct of a trade or business in the U.S.and, if required by an applicable income tax treaty, the dividends are attributable to a permanent establishment maintained bythe holder in the U.S. or unless the holder is subject to backup withholding, as discussed below. Except to the extentotherwise provided under an applicable income tax treaty, a Non-U.S. Holder generally will be taxed in the same manner asa U.S. Holder on dividends that are effectively connected with the Holder’s conduct of a trade or business in theU.S. Effectively connected dividends received by a corporate Non-U.S. Holder may also, under certain circumstances, besubject to an additional “branch profits tax” at a 30% rate (or, if applicable, a lower treaty rate), subject to certainadjustments.

Taxation of Capital Gains. In general, a Non-U.S. Holder of common shares will not be subject to U.S. federalincome or withholding tax with respect to any gain recognized on a sale, exchange or other taxable disposition of suchcommon shares unless:

the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the U.S. (and ifrequired by an applicable income tax treaty, is also attributable to a permanent establishment that the Non-U.S.Holder maintains in the U.S.), in which case, the Non-U.S. Holder will generally be subject to regular graduatedrates in the same manner as a U.S. Holder, and if the Non-U.S. Holder is a corporation, may be subject to abranch profits tax equal to 30% (or such lower rate provided by an applicable income tax treaty) of its effectivelyconnected earnings and profits for the taxable year, subject to certain adjustments;

the Non-U.S. Holder is an individual who is present in the U.S. for 183 or more days in the taxable year of thesale, exchange or other taxable disposition and meets certain other

19

requirements, in which case the gain generally will be subject to a flat 30% tax that may be offset by U.S. sourcecapital losses (even though the Non-U.S. Holder is not considered a resident of the U.S.);

our common shares constitute a U.S. real property interest by reason of our status as a “United States realproperty holding corporation” (“USRPHC”), for U.S. federal income tax purposes at any time within the shorterof the five-year period preceding your disposition of, or your holding period for, our common shares; or

the Non-U.S. Holder is subject to backup withholding, as discussed below.

We believe that, as of March 1, 2020, we are not currently and will not become a USRPHC in the foreseeable future.However, because the determination of whether we are a USRPHC depends on the fair market value of our U.S. realproperty relative to the fair market value of our non-U.S. real property and other business assets, we cannot assure you thatwe will not become a USRPHC in the future. Even if we become a USRPHC, however, as long as our common shares are“regularly traded,” as defined by applicable U.S. Treasury Regulations, on an established securities market, such commonshares will be treated as U.S. real property interests only if you actually or constructively hold own more than 5% of suchregularly traded common shares at any time during the shorter of the five-year period preceding your disposition of, or yourholding period for, our common shares.

Backup Withholding and Information Reporting. In general, dividends on common shares, and the proceeds of asale, exchange or other disposition of common shares for cash, paid within the U.S. or through certain U.S. related financialintermediaries to a U.S. Holder or a Non-U.S. Holder are subject to information reporting to the IRS and may be subject tobackup withholding unless the holder is an exempt recipient, is an exempt foreign person or, in the case of backupwithholding, provides an accurate taxpayer identification number and certifies under penalty of perjury that the holder is aU.S. person and is not subject to backup withholding.

Backup withholding is not an additional tax. Generally, a holder may obtain a refund of any amounts withheld underthe backup withholding rules that exceed such holder’s U.S. federal income tax liability by timely filing a refund claim withthe IRS. The amount of any backup withholding withheld from a payment to a holder will be allowed as a credit against theholder’s U.S. federal income tax liability, provided that the required information is timely furnished to the IRS. Holders areencouraged to consult their independent tax advisors regarding the application of information reporting and backupwithholding in their particular situations, the availability of exemptions and the procedures for obtaining exemptions.

You are encouraged to consult with your own independent tax advisor regarding the application of the U.S.federal income tax laws to your particular circumstances, as well as any additional tax consequences resulting froman investment in our common shares, including the applicability and effect of the tax laws of any state, local or non-U.S. jurisdiction, including estate, gift and inheritance tax laws.

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Exhibit 10.4

PACIFIC DRILLING S.A.

NOTICE OF LONG TERM INCENTIVE CASH AWARD

(Executive Award)

Pacific Drilling S.A. (the “Company”) hereby grants you (the “Participant”) the following Long Term Incentive Cash Award (the “Cash Award”). The terms and conditions of this Cash Award are set forth in this notice below.

Participant Name:

Employee Number:

Grant Name:

Issue Date:

Total Cash Award:

Vesting and PaymentSchedule:

The Cash Award will vest as follows: (i) 33⅓% of the grant on the first anniversary of the Issue Date (the “InitialVesting Date”); (ii) 33⅓% of the grant on the first anniversary of the Initial Vesting Date; and (iii) 33⅓% of thegrant on the second anniversary of the Initial Vesting Date. Except as provided below, any termination ofemployment or separation of service prior to vesting will result in forfeiture of any unvested portion of the CashAward. In the event of a Change of Control (as defined in the Company’s 2011 Omnibus Stock Incentive Plan)the unvested Cash Awards will vest as follows: 50% of the unvested Cash Award will become fully vested on theeffective date of the Change of Control with the remaining 50% of the unvested Cash Award continuing to vest onthe original vesting schedule, provided that, if you are terminated by your employer without Cause (as definedbelow) or you terminate your employment for Good Reason (as defined below) prior to the sixth monthanniversary of such Change of Control, any outstanding portion of the Cash Award shall vest and be paid on thedate your employment terminates. Notwithstanding the foregoing, no payments will be triggered as a result of aChange of Control alone unless such event also constitutes a “change in the ownership,” “change in effectivecontrol,” and/or a “change in the ownership of a substantial portion of assets” of the Company as those terms aredefined under Treasury Regulation §1.409A-3(i)(5), but only to the extent necessary to establish a time or form ofpayment that complies with Section 409A, without altering the definition of Change of Control for purposes ofdetermining whether your rights to such Award become vested or otherwise unconditional upon the Change ofControl.

“Cause” shall mean: (i) your failure to substantially perform your material duties owed to the Company or youremployer, under any employment agreement between you and the Company or your employer or otherwise(other than as a result of incapacity due to physical or mental illness); (ii) your gross negligence, fraud or willfulmisconduct in the course of your employment with your employer that has a detrimental effect on the Company,your employer or any of their Affiliates; (iii) your commission of any act or your failure to take any act that theCompany or your employer reasonably determines was intended by you to injure the reputation, business, orbusiness relationships of the Company, your employer or any of their affiliates; (iv) your indictment of, convictionof, or plea of guilty or nolo contendere to (A) any misdemeanor involving moral turpitude, theft, unethical businessconduct or

other conduct which could reflect in some material fashion unfavorably upon the Company, your employer or anyof their affiliates or (B) any felony (or the equivalent of such misdemeanor or felony in a jurisdiction other than theUnited States); (v) your material breach of any employment agreement between yourself and your employer,including without limitation, any of the restrictive covenants contained therein; or (vi) your intentional, materialmisappropriation, embezzlement or misuse of funds or property belonging to the Company, your employer or anyof their Affiliates.

“Good Reason” shall mean: (i) A material diminution in your title, duties or responsibilities, or the assignment toyou of duties or responsibilities inconsistent in any material respect with your title, duties and responsibilities asset forth in any employment agreement between you and your employer; (ii) A material reduction in your basesalary, other than as part of an across-the-board reduction in the salaries of other similarly situated employees ofthe Company or your employer; (iii) Any reduction in the aggregate compensation and benefits provided to youunder any employment agreement between you and your employer, other than any such reduction that is part ofan across-the-board reduction in aggregate compensation and benefits provided to other similarly situatedemployees of the Company or your employer; or (iv) Any material breach by your employer of any employmentagreement between yourself and your employer. Notwithstanding the foregoing, you shall not have the right toterminate your employment hereunder for Good Reason unless (1) within 30 days of the initial existence of thecondition or conditions giving rise to such right you provide written notice to the Company of the existence of suchcondition or conditions, and (2) the Company fails to remedy such condition or conditions within 30 days followingthe receipt of such written notice (the “Cure Period”). If any such condition is not remedied within the Cure Period,you must terminate your employment with the Company within a reasonable period of time, not to exceed 30days, following the end of the Cure Period.

Other Terms Applicable tothe Cash Award

Administration; Amendment: The Cash Award will be administered by the Committee, which has the authority tointerpret, administer, reconcile any inconsistency in, correct any default in and supply any omission in, this noticeand make any other determination and take any other action that the Committee deems necessary or desirablefor the administration of the Cash Award. The Committee may waive any conditions or rights under, or amendany terms of the Cash Award, prospectively or retroactively; provided, however, that any such waiver oramendment that would materially and adversely impair your rights will not to that extent be effective without yourconsent. Except as otherwise provided herein, all determinations, interpretations and other decisions under orwith respect to the Cash Award by the Committee shall be final, conclusive and binding.

Tax Matters: You will not receive your cash following the vesting of the Cash Award unless you pay, or makeacceptable arrangements to pay, any taxes required to be withheld as a result of the vesting and payment of theaward. You hereby authorize withholding from payroll or any other payment due to you from the Company or anyAffiliate to satisfy any such withholding tax obligation. The provisions of this notice are intended to comply withSection 409A of the Code, and all such provisions shall be construed and interpreted accordingly. For purposesof Section 409A of the Code, each payment made under this notice will be treated as a separate payment.Notwithstanding any provision of this notice to the contrary, if necessary to comply with the restriction in Section409A(a)(2)(B) of the Code concerning payments to “specified employees” (as defined in Section 409A of theCode) any payment on account of your separation from service that would otherwise be due hereunder within sixmonths after such separation will be delayed until the first business day of the seventh month following the dateof your termination and the first such payment will include the cumulative amount of any payments that wouldhave been paid prior to such date if not for such restriction. Notwithstanding anything contained herein to

the contrary, you will not be considered to have terminated employment with the Company for purposes of thisnotice unless you would be considered to have incurred a “separation from service” from the Company within themeaning of Section 409A.

Miscellaneous: The Company and its Affiliates reserves the right to terminate your service at any time and forany reason without thereby incurring any liability to you. You may not sell, transfer, pledge, exchange,hypothecate or dispose of the Cash Award.

Governing Law: The validity, construction and effect of this notice shall be determined in accordance with thelaws of the State of New York, without giving effect to the conflict of laws provisions thereof.

By clicking “Agree” below, you acknowledge receipt of this Notice, and agree that (a) you have carefully read, fully understand andagree to all of the terms and conditions described in this Notice; (b) you understand and agree that this Notice, includingany attachments, constitutes the entire understanding between you and the Company regarding this Cash Award, and that anyprior agreements, commitments or negotiations concerning this Cash Award are replaced and superseded; (c) you have been givenan opportunity to consult your own legal and tax counsel with respect to all matters relating to this grant prior to agreeing and thatyou have either consulted such counsel or voluntarily declined to consult such counsel and (d) any tax liability or other adverse taxconsequences to you resulting from the grant or vesting of the Cash Award will be the responsibility of, and will be borne entirelyby, you.

In addition, by clicking “Agree” below you are consenting to receive documents from the Company and Solium Capital Inc. or anyfuture plan administrator (the “Administrator”) by means of electronic delivery. You agree that you have received notice thatdelivery of the Notice of Long Term Incentive Cash Award, and any other documents that the Company is required or desires todeliver to you will be made electronically through the Administrator’s website or via the most recent email account that theCompany has on file for you at the time of the document distribution. If documents are posted to the Administrator’s websiterather than emailed directly to you, then the Company or the Administrator will send you an email notifying you that a document ordocuments have been posted and instruction on how to access those documents. You understand that in order to view thesedocuments you will need a connection to the internet, you will need to log into your email and/or the Administrator’s intranet page,and you will need to have internet web browsing software and software that can process PDF documents, such as Adobe Reader,installed on the computer you are using in order to view the documents being delivered to you. These programs and an internetconnection are available on your workplace computer. If you are attempting to access these documents from your home computerand you do not have access to this software, the Company will provide you with free software and technical assistance in order toaccess the documents. The only cost to you of viewing the documents electronically should be any charges you may incur forconnection to the internet, to the extent you do not access the documents from your work computer and you do not have access toa free internet connection outside of work.

Pacific Drilling S.A.

SOCIÉTÉ ANONYME

8-10 Avenue de la Gare

L-1610 Luxembourg

By:

Title: CEO

Exhibit 10.6

PACIFIC DRILLING S.A.2018 OMNIBUS STOCK INCENTIVE PLANRESTRICTED STOCK UNIT AGREEMENT

(Executive Award)

Pacific Drilling S.A. (the “Company”) hereby grants you (the “Participant”) the following restricted stock units(“RSUs”) representing the right to receive an equivalent number of shares of the Company’s share capital (“Shares”). Theterms and conditions of this grant of RSUs are set forth in this Restricted Stock Unit Agreement (this “Agreement”), as wellas in the Pacific Drilling S.A. 2018 Omnibus Stock Incentive Plan (the “Plan”), which is made a part of this document.Except as otherwise defined in this Agreement, capitalized terms have the respective meanings set forth in the Plan.

Date of Grant: Name of Participant: Number of RSUs: 1. The Award. Effective on the Date of Grant, the Company grants to the Participant under the Plan the total numberof RSUs specified above, subject to the terms, conditions, and restrictions set forth in the Plan and in this Agreement.

2. Terms of the Award.

(a) Vesting Schedule. Subject to the terms and conditions set forth in this Agreement and the Plan (and yourcontinued employment or service on each Vesting Date), the RSUs will vest as follows: one-third of the grant on each ofJanuary 1, 2020, 2021 and 2022 (each such date, a “Vesting Date”). Any fractional RSU resulting from the application ofthe vesting schedule shall be aggregated and the RSU resulting from such aggregation shall vest on the final Vesting Date.

(b) Termination of Employment or Service.

(i) Except as otherwise provided herein, if your employment with or service to the Company or itsAffiliates terminates for any reason, subject always to any terms and conditions in the Plan or this Agreement,vesting of your RSUs immediately stops and any unvested RSUs as of such date of termination shall be forfeitedimmediately.

(ii) Except as set forth in Section 2(c), if your employment is terminated by the Company without Cause(and other than due to death or disability) or if you terminate your employment for Good Reason, then your RSUsthat were scheduled to vest in the twelve months following your termination shall vest on the date of suchtermination.

(c) Change of Control.

(i) If a Change of Control event occurs, any outstanding unvested RSUs shall continue to vest inaccordance with the vesting schedule set forth in Section 2(a), conditioned on your continued employment or service;provided, however, that any unvested RSUs will become fully vested on the earlier to occur of (A) the firstanniversary of the consummation of the Change of Control, or (B) the date you are terminated by your employerwithout Cause or you terminate your employment for Good Reason on or after the Change of Control.

(ii) If your employment is terminated by your employer without Cause and such termination occursafter the entry into a signed definitive agreement which if consummated would constitute a Change of Control, thenthe RSUs shall remain outstanding until the date of such Change of Control and will become fully vested on the dateof such Change of Control (for the avoidance of doubt only if such Change of Control occurs).

(d) Definitions. For purposes of this Agreement,

(i) “Cause” shall mean: (A) your failure to substantially perform your material duties owed to theCompany or your employer, under any employment agreement between you and the Company or your employer orotherwise (other than as a result of incapacity due to physical or mental illness); (B) your gross negligence, fraud orwillful misconduct in the course of your employment with your employer that has a detrimental effect on theCompany, your employer or any of their Affiliates; (C) your commission of any act or your failure to take any actthat the Company or your employer reasonably determines was intended by you to injure the reputation, business, orbusiness relationships of the Company, your employer or any of their affiliates; (D) your indictment of, convictionof, or plea of guilty or nolo contendere to (1) any misdemeanor involving moral turpitude, theft, unethical businessconduct or other conduct which could reflect in some material fashion unfavorably upon the Company, youremployer or any of their affiliates or (2) any felony (or the equivalent of such misdemeanor or felony in a jurisdictionother than the United States); (E) your material breach of any employment agreement between yourself and youremployer, including without limitation, any of the restrictive covenants contained therein; or (F) your intentional,material misappropriation, embezzlement or misuse of funds or property belonging to the Company, your employeror any of their Affiliates.

(ii) “Good Reason” shall mean: (A) a material diminution in your title, duties or responsibilities, or theassignment to you of duties or responsibilities inconsistent in any material respect with your title, duties andresponsibilities as set forth in any employment agreement between you and your employer; (B) a material reductionin your base salary, other than as part of an across-the-board reduction in the salaries of other similarly situatedemployees of the Company or your employer; (C) any reduction in the aggregate compensation and benefitsprovided to you under any employment agreement between you and your employer, other than any such reductionthat is part of an across-the-board reduction in aggregate compensation and benefits provided to other similarlysituated employees of the Company or your employer; or (D) any material breach by your employer of anyemployment agreement between yourself and your employer. Notwithstanding the foregoing, you shall not have theright to terminate your employment hereunder for Good Reason unless (1) within 30 days of the initial existence ofthe condition or conditions giving rise to such right you provide written notice to the Company of the existence ofsuch condition or conditions, and (2) the Company fails to remedy such condition or conditions within 30 daysfollowing the receipt of such written notice (the “Cure Period”). If any such condition is not remedied within theCure Period, you must terminate your employment with the Company within a reasonable period of time, not toexceed 30 days, following the end of the Cure Period.

3. Issuance of Shares; Legends.

(a) As soon as practicable following the date any RSUs vest under this Agreement, but no later than 30 daysafter such date, the Company shall deliver to you the number of Shares to which you are entitled under this Agreement. TheCompany, in its sole discretion, may elect to deliver the Shares either in certificate form or electronically to a brokerageaccount established for your benefit at a brokerage/financial institution selected by the Company, containing such legends asmay be required pursuant to applicable securities laws or any other agreement to which you are a party. You agree tocomplete and sign any documents and take any additional actions that the Company may request to enable it to deliver theShares on your behalf.

(b) You agree that the Shares which you may acquire pursuant to this Agreement will not be sold or otherwisedisposed of in any manner which would constitute a violation of any applicable federal, state, or foreign securities laws. Youalso agree that (i) the Company may refuse to register the transfer of the Shares acquired

pursuant to this Agreement on the stock transfer records of the Company if such proposed transfer would, in the opinion ofcounsel satisfactory to the Company, constitute a violation of any applicable securities law, and (ii) the Company may giverelated instructions to its transfer agent, if any, to stop registration of the transfer of such Shares.

4. Nontransferability of RSUs. You may not sell, transfer, pledge, exchange, hypothecate or dispose of the RSUs. Abreach of these terms of this Agreement shall cause a forfeiture of the RSUs.

5. No Shareholder Rights. The RSUs granted pursuant to this Agreement do not and shall not entitle you to any rightsof a holder of Shares prior to the date Shares are issued to you in settlement of the Award.

6. Tax Matters.

(a) Tax Liability and Withholding. You shall be required to pay to the Company, and the Company shall havethe right to deduct from any compensation paid to you, the amount of any required withholding taxes in respect of the RSUsand to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of suchwithholding taxes prior to the issuance of any Shares. In order to satisfy any federal, state or local tax withholdingobligations arising from the vesting of RSUs under this Agreement, the Company shall withhold from the Shares to be issuedupon the vesting of such RSUs, Shares with a value equal to the minimum statutory amount required to be withheld. Thevalue of the Shares to be withheld shall be based on the Fair Market Value on the date that the amount of tax required to bewithheld is determined.

(b) Section 409A. This Agreement is intended to comply with Section 409A of the Code or an exemptiontherefrom, and all such provisions shall be construed and interpreted accordingly. For purposes of Section 409A of the Code,each payment made under this Agreement will be treated as a separate payment. Notwithstanding anything contained hereinto the contrary, if necessary to avoid penalties under Section 409A of the Code, the Participant will not be considered to haveterminated employment for purposes of this Agreement unless the Participant would be considered to have incurred a"separation from service” within the meaning of Section 409A of the Code.

7. Compliance With Securities Law. Notwithstanding any provision of this Agreement to the contrary, the issuanceof Shares will be subject to compliance with all applicable requirements of federal, state, or foreign law with respect to suchsecurities and with the requirements of any stock exchange or market system upon which the Shares may then be listed. NoShares will be issued hereunder if such issuance would constitute a violation of any applicable federal, state, or foreignsecurities laws or other law or regulations or the requirements of any stock exchange or market system upon which theShares may then be listed. In addition, Shares will not be issued hereunder unless (a) a registration statement under theSecurities Act of 1933, as amended (the “Act”), is at the time of issuance in effect with respect to the shares issued or (b) inthe opinion of legal counsel to the Company, the shares issued may be issued in accordance with the terms of an applicableexemption from the registration requirements of the Act. The inability of the Company to obtain from any regulatory bodyhaving jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance andsale of any shares subject to the Award will relieve the Company of any liability in respect of the failure to issue such sharesas to which such requisite authority has not been obtained. As a condition to any issuance hereunder, the Company mayrequire you to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicablelaw or regulation and to make any representation or warranty with respect to such compliance as may be requested by theCompany. From time to time, the Board and appropriate officers of the Company are authorized to take the actions necessaryand appropriate to file required documents with governmental authorities, stock exchanges, and other appropriate Persons tomake shares of Shares available for issuance.

8. Clawback. Notwithstanding anything to the contrary contained herein, the Company may cancel the RSUs if youviolate any non-competition, non-solicitation, non-disparagement or non-disclosure covenant or agreement with theCompany or any Affiliate, including any covenants contained in the Pacific Drilling Global Employee Handbook (afterhaving been given notice of any such violation and giving effect to any applicable

cure period set forth therein), as determined by the Company in good faith. In such event, you will forfeit any compensation,gain or other value realized thereafter on the vesting or settlement of the RSUs, the sale or other transfer of the RSUs, or thesale of Shares acquired in respect of the RSUs, and must promptly repay such amounts to the Company.

9. Retention Rights. This Agreement does not give you the right to continue in the employ of the Company or itsAffiliates or to be retained by the Company or its Affiliates in any other capacity. The Company and its Affiliates reserve theright to terminate your employment or service at any time and for any reason.

10. Tax Disclaimer. You agree that you are responsible for consulting your own tax advisor as to the tax consequencesassociated with the grant and vesting of your RSUs. The tax rules governing RSUs are complex, change frequently anddepend on the individual taxpayer’s situation.

By accepting this grant of RSUs, you acknowledge that any tax liability or other adverse tax consequences to youresulting from the grant or vesting of the RSUs will be the responsibility of, and will be borne entirely by, you. YOU ARETHEREFORE ENCOURAGED TO CONSULT YOUR OWN TAX ADVISOR BEFORE ACCEPTING THE GRANT OFTHESE RSUS.

11. The Plan and Other Agreements. The text of the Plan is incorporated in this Agreement by reference. Capitalizedterms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan. ThisAgreement and the Plan constitute the entire understanding between you and the Company regarding this grant of RSUs.Any prior agreements, commitments or negotiations concerning this grant of RSUs are superseded. To the extent the terms ofthis Agreement conflict with the terms of the Plan, the terms of this Agreement shall prevail.

12. Miscellaneous Provisions.

(a) You understand and acknowledge that (i) the Plan is entirely discretionary, (ii) the Company has reservedthe right to amend, suspend or terminate the Plan at any time, (iii) the grant of RSUs does not in any way create anycontractual or other right to receive additional grants of RSUs (or benefits in lieu of RSUs) at any time or in any amount and(iv) all determinations with respect to any additional grants, including (without limitation) the times when RSUs will begranted, the number of Shares offered, and the vesting schedule, will be at the sole discretion of the Company.

(b) You understand and acknowledge that participation in the Plan ceases upon termination of your service tothe Company for any reason, except as may explicitly be provided otherwise in the Plan or this Agreement.

13. Applicable Law. This Agreement will be interpreted and enforced under the laws of the State of Texas (withoutregard to their choice of law provisions).

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By clicking “Agree” below, you acknowledge receipt of a copy of the Plan, and agree that (a) you have carefullyread, fully understand and agree to all of the terms and conditions described in the attached Agreement and the Plandocument; (b) you understand and agree that the Plan and the Agreement, including any attachments, constitute theentire understanding between you and the Company regarding this award of RSUs, and that any prior agreements,commitments or negotiations concerning this grant of RSUs are replaced and superseded; (c) you have been given anopportunity to consult your own legal and tax counsel with respect to all matters relating to this grant of RSUs priorto accepting this Agreement and that you have either consulted such counsel or voluntarily declined to consult suchcounsel and (d) any tax liability or other adverse tax consequences to you resulting from the grant or vesting of theRSUs will be the responsibility of, and will be borne entirely by, you.

In addition, by clicking “Agree” below you are consenting to receive documents from the Company and SoliumCapital Inc. or any future plan administrator (the “Administrator”) by means of electronic delivery. You agree thatyou have received notice that delivery of the Agreement, prospectus, prospectus updates, annual reports of theCompany, and any other documents that the Company is required or desires to deliver to you as a result of yourparticipation in the 2018 Omnibus Stock Incentive Plan, or any other equity or incentive plans maintained or adoptedby the Company in the future (the “Incentive Plans”) will be made electronically through the Administrator’s websiteor via the most recent email account that the Company has on file for you at the time of the document distribution. Ifdocuments are posted to the Administrator’s website rather than emailed directly to you, then the Company or theAdministrator will send you an email notifying you that a document or documents have been posted and instructionon how to access those documents. You understand that in order to view these documents you will need a connectionto the internet, you will need to log into your email and/or the Administrator’s intranet page, and you will need tohave internet web browsing software and software that can process PDF documents, such as Adobe Reader, installedon the computer you are using in order to view the documents being delivered to you. These programs and aninternet connection are available on your workplace computer. If you are attempting to access these documents fromyour home computer and you do not have access to this software, the Company will provide you with free softwareand technical assistance in order to access the documents. The only cost to you of viewing the documentselectronically should be any charges you may incur for connection to the internet, to the extent you do not access thedocuments from your work computer and you do not have access to a free internet connection outside of work. Thisconsent shall be effective for the entire time that you are a participant in the Incentive Plans.

PACIFIC DRILLING S.A. By: Bernie G. Wolford, Jr. Title: Chief Executive Officer

Exhibit 10.7PACIFIC DRILLING S.A.

2018 OMNIBUS STOCK INCENTIVE PLANPERFORMANCE SHARE UNIT AGREEMENT

(Executive Award)

Pacific Drilling S.A. (the “Company”) hereby grants you (the “Participant”) the following performance share units(referred to as “PSUs”) representing the right to receive an equivalent number of shares of the Company’s share capital(“Shares”). The terms and conditions of this grant of PSUs are set forth in this Performance Share Unit Agreement (this“Agreement”), as well as in the Pacific Drilling S.A. 2018 Omnibus Stock Incentive Plan (the “Plan”), which is made a partof this document. The PSUs represent performance-based restricted stock units under Section 6 of the Plan. Except asotherwise defined in this Agreement, capitalized terms have the respective meanings set forth in the Plan. Date of Grant: Name of Participant: Target Number of PSUs: Performance Period: January 1, 2019 – December 31, 2021 1. The Award. Effective on the Date of Grant, the Company grants to the Participant under the Plan the target numberof PSUs specified above (the “Target Award”), subject to the terms, conditions, and restrictions set forth in the Plan and inthis Agreement. Any PSUs that do not vest or are not earned as of the end of the Performance Period shall be forfeited.

2. Terms of the Award.

(a) Vesting Conditions.

(i) Subject to the terms and conditions herein, between 0% and 200% of the Target Award will vest andbe earned based on the Company’s Total Shareholder Return, or TSR, relative to the Total Shareholder Return of thePeer Group for the Performance Period specified above (the “Performance Goal”) in accordance with the followingmatrix (the percentage of the Target Award that is earned based upon the achievement of the Performance Goal shallbe referred to as “Earned PSUs”):

Company Rank % of Target Award Earned

1 200%2 150%3 100%4 50%5 25%6 or 7 0%

(ii) Notwithstanding anything herein, if the Company’s absolute TSR is negative for the Performance

Period, any payout under this Award will be capped at the Target Award. Further, in connection with certaintransactions or developments involving the companies in the Peer Group, the Peer

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Group will be adjusted as follows and the percentage of the Target Award earned will be determined based on therevised chart below:

Scenario TreatmentPeer is acquired or goes private If acquired within the first year of Performance Period,

exclude from the Peer Group

If acquired after the first year of Performance Period,measure TSR on acquisition date

Peer goes bankrupt If still trading, TSR will continue to be calculated

If share price can no longer be determined, TSR will bedeemed to be -100%

Two peers merge Acquired peer: same treatment as outlined under “peer isacquired”

Acquiring peer: continue to measure TSR

Company Rank% of Target Award Earned

5 Peers 4 Peers 3 Peers1 200% 200% 200%2 150% 150% 100%3 100% 100% 75%4 50% 50% 0%5 25% 0% n/a6 0% n/a n/a

(b) Termination of Employment or Service. Except as set forth in Section 2(c), if your employment with or

service to the Company or its Affiliates terminates for any reason prior to the end of the Performance Period, subject alwaysto any terms and conditions in the Plan or this Agreement, vesting of your PSUs immediately stops and the outstanding PSUsas of such date of termination shall be forfeited immediately.

(c) Change of Control.

(i) If a Change of Control event occurs prior to the end of the Performance Period, then thePerformance Period shall terminate as of the date of the Change of Control event and the level of achievement of thePerformance Goal shall be evaluated as of such date in accordance with Section 3.

(ii) Following such a Change of Control, payout and vesting of the Earned PSUs will be as follows:

(A) 75% of the Earned PSUs shall vest and be settled within 30 days after the date of aChange of Control;

(B) the remaining 25% of the Earned PSU will vest and be settled within 30 days of theearliest to occur of the following, provided you remain employed as of such date (except asotherwise set forth in subpart (3)): (1) December 31, 2021; (2) the first anniversary of theconsummation of the Change of Control, or (3) the date of your termination of employmentif you are terminated by your employer without Cause or you terminate your employment forGood Reason.

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(iii) If your employment is terminated by your employer without Cause (and other than due to death ordisability) and such termination occurs after the entry into a signed definitive agreement which if consummatedwould constitute a Change of Control, then your Target Award shall remain outstanding and will be eligible tobecome Earned PSUs as if you had remained employed through the earlier of the date of the Change of Control orthe end of the Performance Period (for the avoidance of doubt, subject to the achievement of the Performance Goal).

(iv) On a Change of Control, any PSUs that do not become Earned PSUs shall automatically be forfeitedand cancelled without any payment on the date of the Change of Control.

(d) Definitions. For purposes of this Agreement:

(i) “Cause” shall mean: (A) your failure to substantially perform your material duties owed to theCompany or your employer, under any employment agreement between you and the Company or your employer orotherwise (other than as a result of incapacity due to physical or mental illness); (B) your gross negligence, fraud orwillful misconduct in the course of your employment with your employer that has a detrimental effect on theCompany, your employer or any of their Affiliates; (C) your commission of any act or your failure to take any actthat the Company or your employer reasonably determines was intended by you to injure the reputation, business, orbusiness relationships of the Company, your employer or any of their affiliates; (D) your indictment of, convictionof, or plea of guilty or nolo contendere to (1) any misdemeanor involving moral turpitude, theft, unethical businessconduct or other conduct which could reflect in some material fashion unfavorably upon the Company, youremployer or any of their affiliates or (2) any felony (or the equivalent of such misdemeanor or felony in a jurisdictionother than the United States); (E) your material breach of any employment agreement between yourself and youremployer, including without limitation, any of the restrictive covenants contained therein; or (F) your intentional,material misappropriation, embezzlement or misuse of funds or property belonging to the Company, your employeror any of their Affiliates.

(ii) “Good Reason” shall mean: (A) a material diminution in your title, duties or responsibilities, or theassignment to you of duties or responsibilities inconsistent in any material respect with your title, duties andresponsibilities as set forth in any employment agreement between you and your employer; (B) a material reductionin your base salary, other than as part of an across-the-board reduction in the salaries of other similarly situatedemployees of the Company or your employer; (C) any reduction in the aggregate compensation and benefitsprovided to you under any employment agreement between you and your employer, other than any such reductionthat is part of an across-the-board reduction in aggregate compensation and benefits provided to other similarlysituated employees of the Company or your employer; or (D) any material breach by your employer of anyemployment agreement between yourself and your employer. Notwithstanding the foregoing, you shall not have theright to terminate your employment hereunder for Good Reason unless (1) within 30 days of the initial existence ofthe condition or conditions giving rise to such right you provide written notice to the Company of the existence ofsuch condition or conditions, and (2) the Company fails to remedy such condition or conditions within 30 daysfollowing the receipt of such written notice (the “Cure Period”). If any such condition is not remedied within theCure Period, you must terminate your employment with the Company within a reasonable period of time, not toexceed 30 days, following the end of the Cure Period.

(iii) “Peer Group” shall refer to the following companies: Transocean Ltd., Ensco plc, Rowan Companiesplc, Diamond Offshore Drilling, Inc., Noble Corporation plc, and Seadrill Ltd.

(iv) “Total Shareholder Return” or “TSR” as applied to the Company or any company in the Peer Groupmeans stock price appreciation from the beginning to the end of the Performance Period, including dividends anddistributions made or declared (assuming such dividends or distributions are reinvested in the common stock of theCompany or any company in the Peer Group) during the Performance Period, expressed as a percentage return, usingthe following formula:

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TSR = (A/B)-1, with A equal to the Ending Stock Price including dividends paid and B equal to theBeginning Stock Price.

For purposes of computing TSR, the Beginning Stock Price will be the average closing price of a Share over the 9trading days ending on the day before the first day of the Performance Period and all trading days in the first monthof the Performance Period, or other relevant measurement period, and the Ending Stock Price will be the averageclosing price of a Share over the 30 trading days ending on the last day of the Performance Period or othermeasurement period. TSR of the Company or any company in the Peer Group shall be equitably adjusted to reflectany spin off, stock split, reverse stock split, stock dividend, recapitalization, or reclassification or other similarchange in the number of outstanding shares of common stock.

3. Determination and Payout of Earned PSUs.

(a) Following the end of the Performance Period, the Committee shall, within a reasonably practicable time,determine the extent, if any, to which the Performance Goal has been achieved with respect to the Performance Period andthe percentage of the Target Award, if any, earned. The Committee’s determinations shall be final, conclusive and bindingon the Participant, and on all other persons, to the maximum extent permitted by law. Except as otherwise provided herein inconnection with a Change of Control, payment in respect of the Earned PSUs shall be made promptly following theCommittee’s determination, but in any event, no later than March 15 of the year following the end of the Performance Period(such date being the “Payment Date”). Any PSUs that do not become Earned PSUs shall automatically be forfeited andcancelled without any payment.

(b) All payments in respect of earned PSUs shall be made in freely transferable Shares, which shall be subject tothe Company’s policies, including its insider trading policy. No fractional Shares shall be issued pursuant to this Award, andany fractional Share resulting from any calculation made in accordance with the terms of this Agreement shall be roundeddown to the next whole share.

4. Issuance of Shares; Legends.

(a) The Company, in its sole discretion, may elect to deliver any Shares acquired pursuant to this Agreementeither in certificate form or electronically to a brokerage account established for your benefit at a brokerage/financialinstitution selected by the Company, containing such legends as may be required pursuant to applicable securities laws orany other agreement to which you are a party. You agree to complete and sign any documents and take any additional actionsthat the Company may request to enable it to deliver the Shares on your behalf.

(b) You agree that the Shares which you may acquire pursuant to this Agreement will not be sold or otherwisedisposed of in any manner which would constitute a violation of any applicable federal, state, or foreign securities laws. Youalso agree that (i) the Company may refuse to register the transfer of the Shares acquired pursuant to this Agreement on thestock transfer records of the Company if such proposed transfer would, in the opinion of counsel satisfactory to theCompany, constitute a violation of any applicable securities law, and (ii) the Company may give related instructions to itstransfer agent, if any, to stop registration of the transfer of such Shares.

5. Nontransferability of PSUs. You may not sell, transfer, pledge, exchange, hypothecate or dispose of the PSUs. Abreach of these terms of this Agreement shall cause a forfeiture of the PSUs.

6. No Shareholder Rights. The PSUs granted pursuant to this Agreement do not and shall not entitle you to any rightsof a holder of Shares prior to the date Shares are issued to you in settlement of the Award.

7. Tax Matters.

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(a) Tax Liability and Withholding. You shall be required to pay to the Company, and the Company shall havethe right to deduct from any compensation paid to you, the amount of any required withholding taxes in respect of the PSUsand to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of suchwithholding taxes prior to the issuance of any Shares. In order to satisfy any federal, state or local tax withholdingobligations arising from the settlement of the PSUs under this Agreement, the Company shall withhold from the Shares to beissued upon such settlement, Shares with a value equal to the minimum statutory amount required to be withheld. The valueof the Shares to be withheld shall be based on the Fair Market Value on the date that the amount of tax required to bewithheld is determined.

(b) Section 409A. This Agreement is intended to comply with Section 409A of the Code or an exemptiontherefrom, and all such provisions shall be construed and interpreted accordingly. For purposes of Section 409A of the Code,each payment made under this Agreement will be treated as a separate payment. Notwithstanding anything contained hereinto the contrary, if necessary to avoid penalties under Section 409A of the Code, the Participant will not be considered to haveterminated employment for purposes of this Agreement unless the Participant would be considered to have incurred a"separation from service” within the meaning of Section 409A of the Code.

8. Compliance With Securities Law. Notwithstanding any provision of this Agreement to the contrary, the issuanceof Shares will be subject to compliance with all applicable requirements of federal, state, or foreign law with respect to suchsecurities and with the requirements of any stock exchange or market system upon which the Shares may then be listed. NoShares will be issued hereunder if such issuance would constitute a violation of any applicable federal, state, or foreignsecurities laws or other law or regulations or the requirements of any stock exchange or market system upon which theShares may then be listed. In addition, Shares will not be issued hereunder unless (a) a registration statement under theSecurities Act of 1933, as amended (the “Act”), is at the time of issuance in effect with respect to the shares issued or (b) inthe opinion of legal counsel to the Company, the shares issued may be issued in accordance with the terms of an applicableexemption from the registration requirements of the Act. The inability of the Company to obtain from any regulatory bodyhaving jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance andsale of any shares subject to the Award will relieve the Company of any liability in respect of the failure to issue such sharesas to which such requisite authority has not been obtained. As a condition to any issuance hereunder, the Company mayrequire you to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicablelaw or regulation and to make any representation or warranty with respect to such compliance as may be requested by theCompany. From time to time, the Board and appropriate officers of the Company are authorized to take the actions necessaryand appropriate to file required documents with governmental authorities, stock exchanges, and other appropriate Persons tomake shares of Shares available for issuance.

9. Clawback. Notwithstanding anything to the contrary contained herein, the Company may cancel the PSUs if youviolate any non-competition, non-solicitation, non-disparagement or non-disclosure covenant or agreement with theCompany or any Affiliate, including any covenants contained in the Pacific Drilling Global Employee Handbook (afterhaving been given notice of any such violation and giving effect to any applicable cure period set forth therein), asdetermined by the Company in good faith. In such event, you will forfeit any compensation, gain or other value realizedthereafter on the vesting or settlement of the PSUs, the sale or other transfer of the PSUs, or the sale of Shares acquired inrespect of the PSUs, and must promptly repay such amounts to the Company.

10. Retention Rights. This Agreement does not give you the right to serve as a member of the Board or be retained bythe Company or its Affiliates in any other capacity. The Company and its Affiliates reserve the right to terminate youremployment or service at any time and for any reason subject to the terms of your employment agreement.

11. Tax Disclaimer. You agree that you are responsible for consulting your own tax advisor as to the tax consequencesassociated with the grant and vesting of your PSUs. The tax rules governing PSUs are complex, change frequently anddepend on the individual taxpayer’s situation.

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By accepting this grant of PSUs, you acknowledge that any tax liability or other adverse tax consequences to youresulting from the grant or vesting of the PSUs will be the responsibility of, and will be borne entirely by, you. YOU ARETHEREFORE ENCOURAGED TO CONSULT YOUR OWN TAX ADVISOR BEFORE ACCEPTING THE GRANT OFTHESE PSUS.

12. The Plan and Other Agreements. The text of the Plan is incorporated in this Agreement by reference. Capitalizedterms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan. ThisAgreement (including any attachments and, where applicable, references to the Employment Agreement) and the Planconstitute the entire understanding between you and the Company regarding this grant of PSUs. Any prior agreements,commitments or negotiations concerning this grant of PSUs are superseded. To the extent the terms of this Agreementconflict with the terms of the Plan, the terms of this Agreement shall prevail.

13. Miscellaneous Provisions.

(a) You understand and acknowledge that (i) the Plan is entirely discretionary, (ii) the Company has reservedthe right to amend, suspend or terminate the Plan at any time, (iii) the grant of PSUs does not in any way create anycontractual or other right to receive additional grants of PSUs (or benefits in lieu of PSUs) at any time or in any amount and(iv) all determinations with respect to any additional grants, including (without limitation) the times when PSUs will begranted, the number of Shares offered, and the vesting schedule, will be at the sole discretion of the Company.

(b) You understand and acknowledge that participation in the Plan ceases upon termination of your service tothe Company for any reason, except as may explicitly be provided otherwise in the Plan or this Agreement.

14. Applicable Law. This Agreement will be interpreted and enforced under the laws of the State of Texas (withoutregard to their choice of law provisions).

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By clicking “Agree” below, you acknowledge receipt of a copy of the Plan, and agree that (a) you have carefullyread, fully understand and agree to all of the terms and conditions described in the attached Agreement and the Plandocument; (b) you understand and agree that the Plan and the Agreement, including any attachments, constitute theentire understanding between you and the Company regarding this award of PSUs, and that any prior agreements,commitments or negotiations concerning this grant of PSUs are replaced and superseded; (c) you have been given anopportunity to consult your own legal and tax counsel with respect to all matters relating to this grant of PSUs priorto accepting this Agreement and that you have either consulted such counsel or voluntarily declined to consult suchcounsel and (d) any tax liability or other adverse tax consequences to you resulting from the grant or vesting of thePSUs will be the responsibility of, and will be borne entirely by, you.

In addition, by clicking “Agree” below you are consenting to receive documents from the Company and SoliumCapital Inc. or any future plan administrator (the “Administrator”) by means of electronic delivery. You agree thatyou have received notice that delivery of the Agreement, prospectus, prospectus updates, annual reports of theCompany, and any other documents that the Company is required or desires to deliver to you as a result of yourparticipation in the 2018 Omnibus Stock Incentive Plan, or any other equity or incentive plans maintained or adoptedby the Company in the future (the “Incentive Plans”) will be made electronically through the Administrator’s websiteor via the most recent email account that the Company has on file for you at the time of the document distribution. Ifdocuments are posted to the Administrator’s website rather than emailed directly to you, then the Company or theAdministrator will send you an email notifying you that a document or documents have been posted and instructionon how to access those documents. You understand that in order to view these documents you will need a connectionto the internet, you will need to log into your email and/or the Administrator’s intranet page, and you will

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need to have internet web browsing software and software that can process PDF documents, such as Adobe Reader,installed on the computer you are using in order to view the documents being delivered to you. These programs andan internet connection are available on your workplace computer. If you are attempting to access these documentsfrom your home computer and you do not have access to this software, the Company will provide you with freesoftware and technical assistance in order to access the documents. The only cost to you of viewing the documentselectronically should be any charges you may incur for connection to the internet, to the extent you do not access thedocuments from your work computer and you do not have access to a free internet connection outside of work. Thisconsent shall be effective for the entire time that you are a participant in the Incentive Plans.

PACIFIC DRILLING S.A. By: Bernie G. Wolford, Jr. Title: Chief Executive Officer

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Exhibit 10.8

PACIFIC DRILLING S.A.2018 OMNIBUS STOCK INCENTIVE PLANRESTRICTED STOCK UNIT AGREEMENT

(Executive Award)

Pacific Drilling S.A. (the “Company”) hereby grants you (the “Participant”) the following restricted stock units(“RSUs”) representing the right to receive shares of the Company’s share capital (“Shares”). The terms and conditions of thisgrant of RSUs are set forth in this Restricted Stock Unit Agreement (this “Agreement”), as well as in the Pacific DrillingS.A. 2018 Omnibus Stock Incentive Plan (the “Plan”), which is made a part of this document. Except as otherwise defined inthis Agreement, capitalized terms have the respective meanings set forth in the Plan. Date of Grant: December 20, 2018 Name of Participant: Bernie G. Wolford Jr. Number of RSUs: 200,000 1. The Grant. Effective on the Date of Grant, the Company grants to the Participant under the Plan the total number ofRSUs specified above, subject to the terms, conditions, and restrictions set forth in the Plan and in this Agreement.

2. Vesting.

(a) Vesting Schedule. Subject to the terms and conditions set forth in this Agreement and the Plan (and yourcontinued employment or service on each Vesting Date), the RSUs will vest as follows: one-third of the grant on each of thesecond, third and fourth anniversaries of the Date of Grant (each such date, a “Vesting Date”). Any fractional RSU resultingfrom the application of the vesting schedule shall be aggregated and the RSU resulting from such aggregation shall vest onthe final Vesting Date.

(b) Termination of Employment or Service. After your service to the Company or its Affiliates terminates forany reason, subject always to any terms and conditions in the Plan or this Agreement, vesting of your RSUs immediatelystops and the RSUs that are not vested as of the date your service to the Company or its Affiliates terminates shall beforfeited immediately. Notwithstanding the preceding sentence, if your employment is terminated by the Company withoutCause (and other than due to death or disability) or if you resign for Good Reason (as used in this Agreement, “Cause” and“Good Reason” shall have the meanings defined in your employment agreement with Pacific Drilling Manpower, Inc.,effective November 19, 2018 (the “Employment Agreement”)), then your RSUs which were scheduled to vest in the nexttwelve months shall vest upon such termination or resignation; provided that if such termination or resignation is prior to thesecond anniversary of the Date of Grant, then one third of your RSUs shall vest.

(c) Change of Control.

(i) Subject to your continued employment or service on the date of a Change of Control, vesting of theRSUs that are unvested as of the Change of Control is as follows: 100% of the unvested RSUs will become fullyvested on the first anniversary of the consummation of the Change of Control, provided that, if you are terminated byyour employer without Cause or you terminate your employment for Good Reason on or after the Change of Controland prior to the first anniversary of such Change of Control, then 100% of the unvested RSUs will become fullyvested on the date of such termination.

(ii) If your employment is terminated by your employer without Cause and such termination

occurs after the entry into a signed definitive agreement which if consummated would constitute a Change ofControl, then the RSUs shall remain outstanding until the date of such Change of Control and will become fullyvested on the date of such Change of Control (for the avoidance of doubt only if such Change of Control occurs).

3. Delivery; Certificates; Legends.

(a) Within 30 days following the vesting of the RSUs, the Company shall cause a certificate or certificates forShares to be issued without legend (except for any legend required pursuant to applicable securities laws or any otheragreement to which you are a party) in your name in cancellation for the RSUs that are vested, if any, as of such date.

(b) The Company, in its sole discretion, may elect to deliver certificates either in certificate form orelectronically to a brokerage account established for your benefit at a brokerage/financial institution selected by theCompany. You agree to complete and sign any documents and take any additional actions that the Company may request toenable it to deliver the shares on your behalf.

(c) You agree that the Shares which you may acquire pursuant to this Agreement will not be sold or otherwisedisposed of in any manner which would constitute a violation of any applicable federal, state, or foreign securities laws. Youalso agree that (i) the Company may refuse to register the transfer of the Shares acquired pursuant to this Agreement on thestock transfer records of the Company if such proposed transfer would, in the opinion of counsel satisfactory to theCompany, constitute a violation of any applicable securities law, and (ii) the Company may give related instructions to itstransfer agent, if any, to stop registration of the transfer of such Shares.

4. Nontransferability of RSUs. You may not sell, transfer, pledge, exchange, hypothecate or dispose of the RSUs. Abreach of these terms of this Agreement shall cause a forfeiture of the RSUs.

5. No Shareholder Rights. The RSUs granted pursuant to this Agreement do not and shall not entitle you to any rightsof a holder of Shares prior to the date Shares are issued to you in settlement of the Award.

6. Tax Matters.

(a) Tax Liability and Withholding. You shall be required to pay to the Company, and the Company shall havethe right to deduct from any compensation paid to you, the amount of any required withholding taxes in respect of the RSUsand to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of suchwithholding taxes prior to the issuance of any Shares. You may satisfy any federal, state or local tax withholding obligationby tendering a cash payment, or, if permitted by the Committee, may elect to (a) have the Company withhold Shares fromthe Shares otherwise issuable to you under this Award or (b) deliver previously owned and unencumbered Shares. Anyelection to use Shares to satisfy any or all of your withholding tax liability must be made prior to the date that the amount oftax to be withheld is determined in accordance with applicable tax laws.

(b) Section 409A. This Agreement is intended to comply with Section 409A of the Code or an exemptiontherefrom, and all such provisions shall be construed and interpreted accordingly. For purposes of Section 409A of the Code,each payment made under this Agreement will be treated as a separate payment. Notwithstanding anything contained hereinto the contrary, if necessary to avoid penalties under Section 409A of the Code, the Participant will not be considered to haveterminated employment for purposes of this Agreement unless the Participant would be considered to have incurred a"separation from service” within the meaning of Section 409A of the Code.

7. Compliance With Securities Law. Notwithstanding any provision of this Agreement to the contrary, the issuanceof Shares will be subject to compliance with all applicable requirements of federal, state, or foreign law with respect to suchsecurities and with the requirements of any stock exchange or market system upon which the Shares may then be listed. NoShares will be issued hereunder if such issuance would constitute a violation of any applicable federal, state, or foreignsecurities laws or other law or regulations or the requirements of any stock exchange or market system upon which theShares may then be listed. In addition, Shares will not be issued hereunder unless (a) a registration statement under theSecurities Act of 1933, as amended (the “Act”), is at the time of issuance in effect with respect to the shares issued or (b) inthe opinion of legal counsel to the Company, the shares issued may be issued in accordance with the terms of an applicableexemption from the registration requirements of the Act. The inability of the Company to obtain from any regulatory bodyhaving jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance andsale of any shares subject to the Award will relieve the Company of any liability in respect of the failure to issue such sharesas to which such requisite authority has not been obtained. As a condition to any issuance hereunder, the Company mayrequire you to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicablelaw or regulation and to make any representation or warranty with respect to such compliance as may be requested by theCompany. From time to time, the Board and appropriate officers of the Company are authorized to take the actions necessaryand appropriate to file required documents with governmental authorities, stock exchanges, and other appropriate Persons tomake shares of Shares available for issuance.

8. Clawback. Notwithstanding anything to the contrary contained herein, the Company may cancel the RSUs if youviolate any non-competition, non-solicitation, non-disparagement or non-disclosure covenant or agreement with theCompany or any Affiliate (after having been given notice of any such violation and giving effect to any applicable cureperiod set forth therein), as determined by the Board (excluding you) in good faith. In such event, you will forfeit anycompensation, gain or other value realized thereafter on the vesting or settlement of the RSUs, the sale or other transfer ofthe RSUs, or the sale of Shares acquired in respect of the RSUs, and must promptly repay such amounts to the Company.

9. Retention Rights. This Agreement does not give you the right to serve as a member of the Board or be retained bythe Company or its Affiliates in any other capacity. The Company and its Affiliates reserve the right to terminate youremployment or service at any time and for any reason subject to the terms of your employment agreement.

10. Tax Disclaimer. You agree that you are responsible for consulting your own tax advisor as to the tax consequencesassociated with the grant and vesting of your RSUs. The tax rules governing RSUs are complex, change frequently anddepend on the individual taxpayer’s situation.

By accepting this grant of RSUs, you acknowledge that any tax liability or other adverse tax consequences to youresulting from the grant or vesting of the RSUs will be the responsibility of, and will be borne entirely by, you. YOU ARETHEREFORE ENCOURAGED TO CONSULT YOUR OWN TAX ADVISOR BEFORE ACCEPTING THE GRANT OFTHESE RSUS.

11. The Plan and Other Agreements. The text of the Plan is incorporated in this Agreement by reference. Capitalizedterms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan. ThisAgreement (including any attachments and, where applicable, references to the Employment Agreement) and the Planconstitute the entire understanding between you and the Company regarding this grant of RSUs. Any prior agreements,commitments or negotiations concerning this grant of RSUs are superseded. To the extent the terms of this Agreementconflict with the terms of the Plan, the terms of this Agreement shall prevail.

12. Miscellaneous Provisions.

(a) You understand and acknowledge that (i) the Plan is entirely discretionary, (ii) the Company has reservedthe right to amend, suspend or terminate the Plan at any time, (iii) the grant of RSUs does not in any way

create any contractual or other right to receive additional grants of RSUs (or benefits in lieu of RSUs) at any time or in anyamount and (iv) all determinations with respect to any additional grants, including (without limitation) the times when RSUswill be granted, the number of Shares offered, and the vesting schedule, will be at the sole discretion of the Company.

(b) You understand and acknowledge that participation in the Plan ceases upon termination of your service tothe Company for any reason, except as may explicitly be provided otherwise in the Plan or this Agreement.

13. Applicable Law. This Agreement will be interpreted and enforced under the laws of the State of Texas (withoutregard to their choice of law provisions).

* * *

By clicking “Agree” below, you acknowledge receipt of a copy of the Plan, and agree that (a) you have carefullyread, fully understand and agree to all of the terms and conditions described in the attached Agreement and the Plandocument; (b) you understand and agree that the Plan and the Agreement, including any attachments, constitute theentire understanding between you and the Company regarding this award of RSUs, and that any prior agreements,commitments or negotiations concerning this grant of RSUs are replaced and superseded; (c) you have been given anopportunity to consult your own legal and tax counsel with respect to all matters relating to this grant of RSUs priorto accepting this Agreement and that you have either consulted such counsel or voluntarily declined to consult suchcounsel and (d) any tax liability or other adverse tax consequences to you resulting from the grant or vesting of theRSUs will be the responsibility of, and will be borne entirely by, you.

In addition, by clicking “Agree” below you are consenting to receive documents from the Company and SoliumCapital Inc. or any future plan administrator (the “Administrator”) by means of electronic delivery. You agree thatyou have received notice that delivery of the Agreement, prospectus, prospectus updates, annual reports of theCompany, and any other documents that the Company is required or desires to deliver to you as a result of yourparticipation in the 2018 Omnibus Stock Incentive Plan, or any other equity or incentive plans maintained or adoptedby the Company in the future (the “Incentive Plans”) will be made electronically through the Administrator’s websiteor via the most recent email account that the Company has on file for you at the time of the document distribution. Ifdocuments are posted to the Administrator’s website rather than emailed directly to you, then the Company or theAdministrator will send you an email notifying you that a document or documents have been posted and instructionon how to access those documents. You understand that in order to view these documents you will need a connectionto the internet, you will need to log into your email and/or the Administrator’s intranet page, and you will need tohave internet web browsing software and software that can process PDF documents, such as Adobe Reader, installedon the computer you are using in order to view the documents being delivered to you. These programs and aninternet connection are available on your workplace computer. If you are attempting to access these documents fromyour home computer and you do not have access to this software, the Company will provide you with free softwareand technical assistance in order to access the documents. The only cost to you of viewing the documentselectronically should be any charges you may incur for connection to the internet, to the extent you do not access thedocuments from your work computer and you do not have access to a free internet connection outside of work. Thisconsent shall be effective for the entire time that you are a participant in the Incentive Plans.

PACIFIC DRILLING S.A.

Title:CEO

Exhibit 10.9

PACIFIC DRILLING S.A.2018 OMNIBUS STOCK INCENTIVE PLAN

PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT(Executive Award)

Pacific Drilling S.A. (the “Company”) hereby grants you (the “Participant”) the following performance-basedrestricted stock units (“RSUs”) representing the right to receive shares of the Company’s share capital (“Shares”). The termsand conditions of this grant of RSUs are set forth in this Performance-Based Restricted Stock Unit Agreement (this“Agreement”), as well as in the Pacific Drilling S.A. 2018 Omnibus Stock Incentive Plan (the “Plan”), which is made a partof this document. Except as otherwise defined in this Agreement, capitalized terms have the respective meanings set forth inthe Plan.

Date of Grant: December 20, 2018

Name of Participant: Bernie G. Wolford Jr.

Number of RSUs: 200,000 1. The Grant. Effective on the Date of Grant, the Company grants to the Participant under the Plan the total numberof RSUs specified above, subject to the terms, conditions, and restrictions set forth in the Plan and in this Agreement.

2. Vesting.

(a) Vesting Schedule.

(i) Subject to the terms and conditions set forth in this Agreement and the Plan (and your continuedemployment or service on the date of a Change of Control), the RSUs will vest and be earned based on theachievement of the relevant IRR (as defined below) as set forth in the chart below (the number of RSUs that areearned based upon the achievement of the relevant IRR shall be referred to as “Earned RSUs”):

IRR% on a Change of Control % of RSUs that will vest[***] 0%[***] 25%[***] 37.5%[***] 50%[***] 75%[***] 100%

[***] = Certain identified information has been excluded from the exhibit because it is both not material andwould likely cause competitive harm to the registrant if publicly disclosed.

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75% of the Earned RSUs shall vest and be settled within 30 days after the date of a Change of Control and theremaining 25% of the Earned RSU will become fully vested on the first anniversary of the consummation of theChange of Control, provided that, if you are terminated by your employer without Cause or you terminate youremployment for Good Reason (as used in this Agreement, “Cause” and “Good Reason” shall have the meaningsdefined in your employment agreement with Pacific Drilling Manpower, Inc., effective November 19, 2018 (the“Employment Agreement”)) on or after the Change of Control and prior to the first anniversary of such Change ofControl, then 100% of the Earned RSUs will become fully vested on the date of such termination. If youremployment is terminated by your employer without Cause (and other than due to death or disability) and suchtermination occurs after the entry into a signed definitive agreement which if consummated would constitute aChange of Control, then the RSUs shall remain outstanding until the date of such Change of Control and will beeligible to become Earned RSUs as if you remained employed through the date of the Change of Control (for theavoidance of doubt, subject to the achievement of the relevant IRR and only if such Change of Control occurs). On aChange of Control, any RSUs that do not become Earned RSUs shall automatically be forfeited and cancelledwithout any payment on the date of the Change of Control. For any Change of Control which occurs prior toDecember 31, 2019, December 31, 2019 shall be the date used to calculate the IRR.

(ii) For purposes of this Agreement:

“Deemed Share Price” means the value of a Share upon the Emergence Date which is $[***], as determinedby the Board, in good faith based upon the assumptions reviewed by the Board. The Board’s determination shall befinal and binding.

“IRR” means, with respect to each Share, as of the date of a Change of Control, an actual annual pre-taxreturn of the specified percentage, compounded annually, on the Deemed Share Price relating to such Share. IRRwith respect to each Share shall be calculated (1) assuming that all cash amounts received (including dividends) inrespect of such Share have been made on the date actually paid by the Company, and (2) using the XIRR function inthe most recent version of Microsoft Excel (or if such program is no longer available, such other software programfor calculating IRR determined by the Board). If a Change of Control occurs prior to December 31, 2019, then theIRR for such Change of Control shall be based on December 31, 2019. [***].

(iii) Except as otherwise provided herein, after your service to the Company or its Affiliates terminatesfor any reason, subject always to any terms and conditions in the Plan or this Agreement, vesting of your RSUsimmediately stops and the RSUs that are not Earned RSUs as of the date your service to the Company or itsAffiliates terminates shall be forfeited immediately.

3. Delivery; Certificates; Legends.

(a) Within 30 days following the vesting of the Earned RSUs, the Company shall cause a certificate orcertificates for Shares to be issued without legend (except for any legend required pursuant to applicable securities laws orany other agreement to which you are a party) in your name in cancellation for the RSUs that are vested, if any, as of suchdate.

(b) The Company, in its sole discretion, may elect to deliver certificates either in certificate form orelectronically to a brokerage account established for your benefit at a brokerage/financial institution selected by theCompany. You agree to complete and sign any documents and take any additional actions that the Company may request toenable it to deliver the shares on your behalf.

(c) You agree that the Shares which you may acquire pursuant to this Agreement will not be sold or otherwisedisposed of in any manner which would constitute a violation of any applicable federal, state, or foreign securities laws. Youalso agree that (i) the Company may refuse to register the transfer of the Shares acquired pursuant to this Agreement on thestock transfer records of the Company if such proposed transfer would, in the opinion of counsel satisfactory to theCompany, constitute a violation of any applicable securities law, and (ii) the

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Company may give related instructions to its transfer agent, if any, to stop registration of the transfer of such Shares.

4. Nontransferability of RSUs. You may not sell, transfer, pledge, exchange, hypothecate or dispose of the RSUs. Abreach of these terms of this Agreement shall cause a forfeiture of the RSUs.

5. No Shareholder Rights. The RSUs granted pursuant to this Agreement do not and shall not entitle you to anyrights of a holder of Shares prior to the date Shares are issued to you in settlement of the Award.

6. Tax Matters.

(a) Tax Liability and Withholding. You shall be required to pay to the Company, and the Company shall havethe right to deduct from any compensation paid to you, the amount of any required withholding taxes in respect of the RSUsand to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of suchwithholding taxes prior to the issuance of any Shares. You may satisfy any federal, state or local tax withholding obligationby tendering a cash payment, or, if permitted by the Committee, may elect to (a) have the Company withhold Shares fromthe Shares otherwise issuable to you under this Award or (b) deliver previously owned and unencumbered Shares. Anyelection to use Shares to satisfy any or all of your withholding tax liability must be made prior to the date that the amount oftax to be withheld is determined in accordance with applicable tax laws.

(b) Section 409A. This Agreement is intended to comply with Section 409A of the Code or an exemptiontherefrom, and all such provisions shall be construed and interpreted accordingly. For purposes of Section 409A of the Code,each payment made under this Agreement will be treated as a separate payment. Notwithstanding anything contained hereinto the contrary, if necessary to avoid penalties under Section 409A of the Code, the Participant will not be considered to haveterminated employment for purposes of this Agreement unless the Participant would be considered to have incurred a"separation from service” within the meaning of Section 409A of the Code.

7. Compliance With Securities Law. Notwithstanding any provision of this Agreement to the contrary, the issuanceof Shares will be subject to compliance with all applicable requirements of federal, state, or foreign law with respect to suchsecurities and with the requirements of any stock exchange or market system upon which the Shares may then be listed. NoShares will be issued hereunder if such issuance would constitute a violation of any applicable federal, state, or foreignsecurities laws or other law or regulations or the requirements of any stock exchange or market system upon which theShares may then be listed. In addition, Shares will not be issued hereunder unless (a) a registration statement under theSecurities Act of 1933, as amended (the “Act”), is at the time of issuance in effect with respect to the shares issued or (b) inthe opinion of legal counsel to the Company, the shares issued may be issued in accordance with the terms of an applicableexemption from the registration requirements of the Act. The inability of the Company to obtain from any regulatory bodyhaving jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance andsale of any shares subject to the Award will relieve the Company of any liability in respect of the failure to issue such sharesas to which such requisite authority has not been obtained. As a condition to any issuance hereunder, the Company mayrequire you to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicablelaw or regulation and to make any representation or warranty with respect to such compliance as may be requested by theCompany. From time to time, the Board and appropriate officers of the Company are authorized to take the actions necessaryand appropriate to file required documents with governmental authorities, stock exchanges, and other appropriate Persons tomake shares of Shares available for issuance.

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8. Clawback. Notwithstanding anything to the contrary contained herein, the Company may cancel the RSUs if youviolate any non-competition, non-solicitation, non-disparagement or non-disclosure covenant or agreement with theCompany or any Affiliate (after having been given notice of any such violation and giving effect to any applicable cureperiod set forth therein), as determined by the Board (excluding you) in good faith. In such event, you will forfeit anycompensation, gain or other value realized thereafter on the vesting or settlement of the RSUs, the sale or other transfer ofthe RSUs, or the sale of Shares acquired in respect of the RSUs, and must promptly repay such amounts to the Company.

9. Retention Rights. This Agreement does not give you the right to serve as a member of the Board or be retained bythe Company or its Affiliates in any other capacity. The Company and its Affiliates reserve the right to terminate youremployment or service at any time and for any reason subject to the terms of your employment agreement.

10. Tax Disclaimer. You agree that you are responsible for consulting your own tax advisor as to the tax consequencesassociated with the grant and vesting of your RSUs. The tax rules governing RSUs are complex, change frequently anddepend on the individual taxpayer’s situation.

By accepting this grant of RSUs, you acknowledge that any tax liability or other adverse tax consequences to youresulting from the grant or vesting of the RSUs will be the responsibility of, and will be borne entirely by, you. YOU ARETHEREFORE ENCOURAGED TO CONSULT YOUR OWN TAX ADVISOR BEFORE ACCEPTING THE GRANT OFTHESE RSUS.

11. The Plan and Other Agreements. The text of the Plan is incorporated in this Agreement by reference. Capitalizedterms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan. ThisAgreement (including any attachments and, where applicable, references to the Employment Agreement) and the Planconstitute the entire understanding between you and the Company regarding this grant of RSUs. Any prior agreements,commitments or negotiations concerning this grant of RSUs are superseded. To the extent the terms of this Agreementconflict with the terms of the Plan, the terms of this Agreement shall prevail.

12. Miscellaneous Provisions.

(a) You understand and acknowledge that (i) the Plan is entirely discretionary, (ii) the Company has reservedthe right to amend, suspend or terminate the Plan at any time, (iii) the grant of RSUs does not in any way create anycontractual or other right to receive additional grants of RSUs (or benefits in lieu of RSUs) at any time or in any amount and(iv) all determinations with respect to any additional grants, including (without limitation) the times when RSUs will begranted, the number of Shares offered, and the vesting schedule, will be at the sole discretion of the Company.

(b) You understand and acknowledge that participation in the Plan ceases upon termination of your service tothe Company for any reason, except as may explicitly be provided otherwise in the Plan or this Agreement.

13. Applicable Law. This Agreement will be interpreted and enforced under the laws of the State of Texas (withoutregard to their choice of law provisions).

* * *

By clicking “Agree” below, you acknowledge receipt of a copy of the Plan, and agree that (a) you have carefullyread, fully understand and agree to all of the terms and conditions described in the attached Agreement and the Plandocument; (b) you understand and agree that the Plan and the Agreement, including any attachments, constitute theentire understanding between you and the Company regarding this award of RSUs, and that any prior agreements,commitments or negotiations concerning this grant of RSUs are replaced and superseded; (c) you have been given anopportunity to consult your own legal and

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tax counsel with respect to all matters relating to this grant of RSUs prior to accepting this Agreement and that youhave either consulted such counsel or voluntarily declined to consult such counsel and (d) any tax liability or otheradverse tax consequences to you resulting from the grant or vesting of the RSUs will be the responsibility of, and willbe borne entirely by, you.

In addition, by clicking “Agree” below you are consenting to receive documents from the Company and SoliumCapital Inc. or any future plan administrator (the “Administrator”) by means of electronic delivery. You agree thatyou have received notice that delivery of the Agreement, prospectus, prospectus updates, annual reports of theCompany, and any other documents that the Company is required or desires to deliver to you as a result of yourparticipation in the 2018 Omnibus Stock Incentive Plan, or any other equity or incentive plans maintained or adoptedby the Company in the future (the “Incentive Plans”) will be made electronically through the Administrator’s websiteor via the most recent email account that the Company has on file for you at the time of the document distribution. Ifdocuments are posted to the Administrator’s website rather than emailed directly to you, then the Company or theAdministrator will send you an email notifying you that a document or documents have been posted and instructionon how to access those documents. You understand that in order to view these documents you will need a connectionto the internet, you will need to log into your email and/or the Administrator’s intranet page, and you will need tohave internet web browsing software and software that can process PDF documents, such as Adobe Reader, installedon the computer you are using in order to view the documents being delivered to you. These programs and aninternet connection are available on your workplace computer. If you are attempting to access these documents fromyour home computer and you do not have access to this software, the Company will provide you with free softwareand technical assistance in order to access the documents. The only cost to you of viewing the documentselectronically should be any charges you may incur for connection to the internet, to the extent you do not access thedocuments from your work computer and you do not have access to a free internet connection outside of work. Thisconsent shall be effective for the entire time that you are a participant in the Incentive Plans. PACIFIC DRILLING S.A. /s/ Bernie G. Wolford Jr. Title: CEO

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Exhibit 10.10

PACIFIC DRILLING S.A.2018 OMNIBUS STOCK INCENTIVE PLANRESTRICTED STOCK UNIT AGREEMENT

(Chairman Award)

Pacific Drilling S.A. (the “Company”) hereby grants you (the “Participant”) the following restricted stock units(“RSUs”) representing the right to receive shares of the Company’s share capital (“Shares”). The terms and conditions of thisgrant of RSUs are set forth in this Restricted Stock Unit Agreement (this “Agreement”), as well as in the Pacific DrillingS.A. 2018 Omnibus Stock Incentive Plan (the “Plan”), which is made a part of this document. Except as otherwise defined inthis Agreement, capitalized terms have the respective meanings set forth in the Plan. Date of Grant: December 20, 2018 Name of Participant: W. Matt Ralls

Number of RSUs: 75,000 1. The Grant. Effective on the Date of Grant, the Company grants to the Participant under the Plan the total number ofRSUs specified above, subject to the terms, conditions, and restrictions set forth in the Plan and in this Agreement.

2. Vesting.

(a) Vesting Schedule. Subject to the terms and conditions set forth in this Agreement and the Plan (and yourcontinued employment or service on each Vesting Date), the RSUs will vest as follows: one-third of the grant on each of thesecond, third and fourth anniversaries of the Date of Grant (each such date, a “Vesting Date”). Any fractional RSU resultingfrom the application of the vesting schedule shall be aggregated and the RSU resulting from such aggregation shall vest onthe final Vesting Date.

(b) Termination of Service. After your service to the Company or its Affiliates terminates for any reason,subject always to any terms and conditions in the Plan or this Agreement, vesting of your RSUs immediately stops and theRSUs that are not vested as of the date your service to the Company or its Affiliates terminates shall be forfeitedimmediately. Notwithstanding the preceding sentence, if your service as a director is terminated by the Company withoutCause (as defined below) or terminates as a result of your death or Disability (as defined below), then your RSUs whichwere scheduled to vest in the next twelve months shall vest upon such termination; provided that if such termination orresignation is prior to the second anniversary of the Date of Grant, then one third of your RSUs shall vest.

(c) Change of Control.

(i) Subject to your continued employment or service on the date of a Change of Control, vesting of theRSUs that are unvested as of the Change of Control is as follows: 100% of the unvested RSUs will become fullyvested on the consummation of the Change of Control.

(ii) If your service as a director is terminated by the Company without Cause or terminates as a result ofyour death or Disability, and such termination occurs after the entry into a signed definitive agreement which ifconsummated would constitute a Change of Control, then the RSUs shall remain outstanding until the date of suchChange of Control and will become fully vested on the date of such Change of Control (for the avoidance of doubtonly if such Change of Control occurs).

(d) Definitions. For purposes of this Agreement:

(i) “Cause.” The Company shall have the right to terminate Participant’s service as a director at anytime for “Cause.” “Cause” means (i) Participant’s commission of fraud, theft, or embezzlement against any memberof the Company or any of its subsidiaries or affiliates (“Company Group”) or a willful breach of fiduciary duty withrespect to any member of the Company Group; (ii) Participant’s willful and continued failure to performParticipant’s duties; (iii) Participant’s breach of this Agreement or breach of any other written agreement betweenParticipant and any member of the Company Group which causes material harm to the Company Group; (iv)Participant’s conviction of, or plea of guilty or nolo contendere to, a felony (or state law equivalent) or to any crimeinvolving moral turpitude; (v) Participant’s gross misconduct or gross negligence in the performance of duties to anymember of the Company Group; or (vi) Participant’s breach and violation of the Company Group’s written policiespertaining to sexual harassment, discrimination or insider trading; provided, however, that solely with respect to theactions or omissions set forth in subparts (ii), (iii), (v) and (vi), such actions or omissions must remain uncured oruncorrected ten (10) business days after the Board (excluding the Participant) has provided Participant written noticeof the obligation to cure such actions or omissions. For the avoidance of doubt, the actions or omissions set forth insubparts (i) and (iv) are not permitted to be cured by Participant under any circumstances. In the event the Board(excluding the Participant) determines in good faith after consultation with legal counsel that its fiduciary obligationsrequire an immediate termination for Cause, then notwithstanding anything herein to the contrary, no cure right shallbe provided to Participant.

(ii) “Disability” means the Participant’s physical or mental infirmity that prevents the Participant fromserving as a director for a period of 180 consecutive days during a 12-month period.

3. Delivery; Certificates; Legends.

(a) Within 30 days following the vesting of the RSUs, the Company shall cause a certificate or certificates forShares to be issued without legend (except for any legend required pursuant to applicable securities laws or any otheragreement to which you are a party) in your name in cancellation for the RSUs that are vested, if any, as of such date.

(b) The Company, in its sole discretion, may elect to deliver certificates either in certificate form orelectronically to a brokerage account established for your benefit at a brokerage/financial institution selected by theCompany. You agree to complete and sign any documents and take any additional actions that the Company may request toenable it to deliver the shares on your behalf.

(c) You agree that the Shares which you may acquire pursuant to this Agreement will not be sold or otherwisedisposed of in any manner which would constitute a violation of any applicable federal, state, or foreign securities laws. Youalso agree that (i) the Company may refuse to register the transfer of the Shares acquired pursuant to this Agreement on thestock transfer records of the Company if such proposed transfer would, in the opinion of counsel satisfactory to theCompany, constitute a violation of any applicable securities law, and (ii) the Company may give related instructions to itstransfer agent, if any, to stop registration of the transfer of such Shares.

4. Nontransferability of RSUs. You may not sell, transfer, pledge, exchange, hypothecate or dispose of the RSUs. Abreach of these terms of this Agreement shall cause a forfeiture of the RSUs.

5. No Shareholder Rights. The RSUs granted pursuant to this Agreement do not and shall not entitle you to any rightsof a holder of Shares prior to the date Shares are issued to you in settlement of the Award.

6. Tax Matters.

(a) Tax Liability and Withholding. You shall be required to pay to the Company, and the Company

shall have the right to deduct from any compensation paid to you, the amount of any required withholding taxes in respect ofthe RSUs and to take all such other action as the Committee deems necessary to satisfy all obligations for the payment ofsuch withholding taxes prior to the issuance of any Shares. You may satisfy any federal, state or local tax withholdingobligation by tendering a cash payment, or, if permitted by the Committee, may elect to (a) have the Company withholdShares from the Shares otherwise issuable to you under this Award or (b) deliver previously owned and unencumberedShares. Any election to use Shares to satisfy any or all of your withholding tax liability must be made prior to the date thatthe amount of tax to be withheld is determined in accordance with applicable tax laws.

(b) Section 409A. This Agreement is intended to comply with Section 409A of the Code or an exemptiontherefrom, and all such provisions shall be construed and interpreted accordingly. For purposes of Section 409A of the Code,each payment made under this Agreement will be treated as a separate payment. Notwithstanding anything contained hereinto the contrary, if necessary to avoid penalties under Section 409A of the Code, the Participant will not be considered to haveterminated service for purposes of this Agreement unless the Participant would be considered to have incurred a “separationfrom service” within the meaning of Section 409A of the Code.

7. Compliance With Securities Law. Notwithstanding any provision of this Agreement to the contrary, the issuanceof Shares will be subject to compliance with all applicable requirements of federal, state, or foreign law with respect to suchsecurities and with the requirements of any stock exchange or market system upon which the Shares may then be listed. NoShares will be issued hereunder if such issuance would constitute a violation of any applicable federal, state, or foreignsecurities laws or other law or regulations or the requirements of any stock exchange or market system upon which theShares may then be listed. In addition, Shares will not be issued hereunder unless (a) a registration statement under theSecurities Act of 1933, as amended (the “Act”), is at the time of issuance in effect with respect to the shares issued or (b) inthe opinion of legal counsel to the Company, the shares issued may be issued in accordance with the terms of an applicableexemption from the registration requirements of the Act. The inability of the Company to obtain from any regulatory bodyhaving jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance andsale of any shares subject to the Award will relieve the Company of any liability in respect of the failure to issue such sharesas to which such requisite authority has not been obtained. As a condition to any issuance hereunder, the Company mayrequire you to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicablelaw or regulation and to make any representation or warranty with respect to such compliance as may be requested by theCompany. From time to time, the Board and appropriate officers of the Company are authorized to take the actions necessaryand appropriate to file required documents with governmental authorities, stock exchanges, and other appropriate Persons tomake shares of Shares available for issuance.

8. Clawback. Notwithstanding anything to the contrary contained herein, the Company may cancel the RSUs if youviolate any non-competition, non-solicitation, non-disparagement or non-disclosure covenant or agreement with theCompany or any Affiliate (after having been given notice of any such violation and giving effect to any applicable cureperiod set forth therein), as determined by the Board (excluding you) in good faith. In such event, you will forfeit anycompensation, gain or other value realized thereafter on the vesting or settlement of the RSUs, the sale or other transfer ofthe RSUs, or the sale of Shares acquired in respect of the RSUs, and must promptly repay such amounts to the Company.

9. Retention Rights. This Agreement does not give you the right to serve as a member of the Board or be retained bythe Company or its Affiliates in any other capacity. The Company and its Affiliates reserve the right to terminate yourservice at any time and for any reason.

10. Tax Disclaimer. You agree that you are responsible for consulting your own tax advisor as to the tax consequencesassociated with the grant and vesting of your RSUs. The tax rules governing RSUs are complex, change frequently anddepend on the individual taxpayer’s situation.

By accepting this grant of RSUs, you acknowledge that any tax liability or other adverse tax consequences

to you resulting from the grant or vesting of the RSUs will be the responsibility of, and will be borne entirely by, you. YOUARE THEREFORE ENCOURAGED TO CONSULT YOUR OWN TAX ADVISOR BEFORE ACCEPTING THE GRANTOF THESE RSUS.

11. The Plan and Other Agreements. The text of the Plan is incorporated in this Agreement by reference. Capitalizedterms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan. ThisAgreement, including any attachments, and the Plan constitute the entire understanding between you and the Companyregarding this grant of RSUs. Any prior agreements, commitments or negotiations concerning this grant of RSUs aresuperseded. To the extent the terms of this Agreement conflict with the terms of the Plan, the terms of this Agreement shallprevail.

12. Miscellaneous Provisions.

(a) You understand and acknowledge that (i) the Plan is entirely discretionary, (ii) the Company has reservedthe right to amend, suspend or terminate the Plan at any time, (iii) the grant of RSUs does not in any way create anycontractual or other right to receive additional grants of RSUs (or benefits in lieu of RSUs) at any time or in any amount and(iv) all determinations with respect to any additional grants, including (without limitation) the times when RSUs will begranted, the number of Shares offered, and the vesting schedule, will be at the sole discretion of the Company.

(b) You understand and acknowledge that participation in the Plan ceases upon termination of your service tothe Company for any reason, except as may explicitly be provided otherwise in the Plan or this Agreement.

13. Applicable Law. This Agreement will be interpreted and enforced under the laws of the State of Texas (withoutregard to their choice of law provisions).

* * *

By clicking “Agree” below, you acknowledge receipt of a copy of the Plan, and agree that (a) you have carefullyread, fully understand and agree to all of the terms and conditions described in the attached Agreement and the Plandocument; (b) you understand and agree that the Plan and the Agreement, including any attachments, constitute theentire understanding between you and the Company regarding this award of RSUs, and that any prior agreements,commitments or negotiations concerning this grant of RSUs are replaced and superseded; (c) you have been given anopportunity to consult your own legal and tax counsel with respect to all matters relating to this grant of RSUs priorto accepting this Agreement and that you have either consulted such counsel or voluntarily declined to consult suchcounsel and (d) any tax liability or other adverse tax consequences to you resulting from the grant or vesting of theRSUs will be the responsibility of, and will be borne entirely by, you.

In addition, by clicking “Agree” below you are consenting to receive documents from the Company and SoliumCapital Inc. or any future plan administrator (the “Administrator”) by means of electronic delivery. You agree thatyou have received notice that delivery of the Agreement, prospectus, prospectus updates, annual reports of theCompany, and any other documents that the Company is required or desires to deliver to you as a result of yourparticipation in the 2018 Omnibus Stock Incentive Plan, or any other equity or incentive plans maintained or adoptedby the Company in the future (the “Incentive Plans”) will be made electronically through the Administrator’s websiteor via the most recent email account that the Company has on file for you at the time of the document distribution. Ifdocuments are posted to the Administrator’s website rather than emailed directly to you, then the Company or theAdministrator will send you an email notifying you that a document or documents have been posted and instructionon how to access those documents. You understand that in order to view these documents you will need a connectionto the internet, you will need to log into your email and/or the Administrator’s intranet page, and you will need tohave internet web browsing software and software that can process PDF documents, such as Adobe

Reader, installed on the computer you are using in order to view the documents being delivered to you. Theseprograms and an internet connection are available on your workplace computer. If you are attempting to access thesedocuments from your home computer and you do not have access to this software, the Company will provide youwith free software and technical assistance in order to access the documents. The only cost to you of viewing thedocuments electronically should be any charges you may incur for connection to the internet, to the extent you do notaccess the documents from your work computer and you do not have access to a free internet connection outside ofwork. This consent shall be effective for the entire time that you are a participant in the Incentive Plans.

PACIFIC DRILLING S.A.

Title:CEO

Exhibit 10.11

PACIFIC DRILLING S.A.2018 OMNIBUS STOCK INCENTIVE PLAN

PERFORMANCE-BASED RESTRICTED STOCK UNIT AGREEMENT(Chairman Award)

Pacific Drilling S.A. (the “Company”) hereby grants you (the “Participant”) the following performance-basedrestricted stock units (“RSUs”) representing the right to receive shares of the Company’s share capital (“Shares”). The termsand conditions of this grant of RSUs are set forth in this Performance-Based Restricted Stock Unit Agreement (this“Agreement”), as well as in the Pacific Drilling S.A. 2018 Omnibus Stock Incentive Plan (the “Plan”), which is made a partof this document. Except as otherwise defined in this Agreement, capitalized terms have the respective meanings set forth inthe Plan.

Date of Grant: December 20, 2018

Name of Participant: W. Matt Ralls

Number of RSUs: 75,000 1. The Grant. Effective on the Date of Grant, the Company grants to the Participant under the Plan the total number ofRSUs specified above, subject to the terms, conditions, and restrictions set forth in the Plan and in this Agreement.

2. Vesting.

(a) Vesting Schedule.

(i) Subject to the terms and conditions set forth in this Agreement and the Plan (and your continuedemployment or service on the date of a Change of Control), the RSUs will vest and be earned based on theachievement of the relevant IRR (as defined below) as set forth in the chart below:

IRR% on a Change of Control % of RSUs that will vest[***] 0%[***] 25%[***] 37.5%[***] 50%[***] 75%[***] 100%

[***] = Certain identified information has been excluded from the exhibit because it is both not material andwould likely cause competitive harm to the registrant if publicly disclosed.

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100% of the RSUs shall vest and be settled within 30 days after the date of a Change of Control based upon theachievement of the relevant IRR in the chart above. If your service as a director is terminated by the Companywithout Cause (as defined below) and other than as a result of death or Disability (as defined below) and suchtermination occurs after the entry into a signed definitive agreement which if consummated would constitute aChange of Control, then the RSUs shall remain outstanding until the date of such Change of Control and will beeligible to vest as if you continued to provide services through the date of the Change of Control (for the avoidanceof doubt, subject to the achievement of the relevant IRR and only if such Change of Control occurs). On a Change ofControl, any RSUs that do not become vested shall automatically be forfeited and cancelled without any payment onthe date of the Change of Control. For any Change of Control which occurs prior to December 31, 2019, December31, 2019 shall be the date used to calculate the IRR.

(ii) For purposes of this Agreement:

(A) “Cause.” The Company shall have the right to terminate Participant’s service as a director atany time for “Cause.” “Cause” means (i) Participant’s commission of fraud, theft, orembezzlement against any member of the Company or any of its subsidiaries or affiliates(“Company Group”) or a willful breach of fiduciary duty with respect to any member of theCompany Group; (ii) Participant’s willful and continued failure to perform Participant’sduties; (iii) Participant’s breach of this Agreement or breach of any other written agreementbetween Participant and any member of the Company Group which causes material harm tothe Company Group; (iv) Participant’s conviction of, or plea of guilty or nolo contendere to,a felony (or state law equivalent) or to any crime involving moral turpitude; (v) Participant’sgross misconduct or gross negligence in the performance of duties to any member of theCompany Group; or (vi) Participant’s breach and violation of the Company Group’s writtenpolicies pertaining to sexual harassment, discrimination or insider trading; provided,however, that solely with respect to the actions or omissions set forth in subparts (ii), (iii), (v)and (vi), such actions or omissions must remain uncured or uncorrected ten (10) businessdays after the Board (excluding the Participant) has provided Participant written notice of theobligation to cure such actions or omissions. For the avoidance of doubt, the actions oromissions set forth in subparts (i) and (iv) are not permitted to be cured by Participant underany circumstances. In the event the Board (excluding the Participant) determines in goodfaith after consultation with legal counsel that its fiduciary obligations require an immediatetermination for Cause, then notwithstanding anything herein to the contrary, no cure rightshall be provided to Participant.

(B) “Deemed Share Price” means the value of a Share upon the Emergence Date which is $[***],as determined by the Board, in good faith based upon the assumptions reviewed by theBoard. The Board’s determination shall be final and binding.

(C) “Disability” means the Participant’s physical or mental infirmity that prevents the Participantfrom serving as a director for a period of 180 consecutive days during a 12-month period.

(D) “IRR” means, with respect to each Share, as of the date of a Change of Control, an actualannual pre-tax return of the specified percentage, compounded annually, on the DeemedShare Price relating to such Share. IRR with respect to each Share shall be calculated (1)assuming that all cash amounts received (including dividends) in respect of such Share havebeen made on the date actually paid by the Company, and (2) using the XIRR function in themost

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recent version of Microsoft Excel (or if such program is no longer available, such othersoftware program for calculating IRR determined by the Board). If a Change of Controloccurs prior to December 31, 2019, then the IRR for such Change of Control shall be basedon December 31, 2019. [***].

(iii) Except as otherwise provided herein, after your service to the Company or its Affiliates terminatesfor any reason, subject always to any terms and conditions in the Plan or this Agreement, vesting of your RSUsimmediately stops and the RSUs that are not vested as of the date your service to the Company or its Affiliatesterminates shall be forfeited immediately.

3. Delivery; Certificates; Legends.

(a) Within 30 days following the vesting of the RSUs, the Company shall cause a certificate or certificates forShares to be issued without legend (except for any legend required pursuant to applicable securities laws or any otheragreement to which you are a party) in your name in cancellation for the RSUs that are vested, if any, as of such date.

(b) The Company, in its sole discretion, may elect to deliver certificates either in certificate form orelectronically to a brokerage account established for your benefit at a brokerage/financial institution selected by theCompany. You agree to complete and sign any documents and take any additional actions that the Company may request toenable it to deliver the shares on your behalf.

(c) You agree that the Shares which you may acquire pursuant to this Agreement will not be sold or otherwisedisposed of in any manner which would constitute a violation of any applicable federal, state, or foreign securities laws. Youalso agree that (i) the Company may refuse to register the transfer of the Shares acquired pursuant to this Agreement on thestock transfer records of the Company if such proposed transfer would, in the opinion of counsel satisfactory to theCompany, constitute a violation of any applicable securities law, and (ii) the Company may give related instructions to itstransfer agent, if any, to stop registration of the transfer of such Shares.

4. Nontransferability of RSUs. You may not sell, transfer, pledge, exchange, hypothecate or dispose of the RSUs. Abreach of these terms of this Agreement shall cause a forfeiture of the RSUs.

5. No Shareholder Rights. The RSUs granted pursuant to this Agreement do not and shall not entitle you to any rightsof a holder of Shares prior to the date Shares are issued to you in settlement of the Award.

6. Tax Matters.

(a) Tax Liability and Withholding. You shall be required to pay to the Company, and the Company shall havethe right to deduct from any compensation paid to you, the amount of any required withholding taxes in respect of the RSUsand to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of suchwithholding taxes prior to the issuance of any Shares. You may satisfy any federal, state or local tax withholding obligationby tendering a cash payment, or, if permitted by the Committee, may elect to (a) have the Company withhold Shares fromthe Shares otherwise issuable to you under this Award or (b) deliver previously owned and unencumbered Shares. Anyelection to use Shares to satisfy any or all of your withholding tax liability must be made prior to the date that the amount oftax to be withheld is determined in accordance with applicable tax laws.

(b) Section 409A. This Agreement is intended to comply with Section 409A of the Code or an exemptiontherefrom, and all such provisions shall be construed and interpreted accordingly. For purposes of Section 409A of the Code,each payment made under this Agreement will be treated as a separate payment. Notwithstanding anything contained hereinto the contrary, if necessary to avoid penalties under Section 409A of the Code, the Participant will not be considered to haveterminated service for purposes of this Agreement unless the Participant would be considered to have incurred a “separationfrom service” within the meaning of Section

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409A of the Code.

7. Compliance With Securities Law. Notwithstanding any provision of this Agreement to the contrary, the issuanceof Shares will be subject to compliance with all applicable requirements of federal, state, or foreign law with respect to suchsecurities and with the requirements of any stock exchange or market system upon which the Shares may then be listed. NoShares will be issued hereunder if such issuance would constitute a violation of any applicable federal, state, or foreignsecurities laws or other law or regulations or the requirements of any stock exchange or market system upon which theShares may then be listed. In addition, Shares will not be issued hereunder unless (a) a registration statement under theSecurities Act of 1933, as amended (the “Act”), is at the time of issuance in effect with respect to the shares issued or (b) inthe opinion of legal counsel to the Company, the shares issued may be issued in accordance with the terms of an applicableexemption from the registration requirements of the Act. The inability of the Company to obtain from any regulatory bodyhaving jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance andsale of any shares subject to the Award will relieve the Company of any liability in respect of the failure to issue such sharesas to which such requisite authority has not been obtained. As a condition to any issuance hereunder, the Company mayrequire you to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicablelaw or regulation and to make any representation or warranty with respect to such compliance as may be requested by theCompany. From time to time, the Board and appropriate officers of the Company are authorized to take the actions necessaryand appropriate to file required documents with governmental authorities, stock exchanges, and other appropriate Persons tomake shares of Shares available for issuance.

8. Clawback. Notwithstanding anything to the contrary contained herein, the Company may cancel the RSUs if youviolate any non-competition, non-solicitation, non-disparagement or non-disclosure covenant or agreement with theCompany or any Affiliate (after having been given notice of any such violation and giving effect to any applicable cureperiod set forth therein), as determined by the Board (excluding you) in good faith. In such event, you will forfeit anycompensation, gain or other value realized thereafter on the vesting or settlement of the RSUs, the sale or other transfer ofthe RSUs, or the sale of Shares acquired in respect of the RSUs, and must promptly repay such amounts to the Company.

9. Retention Rights. This Agreement does not give you the right to serve as a member of the Board or be retained bythe Company or its Affiliates in any other capacity. The Company and its Affiliates reserve the right to terminate yourservice at any time and for any reason.

10. Tax Disclaimer. You agree that you are responsible for consulting your own tax advisor as to the tax consequencesassociated with the grant and vesting of your RSUs. The tax rules governing RSUs are complex, change frequently anddepend on the individual taxpayer’s situation.

By accepting this grant of RSUs, you acknowledge that any tax liability or other adverse tax consequences to youresulting from the grant or vesting of the RSUs will be the responsibility of, and will be borne entirely by, you. YOU ARETHEREFORE ENCOURAGED TO CONSULT YOUR OWN TAX ADVISOR BEFORE ACCEPTING THE GRANT OFTHESE RSUS.

11. The Plan and Other Agreements. The text of the Plan is incorporated in this Agreement by reference. Capitalizedterms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan. ThisAgreement, including any attachments, and the Plan constitute the entire understanding between you and the Companyregarding this grant of RSUs. Any prior agreements, commitments or negotiations concerning this grant of RSUs aresuperseded. To the extent the terms of this Agreement conflict with the terms of the Plan, the terms of this Agreement shallprevail.

12. Miscellaneous Provisions.

(a) You understand and acknowledge that (i) the Plan is entirely discretionary, (ii) the Company has reservedthe right to amend, suspend or terminate the Plan at any time, (iii) the grant of RSUs does not in any way

4

create any contractual or other right to receive additional grants of RSUs (or benefits in lieu of RSUs) at any time or in anyamount and (iv) all determinations with respect to any additional grants, including (without limitation) the times when RSUswill be granted, the number of Shares offered, and the vesting schedule, will be at the sole discretion of the Company.

(b) You understand and acknowledge that participation in the Plan ceases upon termination of your service tothe Company for any reason, except as may explicitly be provided otherwise in the Plan or this Agreement.

13. Applicable Law. This Agreement will be interpreted and enforced under the laws of the State of Texas (withoutregard to their choice of law provisions).

* * *

By clicking “Agree” below, you acknowledge receipt of a copy of the Plan, and agree that (a) you have carefullyread, fully understand and agree to all of the terms and conditions described in the attached Agreement and the Plandocument; (b) you understand and agree that the Plan and the Agreement, including any attachments, constitute theentire understanding between you and the Company regarding this award of RSUs, and that any prior agreements,commitments or negotiations concerning this grant of RSUs are replaced and superseded; (c) you have been given anopportunity to consult your own legal and tax counsel with respect to all matters relating to this grant of RSUs priorto accepting this Agreement and that you have either consulted such counsel or voluntarily declined to consult suchcounsel and (d) any tax liability or other adverse tax consequences to you resulting from the grant or vesting of theRSUs will be the responsibility of, and will be borne entirely by, you.

In addition, by clicking “Agree” below you are consenting to receive documents from the Company and SoliumCapital Inc. or any future plan administrator (the “Administrator”) by means of electronic delivery. You agree thatyou have received notice that delivery of the Agreement, prospectus, prospectus updates, annual reports of theCompany, and any other documents that the Company is required or desires to deliver to you as a result of yourparticipation in the 2018 Omnibus Stock Incentive Plan, or any other equity or incentive plans maintained or adoptedby the Company in the future (the “Incentive Plans”) will be made electronically through the Administrator’s websiteor via the most recent email account that the Company has on file for you at the time of the document distribution. Ifdocuments are posted to the Administrator’s website rather than emailed directly to you, then the Company or theAdministrator will send you an email notifying you that a document or documents have been posted and instructionon how to access those documents. You understand that in order to view these documents you will need a connectionto the internet, you will need to log into your email and/or the Administrator’s intranet page, and you will need tohave internet web browsing software and software that can process PDF documents, such as Adobe Reader, installedon the computer you are using in order to view the documents being delivered to you. These programs and aninternet connection are available on your workplace computer. If you are attempting to access these documents fromyour home computer and you do not have access to this software, the Company will provide you with free softwareand technical assistance in order to access the documents. The only cost to you of viewing the documentselectronically should be any charges you may incur for connection to the internet, to the extent you do not access thedocuments from your work computer and you do not have access to a free internet connection outside of work. Thisconsent shall be effective for the entire time that you are a participant in the Incentive Plans.

PACIFIC DRILLING S.A. /s/ Bernie G. Wolford Jr. Title: CEO

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Exhibit 10.12PACIFIC DRILLING S.A.

2018 OMNIBUS STOCK INCENTIVE PLANRESTRICTED STOCK UNIT AGREEMENT

(Director Award)

Pacific Drilling S.A. (the “Company”) hereby grants you (the “Participant”) the following restricted stock units(“RSUs”) representing the right to receive shares of the Company’s share capital (“Shares”). The terms and conditions of thisgrant of RSUs are set forth in this Restricted Stock Unit Agreement (this “Agreement”), as well as in the Pacific DrillingS.A. 2018 Omnibus Stock Incentive Plan (the “Plan”), which is made a part of this document. Except as otherwise defined inthis Agreement, capitalized terms have the respective meanings set forth in the Plan.

Date of Grant: December 20, 2018 Name of Participant: [ ] Number of RSUs: 7,500 1. The Grant. Effective on the Date of Grant, the Company grants to the Participant under the Plan the total number ofRSUs specified above, subject to the terms, conditions, and restrictions set forth in the Plan and in this Agreement.

2. Vesting.

(a) Vesting Schedule. Subject to the terms and conditions set forth in this Agreement and the Plan (and yourcontinued service on each Vesting Date), the RSUs will vest as follows: one-half of the grant on each of the first and secondanniversaries of the Date of Grant. Any fractional RSU resulting from the application of the vesting schedule shall beaggregated and the RSU resulting from such aggregation shall vest on the final Vesting Date.

(b) Termination of Service. After your service to the Company or its Affiliates terminates for any reason,subject always to any terms and conditions in the Plan or this Agreement, vesting of your RSUs immediately stops and theRSUs that are not vested as of the date your service to the Company or its Affiliates terminates shall be forfeitedimmediately.

(c) Change of Control. Subject to your continued employment or service on the date of a Change of Control,vesting of the RSUs that are unvested as of the Change of Control is as follows: 100% of the unvested RSUs will becomefully vested on the consummation of the Change of Control.

3. Delivery; Certificates; Legends.

(a) Within 30 days following the vesting of the RSUs, the Company shall cause a certificate or certificates forShares to be issued without legend (except for any legend required pursuant to applicable securities laws or any otheragreement to which you are a party) in your name in cancellation for the RSUs that are vested, if any, as of such date.

(b) The Company, in its sole discretion, may elect to deliver certificates either in certificate form orelectronically to a brokerage account established for your benefit at a brokerage/financial institution selected by theCompany. You agree to complete and sign any documents and take any additional actions that the Company may request toenable it to deliver the shares on your behalf.

(c) You agree that the Shares which you may acquire pursuant to this Agreement will not be sold or otherwisedisposed of in any manner which would constitute a violation of any applicable federal, state, or foreign securities laws. Youalso agree that (i) the Company may refuse to register the transfer of the Shares acquired pursuant to this Agreement on thestock transfer records of the Company if such proposed transfer would, in the opinion of counsel satisfactory to theCompany, constitute a violation of any applicable securities law, and (ii) the Company may give related instructions to itstransfer agent, if any, to stop registration of the transfer of such Shares.

4. Nontransferability of RSUs. You may not sell, transfer, pledge, exchange, hypothecate or dispose of the RSUs. Abreach of these terms of this Agreement shall cause a forfeiture of the RSUs.

5. No Shareholder Rights. The RSUs granted pursuant to this Agreement do not and shall not entitle you to any rightsof a holder of Shares prior to the date Shares are issued to you in settlement of the Award.

6. Tax Matters.

(a) Tax Liability and Withholding. You shall be required to pay to the Company, and the Company shall havethe right to deduct from any compensation paid to you, the amount of any required withholding taxes in respect of the RSUsand to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of suchwithholding taxes prior to the issuance of any Shares. You may satisfy any federal, state or local tax withholding obligationby tendering a cash payment, or, if permitted by the Committee, may elect to (a) have the Company withhold Shares fromthe Shares otherwise issuable to you under this Award or (b) deliver previously owned and unencumbered Shares. Anyelection to use Shares to satisfy any or all of your withholding tax liability must be made prior to the date that the amount oftax to be withheld is determined in accordance with applicable tax laws.

(b) Section 409A. This Agreement is intended to comply with Section 409A of the Code or an exemptiontherefrom, and all such provisions shall be construed and interpreted accordingly. For purposes of Section 409A of the Code,each payment made under this Agreement will be treated as a separate payment. Notwithstanding anything contained hereinto the contrary, if necessary to avoid penalties under Section 409A of the Code, the Participant will not be considered to haveterminated service for purposes of this Agreement unless the Participant would be considered to have incurred a "separationfrom service” within the meaning of Section 409A of the Code.

7. Compliance With Securities Law. Notwithstanding any provision of this Agreement to the contrary, the issuanceof Shares will be subject to compliance with all applicable requirements of federal, state, or foreign law with respect to suchsecurities and with the requirements of any stock exchange or market system upon which the Shares may then be listed. NoShares will be issued hereunder if such issuance would constitute a violation of any applicable federal, state, or foreignsecurities laws or other law or regulations or the requirements of any stock exchange or market system upon which theShares may then be listed. In addition, Shares will not be issued hereunder unless (a) a registration statement under theSecurities Act of 1933, as amended (the “Act”), is at the time of issuance in effect with respect to the shares issued or (b) inthe opinion of legal counsel to the Company, the shares issued may be issued in accordance with the terms of an applicableexemption from the registration requirements of the Act. The inability of the Company to obtain from any regulatory bodyhaving jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance andsale of any shares subject to the Award will relieve the Company of any liability in respect of the failure to issue such sharesas to which such requisite authority has not been obtained. As a condition to any issuance hereunder, the Company mayrequire you to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicablelaw or regulation and to make any representation or warranty with respect to such compliance as may be requested by theCompany. From time to time, the Board and appropriate officers of the Company are authorized to take the actions necessaryand appropriate to file required documents with governmental authorities, stock exchanges, and other appropriate Persons tomake shares of Shares available for issuance.

8. Clawback. Notwithstanding anything to the contrary contained herein, the Company may cancel the RSUs if youviolate any non-competition, non-solicitation, non-disparagement or non-disclosure covenant or agreement with theCompany or any Affiliate (after having been given notice of any such violation and giving effect to any applicable cureperiod set forth therein), as determined by the Board (excluding you) in good faith. In such event, you will forfeit anycompensation, gain or other value realized thereafter on the vesting or settlement of the RSUs, the sale or other transfer ofthe RSUs, or the sale of Shares acquired in respect of the RSUs, and must promptly repay such amounts to the Company.

9. Retention Rights. This Agreement does not give you the right to serve as a member of the Board or be retained bythe Company or its Affiliates in any other capacity. The Company and its Affiliates reserve the right to terminate yourservice at any time and for any reason.

10. Tax Disclaimer. You agree that you are responsible for consulting your own tax advisor as to the tax consequencesassociated with the grant and vesting of your RSUs. The tax rules governing RSUs are complex, change frequently anddepend on the individual taxpayer’s situation.

By accepting this grant of RSUs, you acknowledge that any tax liability or other adverse tax consequences to youresulting from the grant or vesting of the RSUs will be the responsibility of, and will be borne entirely by, you. YOU ARETHEREFORE ENCOURAGED TO CONSULT YOUR OWN TAX ADVISOR BEFORE ACCEPTING THE GRANT OFTHESE RSUS.

11. The Plan and Other Agreements. The text of the Plan is incorporated in this Agreement by reference. Capitalizedterms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan. ThisAgreement, including any attachments, and the Plan constitute the entire understanding between you and the Companyregarding this grant of RSUs. Any prior agreements, commitments or negotiations concerning this grant of RSUs aresuperseded. To the extent the terms of this Agreement conflict with the terms of the Plan, the terms of this Agreement shallprevail.

12. Miscellaneous Provisions.

(a) You understand and acknowledge that (i) the Plan is entirely discretionary, (ii) the Company has reservedthe right to amend, suspend or terminate the Plan at any time, (iii) the grant of RSUs does not in any way create anycontractual or other right to receive additional grants of RSUs (or benefits in lieu of RSUs) at any time or in any amount and(iv) all determinations with respect to any additional grants, including (without limitation) the times when RSUs will begranted, the number of Shares offered, and the vesting schedule, will be at the sole discretion of the Company.

(b) You understand and acknowledge that participation in the Plan ceases upon termination of your service tothe Company for any reason, except as may explicitly be provided otherwise in the Plan or this Agreement.

13. Applicable Law. This Agreement will be interpreted and enforced under the laws of the State of Texas (withoutregard to their choice of law provisions).

* * *

By clicking “Agree” below, you acknowledge receipt of a copy of the Plan, and agree that (a) you have carefullyread, fully understand and agree to all of the terms and conditions described in the attached Agreement and the Plandocument; (b) you understand and agree that the Plan and the Agreement, including any attachments, constitute theentire understanding between you and the Company regarding this award of RSUs, and that any prior agreements,commitments or negotiations concerning this grant of RSUs are replaced and superseded; (c) you have been given anopportunity to consult your own legal and tax counsel with respect to all matters relating to this grant of RSUs priorto accepting this Agreement and

that you have either consulted such counsel or voluntarily declined to consult such counsel and (d) any tax liability orother adverse tax consequences to you resulting from the grant or vesting of the RSUs will be the responsibility of,and will be borne entirely by, you.

In addition, by clicking “Agree” below you are consenting to receive documents from the Company and SoliumCapital Inc. or any future plan administrator (the “Administrator”) by means of electronic delivery. You agree thatyou have received notice that delivery of the Agreement, prospectus, prospectus updates, annual reports of theCompany, and any other documents that the Company is required or desires to deliver to you as a result of yourparticipation in the 2018 Omnibus Stock Incentive Plan, or any other equity or incentive plans maintained or adoptedby the Company in the future (the “Incentive Plans”) will be made electronically through the Administrator’s websiteor via the most recent email account that the Company has on file for you at the time of the document distribution. Ifdocuments are posted to the Administrator’s website rather than emailed directly to you, then the Company or theAdministrator will send you an email notifying you that a document or documents have been posted and instructionon how to access those documents. You understand that in order to view these documents you will need a connectionto the internet, you will need to log into your email and/or the Administrator’s intranet page, and you will need tohave internet web browsing software and software that can process PDF documents, such as Adobe Reader, installedon the computer you are using in order to view the documents being delivered to you. These programs and aninternet connection are available on your workplace computer. If you are attempting to access these documents fromyour home computer and you do not have access to this software, the Company will provide you with free softwareand technical assistance in order to access the documents. The only cost to you of viewing the documentselectronically should be any charges you may incur for connection to the internet, to the extent you do not access thedocuments from your work computer and you do not have access to a free internet connection outside of work. Thisconsent shall be effective for the entire time that you are a participant in the Incentive Plans.

PACIFIC DRILLING S.A. By: Title: Date:

Exhibit 10.13

DRAFT 12/12/2019TIME BASED RSUs

PACIFIC DRILLING S.A.2018 OMNIBUS STOCK INCENTIVE PLANRESTRICTED STOCK UNIT AGREEMENT

(Director Award)

Pacific Drilling S.A. (the “Company”) hereby grants you (the “Participant”) the following restricted stock units(“RSUs”) representing the right to receive shares of the Company’s share capital (“Shares”). The terms and conditions of thisgrant of RSUs are set forth in this Restricted Stock Unit Agreement (this “Agreement”), as well as in the Pacific DrillingS.A. 2018 Omnibus Stock Incentive Plan (the “Plan”), which is made a part of this document. Except as otherwise defined inthis Agreement, capitalized terms have the respective meanings set forth in the Plan.

Date of Grant: December 12, 2019 Name of Participant: [ ] Number of RSUs: 3,750 1. The Grant. Effective on the Date of Grant, the Company grants to the Participant under the Plan the total number ofRSUs specified above, subject to the terms, conditions, and restrictions set forth in the Plan and in this Agreement.

2. Vesting.

(a) Vesting Schedule. Subject to the terms and conditions set forth in this Agreement and the Plan (and yourcontinued service on the Vesting Date), the RSUs will vest on the first anniversary of the Date of Grant.

(b) Termination of Service. After your service to the Company or its Affiliates terminates for any reason,subject always to any terms and conditions in the Plan or this Agreement, vesting of your RSUs immediately stops and theRSUs that are not vested as of the date your service to the Company or its Affiliates terminates shall be forfeitedimmediately.

(c) Change of Control. Subject to your continued employment or service on the date of a Change of Control,vesting of the RSUs that are unvested as of the Change of Control is as follows: 100% of the unvested RSUs will becomefully vested on the consummation of the Change of Control.

3. Delivery; Certificates; Legends.

(a) Within 30 days following the vesting of the RSUs, the Company shall cause a certificate or certificates forShares to be issued without legend (except for any legend required pursuant to applicable securities laws or any otheragreement to which you are a party) in your name in cancellation for the RSUs that are vested, if any, as of such date.

(b) The Company, in its sole discretion, may elect to deliver certificates either in certificate form orelectronically to a brokerage account established for your benefit at a brokerage/financial institution selected by theCompany. You agree to complete and sign any documents and take any additional actions that the Company may request toenable it to deliver the shares on your behalf.

(c) You agree that the Shares which you may acquire pursuant to this Agreement will not be sold or otherwisedisposed of in any manner which would constitute a violation of any applicable federal, state, or foreign securities laws. Youalso agree that (i) the Company may refuse to register the transfer of the Shares acquired

pursuant to this Agreement on the stock transfer records of the Company if such proposed transfer would, in the opinion ofcounsel satisfactory to the Company, constitute a violation of any applicable securities law, and (ii) the Company may giverelated instructions to its transfer agent, if any, to stop registration of the transfer of such Shares.

4. Nontransferability of RSUs. You may not sell, transfer, pledge, exchange, hypothecate or dispose of the RSUs. Abreach of these terms of this Agreement shall cause a forfeiture of the RSUs.

5. No Shareholder Rights. The RSUs granted pursuant to this Agreement do not and shall not entitle you to any rightsof a holder of Shares prior to the date Shares are issued to you in settlement of the Award.

6. Tax Matters.

(a) Tax Liability and Withholding. You shall be required to pay to the Company, and the Company shall havethe right to deduct from any compensation paid to you, the amount of any required withholding taxes in respect of the RSUsand to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of suchwithholding taxes prior to the issuance of any Shares. You may satisfy any federal, state or local tax withholding obligationby tendering a cash payment, or, if permitted by the Committee, may elect to (a) have the Company withhold Shares fromthe Shares otherwise issuable to you under this Award or (b) deliver previously owned and unencumbered Shares. Anyelection to use Shares to satisfy any or all of your withholding tax liability must be made prior to the date that the amount oftax to be withheld is determined in accordance with applicable tax laws.

(b) Section 409A. This Agreement is intended to comply with Section 409A of the Code or an exemptiontherefrom, and all such provisions shall be construed and interpreted accordingly. For purposes of Section 409A of the Code,each payment made under this Agreement will be treated as a separate payment. Notwithstanding anything contained hereinto the contrary, if necessary to avoid penalties under Section 409A of the Code, the Participant will not be considered to haveterminated service for purposes of this Agreement unless the Participant would be considered to have incurred a "separationfrom service” within the meaning of Section 409A of the Code.

7. Compliance With Securities Law. Notwithstanding any provision of this Agreement to the contrary, the issuanceof Shares will be subject to compliance with all applicable requirements of federal, state, or foreign law with respect to suchsecurities and with the requirements of any stock exchange or market system upon which the Shares may then be listed. NoShares will be issued hereunder if such issuance would constitute a violation of any applicable federal, state, or foreignsecurities laws or other law or regulations or the requirements of any stock exchange or market system upon which theShares may then be listed. In addition, Shares will not be issued hereunder unless (a) a registration statement under theSecurities Act of 1933, as amended (the “Act”), is at the time of issuance in effect with respect to the shares issued or (b) inthe opinion of legal counsel to the Company, the shares issued may be issued in accordance with the terms of an applicableexemption from the registration requirements of the Act. The inability of the Company to obtain from any regulatory bodyhaving jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance andsale of any shares subject to the Award will relieve the Company of any liability in respect of the failure to issue such sharesas to which such requisite authority has not been obtained. As a condition to any issuance hereunder, the Company mayrequire you to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicablelaw or regulation and to make any representation or warranty with respect to such compliance as may be requested by theCompany. From time to time, the Board and appropriate officers of the Company are authorized to take the actions necessaryand appropriate to file required documents with governmental authorities, stock exchanges, and other appropriate Persons tomake shares of Shares available for issuance.

8. Clawback. Notwithstanding anything to the contrary contained herein, the Company may cancel the RSUs if youviolate any non-competition, non-solicitation, non-disparagement or non-disclosure covenant or agreement with theCompany or any Affiliate (after having been given notice of any such violation and giving effect to any applicable cureperiod set forth therein), as determined by the Board (excluding you) in good faith. In such event, you will forfeit anycompensation, gain or other value realized thereafter on the vesting or settlement of the RSUs, the sale or other transfer ofthe RSUs, or the sale of Shares acquired in respect of the RSUs, and must promptly repay such amounts to the Company.

9. Retention Rights. This Agreement does not give you the right to serve as a member of the Board or be retained bythe Company or its Affiliates in any other capacity. The Company and its Affiliates reserve the right to terminate yourservice at any time and for any reason.

10. Tax Disclaimer. You agree that you are responsible for consulting your own tax advisor as to the tax consequencesassociated with the grant and vesting of your RSUs. The tax rules governing RSUs are complex, change frequently anddepend on the individual taxpayer’s situation.

By accepting this grant of RSUs, you acknowledge that any tax liability or other adverse tax consequences to youresulting from the grant or vesting of the RSUs will be the responsibility of, and will be borne entirely by, you. YOU ARETHEREFORE ENCOURAGED TO CONSULT YOUR OWN TAX ADVISOR BEFORE ACCEPTING THE GRANT OFTHESE RSUS.

11. The Plan and Other Agreements. The text of the Plan is incorporated in this Agreement by reference. Capitalizedterms used in this Agreement and not otherwise defined herein shall have the meanings ascribed to them in the Plan. ThisAgreement, including any attachments, and the Plan constitute the entire understanding between you and the Companyregarding this grant of RSUs. Any prior agreements, commitments or negotiations concerning this grant of RSUs aresuperseded. To the extent the terms of this Agreement conflict with the terms of the Plan, the terms of this Agreement shallprevail.

12. Miscellaneous Provisions.

(a) You understand and acknowledge that (i) the Plan is entirely discretionary, (ii) the Company has reservedthe right to amend, suspend or terminate the Plan at any time, (iii) the grant of RSUs does not in any way create anycontractual or other right to receive additional grants of RSUs (or benefits in lieu of RSUs) at any time or in any amount and(iv) all determinations with respect to any additional grants, including (without limitation) the times when RSUs will begranted, the number of Shares offered, and the vesting schedule, will be at the sole discretion of the Company.

(b) You understand and acknowledge that participation in the Plan ceases upon termination of your service tothe Company for any reason, except as may explicitly be provided otherwise in the Plan or this Agreement.

13. Applicable Law. This Agreement will be interpreted and enforced under the laws of the State of Texas (withoutregard to their choice of law provisions).

* * *

By clicking “Agree” below, you acknowledge receipt of a copy of the Plan, and agree that (a) you have carefullyread, fully understand and agree to all of the terms and conditions described in the attached Agreement and the Plandocument; (b) you understand and agree that the Plan and the Agreement, including any attachments, constitute theentire understanding between you and the Company regarding this award of RSUs, and that any prior agreements,commitments or negotiations concerning this grant of RSUs are replaced and superseded; (c) you have been given anopportunity to consult your own legal and tax counsel with respect to all matters relating to this grant of RSUs priorto accepting this Agreement and

that you have either consulted such counsel or voluntarily declined to consult such counsel and (d) any tax liability orother adverse tax consequences to you resulting from the grant or vesting of the RSUs will be the responsibility of,and will be borne entirely by, you.

In addition, by clicking “Agree” below you are consenting to receive documents from the Company and SoliumCapital Inc. or any future plan administrator (the “Administrator”) by means of electronic delivery. You agree thatyou have received notice that delivery of the Agreement, prospectus, prospectus updates, annual reports of theCompany, and any other documents that the Company is required or desires to deliver to you as a result of yourparticipation in the 2018 Omnibus Stock Incentive Plan, or any other equity or incentive plans maintained or adoptedby the Company in the future (the “Incentive Plans”) will be made electronically through the Administrator’s websiteor via the most recent email account that the Company has on file for you at the time of the document distribution. Ifdocuments are posted to the Administrator’s website rather than emailed directly to you, then the Company or theAdministrator will send you an email notifying you that a document or documents have been posted and instructionon how to access those documents. You understand that in order to view these documents you will need a connectionto the internet, you will need to log into your email and/or the Administrator’s intranet page, and you will need tohave internet web browsing software and software that can process PDF documents, such as Adobe Reader, installedon the computer you are using in order to view the documents being delivered to you. These programs and aninternet connection are available on your workplace computer. If you are attempting to access these documents fromyour home computer and you do not have access to this software, the Company will provide you with free softwareand technical assistance in order to access the documents. The only cost to you of viewing the documentselectronically should be any charges you may incur for connection to the internet, to the extent you do not access thedocuments from your work computer and you do not have access to a free internet connection outside of work. Thisconsent shall be effective for the entire time that you are a participant in the Incentive Plans.

PACIFIC DRILLING S.A. By: Title: Date:

Exhibit 10.14

PACIFIC DRILLING S.A.

NOTICE OF LONG TERM INCENTIVE CASH AWARD (Executive/Employee Form)

Pacific Drilling S.A. (the “Company”) hereby grants you (the “Participant”) the following Long Term Incentive Cash Award (the “Cash Award”). The terms and conditions of this Cash Award are set forth in this notice below.

Participant Name: Employee Number: Grant Name: Award Date: December 12, 2019 Total Cash Award:

Vesting Schedule: The Cash Award will vest on December 31, 2020 (the “Vesting Date”), provided you are employed by the Company or anaffiliate as of such date. Except as provided below, any termination of employment or separation of service prior to theVesting Date will result in forfeiture of the unvested Cash Award.

In the event of a Change of Control (as defined in the Company’s 2018 Omnibus Stock Incentive Plan) prior to the VestingDate, the unvested Cash Award will remain outstanding and continue to vest on the Vesting Date, provided that, if on orwithin six months after the Change of Control, you are terminated by your employer without Cause or you terminate youremployment for Good Reason, the unvested Cash Award shall vest and be paid immediately upon your termination.

Except as otherwise provided in an employment or severance agreement between you and the Company or an affiliate,for purposes of this Notice “Cause” shall mean: (i) your failure to substantially perform your material duties owed to theCompany or your employer, under any employment agreement between you and the Company or your employer orotherwise (other than as a result of incapacity due to physical or mental illness); (ii) your gross negligence, fraud or willfulmisconduct in the course of your employment with your employer that has a detrimental effect on the Company, youremployer or any of their Affiliates; (iii) your commission of any act or your failure to take any act that the Company or youremployer reasonably determines was intended by you to injure the reputation, business, or business relationships of theCompany, your employer or any of their affiliates; (iv) your indictment of, conviction of, or plea of guilty or nolo contendereto (A) any misdemeanor involving moral turpitude, theft, unethical business conduct or other conduct which could reflect insome material fashion unfavorably upon the Company, your employer or any of their affiliates or (B) any felony (or theequivalent of such misdemeanor or felony in a jurisdiction other than the United States); (v) your material breach of anyemployment agreement between yourself and your employer, including without limitation, any of the restrictive covenantscontained therein; or (vi) your intentional, material misappropriation, embezzlement or misuse of funds or propertybelonging to the Company, your employer or any of their Affiliates.

Except as otherwise provided in an employment or severance agreement between you and the Company or an affiliate,for purposes of this Notice “Good Reason” shall mean: (i) A material diminution in your title, duties or responsibilities, orthe assignment to you of duties or responsibilities inconsistent in any material respect with your title, duties andresponsibilities as set forth in any employment agreement between you and your employer; (ii) A material reduction inyour base salary, other than as part of an across-the-board reduction in the salaries of other similarly situated employeesof the Company or your employer; (iii) Any reduction in the aggregate compensation and benefits provided to you underany employment agreement between you and your employer, other than any such reduction that is part of an across-the-board reduction in aggregate compensation and benefits provided to other similarly situated employees of the Companyor your employer; or (iv) Any material breach by your employer of any employment agreement between yourself and youremployer. Notwithstanding the foregoing, you shall not have the right to terminate your employment hereunder for GoodReason unless (1) within 30 days of the initial existence of the condition or conditions giving rise to such right you providewritten notice to the Company of the existence of such condition or conditions, and (2) the Company fails to remedy suchcondition or conditions within 30 days following the receipt of such written notice (the “Cure Period”). If any such conditionis not remedied within the Cure Period, you must terminate your employment with the Company within a reasonableperiod of time, not to exceed 30 days, following the end of the Cure Period.

Other TermsApplicable to theCash Award:

Payment Timing: The Cash Award will be paid to you as soon as reasonably practical after the Vesting Date, but no laterthan 30 days thereafter, in accordance with the Company’s normal payroll practices, subject to any withholding taxes duein connection with the payment.

Clawback: Notwithstanding anything to the contrary contained herein, the Company may cancel the Cash Award if youviolate any non-competition, non-solicitation, non-disparagement or non-disclosure covenant or agreement with theCompany or any affiliate, including any covenants contained in the Pacific Drilling Global Employee Handbook (afterhaving been given notice of any such violation and giving effect to any applicable cure period set forth therein), asdetermined by the Company in good faith. In such event, you will forfeit any compensation, gain or other value realizedthereafter on the vesting of the Cash Award, and must promptly repay such amounts to the Company.

Retention Rights: This Notice does not give you the right to continue in the employ of the Company or its affiliates or to beretained by the Company or its affiliates in any other capacity.

Administration: The Cash Award will be administered by the Compensation Committee of the Company’s Board ofDirectors (the “Committee”). All determinations, interpretations and other decisions under or with respect to the CashAward by the Committee shall be final, conclusive and binding.

Tax Matters: The Cash Award is intended to be exempt from Section 409A of the Code as a short term deferral, and allsuch provisions shall be construed and interpreted accordingly.

By clicking “Agree” below, you acknowledge receipt of this Notice, and agree that (a) you have carefully read, fully understand andagree to all of the terms and conditions described in this Notice; (b) you understand and agree that this Notice constitutes theentire understanding between you and the Company regarding this Cash Award, and (c) any tax liability in connection with theCash Award will be your responsibility. In addition, by clicking “Agree” below you are consenting to receive documents from theCompany and Solium Capital Inc. or any future plan administrator (the “Administrator”) by means of electronic delivery.

Pacific Drilling S.A.

SOCIÉTÉ ANONYME

8-10 Avenue de la Gare

L-1610 Luxembourg By: [Insert Bernie Wolford Signature]

Title: CEO

Exhibit 10.15

PACIFIC DRILLING S.A.

NOTICE OF LONG TERM INCENTIVE CASH AWARD (Director Form)

Pacific Drilling S.A. (the “Company”) hereby grants you (the “Participant”) the following Long Term Incentive Cash Award (the “Cash Award”). The terms and conditions of this Cash Award are set forth in this notice below.

Participant Name: Employee Number: Grant Name: Award Date: December 12, 2019 Total Cash Award: $50,000 Vesting Schedule: The Cash Award will vest on the first anniversary of the Award Date (the “Vesting Date”), subject to your continued

service as a director as of such date. Except as provided below, any separation of service prior to the Vesting Date willresult in forfeiture of the unvested Cash Award.

In the event of a Change of Control (as defined in the Company’s 2018 Omnibus Stock Incentive Plan) prior to theVesting Date, the unvested Cash Award will become fully vested on the date of the Change of Control.

Other TermsApplicable to theCash Award:

Payment Timing: The Cash Award will be paid to you as soon as reasonably practical after the Vesting Date, but nolater than 30 days thereafter, in accordance with the Company’s normal payroll practices, subject to any withholdingtaxes due in connection with the payment.

Clawback: Notwithstanding anything to the contrary contained herein, the Company may cancel the Cash Award if youviolate any non-competition, non-solicitation, non-disparagement or non-disclosure covenant or agreement with theCompany or any affiliate, including any covenants contained in the Pacific Drilling Global Employee Handbook (afterhaving been given notice of any such violation and giving effect to any applicable cure period set forth therein), asdetermined by the Company in good faith. In such event, you will forfeit any compensation, gain or other value realizedthereafter on the vesting of the Cash Award, and must promptly repay such amounts to the Company.

Retention Rights: This Notice does not give you the right to continue in the service of the Company or its affiliates inany capacity.

Administration: The Cash Award will be administered by the Compensation Committee of the Company’s Board ofDirectors (the “Committee”). All determinations, interpretations and other decisions under or with respect to the CashAward by the Committee shall be final, conclusive and binding.

Tax Matters: The Cash Award is intended to be exempt from Section 409A of the Code as a short term deferral, andall such provisions shall be construed and interpreted accordingly.

By clicking “Agree” below, you acknowledge receipt of this Notice, and agree that (a) you have carefully read, fully understand andagree to all of the terms and conditions described in this Notice; (b) you understand and agree that this Notice constitutes theentire understanding between you and the Company regarding this Cash Award, and (c) any tax liability in connection with theCash Award will be your responsibility. In addition, by clicking “Agree” below you are consenting to receive documents from theCompany and Solium Capital Inc. or any future plan administrator (the “Administrator”) by means of electronic delivery. Pacific Drilling S.A. SOCIÉTÉ ANONYME 8-10 Avenue de la Gare L-1610 Luxembourg By: [Insert Bernie Wolford Signature] Title: CEO

Exhibit 10.16

Pacific Drilling S.A. Annual Incentive PlanDocument Id.: HRS-WWD_PLN-010

Document Version: R03Effective Date: 01 January, 2019

Document Owner: SVP Corporate Services Copyright © 2019 Pacific Drilling Unpublished Work; all rights reserved.

Document Title: Pacific Drilling S.A. Annual Incentive PlanDocument Id.: HRS-WWD_PLN-010

PART I - PLAN FRAMEWORK1. Plan Name

The Pacific Drilling S.A. Annual Incentive Plan (“the Plan”).

2. Plan ObjectiveThe objective of the Plan is to advance the interests of Pacific Drilling S.A. and its subsidiaries (the “Company”) byproviding a mechanism to encourage and reward participants and align employee incentives with Company performance.

3. Plan TermThe Plan will commence on January 1, 2019 and will remain in effect for successive fiscal years (each such fiscal year, a“Plan Year”), until terminated as provided herein.

4. Plan EligibilityOn-shore and offshore employees of the Company whose decisions, activities, and performance have a significant impacton the business results may participate in the Plan as approved by Compensation Committee (the “Committee”) of thePacific Drilling S.A. Board of Directors (the “Board”) or the Chief Executive Officer (CEO) and SVP Corporate Services, asprovided in Part II.

5. Individual Target Bonus LevelsThe Committee will recommend to the Board for approval each individual participant’s target bonus level. A participant’starget bonus level reflects the participant’s level of responsibility within the organization, local competitive pay practices,external market comparators, and other criteria. The total of all individual target bonuses for a Plan Year is the “TargetBonus Pool.”

6. Company Performance Targets and AchievementFor each Plan Year, the Board, in collaboration with the CEO, establishes the Company performance targets under thePlan.

7. Determination of Achievement of Company Performance Targets and Bonus PayoutThe Committee will determine achievement of the applicable Company performance targets as of the end of each PlanYear and adjust the applicable Target Bonus Pool to reflect the actual results of the performance targets, excluded itemsand the impact of Board-approved strategic decisions, and any discretionary bonus recommendations, as follows (suchamount being the “Actual Bonus Pool”):

80% of the Actual Bonus Pool will be awarded based on the Company’s achievement against the Companyperformance targets as adjusted for the impact of Board-approved exclusions and strategic decisions

20% of the Actual Bonus Pool will be awarded at the discretion of the Board.

The Committee will recommend the Actual Bonus Pool to the Board for approval. Depending on the Board’s subjectiveassessment of performance, the Actual Bonus Pool could be adjusted upwards or downwards. Factors for considerationcould include absolute total shareholder return, execution of strategic priorities, liquidity, strategic decisions, etc.

8. Allocation of the Actual Bonus PoolThe total allocated bonus dollars for each Plan Year will not exceed the Actual Bonus Pool approved by the Board.

Uncontrolled when printed. Refer to controlled electronic version. Page 1 of 4

Pacific Drilling S.A. Annual Incentive PlanDocument Id.: HRS-WWD_PLN-010

Document Version: R03Effective Date: 01 January, 2019

Document Owner: SVP Corporate Services

Each participant’s bonus payment for a given Plan Year will generally be determined by his or her pro-rata share of theapproved Actual Bonus Pool, based upon their share of the Target Bonus Pool, subject to adjustments:

The individual allocation of the bonus for executive officers will be determined by the Board of Directors.

The individual allocation of the bonus for those below the executive officer level will be at the discretion of theChief Executive Officer and the Senior Vice President Corporate Services as set forth in Part II, Section 1. Anindividual’s Actual Bonus Payout may be influenced by multiple factors during the Plan Year, including but notlimited to individual performance, team performance and the outcome of special projects.

PART II – PLAN RULES AND ADMINISTRATION

1. AdministrationThe Plan shall be administered by the Committee, subject to the overall authority of the Board. The Committee shall havefull authority to interpret the Plan, including, in particular, authority to:

designate participants for each Plan Year;

establish performance goals and objectives for each Plan Year;

adjust performance goals for strategic decisions made during the Plan Year;

establish, and recommend to the Board for approval, the Target Bonus Pool for each Plan Year;

establish regulations for the administration of the Plan and make all determinations deemed necessary for theadministration of the Plan; and

determine whether the Company performance targets have been met and calculate and recommend to the Boardfor approval the Actual Bonus Pool and individual bonus payouts for each Plan Year.

In addition to the powers delegated herein, the Committee and the Board may, in their discretion, delegate all or part oftheir powers and authority under the Plan to one or more executive officers and/or directors of the Company; providedhowever that neither may delegate its responsibility with respect to awards to executive officers of the Company. Unlessotherwise determined by the Committee and the Board, each expressly delegates to each of the Chief Executive Officerand the Senior Vice President Corporate Services, either together or acting alone, the authority to determine the individualtarget bonus levels, and make changes thereto, with respect to participants who are not executive officers of theCompany.

All decisions by the Committee, the Board, or their delegees pursuant to the provisions of the Plan shall be final,conclusive and binding on all persons, including the participants, the Company and its respective equity holders.

The Committee may appoint agents to assist in administering the Plan. The Committee and each member thereof shall beentitled to, in good faith, rely or act upon any report or other information furnished by any officer or employee of theCompany, the Company's certified public accountants, consultants or any other agent assisting in the administration of thePlan. Members of the Committee or the Board and any officer or employee of the Company acting at the direction or onbehalf of the Committee or the Board shall not be personally liable for any action or determination taken or made in goodfaith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected by the Companywith respect to any such action or determination.

Uncontrolled when printed. Refer to controlled electronic version. Page 2 of 4

Pacific Drilling S.A. Annual Incentive PlanDocument Id.: HRS-WWD_PLN-010

Document Version: R03Effective Date: 01 January, 2019

Document Owner: SVP Corporate Services

2. Bonus PaymentAny bonus payment for a given Plan Year will be paid to participants no later than the end of the first quarter following theend of the applicable Plan Year.

3. LeaversExcept as otherwise provided herein, to be eligible for any payment under the Plan for a given Plan Year, participantsmust be (i) actively employed on the last day of the Plan Year, and (ii) actively employed and in good standing (asdetermined by the Company) on the date the bonus is paid. Individuals who are terminated by the Company for conductand/or performance reasons prior to a bonus payment for a given Plan Year are not eligible for either a partial or full bonuspayment. Individuals who are terminated for redundancy after the end of a Plan Year but before the applicable bonuspayment is made and who remain eligible for rehire will be eligible for the bonus payment.

4. New HiresNew employees who join the Plan after the start of a Plan Year will be eligible for payment under the Plan subject to thefollowing provisions:

If an employee is hired on or before September 30 of a given Plan Year, any bonus payment for that year will bebased on a pro-rated target bonus level, calculated by multiplying the annual target bonus level applicable to theemployee by a fraction, the numerator of which is the number of days he or she was employed during the PlanYear, and the denominator of which is 365.

If an employee is hired after September 30 of a given Plan Year, the employee will be ineligible for a bonuspayment for that year.

5. Promotions/Demotions/Salary Adjustment/TransfersIf an employee experiences a promotion, demotion, salary adjustment, transfer or other event that causes a change in theapplicable target bonus level, the employee’s final target bonus level for the Plan Year shall be the sum of the products of(i) each target bonus level applicable to the employee during the Plan multiplied by (ii) a fraction, the numerator of which isthe number of days during the Plan Year that the such target bonus level applied to the employee, and the denominator ofwhich is 365.

6. Leave of AbsenceParticipants on any approved leave of absence lasting longer than two (2) weeks, including, but not limited to medical,personal, and Family Medical Leave Act (FMLA) leaves, will not accrue bonus during the period of absence. Employees onan approved Leave of Absence at the time of bonus payment will not receive bonus payment until he or she returns fromthe Leave of Absence and is designated as an active employee.

7. Board DiscretionAs noted herein, the Actual Bonus Pool and bonus payouts under this Plan for each Plan Year are determined entirely atthe Board’s discretion. The Board’s authority includes, but is not limited to, the power to:

Approve the payout of only a portion of the recommended Actual Bonus Pool, if any;

Amend or modify the Plan’s design, terms, and targets; and

Terminate or suspend the Plan.

8. General Provisions8.1. Compliance with Legal Requirements. The Plan and the award of bonuses shall be subject to all applicablefederal and state laws, rules and regulations, and to such approvals by any regulatory or governmental agency as may berequired.

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Pacific Drilling S.A. Annual Incentive PlanDocument Id.: HRS-WWD_PLN-010

Document Version: R03Effective Date: 01 January, 2019

Document Owner: SVP Corporate Services

8.2. No Right to Employment. Nothing in the Plan or in any notice of award shall confer upon any person the right tocontinue in the employment of the Company or affect the right of the Company to terminate the employment of any Planparticipant.

8.3. No Right to Award. Unless otherwise expressly set forth in an employment agreement signed by the Companyand a participant, a participant shall not have any right to any bonus payment under the Plan until such bonus paymenthas been paid to such participant and participation in the Plan in one Plan Year does not connote any right to become aparticipant in the Plan in any future Plan Years.

8.4. Withholding. The Company shall have the right to withhold from any bonus payment, any federal, state or localincome and/or payroll taxes required by law to be withheld and to take such other action as the Committee may deemadvisable to enable the Company and participants to satisfy obligations for the payment of withholding taxes and other taxobligations relating to a bonus payment.

8.5. Unfunded Status. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create orbe construed to create a trust of any kind or a fiduciary relationship between the Company and any participant, beneficiaryor legal representative or any other person. All payments to be under the Plan shall be paid from the general funds of theCompany and no special or separate fund shall be established and no segregation of assets shall be made to assurepayment of such amounts. The Plan is not intended to be subject to the Employee Retirement Income Security Act of1974, as amended (ERISA).

8.6. Section 409A of the Code. It is intended that payments under the Plan qualify as short-term deferrals exemptfrom the requirements of Section 409A of the U.S. Internal Revenue Code of 1986, as amended (“Section 409A”). In theevent that any Award does not qualify for treatment as an exempt short-term deferral, it is intended that such amount willbe paid in a manner that satisfies the requirements of Section 409A. The Plan shall be interpreted and construedaccordingly.

8.7. Severability. In the event that any provision of the Plan shall be considered illegal or invalid for any reason, suchillegality or invalidity shall not affect the remaining provisions of the Plan, but shall be fully severable, and the Plan shall beconstrued and enforced as if such illegal or invalid provision had never been contained therein.

8.8 Conflicts. To the extent the terms of the Plan conflict with the terms of any employment or other agreementbetween the Company or its subsidiaries and a participant, the terms of such agreement shall prevail with respect to thatparticipant’s awards under the Plan.

Name: Amy Roddy Job Title: SVP Corporate Services Signature:

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Exhibit 10.17

EXECUTION VERSION

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is made and entered into by and between Pacific DrillingManpower, Inc., a Delaware corporation (the “Company”) and an indirect wholly-owned subsidiary of PacificDrilling S.A., a limited liability company (societe anonyme) organized under the laws of Luxembourg, having itsregistered office located at 8-10 Avenue de la Gare, L-1610 Luxembourg, and registered with the Luxembourgregister of commerce and companies under number B 159658, organized under the laws of Luxembourg (the“Parent”), the Parent for the purposes of Section 26 of this Agreement, and Bernie G. Wolford, Jr. (“Employee”)(collectively, the “Parties”), effective as of November 19, 2018 (the “Effective Date”).

1. Employment. During the Employment Period (as defined in Section 4), the Company shall employEmployee, and Employee shall serve, as Chief Executive Officer of the Company and Parent and in such otherposition or positions as may be assigned from time to time by the board of directors (the “Board”) of the Parent. Inaddition, during the Employment Period, Employee shall serve as a member of the Board for no additionalconsideration.

2. Duties and Responsibilities of Employee; Company Investment.

(a) During the Employment Period, Employee shall devote Employee’s full business time,attention and best efforts to the businesses of the Company, the Parent and its direct and indirect subsidiaries andaffiliates (collectively, the “Company Group”) as may be requested by the Board from time to time. Employee’sduties shall include those normally incidental to the position(s) identified in Section 1, as well as such additionalduties as may be assigned to Employee by the Board from time to time, which duties may include providing servicesto other members of the Company Group in addition to the Company and Parent. Employee may, without violatingthis Agreement, (i) as a passive investment, own publicly traded securities in such form or manner as shall notrequire any services by Employee in the operation of the entities in which such securities are owned; (ii) engage incharitable and civic activities; or (iii) with the prior written consent of the Board, engage in other personal andpassive investment activities, in each case, so long as such interests or activities do not interfere with Employee’sability to fulfill Employee’s duties and responsibilities under this Agreement and are not inconsistent withEmployee’s obligations to the Company Group or competitive with the business of the Company Group.Specifically, Employee shall continue to be permitted to be an owner, advisor, and otherwise affiliated with MassTechnology Corporation, an entity that specializes in oil storage tank tightness testing and water jet cutting in thedownstream oil and gas, chemical, industrial and military sectors; provided that (i) any such affiliation only requiresa de minimus amount of Executive’s time and (ii) Mass Technology Corporation does not compete with theCompany Group.

(b) Employee hereby represents and warrants that Employee is not the subject of, or a party to,any employment agreement, non-competition covenant, nondisclosure agreement, or any other agreement,obligation, restriction or understanding that would prohibit Employee from executing this Agreement or fullyperforming each of Employee’s duties and responsibilities hereunder, or would in any manner, directly or indirectly,limit or affect any of the duties and responsibilities that may now or in the future be assigned to Employee hereunder.

(c) Employee understands that Employee owes each member of the Company Group fiduciary

duties (including (i) duties of loyalty and disclosure and (ii) fiduciary duties as an officer of the Company), and theobligations described in this Agreement are in addition to, and not in lieu of, the obligations Employee owes eachmember of the Company Group under statutory and common law.

(d) Company Investment. Subject to applicable law, commencing on the Effective Date andending on the first anniversary of the Effective Date, Employee agrees that he shall have the opportunity to make atotal equity investment in the Parent in an aggregate amount up to $1,000,000 (the “Equity Investment”) pursuantto one or more purchases of shares of the Parent’s common stock on the open market, directly from the Parent orunder a written plan entered into with a broker for trading the Parent’s common stock in a manner that complies withRule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). If Employee makes anopen market purchase of shares of the Parent’s common stock with respect to the Equity Investment, Employee shalluse reasonable efforts to comply with the limitations and restrictions set forth in Rule 10b-18(b) promulgated underthe Exchange Act in making such purchase. Employee shall be prohibited from selling or otherwise transferringshares of the Parent’s common stock until Employee owns shares of the Parent’s common stock with an aggregatevalue equal to five (5) times Employee’s Base Salary (as defined below) and once Employee owns shares of theParent’s common stock with an aggregate value equal to five (5) times Employee’s Base Salary, Employee shall alsobe prohibited from entering into any sale or transfer of the Parent’s common stock to the extent such sale or transferwould result in Employee ceasing to own shares of the Parent’s common stock with an aggregate value at least equalto five (5) times Employee’s Base Salary; provided, however, that the foregoing sale and transfer restrictions shallnot apply to any sales of shares intended to satisfy applicable tax withholding obligations due in connection with theexercise, vesting or settlement of equity awards under the Parent’s Equity Incentive Plan (as defined below) and shallno longer apply upon the earlier to occur of (x) the end of the Employment Period (as defined below) and (y) a“Change of Control” (as defined in Section 6(i) below). In addition, Employee shall be subject to the provisions ofany applicable stock ownership guidelines, policies or procedures adopted by the Company. Notwithstanding anyprovision of this Agreement to the contrary, the Company and Parent reserves the right, without Employee’s consent(but after consultation with Employee), to adopt any such stock ownership guidelines, procedures and policies withretroactive effect; provided, however, in no event shall the terms hereof in any way impact the participation ofEmployee in the Equity Incentive Plan. For the avoidance of doubt, shares of the Parent’s common stock (i) held byEmployee’s immediate family, (ii) held in trusts, family limited partnerships or similar vehicles for the benefit ofEmployee or Employee’s immediate family and (iii) underlying vested restricted stock units or vested butunexercised “in the money” stock options, in each case, shall be treated as owned by Employee for purposes ofsatisfying the requirements set forth in this Section 2(d).

3. Compensation.

(a) Base Salary. During the Employment Period, the Company shall pay to Employee anannualized base salary of $700,000 (the “Base Salary”) in consideration for Employee’s services under thisAgreement, payable in substantially equal installments in conformity with the Company’s customary payrollpractices for other senior executives as may exist from time to time, but no less frequently than monthly. The BaseSalary shall be reviewed

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by the Board (or a committee thereof) in accordance with the Company’s policies and practices, but no lessfrequently than once annually, and may be increased but not decreased unless such decrease is agreed to in writingby Employee. To the extent applicable, the term “Base Salary” shall include any such increases (or decreases agreedto in writing by Employee) to the Base Salary enumerated above.

(b) Annual Bonus. Employee shall be eligible for discretionary bonus compensation for eachcomplete calendar year (and any partial year in the event of a Change of Control) that Employee is employed by theCompany hereunder (the “Annual Bonus”). Each Annual Bonus shall have a target value that is not less than 100%of Employee’s Base Salary as in effect on the last day of the calendar year to which such Annual Bonus relates (the“Bonus Year”) and a maximum value equal to 150% of Employee’s Base Salary as in effect on the last day of suchBonus Year. The performance targets that must be achieved in order to be eligible for certain bonus levels shall beestablished by the Board (or a committee thereof) annually, in its sole discretion, and communicated to Employeewithin the first ninety (90) days of the applicable Bonus Year (provided that such 90 day period shall be shortened to60 days commencing in 2020). Notwithstanding the foregoing, Employee shall be eligible to receive an AnnualBonus for the 2018 calendar year, the amount of which will be determined by the Board in its sole discretion. EachAnnual Bonus, if any, shall be paid as soon as administratively feasible after the Board (or a committee thereof)certifies whether the applicable performance targets for the applicable Bonus Year have been achieved, which isexpected to be no later than thirty (30) days after the completion of the Parent’s annual audit for the applicable BonusYear. Notwithstanding anything in this Section 3(b) to the contrary, no Annual Bonus, if any, nor any portionthereof, shall be payable for any Bonus Year unless Employee remains continuously employed by the Company fromthe Effective Date through the end of the applicable year.

(c) Sign-On Equity Awards. In consideration of Employee entering into this Agreement and asan inducement to join the Company, on or as soon as reasonably practicable following the Effective Date, the Parentshall grant Employee, under the Pacific Drilling S.A. 2018 Omnibus Stock Incentive Plan, as amended from time totime (the “Equity Incentive Plan”), subject to approval by the Board and an effective registration statement pursuantto applicable securities exchange listing standards, a one-time sign on equity award on the terms set forth onSchedule I attached hereto (the “Sign-On Equity Awards”).

(d) Business Expenses. Subject to Section 22, the Company shall reimburse Employee forEmployee’s reasonable out-of-pocket business-related expenses actually incurred in the performance of Employee’sduties under this Agreement so long as Employee timely submits all documentation for such reimbursement, asrequired by Company policy in effect from time to time. Any such reimbursement of expenses shall be made by theCompany upon or as soon as practicable following receipt of such documentation (but in any event not later than theclose of Employee’s taxable year following the taxable year in which the expense is incurred by Employee). In noevent shall any reimbursement be made to Employee for such expenses incurred after the date of Employee’stermination of employment with the Company.

(e) Benefits. During the Employment Period, Employee shall be eligible to participate in thesame benefit plans and programs in which other senior executives are eligible to participate, subject to the terms andconditions of the applicable plans and programs in effect from

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time to time. The Company shall not, however, by reason of this Section 3(g), be obligated to institute, maintain, orrefrain from changing, amending, or discontinuing, any such plan or policy, so long as such changes are similarlyapplicable to other senior executives generally.

(f) Vacation. During the Employment Period, Employee shall be eligible to accrue vacation foreach complete calendar year that Employee is employed by the Company hereunder (prorated for partial years) inaccordance with the Company’s vacation policy, as amended from time to time. Notwithstanding the previoussentence, Employee shall be eligible for five (5) weeks paid vacation per full year (prorated for partial years).

4. Term of Employment. The initial term of Employee’s employment under this Agreement shall befor the period beginning on the Effective Date and continuing until such time as Employee’s employment isterminated in accordance with Section 5 hereof (the “Employment Period”).

5. Termination of Employment.

(a) Company’s Right to Terminate Employee’s Employment for Cause. The Company shall havethe right to terminate Employee’s employment hereunder at any time for “Cause.” For purposes of this Agreement,“Cause” shall mean:

(i) Employee’s commission of fraud, theft, or embezzlement against any member of theCompany Group or a willful breach of fiduciary duty with respect to any member of the Company Group;

(ii) Employee’s willful and continued failure to perform Employee’s duties;

(iii) Employee’s breach of Section 2(b) or Section 7 of this Agreement or breach of anyother written agreement between Employee and any member of the Company Group which causes materialharm to the Company Group;

(iv) Employee’s conviction of, or plea of guilty or nolo contendere to, a felony (or statelaw equivalent) or to any crime involving moral turpitude;

(v) Employee’s gross misconduct or gross negligence in the performance of duties to anymember of the Company Group; or

(vi) Employee’s breach and violation of the Company’s or the Parent’s written policiespertaining to sexual harassment, discrimination or insider trading.

Provided, however, that solely with respect to the actions or omissions set forth in Section 5(a)(ii), (iii), (v) and (vi),such actions or omissions must remain uncured or uncorrected ten (10) business days after the Board has providedEmployee written notice of the obligation to cure such actions or omissions. For the avoidance of doubt, the actionsor omissions set forth in Section 5(a)(i) and (iv) are not permitted to be cured by Employee under any circumstances. In the event the Board determines in good faith after consultation with legal counsel that its fiduciary obligationsrequire

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an immediate termination for Cause, then, notwithstanding anything herein to the contrary, no cure right shall beprovided to Employee.

(b) Company’s Right to Terminate for Convenience. The Company shall have the right toterminate Employee’s employment for convenience at any time and for any reason, or no reason at all, upon 30 dayswritten notice (or pay in lieu thereof) to Employee.

(c) Employee’s Right to Terminate for Good Reason. Employee shall have the right to terminateEmployee’s employment with the Company at any time for “Good Reason.” For purposes of this Agreement, “GoodReason” shall mean:

(i) A material diminution in Employee’s Base Salary or target Annual Bonus;

(ii) the relocation of the geographic location of Employee’s principal place of employmentto a location more than twenty five (25) miles outside the greater Houston, Texas metropolitan area(excluding reasonably required business travel in connection with the performance of Employee’s dutiesunder this Agreement);

(iii) a material and adverse change to, or a material reduction of, Employee’s duties andresponsibilities to the Company or the Parent; provided, that Employee shall not have Good Reason toterminate his employment pursuant to this clause as a result of a change to his title, duties, or responsibilitiesfollowing the occurrence of a Change of Control during the Protection Period; provided further that if at theend of the Protection Period to the extent Employee is still employed by the Company or Parent, if Employeeis not offered the position of Chief Executive Officer or Chief Operating Officer at the Company or Parent, ortheir respective successors if applicable (on terms which are in the aggregate at least as favorable in thisAgreement excluding the Enhanced Severance) then Employee shall have Good Reason to terminate hisemployment for Good Reason; or

(iv) any material breach by the Company of any provision of this Agreement.

Notwithstanding the foregoing provisions of this Section 5(c) or any other provision of this Agreement to thecontrary, any assertion by Employee of a termination for Good Reason due to a condition described in Section 5(c)(i), (ii), (iii) or (iv) shall not be effective unless all of the following conditions are satisfied: (A) the condition givingrise to Employee’s termination of employment must have arisen without Employee’s consent, (B) Employee mustprovide written notice to the Board of the existence of such condition(s) within ninety (90) days of the initialexistence of such condition(s), (C) the condition(s) specified in such notice must remain uncorrected for thirty (30)days following the Board’s receipt of such written notice, and (D) the date of Employee’s termination of employmentmust occur within ninety (90) days following the Board’s receipt of such notice.

(d) Death or Disability. Upon the death or Disability of Employee, Employee’s employment withCompany shall terminate. For purposes of this Agreement, a “Disability” shall exist if Employee is entitled toreceive long-term disability benefits under the Company’s disability plan.

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(e) Employee’s Right to Terminate for Convenience. In addition to Employee’s right to terminate

Employee’s employment for Good Reason, Employee shall have the right to terminate Employee’s employment withthe Company for convenience at any time and for any other reason, or no reason at all, upon ninety (90) days’advance written notice to the Company; provided, however, that if Employee has provided notice to the Company ofEmployee’s termination of employment, the Company or Parent may determine, in its sole discretion, that suchtermination shall be effective on any date prior to the effective date of termination provided in such notice (and, ifsuch earlier date is so required, then it shall not change the basis for Employee’s termination of employment nor beconstrued or interpreted as a termination of employment pursuant to Section 5(b)).

6. Obligations of the Company upon Termination of Employment.

(a) For Cause; Other than for Good Reason. If Employee’s employment is terminated during theEmployment Period (i) by the Company for Cause pursuant to Section 5(a) or (ii) by Employee other than for GoodReason pursuant to Section 5(e), then Employee shall be entitled to all accrued but unpaid vacation and unpaid BaseSalary earned by Employee through the date that Employee’s employment terminates (the “Termination Date”) and,subject to the terms and conditions of any benefit plans in which he may participate at the time of such termination,any post-employment benefits available pursuant to the terms of those plans; however, Employee shall not be entitledto any additional amounts or benefits as the result of such termination of employment.

(b) Without Cause; For Good Reason. In addition to the amounts in Section 6(a), subject toSection 6(g) below, Employee shall be entitled to certain severance consideration described below, payable at thetimes and in the form set forth in Section 6(f) below, if Employee’s employment is terminated during theEmployment Period (x) by the Company without Cause pursuant to Section 5(b) or (y) by Employee for GoodReason pursuant to Section 5(c), the Company shall provide Employee with a severance payment in an amount equalto (A) $4,000,000 if such termination occurs prior to January 1, 2021 (the “Enhanced Payment”) (unless suchtermination occurs during the Protection Period as defined below) or (B) if such termination occurs on or afterJanuary 1, 2021 one and a half (1.5) times the sum of (i) Employee’s Base Salary as in effect immediately prior tothe Termination Date and (ii) the target value of Employee’s Annual Bonus for the Bonus Year during which suchtermination occurs (the amount set forth in clause (A) or (B), the “Severance Payment”). Notwithstanding theforegoing, subject to Section 6(g) below and payable at the times and in the form set forth in Section 6(f) below, ifEmployee’s employment is terminated during the Employment Period (x) by the Company without Cause pursuantto Section 5(b) or (y) by Employee for Good Reason pursuant to Section 5(c), in each case, during the ProtectionPeriod (as defined below), the Company shall provide Employee with a severance payment in an amount equal totwo (2) times the sum of (A) Employee’s Base Salary as in effect immediately prior to the Termination Date and(B) the target value of Employee’s Annual Bonus for the Bonus Year during which such termination occurs; (the“CIC Severance Payment”), (and for the avoidance of doubt if such termination is prior to January 1, 2021 then theCIC Severance Payment shall apply and not the Enhanced Payment). For purposes of this Agreement, “ProtectionPeriod” is the period of time during the Employment Period beginning on the date of a Change of Control andending on the first anniversary of the date of such Change of Control. If during the Employment Period, Employee’semployment is terminated

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by the Company without Cause pursuant to Section 5(b) and such termination occurs after the entry into a signeddefinitive agreement which if consummated would constitute a Change of Control, then Employee shall receive anadditional payment equal to the excess of the CIC Severance Payment minus the Severance Payment with suchadditional payment being made at the time of the Change of Control (and for the avoidance of doubt such additionalpayment shall only be made if such Change of Control occurs).

(c) Death or Disability. If Employee’s employment is terminated during the Employment Perioddue to Employee’s death or Disability pursuant to Section 5(d), then Employee shall be entitled to all accrued butunpaid vacation and unpaid Base Salary earned by Employee through the Termination Date and, subject to the termsand conditions of any benefit plans in which he may participate at the time of such termination, any post-employmentbenefits available pursuant to the terms of those plans; however, Employee shall not be entitled to any additionalamounts or benefits as the result of such termination of employment.

(d) Acceleration of Unvested Sign-On Equity Awards. Subject to Section 6(g) below, ifEmployee’s employment is terminated during the Employment Period (i) by the Company without Cause pursuant toSection 5(b) or (ii) by Employee for Good Reason pursuant to Section 5(c), all outstanding unvested Sign-On EquityAwards under the Equity Incentive Plan, granted to Employee prior to the Termination Date which vests solely basedon the passage of time (as opposed to performance) shall immediately become vested as of the Termination Date asto a portion equal to one-third of each such award that would have otherwise vested on the next regularly scheduledvesting date following the Termination Date if Employee remained continuously employed by the Company Groupin accordance with the terms of the equity awards.

(e) COBRA. Subject to Section 6(g) below, if Employee’s employment is terminated during theEmployment Period (i) by the Company without Cause pursuant to Section 5(b) or (ii) by Employee for GoodReason pursuant to Section 5(c), then if Employee timely and properly elects continuation coverage under theCompany’s group health plans pursuant to the Consolidated Omnibus Reconciliation Act of 1985, as amended(“COBRA”), the Company shall reimburse Employee for the difference between the monthly amount Employeepays to effect and continue such coverage for Employee and Employee’s spouse and eligible dependents, if any (the“Monthly Premium Payment”), and the monthly employee contribution amount that active similarly situatedemployees of the Company pay for the same or similar coverage under such group health plans (such difference, the“Monthly Reimbursement Amount”). Each such reimbursement payment shall be paid to Employee on theCompany’s first regularly scheduled pay date in the month immediately following the month in which Employeetimely remits the Monthly Premium Payment. Employee shall be eligible to receive such reimbursement paymentsuntil the earlier of: (x) the date Employee is no longer eligible to receive COBRA continuation coverage, (y) the dateon which Employee becomes eligible to receive coverage under a group health plan sponsored by another employer(and any such eligibility shall be promptly reported to the Company by Employee) and (z) the eighteen monthanniversary of the Termination Date (and if such termination occurs during the Protection Period the eighteen monthanniversary of the Termination Date); provided, however, that Employee acknowledges and agrees that (1) theelection of COBRA continuation coverage and the payment of any premiums due with respect to such COBRAcontinuation coverage shall remain Employee’s sole responsibility, and the Company shall assume no obligation forpayment of any such premiums relating to such COBRA

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continuation coverage, (2) in no event shall the Company be required to pay a Monthly Reimbursement Amount ifsuch payment could reasonably be expected to subject the Company to sanctions imposed pursuant to Section 2716of the Patient Protection and Affordable Care Act of 2010 and the related regulations and guidance promulgatedthereunder (collectively, the “PPACA”) and (3) if payment of a Monthly Reimbursement Amount cannot beprovided to Employee without subjecting the Company to sanctions imposed pursuant to Section 2716 of the PPACAor otherwise causing the Company to incur a penalty, tax or other adverse impact on the Company, then theCompany and Employee shall negotiate in good faith to determine an alternative manner in which the Company mayprovide a substantially equivalent benefit to Employee without such adverse impact on the Company.

(f) Payment Timing. Payment of the Severance Payment or the CIC Severance Payment(individually, as applicable, the “Cash Severance Payment”), as applicable, shall be divided into substantially equalinstallments and paid in accordance with the Company’s normal payroll procedures over a 18-month period for theSeverance Payment provided that if the Enhanced Payment is made then the period shall be 24 months rather than18 and an 24-month period for the CIC Severance Payment, in each case, following the Termination Date;provided, however, that (i) the first installment of the Cash Severance Payment shall be paid on the Company’s firstregularly scheduled pay date that is on or after the date that is sixty (60) days after the Termination Date, theCompany shall pay to Employee, without interest, a number of such installments equal to the number of suchinstallments that would have been paid during the period beginning on the Termination Date and ending on theCompany’s first regularly scheduled pay date that is on or after the date that is sixty (60) days after the TerminationDate had the installments been paid on a monthly basis commencing on the Company’s first regularly scheduled paydate coincident with or next following the Termination Date, and each of the remaining installments shall be paid ona monthly basis thereafter, (ii) to the extent, if any, that the aggregate amount of the installments of the CashSeverance Payment that would otherwise be paid pursuant to the preceding provisions of this Section 6(f) afterMarch 15 of the calendar year following the calendar year in which the Termination Date occurs (the “ApplicableMarch 15”) exceeds the maximum exemption amount under Treasury Regulation Section 1.409A-1(b)(9)(iii)(A),then such excess shall be paid to Employee in a lump sum on the Applicable March 15 (or the first business daypreceding the Applicable March 15 if the Applicable March 15 is not a business day) and the installments of theCash Severance Payment payable after the Applicable March 15 shall be reduced by such excess (beginning with theinstallment first payable after the Applicable March 15 and continuing with the next succeeding installment until theaggregate reduction equals such excess), and (iii) all remaining installments of the Cash Severance Payment, if any,that would otherwise be paid pursuant to the preceding provisions of this Section 6(f) after December 31 of thecalendar year following the calendar year in which the Termination Date occurs shall be paid with the installment ofthe Cash Severance Payment, if any, due in December of the calendar year following the calendar year in which theTermination Date occurs.

(g) Conditions to Receipt of Severance Consideration. Notwithstanding the foregoing,Employee’s eligibility and entitlement to the Cash Severance Payment and any other payment or benefit referencedin Section 6 above (collectively, the “ Severance Consideration”) are dependent upon Employee’s (i) continuedcompliance with Employee’s obligations under each of Section 7 below and (ii) execution and delivery to theCompany, on or before the Release Expiration Date (as defined below), and non-revocation within any time providedby the Company

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to do so, of a release of all claims in a form acceptable to the Company and Parent, which shall be based on the formattached hereto as Exhibit A subject to mutually agreed modification based on changes in applicable law and thecircumstances of Employee’s termination of employment (the “Release”), which Release shall release each memberof the Company Group and their respective affiliates, and the foregoing entities’ respective shareholders, members,partners, officers, managers, directors, fiduciaries, employees, representatives, attorneys, agents and benefit plans(and fiduciaries of such plans) from any and all claims, including any and all causes of action arising out ofEmployee’s employment with the Company and any other member of the Company Group or the termination of suchemployment, but excluding all claims to severance payments Employee may have under this Section 6 or any vestedrights or benefits under any of the Company’s benefit plans or any other agreement in which Employee participatedimmediately prior to the termination of such employment. If the Release is not executed and returned to theCompany on or before the Release Expiration Date, and the required revocation period has not fully expired withoutrevocation of the Release by Employee, then Employee shall not be entitled to any portion of the SeveranceConsideration. As used herein, the “Release Expiration Date” is that date that is twenty-one (21) days followingthe date upon which the Company delivers the Release to Employee (which shall occur no later than seven (7) daysafter the Termination Date) or, in the event that such termination of employment is “in connection with an exitincentive or other employment termination program” (as such phrase is defined in the Age Discrimination inEmployment Act of 1967, as amended), the date that is forty-five (45) days following such delivery date.

(h) After-Acquired Evidence. Notwithstanding any provision of this Agreement to the contrary,in the event that the Company determines that Employee is eligible to receive any Severance Consideration pursuantto this Section 6 but, after such determination, a court of competent jurisdiction determines that subsequently, duringthe period ending on the first anniversary of the date that the final or last Cash Severance Payment installment is paidto Employee, the Company acquired evidence that: (i) Employee has failed to abide by Employee’s continuingobligations under Section 7; or (ii) a Cause condition existed prior to the Termination Date that, had the Companybeen fully aware of such condition, would have resulted in the termination of Employee’s employment pursuant toSection 5(a), then Employee shall promptly return to the Company all installments of the Cash Severance Payment(other than the first six such installments) or other Severance Consideration (to the extent possible) received byEmployee prior to the date that the Company determines that the conditions of this Section 6(h) have been satisfied. In the event that the Company determines that the conditions of this Section 6(h). have been satisfied, Employeeacknowledges and agrees that the first six installments of the Cash Severance Payment constitute adequateconsideration for the Release.

(i) Change of Control Definition. As used herein, “Change of Control” shall have the meaningset forth in the Equity Incentive Plan.

7. Restrictive Covenants.

(a) Generally. The Company shall provide Employee access to Confidential Information (asdefined below) for use only during the Employment Period, and Employee acknowledges and agrees that theCompany Group shall be entrusting Employee, in Employee’s unique and special capacity, with developing thegoodwill of the Company Group, and in

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consideration thereof and in consideration of the Company providing Employee with access to ConfidentialInformation and as an express incentive for the Company to enter into this Agreement and employ Employee,Employee has voluntarily agreed to the covenants set forth in this Section 7. Employee further agrees andacknowledges that the limitations and restrictions set forth herein, including geographical and temporal restrictionson certain competitive activities, are reasonable in all respects and not oppressive, shall not cause Employee unduehardship, and are material and substantial parts of this Agreement intended and necessary to prevent unfaircompetition and to protect the Company Group’s Confidential Information, goodwill and substantial and legitimatebusiness interests.

(b) Non-Competition. Employee agrees that, during the Non-Compete Period (as defined below),Employee shall not, without the prior written approval of the Board, directly or indirectly, for Employee or on behalfof or in conjunction with any other person or entity of any nature:

(i) engage in or participate within the Market Area (as defined below) in competition withany member of the Company Group in any aspect of the Business (as defined below), which prohibition shallprevent Employee from directly or indirectly owning, managing, operating, joining, becoming an officer,director, employee or consultant of, or loaning money to, or selling or leasing equipment or real estate to orotherwise being affiliated with any person or entity engaged in, or planning to engage in, the Business in theMarket Area in competition, or anticipated competition, with any member of the Company Group (which, forthis purpose, includes any company that directly competes with the Company Group as of the date hereof orin the future); or

(ii) appropriate any Business Opportunity (as defined below) of, or relating to, theCompany Group located in the Market Area.

(c) Non-Solicitation. Employee agrees that, during the Non-Solicit Period (as defined below),Employee shall not, without the prior written approval of the Board, directly or indirectly, for Employee or on behalfof or in conjunction with any other person or entity of nature:

(i) solicit, canvass, approach, encourage, entice or induce any customer or supplier of anymember of the Company Group to cease or lessen such customer’s or supplier’s business with the CompanyGroup; or

(ii) solicit, canvass, approach, encourage, entice or induce any employee or contractor ofthe Company Group to terminate his, her or its employment or engagement with any member of the CompanyGroup.

(d) Non-Disclosure; Non-Use of Confidential Information. Employee shall not disclose or use atany time, either during Employee’s employment with the Company or at any time thereafter, any ConfidentialInformation of which Employee is or becomes aware, whether or not such information is developed by Employee,except to the extent that such disclosure or use is directly related to and required by Employee’s performance in goodfaith of duties assigned to Employee by the Company. Employee will take all appropriate steps to safeguardConfidential Information in Employee’s possession and to protect it against disclosure, misuse, espionage, loss

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and theft. Employee shall deliver to the Company at the Date of Termination, or at any time the Company mayrequest, all memoranda, notes, plans, records, reports, computer tapes and software and other documents and data(and copies thereof) relating to the Confidential Information or the “Work Product” (as defined below in Section 7(j)(viii)) of the business of the Company Group that Employee may then possess or have under Employee’scontrol. Nothing in this Agreement will preclude, prohibit or restrict Employee from (i) communicating with anyfederal, state or local administrative or regulatory agency or authority, including but not limited to the Securities andExchange Commission (the “SEC”); (ii) participating or cooperating in any investigation conducted by anygovernmental agency or authority; or (iii) filing a charge of discrimination with the United States Equal EmploymentOpportunity Commission or any other federal state or local administrative agency or regulatory authority. Nothing inthis Agreement, or any other agreement between the Parties, prohibits or is intended in any manner to prohibit,Employee from (1) reporting a possible violation of federal or other applicable law or regulation to any governmentalagency or entity, including but not limited to the Department of Justice, the SEC, the U.S. Congress, and anygovernmental agency Inspector General, or (2) making other disclosures that are protected under whistleblowerprovisions of federal law or regulation. This Agreement does not limit Employee’s right to receive an award(including, without limitation, a monetary reward) for information provided to the SEC. Employee does not need theprior authorization of anyone at the Company to make any such reports or disclosures, and Employee is not requiredto notify the Company that Employee has made such reports or disclosures. Nothing in this Agreement or any otheragreement or policy of the Company is intended to interfere with or restrain the immunity provided under 18 U.S.C.§1833(b). Employee cannot be held criminally or civilly liable under any federal or state trade secret law for thedisclosure of a trade secret that is made (x) (A) in confidence to federal, state or local government officials, directlyor indirectly, or to an attorney, and (B) for the purpose of reporting or investigating a suspected violation of law; (y)in a complaint or other document filed in a lawsuit or other proceeding, if filed under seal; or (z) in connection with alawsuit alleging retaliation for reporting a suspected violation of law, if filed under seal and does not disclose thetrade secret, except pursuant to a court order. The foregoing provisions regarding protected disclosures are intendedto comply with all applicable laws. If any laws are adopted, amended or repealed after the execution of thisAgreement, this Agreement shall be deemed to be amended to reflect the same.

(e) Proprietary Rights. Employee recognizes that the Company Group possesses a proprietaryinterest in all Confidential Information and Work Product and has the exclusive right and privilege to use, protect bycopyright, patent or trademark, or otherwise exploit the processes, ideas and concepts described therein to theexclusion of Employee, except as otherwise agreed between the Company Group and Employee in writing. Employee expressly agrees that any Work Product made or developed by Employee or Employee’s agents during thecourse of Employee’s employment, including any Work Product which is based on or arises out of Work Product,shall be the property of and inure to the exclusive benefit of the Company Group. Employee further agrees that allWork Product developed by Employee (whether or not able to be protected by copyright, patent or trademark) duringthe course of Employee’s employment with the Company, or involving the use of the time, materials or otherresources of the Company Group, shall be promptly disclosed to the Company Group and shall become the exclusiveproperty of the Company Group, and Employee shall execute and deliver any and all documents necessary orappropriate to implement the foregoing.

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(f) Non-Disparagement. During the Employment Period and at all times thereafter, neither

Employee nor Employee’s agents shall directly or indirectly issue or communicate any public statement, or statementlikely to become public, that maligns, denigrates or disparages the Company (including, in the case ofcommunications by Employee or Employee’s agents, the Company Group, any of the Company Group’s officers,directors or employees). The foregoing shall not be violated by truthful responses to (i) legal process orgovernmental inquiry or (ii) by private statements to the Company Group or any of the Company Group’s officers,directors or employees; provided, with respect to clause (ii), such statements are made in the course of carrying outEmployee’s duties pursuant to this Agreement.

(g) Enforcement. Because of the difficulty of measuring economic losses to the Company Groupas a result of a breach of the covenants set forth in this Section 7, and because of the immediate and irreparabledamage that would be caused to the members of the Company Group for which they would have no other adequateremedy, the Company and each other member of the Company Group shall be entitled to enforce the foregoingcovenants, in the event of a breach as determined by a court of law, by (i) notwithstanding anything to the contrarycontained in an Equity Incentive Plan or an award agreement, causing the forfeiture of any unvested awards grantedunder an Equity Incentive Plan (including the equity awards described in Section 3(c)) or (ii) obtaining injunctionsand restraining orders from any court of competent jurisdiction, without the necessity of showing any actual damagesor that money damages would not afford an adequate remedy, and without the necessity of posting any bond or othersecurity. The aforementioned equitable relief shall not be the Company’s or any other member of the CompanyGroup’s exclusive remedy for a breach but instead shall be in addition to all other rights and remedies available tothe Company and each other member of the Company Group at law and equity.

(h) Blue Pencil. If, at any time, the provisions of this Section 7 shall be determined to be invalidor unenforceable under any applicable law, by reason of being vague or unreasonable as to area, duration or scope ofactivity, this Agreement shall be considered divisible and shall become and be immediately amended to only sucharea, duration and scope of activity as shall be determined to be reasonable and enforceable by the court or otherbody having jurisdiction over the matter and Employee and the Company agree that this Agreement as so amendedshall be valid and binding as though any invalid or unenforceable provision had not been included herein.

(i) Tolling. The periods during which the covenants set forth in this Section 7 shall survive shallbe tolled during (and shall be deemed automatically extended by) any period during which Employee is found by ajudge residing in a court of competent jurisdiction to be in violation of any such covenants, to the extent permitted byapplicable law.

(j) For purposes of Section 7, the following terms shall have the following meanings:

(i) “Business” shall mean the business and operations that are the same or similar to thoseperformed by the Company and any other member of the Company Group for which Employee providesservices or about which Employee obtains Confidential Information during the Employment Period, whichbusiness and operations

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include the provision of offshore drilling services through the use of high-specification floating rigs.

(ii) “Business Opportunity” shall mean any commercial, investment or other businessopportunity relating to the Business of which Employee was aware during his employment with the Companyor about which Employee received Confidential Information.

(iii) “Company” shall include the Company, the Parent and any direct or indirectsubsidiaries and affiliates thereof and any successors thereto.

(iv) “Confidential Information” means information that is not generally known to thepublic (but for purposes of clarity, Confidential Information shall never exclude any such information thatbecomes known to the public because of Employee’s unauthorized disclosure) and that is used, developed orobtained by the Company Group in connection with its business, including, but not limited to, information,observations and data obtained by Employee while employed by the Company Group concerning (A) thebusiness or affairs of the Company Group, (B) products or services, (C) fees, costs and pricing structures,(D) designs, (E) analyses, (F) drawings, photographs and reports, (G) computer software, including operatingsystems, applications and program listings, (H) flow charts, manuals and documentation, (I) databases,(J) accounting and business methods, (K) inventions, devices, new developments, methods and processes,whether patentable or unpatentable and whether or not reduced to practice, (L) customers and clients andcustomer or client lists, (M) other copyrightable works, (N) all production methods, processes, technologyand trade secrets, and (O) all similar and related information in whatever form. Confidential Information willnot include any information that has been published in a form generally available to the public (except as aresult of Employee’s unauthorized disclosure) prior to the date Employee proposes to disclose or use suchinformation. Confidential Information will not be deemed to have been published or otherwise disclosedmerely because individual portions of the information have been separately published, but only if all materialfeatures comprising such information have been published in combination.

(v) “Market Area” shall mean states of Texas, Mississippi, Alabama, and Louisiana, thecountries of Nigeria and Brazil, and any additional areas in which the Company expands its operations orcreates plans to expand its operations with such areas added to Exhibit B hereof from time to time andprovided to Employee.

(vi) “Non-Compete Period” shall mean the period during which Employee is employedby any member of the Company Group and continuing until the first anniversary of the Termination Date.

(vii) “Non-Solicit Period” shall mean the period during which Employee is employed byany member of the Company Group and continuing for a period of 24 months following the TerminationDate.

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(viii) “Work Product” means all inventions, innovations, improvements, technical

information, systems, software developments, methods, designs, analyses, drawings, reports, service marks,trademarks, trade names, logos and all similar or related information (whether patentable or unpatentable)that relates to the Company Group’s actual or anticipated Business, research and development or existing orfuture products or services and that are conceived, developed or made by Employee (whether or not duringusual business hours and whether or not alone or in conjunction with any other person) while employed bythe Company together with all patent applications, letters patent, trademark, trade name and service markapplications or registrations, copyrights and reissues thereof that may be granted for or upon any of theforegoing.

8. Dispute Resolution; Submission to Jurisdiction.

(a) Each Party irrevocably agrees for the exclusive benefit of the other that any and all suits,actions or proceedings relating to this Agreement (a “Proceeding”) shall be maintained in either the courts of theState of Delaware or the federal District Courts sitting in Wilmington, Delaware (collectively, the “Chosen Courts”)and that the Chosen Courts shall have exclusive jurisdiction to hear and determine or settle any such Proceeding andthat any such Proceedings shall only be brought in the Chosen Courts. Each Party irrevocably waives any objectionthat it may have now or hereafter to the laying of the venue of any Proceedings in the Chosen Courts and any claimthat any Proceedings have been brought in an inconvenient forum and further irrevocably agrees that a judgment inany Proceeding brought in the Chosen Courts shall be conclusive and binding upon it and may be enforced in thecourts of any other jurisdiction. Each of the Parties hereto agrees that this Agreement involves at least $100,000 andthat this Agreement has been entered into in express reliance on Section 2708 of Title 6 of the Delaware Code. Eachof the Parties hereto irrevocably and unconditionally agrees that (i) to the extent such party is not otherwise subject toservice of process in the State of Delaware, it will appoint (and maintain an agreement with respect to) an agent inthe State of Delaware as such party’s agent for acceptance of legal process and notify the other party hereto of thename and address of said agent, (ii) service of process may also be made on such party by pre-paid certified mailwith a validated proof of mailing receipt constituting evidence of valid service sent to such party at the address setforth in Section 17 of this Agreement, as such address may be changed from time to time pursuant hereto, and (iii)service made pursuant to clause (i) or (ii) above shall, to the fullest extent permitted by applicable law, have the samelegal force and effect as if served upon such party personally within the State of Delaware.

(b) EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURYIN ANY SUIT, ACTION OR OTHER PROCEEDING INSTITUTED BY OR AGAINST SUCH PARTY INRESPECT OF ITS RIGHTS OR OBLIGATIONS HEREUNDER.

9. Confidentiality of Agreement. The Parties agree that the consideration furnished under thisAgreement, the discussions and correspondence that led to this Agreement, and the terms and conditions of thisAgreement are private and confidential. Except as may be required by applicable law, regulation, or stock exchangerequirement, neither Party may disclose the above information to any other person or entity without the prior writtenapproval of the other.

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10. Defense of Claims. During the Employment Period and following the Termination Date, upon

reasonable notice and without the necessity of the Company’s obtaining a subpoena or court order, Employee shallreasonably cooperate with the Company Group in the defense of any claims or actions that may be made by oragainst any member of the Company Group that relate to Employee’s actual or prior areas of responsibility. TheCompany shall pay or reimburse Employee for all of Employee’s reasonable travel and other direct expensesreasonably incurred, to comply with Employee’s obligations under this Section 10, so long as Employee providesreasonable documentation of such expenses and obtains the Company’s prior approval before incurring suchexpenses.

11. Withholdings; Deductions. The Company may withhold and deduct from any benefits and paymentsmade or to be made pursuant to this Agreement (a) all federal, state, local and other taxes as may be requiredpursuant to any law or governmental regulation or ruling and (b) any deductions consented to in writing byEmployee.

12. Title and Headings; Construction. Titles and headings to Sections hereof are for the purpose ofreference only and shall in no way limit, define or otherwise affect the provisions hereof. Any and all Exhibits orAttachments referred to in this Agreement are, by such reference, incorporated herein and made a part hereof for allpurposes. Unless the context requires otherwise, all references herein to an agreement, instrument or other documentshall be deemed to refer to such agreement, instrument or other document as amended, supplemented, modified andrestated from time to time to the extent permitted by the provisions thereof. All references to “dollars” or “$” in thisAgreement refer to United States dollars. The words “herein”, “hereof”, “hereunder” and other compounds of theword “here” shall refer to the entire Agreement, including all Exhibits attached hereto, and not to any particularprovision hereof. Wherever the context so requires, the masculine gender includes the feminine or neuter, and thesingular number includes the plural and conversely. The use herein of the word “including” following any generalstatement, term or matter shall not be construed to limit such statement, term or matter to the specific items ormatters set forth immediately following such word or to similar items or matters, whether or not non-limitinglanguage (such as “without limitation”, “but not limited to”, or words of similar import) is used with referencethereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadestpossible scope of such general statement, term or matter. Neither this Agreement nor any uncertainty or ambiguityherein shall be construed or resolved against any party hereto, whether under any rule of construction or otherwise. On the contrary, this Agreement has been reviewed by each of the Parties hereto and shall be construed andinterpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes andintentions of the Parties hereto.

13. Applicable Law. This Agreement shall in all respects be construed according to the laws of the Stateof Delaware without regard to its conflict of laws principles that would result in the application of the laws of anotherjurisdiction.

14. Entire Agreement and Amendment. This Agreement and the Confidentiality Agreement containthe entire agreement of the Parties with respect to the matters covered herein and supersede all prior andcontemporaneous agreements and understandings, oral or written, between the Parties hereto concerning the subjectmatter hereof. This Agreement may be amended only by a written instrument executed by both Parties.

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15. Waiver of Breach. Any waiver of this Agreement must be executed by the party to be bound by such

waiver. No waiver by either party hereto of a breach of any provision of this Agreement by the other party, or ofcompliance with any condition or provision of this Agreement to be performed by such other party, shall operate orbe construed as a waiver of any subsequent breach by such other party or any similar or dissimilar provision orcondition at the same or any subsequent time. The failure of either party hereto to take any action by reason of anybreach shall not deprive such party of the right to take action at any time.

16. Assignment. This Agreement is personal to Employee, and neither this Agreement nor any rights orobligations hereunder shall be assignable or otherwise transferred by Employee. The Company may assign thisAgreement without Employee’s consent, including to any member of the Company Group and to any successor(whether by merger, purchase or otherwise) to all or substantially all of the equity, assets or businesses of theCompany Group.

17. Notices. Notices provided for in this Agreement shall be in writing and shall be deemed to have beenduly received (a) when delivered in person, (b) on the first Business Day after such notice is sent by air expressovernight courier service, or (c) on the second Business Day following deposit with an internationally-recognizedovernight or second-day courier service with proof of receipt maintained, in each case, to the following address, asapplicable:

If to the Company, addressed to:

Pacific Drilling Manpower, Inc. Attention: General Counsel 11700 Katy Fwy Houston, Texas 77079 Email: l.buchanan@pacificdrilling.com

If to Employee, addressed to the following until an updated address is provided to the Company by theEmployee:

Bernie G. Wolford, Jr. 8230 Scoresby Manor Ct. Spring, Texas 77379

18. Counterparts. This Agreement may be executed in any number of counterparts, including byelectronic mail or facsimile, each of which when so executed and delivered shall be an original, but all suchcounterparts shall together constitute one and the same instrument. Each counterpart may consist of a copy hereofcontaining multiple signature pages, each signed by one party, but together signed by both Parties.

19. Deemed Resignations. Except as otherwise determined by the Board or as otherwise agreed to inwriting by Employee and any member of the Company Group prior to the termination of Employee’s employmentwith the Company or any member of the Company Group, any termination of Employee’s employment shallconstitute, as applicable, an automatic resignation of Employee: (a) as an officer of the Company and each memberof the Company Group; (b) from the Board; and (c) from the board of directors or board of managers (or similar

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governing body) of any member of the Company Group and from the board of directors or board of managers (orsimilar governing body) of any corporation, limited liability entity, unlimited liability entity or other entity in whichany member of the Company Group holds an equity interest and with respect to which board of directors or board ofmanagers (or similar governing body) Employee serves as such Company Group member’s designee or otherrepresentative.

20. Certain Excise Taxes. Notwithstanding anything to the contrary in this Agreement, if Employee is a “disqualified individual” (as defined in Section 280G(c) of the Code), and the paymentsand benefits provided for in this Agreement, together with any other payments and benefits which Employee has theright to receive from the Company or any of its affiliates, would constitute a “parachute payment” (as defined inSection 280G(b)(2) of the Code), then the payments and benefits provided for in this Agreement shall be either(i) reduced (but not below zero) so that the present value of such total amounts and benefits received by Employeefrom the Company or any of its affiliates shall be one dollar ($1.00) less than three times Employee’s “base amount”(as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received byEmployee shall be subject to the excise tax imposed by Section 4999 of the Code or (ii) paid in full, whicheverproduces the better net after-tax position to Employee (taking into account any applicable excise tax underSection 4999 of the Code and any other applicable taxes). The reduction of payments and benefits hereunder, ifapplicable, shall be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in whichsuch payment or benefit would be paid or provided (beginning with such payment or benefit that would be made lastin time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time)and, then, reducing any benefit to be provided in-kind hereunder in a similar order. The determination as to whetherany such reduction in the amount of the payments and benefits provided hereunder is necessary shall be made by theCompany in good faith. If a reduced payment or benefit is made or provided and through error or otherwise thatpayment or benefit, when aggregated with other payments and benefits from the Company or any of its affiliates usedin determining if a “parachute payment” exists, exceeds one dollar ($1.00) less than three times Employee’s baseamount, then Employee shall immediately repay such excess to the Company upon notification that an overpaymenthas been made. Nothing in this Section 20 shall require the Company Group to be responsible for, or have anyliability or obligation with respect to, Employee’s excise tax liabilities under Section 4999 of the Code.

21. Section 409A.

(a) Notwithstanding any provision of this Agreement to the contrary, all provisions of thisAgreement are intended to comply with Section 409A of the Code, and the applicable Treasury regulations andadministrative guidance issued thereunder (collectively, “Section 409A”) or an exemption therefrom and shall beconstrued and administered in accordance with such intent. Any payments under this Agreement that may beexcluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-termdeferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, eachinstallment payment provided under this Agreement shall be treated as a separate payment. Any payments to bemade under this Agreement upon a termination of Employee’s employment shall only be made if such termination ofemployment constitutes a “separation from service” under Section 409A.

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(b) To the extent that any right to reimbursement of expenses or payment of any benefit in-kind

under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A), (i) anysuch expense reimbursement shall be made by the Company no later than the last day of the taxable year followingthe taxable year in which such expense was incurred by Employee, (ii) the right to reimbursement or in-kind benefitsshall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible forreimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible forreimbursement or in-kind benefits to be provided in any other taxable year; provided, that the foregoing clause shallnot be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Codesolely because such expenses are subject to a limit related to the period in which the arrangement is in effect.

(c) Notwithstanding any provision in this Agreement to the contrary, if any payment or benefitprovided for herein would be subject to additional taxes and interest under Section 409A if Employee’s receipt ofsuch payment or benefit is not delayed until the earlier of (i) the date of Employee’s death or (ii) the date that is six(6) months after the Termination Date (such date, the “Section 409A Payment Date”), then such payment or benefitshall not be provided to Employee (or Employee’s estate, if applicable) until the Section 409A Payment Date.Notwithstanding the foregoing, the Company makes no representations that the payments and benefits providedunder this Agreement are exempt from, or compliant with, Section 409A and in no event shall any member of theCompany Group be liable for all or any portion of any taxes, penalties, interest or other expenses that may beincurred by Employee on account of non-compliance with Section 409A.

22. Clawback. To the extent required by applicable law or any applicable securities exchange listingstandards, or if Employee violates any non-competition, non-solicitation, nondisparagement or nondisclosurecovenant or agreement with the Company Group, the Company may require forfeiture or recoupment of any bonusesor other compensation or severance paid to you under this Agreement. Notwithstanding any provision of thisAgreement to the contrary, the Company and Parent reserves the right, without the consent of Employee, to adoptany such clawback policies and procedures, including such policies and procedures applicable to this Agreementwith retroactive effect; provided such clawback policies and procedures apply to all senior executives of theCompany or Parent.

23. Effect of Termination. The provisions of Sections 5, 7-11 and 19 and those provisions necessary tointerpret and enforce them, shall survive any termination of this Agreement and any termination of the employmentrelationship between Employee and the Company.

24. Third-Party Beneficiaries. Each member of the Company Group that is not a signatory to thisAgreement shall be a third-party beneficiary of Employee’s obligations under Section 7 and shall be entitled toenforce such obligations as if a party hereto.

25. Severability. It is the desire and intent of the Parties hereto that the provisions of this Agreement beenforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in whichenforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court ofcompetent jurisdiction to be invalid, prohibited or unenforceable under any present or future law, and if the rightsand obligations of

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any party under this Agreement will not be materially and adversely affected thereby, such provision, as to suchjurisdiction, shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting thevalidity or enforceability of such provision in any other jurisdiction; furthermore, in lieu of such invalid orunenforceable provision there will be added automatically as a part of this Agreement, a legal, valid and enforceableprovision as similar in terms to such invalid or unenforceable provision as may be possible. Notwithstanding theforegoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable insuch jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisionsof this Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

26. Guarantee. Parent hereby unconditionally and without limitation guarantees the performance of, andagrees to cause to be performed, all of the obligations of the Company under this Agreement. Parent agrees to act asa surety for the performance of all of the obligations of the Company under this Agreement. For avoidance of doubt,Parent shall be a guarantor and surety of all payment and performance obligations of the Company under thisAgreement and Employee may, in his sole discretion, pursue all rights and remedies that Employee may havepursuant to this Agreement, at law or in equity against both the Company and Parent.

[Remainder of Page Intentionally Blank;Signature Page Follows]

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IN WITNESS WHEREOF, Employee and the Company each have executed this Agreement to be effective

as of the Effective Date.

EMPLOYEE Bernie G. Wolford, Jr. PACIFIC DRILLING MANPOWER, INC. By: Name: Amy Roddy Title: SVP, Corporate Services FOR PURPOSES OF SECTION 26 ONLY PACIFIC DRILLING S.A. By: Name: W. Matt Ralls Title: Chairman

SIGNATURE PAGE TOEMPLOYMENT AGREEMENT

Exhibit A

FORM OF RELEASE AGREEMENT

This General Release of Claims (this “Agreement”) is entered into by Bernie G. Wolford (“Employee”) andis that certain Release referred to in Section 6(g) of the Employment Agreement effective as of November 19, 2018,by and between Pacific Drilling Manpower, Inc. (the “Company”), and Employee. Capitalized terms not definedherein have the meaning given to them in the Employment Agreement.

1. Severance Consideration. Employee acknowledges and agrees that the last day of Employee’s employment with the Company Group was ___________, 2___ (the “Separation Date”). If (a) Employee executesthis Agreement on or after the Separation Date and returns it to the Company, care of [NAME] [ADDRESS] [E-MAIL] so that it is received by [NAME] no later than 11:59 p.m., [] time on [DATE], (b) does not exercise hisrevocation rights pursuant to Section 11 below, and (c) abides by Employee’s continuing obligations under theEmployment Agreement (including the terms of Sections 7, and 10 thereof), then the Company will provideEmployee the Severance Consideration, which Severance Consideration will be provided as set forth Section 6 of theEmployment Agreement.

2. Satisfaction of All Leaves and Payment Amounts; Prior Rights and Obligations. In entering intothis Agreement, Employee expressly acknowledges and agrees that Employee has received all leaves (paid andunpaid) to which Employee was entitled during Employee’s employment with the Company and any other CompanyParty (as defined below) and Employee has received all wages, bonuses, and other compensation, been provided allbenefits, been afforded all rights and been paid all sums that Employee is owed and has been owed by the Companyand any other Company Party as of the date that Employee executes this Agreement (the “Signing Date”). For theavoidance of doubt, Employee acknowledges and agrees that Employee had no right to the Severance Consideration(or any portions thereof) but for Employee’s entry into this Agreement.

3. Release of Liability for Claims.

(a) In consideration of Employee’s receipt of the Severance Consideration (and any portionthereof), Employee hereby forever releases, discharges and acquits the Company, the Parent its affiliates, and each ofthe foregoing entities’ respective past, present and future subsidiaries, affiliates, stockholders, members, partners,directors, officers, managers, insurers, employees, agents, attorneys, heirs, predecessors, successors andrepresentatives in their personal and representative capacities, as well as all employee benefit plans maintained byany Company Party and all fiduciaries and administrators of any such plans, in their personal and representativecapacities (collectively, the “Company Parties”), from liability for, and Employee hereby waives, any and allclaims, damages, or causes of action of any kind related to Employee’s employment with any Company Party, thetermination of such employment, and any other acts or omissions related to any matter occurring or existing on orprior to the Signing Date, including (i) any alleged violation through such date of: (A) any federal, state or local anti-discrimination or anti-retaliation law, including the Age Discrimination in Employment Act of 1967, as amended(including as amended by the Older Workers Benefit Protection Act), Title VII of the Civil Rights Act of 1964,

EXHIBIT A

as amended, the Civil Rights Act of 1991, as amended, and Sections 1981 through 1988 of Title 42 of the UnitedStates Code, as amended; and the Americans with Disabilities Act of 1990, as amended; (B) the EmployeeRetirement Income Security Act of 1974, as amended (“ERISA”); (C) the Immigration Reform Control Act, asamended; (D) the Occupational Safety and Health Act, as amended; (E) the Family and Medical Leave Act of 1993;(F) any federal, state or local wage and hour law; (G) any other local, state or federal law, regulation or ordinance; or(H) any public policy, contract, tort, or common law claim or claim for fiduciary duty or breach thereof or claim forfraud or misrepresentation or fraud of any kind; (ii) any allegation for costs, fees, or other expenses includingattorneys’ fees incurred in, or with respect to, a Released Claim; (iii) any and all rights, benefits or claims Employeemay have under any retention, change in control, bonus or severance plan or policy of any Company Party or anyretention, change in control, bonus or severance-related agreement that Employee may have or have had with anyCompany Party other than the rights to the Severance Consideration described herein; (iv) any and all rights, benefitsor claims Employee may have under any employment contract (including the Employment Agreement), equity-basedcompensation plan or arrangement, incentive compensation plan, limited liability company agreements, and anyother agreement; and (v) any claim for compensation or benefits of any kind not expressly set forth in this Agreement(collectively, the “Released Claims”). In no event shall the Released Claims include (x) any claim that first arisesafter the Signing Date or (y) any claim to vested benefits under an employee benefit plan governed by ERISA. ThisAgreement is not intended to indicate that any such claims exist or that, if they do exist, they are meritorious. Rather,Employee is simply agreeing that, in exchange for the consideration received by him pursuant to Section 2, any andall potential claims of this nature that Employee may have against the Company Parties, regardless of whether theyactually exist, are expressly settled, compromised and waived. THIS RELEASE INCLUDES MATTERSATTRIBUTABLE TO THE SOLE OR PARTIAL NEGLIGENCE (WHETHER GROSS OR SIMPLE) OROTHER FAULT, INCLUDING STRICT LIABILITY, OF ANY OF THE COMPANY PARTIES.

(b) Notwithstanding this release of liability, nothing in this Agreement prevents Employee fromfiling any non-legally waivable claim (including a challenge to the validity of this Agreement) with the EqualEmployment Opportunity Commission (“EEOC”) or comparable state or local agency or participating in (orcooperating with) any investigation or proceeding conducted by the EEOC or comparable state or local agency orcooperating with such agency; however, Employee understands and agrees that Employee is waiving any and allrights to recover any monetary or personal relief or recovery as a result of such EEOC or comparable state or localagency or proceeding or subsequent legal actions.

4. Representation About Claims. Employee represents and warrants that, as of the Signing Date,Employee has not filed any claims, complaints, charges, or lawsuits against any of the Company Parties with anygovernmental agency or with any state or federal court for or with respect to a matter, claim, or incident that occurredor arose out of one or more occurrences that took place on or prior to the Signing Date. Employee further representsand warrants that Employee has made no assignment, sale, delivery, transfer or conveyance of any rights Employeehas asserted or may have against any of the Company Parties with respect to any Released Claim.

5. Employee’s Acknowledgments. By executing and delivering this Agreement, Employee expresslyacknowledges that:

EXHIBIT A

(a) Employee has carefully read this Agreement and has had sufficient time (and at least [21] [45]

days) to consider this Agreement before signing it and delivering it to the Company;

(b) [If 45-day period applies: Employee has been provided with, and attached to this Agreementis, a listing of: (A) the job titles and ages of all employees selected for participation in the exit incentive program orother employment termination program pursuant to which Employee is being offered this Agreement; (B) the jobtitles and ages of all employees in the same job classification or organizational unit who were not selected forparticipation in the program; and (C) information about the unit affected by the program, including any eligibilityfactors for such program and any time limits applicable to such program;]

(c) Employee has been advised, and hereby is advised in writing, to discuss this Agreement withan attorney of Employee’s choice and Employee has had adequate opportunity to do so prior to executing thisAgreement;

(d) Employee fully understands the final and binding effect of this Agreement; the only promisesmade to Employee to sign this Agreement are those stated herein; and Employee is signing this Agreementknowingly, voluntarily and of Employee’s own free will, and understands and agrees to each of the terms of thisAgreement;

(e) The only matters relied upon by Employee and causing Employee to sign this Agreement arethe provisions set forth in writing within the four corners of this Agreement;

(f) Employee would not otherwise have been entitled to the consideration described in Section 1above, or any portion thereof, but for Employee’s agreement to be bound by the terms of this Agreement; and

(g) No Company Party has provided any tax or legal advice regarding this Agreement andEmployee has had the opportunity to receive sufficient tax and legal advice from advisors of Employee’s ownchoosing such that Employee enters into this Agreement with full understanding of the tax and legal implicationsthereof.

6. Third-Party Beneficiaries. Employee expressly acknowledges and agrees that each Company Partythat is not a signatory to this Agreement shall be a third-party beneficiary of Employee’s release of claims andrepresentations in Sections 2-5 and 9 hereof.

7. Severability. Any term or provision of this Agreement (or part thereof) that renders such term orprovision (or part thereof) or any other term or provision hereof (or part thereof) invalid or unenforceable in anyrespect shall be severable and shall be modified or severed to the extent necessary to avoid rendering such term orprovision (or part thereof) invalid or unenforceable, and such modification or severance shall be accomplished in themanner that most nearly preserves the benefit of the bargain set forth in the Employment Agreement and hereunder.

8. Withholding of Taxes and Other Deductions. Employee acknowledges that the Company maywithhold from the Severance Consideration all federal, state, local, and other taxes and withholdings as may berequired by any law or governmental regulation or ruling.

EXHIBIT A

9. Return of Property. Employee represents and warrants that Employee has returned to the Company

all property belonging to the Company or any other Company Party, including all computer files, electronicallystored information and other materials provided to him by the Company or any other Company Party in the course ofEmployee’s employment with the Company and Employee further represents and warrants that Employee has notmaintained a copy of any such materials in any form.

10. Further Assurances. In signing below, Employee expressly acknowledges the enforceability, andcontinued effectiveness of Sections 7 and 10 of the Employment Agreement and promises to abide by those terms ofthe Employment Agreement.

11. Revocation Right. Notwithstanding the initial effectiveness of this Agreement, Employee mayrevoke the delivery (and therefore the effectiveness) of this Agreement within the seven-day period beginning on thedate Employee executes this Agreement (such seven day period being referred to herein as the “Release RevocationPeriod”). To be effective, such revocation must be in writing signed Employee and must be received by [NAME][ADDRESS] [E-MAIL] before 11:59 p.m., [] time, on the last day of the Release Revocation Period. If aneffective revocation is delivered in the foregoing manner and timeframe, no Severance Consideration shall beprovided and this Agreement shall be null and void; provided, however, that the provisions of Sections 2, 4, 9 and10 shall remain in full force and effect and shall not be affected by any such revocation.

12. Employment Agreement. This Agreement shall be subject to the provisions of Sections 8, 12, 13, 14 and 18 of the Employment Agreement, which provisions are hereby incorporated by reference as a part of thisAgreement.

[Remainder of Page Intentionally Blank;Signature Page Follows]

EXHIBIT A

IN WITNESS WHEREOF, Employee has executed this Agreement as of the date set forth below, effective

for all purposes as provided above.

EMPLOYEE Bernie G. Wolford, Jr. Date:

SIGNATURE PAGE TORELEASE AGREEMENT

Exhibit B

ADDITIONAL MARKET AREA

[Intentionally Blank; Reserved for Future Use]

EXHIBIT B

Schedule I

Sign-On Equity Award Terms

[See separate attachments]

EXHIBIT B

Exhibit 10.18

EXECUTION VERSION

EMPLOYMENT AGREEMENT

This Employment Agreement (“Agreement”) is made and entered into by and between Pacific DrillingManpower, Inc., a Delaware corporation (the “Company”) and an indirect wholly-owned subsidiary of PacificDrilling S.A., a limited liability company (societe anonyme) organized under the laws of Luxembourg, having itsregistered office located at 8-10 Avenue de la Gare, L-1610 Luxembourg, and registered with the Luxembourgregister of commerce and companies under number B 159658, organized under the laws of Luxembourg (the“Parent”), the Parent for the purposes of Section 26 of this Agreement, and James W. Harris (“Employee”)(collectively, the “Parties”), effective as of July 22, 2019 (the “Effective Date”).

1. Employment. During the Employment Period (as defined in Section 4), the Company shall employEmployee, and Employee shall serve, as Senior Vice President and Chief Financial Officer of the Company andParent and in such other position or positions as may be assigned from time to time by the board of directors (the“Board”) of the Parent.

2. Duties and Responsibilities of Employee; Company Investment.

(a) During the Employment Period, Employee shall devote Employee’s full business time,attention and best efforts to the businesses of the Company, the Parent and its direct and indirect subsidiaries andaffiliates (collectively, the “Company Group”) as may be requested by the Board from time to time. Employee’sduties shall include those normally incidental to the position identified in Section 1, as well as such additional dutiesas may be assigned to Employee by the Board from time to time, which duties may include providing services toother members of the Company Group in addition to the Company and Parent. Employee may, without violating thisAgreement, (i) as a passive investment, own publicly traded securities in such form or manner as shall not requireany services by Employee in the operation of the entities in which such securities are owned; (ii) engage in charitableand civic activities; or (iii) with the prior written consent of the Board, engage in other personal and passiveinvestment activities, in each case, so long as such interests or activities do not interfere with Employee’s ability tofulfill Employee’s duties and responsibilities under this Agreement and are not inconsistent with Employee’sobligations to the Company Group or competitive with the business of the Company Group. Specifically, Employeeshall continue to be permitted to be a director of Centurion Group Ltd.; provided that (i) such affiliation only requiresa de minimus amount of Employee’s time, and (ii) Centurion Group Ltd. does not compete with the CompanyGroup.

(b) Employee hereby represents and warrants that Employee is not the subject of, or a party to,any employment agreement, non-competition covenant, nondisclosure agreement, or any other agreement,obligation, restriction or understanding that would prohibit Employee from executing this Agreement or fullyperforming each of Employee’s duties and responsibilities hereunder, or would in any manner, directly or indirectly,limit or affect any of the duties and responsibilities that may now or in the future be assigned to Employee hereunder.

(c) Employee understands that Employee owes each member of the Company Group fiduciaryduties (including (i) duties of loyalty and disclosure and (ii) fiduciary duties as an officer of the Company), and theobligations described in this Agreement are in addition to,

and not in lieu of, the obligations Employee owes each member of the Company Group under statutory and commonlaw.

3. Compensation.

(a) Base Salary. During the Employment Period, the Company shall pay to Employee anannualized base salary of $450,000 (the “Base Salary”) in consideration for Employee’s services under thisAgreement, payable in substantially equal installments in conformity with the Company’s customary payrollpractices for other senior executives as may exist from time to time, but no less frequently than monthly. The BaseSalary shall be reviewed by the Board (or a committee thereof) in accordance with the Company’s policies andpractices, but no less frequently than once annually, and may be increased but not decreased unless such decrease isagreed to in writing by Employee or is part of, and consistent in amount, percentage and/or application with, anacross-the-board reduction in the base salaries of the senior executives of the Company. To the extent applicable, theterm “Base Salary” shall include any such increases (or decreases) to the Base Salary enumerated above.

(b) Annual Bonus. Employee shall be eligible for discretionary bonus compensation for eachcomplete calendar year (and any partial year in the event of a Change of Control) that Employee is employed by theCompany hereunder (the “Annual Bonus”). Each Annual Bonus shall have a target value that is not less than 75%of Employee’s Base Salary as in effect on September 30 of the calendar year to which such Annual Bonus relates(the “Bonus Year”) and a maximum value equal to 112.5% of Employee’s Base Salary as in effect on September 30of such Bonus Year. The performance targets that must be achieved in order to be eligible for certain bonus levelsshall be established by the Board (or a committee thereof) annually, in its sole discretion, and communicated toEmployee within the first ninety (90) days of the applicable Bonus Year. Notwithstanding the foregoing, Employeeshall be eligible to receive a pro-rata Annual Bonus for the 2019 calendar year, the amount of which will bedetermined by multiplying (i) the Annual Bonus Employee would have received based on achievement of theapplicable performance targets established by the Committee for 2019 for the Company’s senior executives, by (ii)the fraction determined by dividing (A) the number of days of Employee’s employment from the Effective Datethrough December 31, 2019 by (B) 365. Each Annual Bonus, if any, shall be paid as soon as administrativelyfeasible after the Board (or a committee thereof) certifies whether the applicable performance targets for theapplicable Bonus Year have been achieved, but no later than March 15 of the year following the BonusYear. Notwithstanding anything in this Section 3(b) to the contrary, no Annual Bonus, if any, nor any portionthereof, shall be payable for any Bonus Year unless Employee remains continuously employed by the Company fromthe Effective Date through the end of the applicable year.

(c) Sign-On Equity Awards. In consideration of Employee entering into this Agreement and asan inducement to join the Company, on or as soon as reasonably practicable following the Effective Date, the Parentshall grant Employee, under the Pacific Drilling S.A. 2018 Omnibus Stock Incentive Plan, as amended from time totime (the “Equity Incentive Plan”), certain equity awards having terms and conditions consistent with the equityawards granted to the Company’s other senior executives in early 2019. Specifically, Employee shall receive 101,775restricted stock units and 101,775 performance share units (collectively the

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“Sign-On Equity Awards”), which shall be memorialized in separate award agreements between Employee and theParent.

(d) Business Expenses. Subject to Section 21, the Company shall reimburse Employee forEmployee’s reasonable out-of-pocket business-related expenses actually incurred in the performance of Employee’sduties under this Agreement so long as Employee timely submits all documentation for such reimbursement, asrequired by Company policy in effect from time to time. Any such reimbursement of expenses shall be made by theCompany upon or as soon as practicable following receipt of such documentation (but in any event not later than theclose of Employee’s taxable year following the taxable year in which the expense is incurred by Employee). In noevent shall any reimbursement be made to Employee for such expenses incurred after the date of Employee’stermination of employment with the Company.

(e) Benefits. During the Employment Period, Employee shall be eligible to participate in thesame benefit plans and programs in which other senior executives are eligible to participate, subject to the terms andconditions of the applicable plans and programs in effect from time to time. The Company shall not, however, byreason of this Section 3(e), be obligated to institute, maintain, or refrain from changing, amending, or discontinuing,any such plan or policy, so long as such changes are similarly applicable to other senior executives generally.

(f) Vacation. During the Employment Period, Employee shall be eligible to accrue vacation foreach complete calendar year that Employee is employed by the Company hereunder (prorated for partial years) inaccordance with the Company’s vacation policy, as amended from time to time. Notwithstanding the previoussentence, Employee shall be eligible for five (5) weeks (25 days) paid vacation per full year (prorated for partialyears).

4. Term of Employment.

(a) Employment Period. Subject to Section 5, the term of Employee’s employment pursuant tothis Agreement shall commence on the Effective Date and continue in effect through the second anniversary thereof(the “Employment Period”), provided, however, that, commencing on July 23, 2021, and each second anniversarythereafter, the Employment Period shall automatically be extended for two additional years unless, not later thanninety (90) days prior to the expiration date, the Company or the Employee shall give written notice that it or he doesnot wish to extend the Employment Period, in which case the Employment Period and this Agreement shall, subjectto Section 4(b), be terminated as of the expiration date. Following the expiration of the Employment Period underthis Agreement, the Employee may remain employed-at-will with the Company.

(b) Company Decision Not to Renew.

(i) If, during the one-year period immediately following the expiration of theEmployment Period as a result of the Company having given to Employee a non-extension notice underSection 4(a), the Company terminates Employee’s employment without Cause or Employee terminates hisemployment for Good Reason prior to a Change of Control (as defined in Section 6(g)), then Employee shallbe eligible for the same benefits as are provided under Section 6(b)(i).

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(ii) If a non-extension notice is given by the Company under Section 4(a), and as of the

end of the Employment Period, either (A) the Company has signed a letter of intent or an agreement withrespect to a transaction that if consummated would result in a Change of Control, or (B) a publicannouncement has been made of a proposed transaction that if consummated would result in a Change ofControl, and such Change of Control shall occur within six months following the expiration of theEmployment Period, this Agreement shall remain in effect through the Protection Period (as defined inSection 6(b)(ii)) and if the Company terminates Employee’s employment without Cause or Employeeterminates his employment for Good Reason during such Protection Period, then Employee shall be eligiblefor the same benefits as are provided under Section 6(b)(ii).

5. Termination of Employment.

(a) Company’s Right to Terminate Employee’s Employment for Cause. The Company shall havethe right to terminate Employee’s employment hereunder at any time for “Cause.” For purposes of this Agreement,“Cause” shall mean:

(i) Employee’s commission of fraud, theft, or embezzlement against any member of theCompany Group or a willful breach of fiduciary duty with respect to any member of the Company Group;

(ii) Employee’s willful and continued failure to perform Employee’s duties;

(iii) Employee’s breach of Section 2(b) or Section 7 of this Agreement or breach of anyother written agreement between Employee and any member of the Company Group which causes materialharm to the Company Group;

(iv) Employee’s conviction of, or plea of guilty or nolo contendere to, a felony (or state lawequivalent) or to any crime involving moral turpitude;

(v) Employee’s gross misconduct or gross negligence in the performance of duties to anymember of the Company Group; or

(vi) Employee’s breach and violation of the Company’s or the Parent’s written policiespertaining to sexual harassment, discrimination or insider trading.

The Employee shall not be deemed terminated for Cause unless the Company shall have delivered to the Employee atermination notice with a copy of a resolution adopted by the affirmative vote of not less than seventy (70) percent ofthe entire Board at a meeting called for such purpose (after reasonable notice is provided to the Employee and theEmployee has had an opportunity, with counsel, to be heard by the Board) finding that the Employee should beterminated for Cause and specifying in reasonable detail the grounds therefor.

Provided, however, that solely with respect to the actions or omissions set forth in Section 5(a)(ii), (iii), (v) and (vi),such actions or omissions must remain uncured or uncorrected

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ten (10) business days after the Board has provided Employee such written notice. For the avoidance of doubt, theactions or omissions set forth in Section 5(a)(i) and (iv) are not permitted to be cured by Employee under anycircumstances. In the event the Board or Chief Executive Officer determines in good faith after consultation withlegal counsel that its or his fiduciary obligations require an immediate termination for Cause, or that a cure is notpossible, then, notwithstanding anything herein to the contrary, no cure right shall be provided to Employee.

(b) Company’s Right to Terminate for Convenience. The Company shall have the right toterminate Employee’s employment for convenience at any time and for any reason, or no reason at all, upon 30 dayswritten notice (or pay in lieu thereof) to Employee.

(c) Employee’s Right to Terminate for Good Reason. Employee shall have the right to terminateEmployee’s employment with the Company at any time for “Good Reason.” For purposes of this Agreement, “GoodReason” shall mean:

(i) A material diminution in Employee’s Base Salary or target Annual Bonus except, inthe case of a termination under Section 6(b)(i) hereof only (which relates to a termination outside of theProtection Period), a reduction that is part of, and consistent in amount, percentage and/or application with,an across-the-board reduction in the base salaries of the senior executives of the Company;

(ii) the relocation of the geographic location of Employee’s principal place of employmentto a location more than seventy five (75) miles outside the greater Houston, Texas metropolitan area(excluding reasonably required business travel in connection with the performance of Employee’s dutiesunder this Agreement);

(iii) a material and adverse change to, or a material reduction of, Employee’s duties andresponsibilities to the Company or the Parent, which includes but is not limited to his removal without Causeas Chief Financial Officer of Parent; or

(iv) any material breach by the Company of any provision of this Agreement.

Notwithstanding the foregoing provisions of this Section 5(c) or any other provision of this Agreement to thecontrary, any assertion by Employee of a termination for Good Reason due to a condition described in Section 5(c)(i), (ii), (iii) or (iv) shall not be effective unless all of the following conditions are satisfied: (A) the condition givingrise to Employee’s termination of employment must have arisen without Employee’s consent, (B) Employee mustprovide written notice to the Board of the existence of such condition(s) within ninety (90) days of the initialexistence of such condition(s), (C) the condition(s) specified in such notice must remain uncorrected for thirty (30)days following the Board’s receipt of such written notice, and (D) the date of Employee’s termination of employmentmust occur within ninety (90) days following the Board’s receipt of such notice.

(d) Death or Disability. Upon the death or Disability of Employee, Employee’s employment withCompany shall terminate. For purposes of this Agreement, a “Disability” shall exist if Employee is entitled toreceive long-term disability benefits under the

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Company’s disability plan and/or Employee has exhausted all available leave and remains unable to perform theessential functions of the job with or without reasonable accommodation.

(e) Employee’s Right to Terminate for Convenience. In addition to Employee’s right to terminateEmployee’s employment for Good Reason, Employee shall have the right to terminate Employee’s employment withthe Company for convenience at any time and for any other reason, or no reason at all, upon ninety (90) days’advance written notice to the Company; provided, however, that if Employee has provided notice to the Company ofEmployee’s termination of employment, the Company or Parent may determine, in its sole discretion, that suchtermination shall be effective on any date prior to the effective date of termination provided in such notice (and, ifsuch earlier date is so required, then it shall not change the basis for Employee’s termination of employment nor beconstrued or interpreted as a termination of employment pursuant to Section 5(b)).

6. Obligations of the Company upon Termination of Employment.

(a) For Cause; Other than for Good Reason. If Employee’s employment is terminated during theEmployment Period (i) by the Company for Cause pursuant to Section 5(a) or (ii) by Employee other than for GoodReason pursuant to Section 5(e), then Employee shall be entitled to all accrued but unpaid vacation and unpaid BaseSalary earned by Employee through the date that Employee’s employment terminates (the “Termination Date”) and,subject to the terms and conditions of any benefit plans in which he may participate at the time of such termination,any post-employment benefits available pursuant to the terms of those plans; however, Employee shall not be entitledto any additional amounts or benefits as the result of such termination of employment.

(b) Without Cause; For Good Reason. In addition to the amounts in Section 6(a), and subject toSection 6(e) below, Employee shall be entitled to certain severance consideration described below, payable as setforth in Section 6(d) below, if Employee’s employment is terminated during the Employment Period (x) by theCompany without Cause pursuant to Section 5(b) or (y) by Employee for Good Reason pursuant to Section 5(c), asfollows:

(i) Except as otherwise provided in Section 6(b)(ii), the Company shall provide Employeewith a severance payment in an amount equal to the sum of (A) one and one-half (1.5) times the sum of(1) Employee’s Base Salary as in effect immediately prior to the Termination Date and (2) the target value ofEmployee’s Annual Bonus for the Bonus Year during which such termination occurs, and (B) an amountequal to the sum of the Company contributions that would be made for 12 months of group life, long-termdisability and health insurance benefits (collectively, the “Group Benefits”) calculated based on monthlyCompany contributions as of the Termination Date with respect to coverage that was provided to Employeeand his dependents as of such date (the “Severance Payment”).

(ii) If such termination of Employee’s employment by the Company without Cause or byEmployee for Good Reason occurs during the Protection Period (as defined below), in lieu of the SeverancePayment, the Company shall provide Employee

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with a severance payment in an amount determined as follows (as applicable, the “CIC SeverancePayment”):

(A) If the Change of Control occurs prior to the first anniversary of the EffectiveDate, the severance payment shall equal the sum of (A) one (1) times the sum of (1) Employee’s Base Salaryas in effect immediately prior to the Termination Date and (2) the target value of Employee’s Annual Bonusfor the Bonus Year during which such termination occurs, and (B) an amount equal to the sum of theCompany contributions that would be made for 12 months of Group Benefits, calculated based on monthlyCompany contributions as of the Termination Date with respect to coverage that was provided to theEmployee and his dependents as of such date;

(B) If the Change of Control occurs on or after the first anniversary of the EffectiveDate but prior to the second anniversary of the Effective Date, the severance payment shall equal the sum of(A) one and one-half (1.5) times the sum of (1) Employee’s Base Salary as in effect immediately prior to theTermination Date and (2) the target value of Employee’s Annual Bonus for the Bonus Year during whichsuch termination occurs, and (B) an amount equal to the sum of the Company contributions that would bemade for 18 months of Group Benefits, calculated based on monthly Company contributions as of theTermination Date with respect to coverage that was provided to the Employee and his dependents as of suchdate; or

(C) If the Change of Control occurs on or after the second anniversary of theEffective Date, the severance payment shall equal the sum of (A) two (2) times the sum of (1) Employee’sBase Salary as in effect immediately prior to the Termination Date and (2) the target value of Employee’sAnnual Bonus for the Bonus Year during which such termination occurs, and (B) an amount equal to the sumof the Company contributions that would be made for 24 months of Group Benefits, calculated based onmonthly Company contributions as of the Termination Date with respect to coverage that was provided to theEmployee and his dependents as of such date.

For purposes of this Agreement, “Protection Period” is the period of time during the Employment Periodbeginning on the date of a Change of Control and ending on the first anniversary of the date of such Changeof Control. If during the Employment Period, Employee’s employment is terminated by the Company withoutCause pursuant to Section 5(b) and such termination occurs after the entry into a signed definitive agreementwhich if consummated would constitute a Change of Control, then Employee shall receive an additionalpayment equal to the excess of the applicable CIC Severance Payment minus the Severance Payment withsuch additional payment being made at the time of the Change of Control (and for the avoidance of doubtsuch additional payment shall only be made if such Change of Control occurs).

(c) Death or Disability. If Employee’s employment is terminated during the Employment Perioddue to Employee’s death or Disability pursuant to Section 5(d), then Employee shall be entitled to all accrued butunpaid vacation and unpaid Base Salary earned by Employee through the Termination Date and, subject to the termsand conditions of any benefit plans in which he may participate at the time of such termination, any post-employmentbenefits

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available pursuant to the terms of those plans; however, Employee shall not be entitled to any additional amounts orbenefits as the result of such termination of employment.

(d) Payment Timing. Subject to Section 6(e), payment of the Severance Payment or the CICSeverance Payment (individually, as applicable, the “Cash Severance Payment”), as applicable, shall be made onthe Company’s first regularly scheduled pay date that is on or after the date that is sixty (60) days after theTermination Date.

(e) Conditions to Receipt of Cash Severance Payment. Notwithstanding the foregoing,Employee’s eligibility and entitlement to the Cash Severance Payment are dependent upon Employee’s (i) continuedcompliance with Employee’s obligations under each of Section 7 below and (ii) execution and delivery to theCompany, on or before the Release Expiration Date (as defined below), and non-revocation within any time providedby the Company to do so, of a release of all claims in a form provided by the Company and Parent (the “Release”),which Release shall release each member of the Company Group and their respective affiliates, and the foregoingentities’ respective shareholders, members, partners, officers, managers, directors, fiduciaries, employees,representatives, attorneys, agents and benefit plans (and fiduciaries of such plans) from any and all claims, includingany and all causes of action arising out of Employee’s employment with the Company and any other member of theCompany Group or the termination of such employment, but excluding all claims to severance payments Employeemay have under this Section 6 or any vested rights or benefits under any of the Company’s benefit plans or any otheragreement in which Employee participated immediately prior to the termination of such employment. If the Releaseis not executed and returned to the Company on or before the Release Expiration Date, and the required revocationperiod has not fully expired without revocation of the Release by Employee, then Employee shall not be entitled toany portion of the Cash Severance Payment. As used herein, the “Release Expiration Date” is that date that istwenty-one (21) days following the date upon which the Company delivers the Release to Employee (which shalloccur no later than seven (7) days after the Termination Date) or, in the event that such termination of employment is“in connection with an exit incentive or other employment termination program” for a group or class of employees(as such phrase is defined in the Age Discrimination in Employment Act of 1967, as amended), the date that is forty-five (45) days following such delivery date.

(f) After-Acquired Evidence. Notwithstanding any provision of this Agreement to the contrary, inthe event that the Company determines that Employee is eligible to receive a Cash Severance Payment pursuant tothis Section 6 but, after such determination, a court of competent jurisdiction determines that subsequently, duringthe period ending on the first anniversary of the date that the Cash Severance Payment is paid to Employee, theCompany acquired evidence that: (i) Employee has failed to abide by Employee’s continuing obligations underSection 7; or (ii) a Cause condition existed prior to the Termination Date that, had the Company been fully aware ofsuch condition, would have resulted in the termination of Employee’s employment pursuant to Section 5(a), thenEmployee shall promptly return to the Company the Cash Severance Payment received by Employee. Should theCompany institute legal action and recover monies owed pursuant to this Section 6(f), then Employee agrees he willbe required to reimburse the Company for all attorney’s fees and costs associated with said legal action.

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(g) Change of Control Definition. As used herein, “Change of Control” shall have the meaning

set forth in the Equity Incentive Plan.

7. Restrictive Covenants.

(a) Generally. The Company shall provide Employee access to Confidential Information (asdefined below) for use only during the Employment Period, and Employee acknowledges and agrees that theCompany Group shall be entrusting Employee, in Employee’s unique and special capacity, with developing thegoodwill of the Company Group, and in consideration thereof and in consideration of the Company providingEmployee with access to Confidential Information and as an express incentive for the Company to enter into thisAgreement and employ Employee, Employee has voluntarily agreed to the covenants set forth in this Section 7.Employee further agrees and acknowledges that the limitations and restrictions set forth herein, includinggeographical and temporal restrictions on certain competitive activities, are reasonable in all respects and notoppressive, shall not cause Employee undue hardship, and are material and substantial parts of this Agreementintended and necessary to prevent unfair competition and to protect the Company Group’s Confidential Information,goodwill and substantial and legitimate business interests.

(b) Non-Competition. Employee agrees that, during the Non-Compete Period (as defined below),Employee shall not, without the prior written approval of the Board, directly or indirectly, for Employee or on behalfof or in conjunction with any other person or entity of any nature:

(i) engage in or participate in competition with any member of the Company Group inany aspect of the Business (as defined below) within the Market Area (as defined below), which prohibitionshall prevent Employee from directly or indirectly owning, managing, operating, joining, becoming anofficer, director, employee or consultant of, or loaning money to, or selling or leasing equipment or real estateto or otherwise being affiliated with any person or entity engaged in, or planning to engage in, the Business inthe Market Area in competition, or anticipated competition, with any member of the Company Group (which,for this purpose, includes any company that directly competes with the Company Group as of the date hereofor in the future); or

(ii) appropriate any Business Opportunity (as defined below) of, or relating to, theCompany Group located in the Market Area.

(c) Non-Solicitation. Employee agrees that, during the Non-Solicit Period (as defined below),Employee shall not, without the prior written approval of the Board, directly or indirectly, for Employee or on behalfof or in conjunction with any other person or entity:

(i) solicit, canvass, approach, encourage, entice or induce any known customer or supplierof any member of the Company Group to cease or lessen such customer’s or supplier’s business with theCompany Group; or

(ii) solicit, canvass, approach, encourage, entice or induce any employee or contractor ofthe Company Group to terminate his, her or its employment or engagement with any member of the CompanyGroup.

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(d) Non-Disclosure; Non-Use of Confidential Information. Employee shall not disclose or use at

any time, either during Employee’s employment with the Company or at any time thereafter, any ConfidentialInformation of which Employee is or becomes aware, whether or not such information is developed by Employee,except to the extent that such disclosure or use is directly related to and required by Employee’s performance in goodfaith of duties assigned to Employee by the Company. Employee will take all appropriate steps to safeguardConfidential Information in Employee’s possession and to protect it against disclosure, misuse, espionage, loss andtheft. Employee shall deliver to the Company at the Date of Termination, or at any time the Company may request,all memoranda, notes, plans, records, reports, computer tapes and software and other documents and data (and copiesthereof) relating to the Confidential Information or the “Work Product” (as defined below in Section 7(j)(viii)) of thebusiness of the Company Group that Employee may then possess or have under Employee’s control. Nothing in thisAgreement will preclude, prohibit or restrict Employee from (i) communicating with any federal, state or localadministrative or regulatory agency or authority, including but not limited to the Securities and ExchangeCommission (the “SEC”); (ii) participating or cooperating in any investigation conducted by any governmentalagency or authority; or (iii) filing a charge of discrimination with the United States Equal Employment OpportunityCommission or any other federal state or local administrative agency or regulatory authority. Nothing in thisAgreement, or any other agreement between the Parties, prohibits or is intended in any manner to prohibit, Employeefrom (1) reporting a possible violation of federal or other applicable law or regulation to any governmental agency orentity, including but not limited to the Department of Justice, the SEC, the U.S. Congress, and any governmentalagency Inspector General, or (2) making other disclosures that are protected under whistleblower provisions offederal law or regulation. This Agreement does not limit Employee’s right to receive an award (including, withoutlimitation, a monetary reward) for information provided to the SEC. Employee does not need the prior authorizationof anyone at the Company to make any such reports or disclosures, and Employee is not required to notify theCompany that Employee has made such reports or disclosures. Nothing in this Agreement or any other agreement orpolicy of the Company is intended to interfere with or restrain the immunity provided under 18 U.S.C.§1833(b). Employee cannot be held criminally or civilly liable under any federal or state trade secret law for thedisclosure of a trade secret that is made (x) (A) in confidence to federal, state or local government officials, directlyor indirectly, or to an attorney, and (B) for the purpose of reporting or investigating a suspected violation of law; (y)in a complaint or other document filed in a lawsuit or other proceeding, if filed under seal; or (z) in connection with alawsuit alleging retaliation for reporting a suspected violation of law, if filed under seal and does not disclose thetrade secret, except pursuant to a court order. The foregoing provisions regarding protected disclosures are intendedto comply with all applicable laws. If any laws are adopted, amended or repealed after the execution of thisAgreement, this Agreement shall be deemed to be amended to reflect the same.

(e) Proprietary Rights. Employee recognizes that the Company Group possesses a proprietaryinterest in all Confidential Information and Work Product and has the exclusive right and privilege to use, protect bycopyright, patent or trademark, or otherwise exploit the processes, ideas and concepts described therein to theexclusion of Employee, except as otherwise agreed between the Company Group and Employee inwriting. Employee expressly agrees that any Work Product made or developed by Employee or Employee’s agentsduring the course of Employee’s employment, including any Work Product which is based on or arises out

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of Work Product, shall be the property of and inure to the exclusive benefit of the Company Group. Employeefurther agrees that all Work Product developed by Employee (whether or not able to be protected by copyright,patent or trademark) during the course of Employee’s employment with the Company, or involving the use of thetime, materials or other resources of the Company Group, shall be promptly disclosed to the Company Group andshall become the exclusive property of the Company Group, and Employee shall execute and deliver any and alldocuments necessary or appropriate to implement the foregoing.

(f) Non-Disparagement. During the Employment Period and at all times thereafter, neitherEmployee nor Employee’s agents shall directly or indirectly issue or communicate any public statement, or statementlikely to become public, that maligns, denigrates or disparages the Company (including, in the case ofcommunications by Employee or Employee’s agents, the Company Group, any of the Company Group’s officers,directors or employees). The foregoing shall not be violated by truthful responses to (i) legal process orgovernmental inquiry or (ii) by private statements to the Company Group or any of the Company Group’s officers,directors or employees; provided, with respect to clause (ii), such statements are made in the course of carrying outEmployee’s duties pursuant to this Agreement.

(g) Enforcement. Because of the difficulty of measuring economic losses to the Company Groupas a result of a breach of the covenants set forth in this Section 7, and because of the immediate and irreparabledamage that would be caused to the members of the Company Group for which they would have no other adequateremedy, the Company and each other member of the Company Group shall be entitled to enforce the foregoingcovenants, in the event of a breach as determined by a court of law, by (i) notwithstanding anything to the contrarycontained in an Equity Incentive Plan or an award agreement, causing the forfeiture of any unvested awards grantedunder an Equity Incentive Plan (including the equity awards described in Section 3(c)) or (ii) obtaining injunctionsand restraining orders from any court of competent jurisdiction, without the necessity of showing any actual damagesor that money damages would not afford an adequate remedy, and without the necessity of posting any bond or othersecurity. The aforementioned equitable relief shall not be the Company’s or any other member of the CompanyGroup’s exclusive remedy for a breach but instead shall be in addition to all other rights and remedies available tothe Company and each other member of the Company Group at law and equity.

(h) Blue Pencil. If, at any time, the provisions of this Section 7 shall be determined to be invalidor unenforceable under any applicable law, by reason of being vague or unreasonable as to area, duration or scope ofactivity, this Agreement shall be considered divisible and shall become and be immediately amended to only sucharea, duration and scope of activity as shall be determined to be reasonable and enforceable by the court or otherbody having jurisdiction over the matter and Employee and the Company agree that this Agreement as so amendedshall be valid and binding as though any invalid or unenforceable provision had not been included herein.

(i) Tolling. The periods during which the covenants set forth in this Section 7 shall survive shallbe tolled during (and shall be deemed automatically extended by) any period during which Employee is found by ajudge residing in a court of competent jurisdiction to be in violation of any such covenants, to the extent permitted byapplicable law.

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(j) For purposes of Section 7, the following terms shall have the following meanings:

(i) “Business” shall mean the business and operations that are the same or similar to thoseperformed by the Company and any other member of the Company Group for which Employee providesservices or about which Employee obtains Confidential Information during the Employment Period, whichbusiness and operations include the provision of offshore drilling services through the use of high-specification floating rigs.

(ii) “Business Opportunity” shall mean any commercial, investment or other businessopportunity relating to the Business of which Employee was aware during his employment with the Companyor about which Employee received Confidential Information.

(iii) “Company” shall include the Company, the Parent and any direct or indirectsubsidiaries and affiliates thereof and any successors thereto.

(iv) “Confidential Information” means information that is not generally known to thepublic (but for purposes of clarity, Confidential Information shall never exclude any such information thatbecomes known to the public because of Employee’s unauthorized disclosure) and that is used, developed orobtained by the Company Group in connection with its business, including, but not limited to, information,observations and data obtained by Employee while employed by the Company Group concerning (A) thebusiness or affairs of the Company Group, (B) products or services, (C) fees, costs and pricing structures,(D) designs, (E) analyses, (F) drawings, photographs and reports, (G) computer software, including operatingsystems, applications and program listings, (H) flow charts, manuals and documentation, (I) databases,(J) accounting and business methods, (K) inventions, devices, new developments, methods and processes,whether patentable or unpatentable and whether or not reduced to practice, (L) customers and clients andcustomer or client lists, (M) other copyrightable works, (N) all production methods, processes, technologyand trade secrets, and (O) all similar and related information in whatever form. Confidential Information willnot include any information that has been published in a form generally available to the public (except as aresult of Employee’s unauthorized disclosure) prior to the date Employee proposes to disclose or use suchinformation. Confidential Information will not be deemed to have been published or otherwise disclosedmerely because individual portions of the information have been separately published, but only if all materialfeatures comprising such information have been published in combination.

(v) “Market Area” shall mean states of Texas, Mississippi, Alabama, and Louisiana, thecountries of Nigeria and Brazil, the Gulf of Mexico Outer Continental Shelf, and any additional areas inwhich the Company expands its operations or creates plans to expand its operations with such areas added toExhibit A hereof from time to time and provided to Employee.

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(vi) “Non-Compete Period” shall mean the period during which Employee is employed

by any member of the Company Group and continuing until the first anniversary of the Termination Date.

(vii) “Non-Solicit Period” shall mean the period during which Employee is employed byany member of the Company Group and continuing until the first anniversary of the Termination Date.

(viii) “Work Product” means all inventions, innovations, improvements, technicalinformation, systems, software developments, methods, designs, analyses, drawings, reports, service marks,trademarks, trade names, logos and all similar or related information (whether patentable or unpatentable)that relates to the Company Group’s actual or anticipated Business, research and development or existing orfuture products or services and that are conceived, developed or made by Employee (whether or not duringusual business hours and whether or not alone or in conjunction with any other person) while employed bythe Company together with all patent applications, letters patent, trademark, trade name and service markapplications or registrations, copyrights and reissues thereof that may be granted for or upon any of theforegoing.

8. Dispute Resolution; Submission to Jurisdiction.

(a) Each Party irrevocably agrees for the exclusive benefit of the other that any and all suits,actions or proceedings relating to this Agreement (a “Proceeding”) shall be maintained in either the courts of theState of Texas or the federal District Courts sitting in Houston, Texas (collectively, the “Chosen Courts”) and thatthe Chosen Courts shall have exclusive jurisdiction to hear and determine or settle any such Proceeding and that anysuch Proceedings shall only be brought in the Chosen Courts. Each Party irrevocably waives any objection that itmay have now or hereafter to the laying of the venue of any Proceedings in the Chosen Courts and any claim that anyProceedings have been brought in an inconvenient forum and further irrevocably agrees that a judgment in anyProceeding brought in the Chosen Courts shall be conclusive and binding upon it and may be enforced in the courtsof any other jurisdiction.

(b) EACH PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURYIN ANY SUIT, ACTION OR OTHER PROCEEDING INSTITUTED BY OR AGAINST SUCH PARTY INRESPECT OF ITS RIGHTS OR OBLIGATIONS HEREUNDER.

9. Confidentiality of Agreement. The Parties agree that the consideration furnished under thisAgreement, the discussions and correspondence that led to this Agreement, and the terms and conditions of thisAgreement are private and confidential. Except as may be required by applicable law, regulation, or stock exchangerequirement, neither Party may disclose the above information to any other person or entity without the prior writtenapproval of the other.

10. Defense of Claims. During the Employment Period and following the Termination Date, uponreasonable notice and without the necessity of the Company’s obtaining

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a subpoena or court order, Employee shall reasonably cooperate with the Company Group in the defense of anyclaims or actions that may be made by or against any member of the Company Group that relate to Employee’sactual or prior areas of responsibility. The Company shall pay or reimburse Employee for all of Employee’sreasonable travel and other direct expenses reasonably incurred, to comply with Employee’s obligations under thisSection 10, so long as Employee provides reasonable documentation of such expenses and obtains the Company’sprior approval before incurring such expenses.

11. Withholdings; Deductions. The Company may withhold and deduct from any benefits and paymentsmade or to be made pursuant to this Agreement (a) all federal, state, local and other taxes as may be requiredpursuant to any law or governmental regulation or ruling and (b) any deductions consented to in writing byEmployee.

12. Title and Headings; Construction. Titles and headings to Sections hereof are for the purpose ofreference only and shall in no way limit, define or otherwise affect the provisions hereof. Any and all Exhibits orAttachments referred to in this Agreement are, by such reference, incorporated herein and made a part hereof for allpurposes. Unless the context requires otherwise, all references herein to an agreement, instrument or other documentshall be deemed to refer to such agreement, instrument or other document as amended, supplemented, modified andrestated from time to time to the extent permitted by the provisions thereof. All references to “dollars” or “$” in thisAgreement refer to United States dollars. The words “herein”, “hereof”, “hereunder” and other compounds of theword “here” shall refer to the entire Agreement, including all Exhibits attached hereto, and not to any particularprovision hereof. Wherever the context so requires, the masculine gender includes the feminine or neuter, and thesingular number includes the plural and conversely. The use herein of the word “including” following any generalstatement, term or matter shall not be construed to limit such statement, term or matter to the specific items ormatters set forth immediately following such word or to similar items or matters, whether or not non-limitinglanguage (such as “without limitation”, “but not limited to”, or words of similar import) is used with referencethereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadestpossible scope of such general statement, term or matter. Neither this Agreement nor any uncertainty or ambiguityherein shall be construed or resolved against any party hereto, whether under any rule of construction orotherwise. On the contrary, this Agreement has been reviewed by each of the Parties hereto and shall be construedand interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes andintentions of the Parties hereto.

13. Applicable Law. This Agreement shall in all respects be construed according to the laws of the Stateof Texas without regard to its conflict of laws principles that would result in the application of the laws of anotherjurisdiction.

14. Entire Agreement and Amendment. This Agreement and the Confidentiality Agreement containthe entire agreement of the Parties with respect to the matters covered herein and supersede all prior andcontemporaneous agreements and understandings, oral or written, between the Parties hereto concerning the subjectmatter hereof. This Agreement may be amended only by a written instrument executed by both Parties.

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15. Waiver of Breach. Any waiver of this Agreement must be executed by the party to be bound by such

waiver. No waiver by either party hereto of a breach of any provision of this Agreement by the other party, or ofcompliance with any condition or provision of this Agreement to be performed by such other party, shall operate orbe construed as a waiver of any subsequent breach by such other party or any similar or dissimilar provision orcondition at the same or any subsequent time. The failure of either party hereto to take any action by reason of anybreach shall not deprive such party of the right to take action at any time.

16. Assignment. This Agreement is personal to Employee, and neither this Agreement nor any rights orobligations hereunder shall be assignable or otherwise transferred by Employee. The Company may assign thisAgreement without Employee’s consent, including to any member of the Company Group and to any successor(whether by merger, purchase or otherwise) to all or substantially all of the equity, assets or businesses of theCompany Group.

17. Notices. Notices provided for in this Agreement shall be in writing and shall be deemed to have beenduly received (a) when delivered in person, (b) on the first Business Day after such notice is sent by air expressovernight courier service, or (c) on the second Business Day following deposit with an internationally-recognizedovernight or second-day courier service with proof of receipt maintained, in each case, to the following address, asapplicable:

If to the Company, addressed to:

Pacific Drilling Manpower, Inc. Attention: General Counsel 11700 Katy Fwy Houston, Texas 77079 Email: l.buchanan@pacificdrilling.com

If to Employee, addressed to the following until an updated address is provided to the Company by theEmployee:

James W. Harris 11831 Chapelwood Lane Houston, Texas 77024

18. Counterparts. This Agreement may be executed in any number of counterparts, including byelectronic mail or facsimile, each of which when so executed and delivered shall be an original, but all suchcounterparts shall together constitute one and the same instrument. Each counterpart may consist of a copy hereofcontaining multiple signature pages, each signed by one party, but together signed by both Parties.

19. Deemed Resignations. Except as otherwise determined by the Board or as otherwise agreed to inwriting by Employee and any member of the Company Group prior to the termination of Employee’s employmentwith the Company or any member of the Company Group, any termination of Employee’s employment shallconstitute, as applicable, an automatic resignation of Employee: (a) as an officer of the Company and each memberof the Company Group; (b) from the Board; and (c) from the board of directors or board of managers (or similar

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governing body) of any member of the Company Group and from the board of directors or board of managers (orsimilar governing body) of any corporation, limited liability entity, unlimited liability entity or other entity in whichany member of the Company Group holds an equity interest and with respect to which board of directors or board ofmanagers (or similar governing body) Employee serves as such Company Group member’s designee or otherrepresentative.

20. Certain Excise Taxes. Notwithstanding anything to the contrary in this Agreement, if Employee is a “disqualified individual” (as defined in Section 280G(c) of the Code), and the paymentsand benefits provided for in this Agreement, together with any other payments and benefits which Employee has theright to receive from the Company or any of its affiliates, would constitute a “parachute payment” (as defined inSection 280G(b)(2) of the Code), then the payments and benefits provided for in this Agreement shall be either(i) reduced (but not below zero) so that the present value of such total amounts and benefits received by Employeefrom the Company or any of its affiliates shall be one dollar ($1.00) less than three times Employee’s “base amount”(as defined in Section 280G(b)(3) of the Code) and so that no portion of such amounts and benefits received byEmployee shall be subject to the excise tax imposed by Section 4999 of the Code or (ii) paid in full, whicheverproduces the better net after-tax position to Employee (taking into account any applicable excise tax underSection 4999 of the Code and any other applicable taxes). The reduction of payments and benefits hereunder, ifapplicable, shall be made by reducing, first, payments or benefits to be paid in cash hereunder in the order in whichsuch payment or benefit would be paid or provided (beginning with such payment or benefit that would be made lastin time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time)and, then, reducing any benefit to be provided in-kind hereunder in a similar order. The determination as to whetherany such reduction in the amount of the payments and benefits provided hereunder is necessary shall be made by theCompany in good faith. If a reduced payment or benefit is made or provided and through error or otherwise thatpayment or benefit, when aggregated with other payments and benefits from the Company or any of its affiliates usedin determining if a “parachute payment” exists, exceeds one dollar ($1.00) less than three times Employee’s baseamount, then Employee shall immediately repay such excess to the Company upon notification that an overpaymenthas been made. Nothing in this Section 20 shall require the Company Group to be responsible for, or have anyliability or obligation with respect to, Employee’s excise tax liabilities under Section 4999 of the Code.

21. Section 409A.

(a) Notwithstanding any provision of this Agreement to the contrary, all provisions of thisAgreement are intended to comply with Section 409A of the Code, and the applicable Treasury regulations andadministrative guidance issued thereunder (collectively, “Section 409A”) or an exemption therefrom and shall beconstrued and administered in accordance with such intent. Any payments under this Agreement that may beexcluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-termdeferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, eachinstallment payment provided under this Agreement shall be treated as a separate payment. Any payments to bemade under this Agreement upon a termination of Employee’s employment shall only be made if such termination ofemployment constitutes a “separation from service” under Section 409A.

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(b) To the extent that any right to reimbursement of expenses or payment of any benefit in-kind

under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A), (i) anysuch expense reimbursement shall be made by the Company no later than the last day of the taxable year followingthe taxable year in which such expense was incurred by Employee, (ii) the right to reimbursement or in-kind benefitsshall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible forreimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible forreimbursement or in-kind benefits to be provided in any other taxable year; provided, that the foregoing clause shallnot be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Codesolely because such expenses are subject to a limit related to the period in which the arrangement is in effect.

(c) Notwithstanding any provision in this Agreement to the contrary, if any payment or benefitprovided for herein would be subject to additional taxes and interest under Section 409A if Employee’s receipt ofsuch payment or benefit is not delayed until the earlier of (i) the date of Employee’s death or (ii) the date that is six(6) months after the Termination Date (such date, the “Section 409A Payment Date”), then such payment or benefitshall not be provided to Employee (or Employee’s estate, if applicable) until the Section 409A Payment Date.Notwithstanding the foregoing, the Company makes no representations that the payments and benefits providedunder this Agreement are exempt from, or compliant with, Section 409A and in no event shall any member of theCompany Group be liable for all or any portion of any taxes, penalties, interest or other expenses that may beincurred by Employee on account of non-compliance with Section 409A.

22. Clawback. To the extent required by applicable law or any applicable securities exchange listingstandards, or if Employee violates any non-competition, non-solicitation, nondisparagement or nondisclosurecovenant or agreement with the Company Group, the Company may require forfeiture or recoupment of any bonusesor other compensation or severance paid to you under this Agreement. Notwithstanding any provision of thisAgreement to the contrary, the Company and Parent reserves the right, without the consent of Employee, to adoptany such clawback policies and procedures, including such policies and procedures applicable to this Agreementwith retroactive effect; provided such clawback policies and procedures apply to all senior executives of theCompany or Parent.

23. Effect of Termination. The provisions of Sections 5, 7-11 and 19 and those provisions necessary tointerpret and enforce them, shall survive any termination of this Agreement and any termination of the employmentrelationship between Employee and the Company.

24. Third-Party Beneficiaries. Each member of the Company Group that is not a signatory to thisAgreement shall be a third-party beneficiary of Employee’s obligations under Section 7 and shall be entitled toenforce such obligations as if a party hereto.

25. Severability. It is the desire and intent of the Parties hereto that the provisions of this Agreement beenforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in whichenforcement is sought. Accordingly, if any particular provision of this Agreement shall be adjudicated by a court ofcompetent jurisdiction to be

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invalid, prohibited or unenforceable under any present or future law, and if the rights and obligations of any partyunder this Agreement will not be materially and adversely affected thereby, such provision, as to such jurisdiction,shall be ineffective, without invalidating the remaining provisions of this Agreement or affecting the validity orenforceability of such provision in any other jurisdiction; furthermore, in lieu of such invalid or unenforceableprovision there will be added automatically as a part of this Agreement, a legal, valid and enforceable provision assimilar in terms to such invalid or unenforceable provision as may be possible. Notwithstanding the foregoing, ifsuch provision could be more narrowly drawn so as not to be invalid, prohibited or unenforceable in suchjurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions ofthis Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

26. Guarantee. Parent hereby unconditionally and without limitation guarantees the performance of, andagrees to cause to be performed, all of the obligations of the Company under this Agreement. Parent agrees to act asa surety for the performance of all of the obligations of the Company under this Agreement. For avoidance of doubt,Parent shall be a guarantor and surety of all payment and performance obligations of the Company under thisAgreement and Employee may, in his sole discretion, pursue all rights and remedies that Employee may havepursuant to this Agreement, at law or in equity against both the Company and Parent.

[Remainder of Page Intentionally Blank;Signature Page Follows]

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IN WITNESS WHEREOF, Employee and the Company each have executed this Agreement to be effective

as of the Effective Date.

EMPLOYEE James W. Harris PACIFIC DRILLING MANPOWER, INC. By: Name: Bernie Wolford, Jr. Title: Chief Executive Officer FOR PURPOSES OF SECTION 26 ONLY PACIFIC DRILLING S.A. By: Name: Bernie Wolford, Jr. Title: Chief Executive Officer

SIGNATURE PAGE TOEMPLOYMENT AGREEMENT

Exhibit A

ADDITIONAL MARKET AREA

[Intentionally Blank; Reserved for Future Use]

EXHIBIT A

Exhibit 10.19

SEVERANCE AND CHANGE OF CONTROL AGREEMENT

This Severance and Change of Control Agreement (“Agreement”) between Pacific Drilling Manpower, Inc., aDelaware corporation (the “Company”), and _________ (the “Executive”) is dated as of ____________ (the“Agreement Date”).

WITNESSETH

WHEREAS, the Company is an indirect wholly-owned subsidiary of Pacific Drilling S.A., a public limitedliability company (société anonyme) organized under the laws of the Grand Duchy of Luxembourg registered withthe Luxembourg register of commerce and companies under registration number B159658 having its registeredaddress at 8-10 Avenue de la Gare, L-1610, Luxembourg (the “Parent”);

WHEREAS, the Company provides management services to the Parent and subsidiaries of the Parent(collectively, the “Group”) engaged in the business of providing offshore drilling services through the use of high-specification floating rigs;

WHEREAS, the Executive has been and will continue to be an Executive of the Company and as a result hashad, and will continue to gain, access to and knowledge of certain trade secrets and other confidential informationregarding the Company, including without limitation, the assets, manner of doing business, processes, techniques andother proprietary information which constitutes a valuable asset of the Company;

NOW, THEREFORE, in consideration of the mutual undertakings of this Agreement, and for other good andvaluable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

ARTICLE 1DEFINITIONS

As used in this Agreement, the following terms have the meanings specified:

Section 1.1 Affiliate. “Affiliate” of a Person shall mean any other Person controlled by, controlling, orunder common control with, such Person.

Section 1.2 Board. “Board” shall mean the Board of Directors of the Parent.

Section 1.3 Business. “Business” shall mean the provision by the Group of offshore drilling servicesthrough the use of high-specification floating rigs.

Section 1.4 Cause. “Cause” shall mean the Executive’s (a) willful breach of Section 5.1 or 5.2 of thisAgreement; (b) conviction of, or plea of guilty or nolo contendere to, a felony or other crime involving dishonesty ormoral turpitude; (c) material breach of the Group’s Global Code of Conduct, Insider Trading Standard or other Boardor Group adopted policies applicable to management conduct; (d) knowing falsification of information contained inany report provided to the Board or filed or furnished by the Parent with the U.S. Securities and ExchangeCommission (“SEC”) or with any exchange on which the Parent’s securities are listed for

1

trading; or (e) willful engagement in illegal conduct or gross misconduct that is materially injurious to the Group orsubstantial, willful and repeated failure to perform duties as instructed by the Board.

The Executive’s employment shall not be deemed terminated for Cause unless the Company shall havedelivered to the Executive a termination notice with a copy of a resolution adopted by the affirmative vote of not lessthan three-quarters of the entire Board at a meeting called for such purpose (after reasonable notice is provided to theExecutive and the Executive has had an opportunity, with counsel, to be heard by the Board) finding that theExecutive should be terminated for Cause and specifying in reasonable detail the grounds therefor.

Section 1.5 Change of Control. “Change of Control” shall mean:

(a) the acquisition by any Person of beneficial ownership (within the meaning of Rule 13d-3promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”)) of more than 50% of the outstandingshares of the Parent’s Common Shares, $.01 par value per share (the “Common Shares”), provided, however, thatfor purposes of this subsection (a), the following events shall not constitute a Change of Control:

(i) The continuing ownership by Quantum Pacific Group or its Affiliates (the “QuantumGroup”) of those shares of Parent Common Shares that the Quantum Group owns as of the date of this Agreement,or any increase in ownership of shares of Parent Common Shares by the Quantum Group;

(ii) any Parent issuance or sale of its Common Shares to a Person;

(iii) any acquisition of Common Shares by the Parent;

(iv) any acquisition of Common Shares by any employee benefit plan (or related trust)sponsored or maintained by the Parent or a Parent Affiliate; or

(v) any acquisition of Common Shares by any entity pursuant to a transaction thatcomplies with clauses (i), (ii) and (iii) of subsection (c) of this Section 1.5; or

(b) individuals who, as of the Agreement Date, constitute the Board of the Parent (the “IncumbentBoard”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individualwho becomes a director after the Agreement Date through either (i) an election by the Incumbent Board to fill avacancy, or (ii) an election by the Parent’s shareholders following a nomination of such individual by the vote of atleast a majority of the directors then comprising the Incumbent Board, shall be considered a member of theIncumbent Board, unless such individual’s initial assumption of office is a result of an actual or threatened electioncontest with respect to the election or removal of directors or other actual or threatened solicitation of proxies orconsents by or on behalf of a Person other than the Incumbent Board; or

(c) consummation of a reorganization, merger or consolidation, statutory share exchange of theParent, or sale or other disposition of all or substantially all of the assets of

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the Group (a “Business Combination”), in each case, unless, following such Business Combination,

(i) Persons who were the beneficial owners of the Parent’s outstanding Common Sharesand any other securities of the Parent having Voting Power immediately prior to such Business Combinationcontinue to be the beneficial owners, respectively, of 50% or more of the then outstanding shares of common stock,and 50% or more of the Voting Power of the then outstanding voting securities of the corporation resulting from suchBusiness Combination (which, for purposes of paragraphs (i), (ii) and (iii) hereof, shall include a corporation whichas a result of such transaction controls the Parent or all or substantially all of the Parent’s assets either directly orindirectly; and

(ii) except to the extent that such ownership in the Parent existed prior to the BusinessCombination, no Person (excluding, for the purpose of this clause, any corporation resulting from such BusinessCombination or any employee benefit plan or related trust of the Parent or the corporation resulting from suchBusiness Combination) beneficially owns, directly or indirectly, 50% or more of the then outstanding shares ofcommon stock of the corporation resulting from such Business Combination or 50% or more of the combined VotingPower of the then outstanding voting securities of such corporation; and

(iii) at least a majority of the members of the board of directors of the corporation resultingfrom such Business Combination were members of the Incumbent Board at the time of the execution of the initialagreement providing for such Business Combination, or, in the absence of an agreement, of the action taken by theBoard of the Parent approving such Business Combination; or

(d) approval by the shareholders of the Parent of a complete liquidation or dissolution of theParent.

Section 1.6 Common Shares. “Common Shares” shall mean the common shares, $.01 par value pershare, of the Parent.

Section 1.7 Company. “Company” shall mean (a) the Company as defined above and its successors andassigns as permitted by Section 6.1(a), and (b) in appropriate contexts, any subsidiary or corporate Affiliate of theCompany.

Section 1.8 Group. “Group” shall mean the Parent and its subsidiaries collectively.

Section 1.9 Confidential Information. “Confidential Information” shall mean any information,knowledge or data of any nature and in any form (including information that is electronically transmitted or stored onany form of magnetic or electronic storage media) relating to the past, current or prospective business or operationsof any member of the Group, that at the time or times concerned is not generally known to persons engaged inbusinesses similar to those conducted or contemplated by any member of the Group, whether produced by anymember of the Group or any of their respective consultants, agents or independent contractors or by the Executive,and whether or not marked confidential, including without limitation information relating to any of the Group’sservices, projects or jobs, project or job locations, estimating or bidding procedures, bidding strategies, businessplans, business acquisitions, joint ventures,

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processes, research and development ideas, methods or techniques, training methods and materials, and otheroperational methods or techniques, quality assurance procedures or standards, operating procedures, files, plans,specifications, proposals, drawings, charts, graphs, support data, trade secrets, supplier lists, supplier information,purchasing methods or practices, distribution and selling activities, consultants’ reports, marketing and engineeringor other technical studies, maintenance records, employment or personnel data, marketing data, strategies ortechniques, financial reports, budgets, projections, cost analyses, pricing information and analyses, employee lists,customer records, customer lists, customer source lists, proprietary computer software, and internal notes andmemoranda relating to any of the foregoing.

Section 1.10 Date of Termination. “Date of Termination” shall mean (a) if the Executive’s employment isterminated by the Company, the date that the Company notifies the Executive of such termination or any later datespecified in the notice of termination, which shall not be more than 15 days after the date of the notice; (b) if theExecutive’s employment is terminated voluntarily by the Executive, the date that the Executive notifies the Companyof such termination or any later date specified therein (which date shall not be later than 15 days after the giving ofsuch notice), as the case may be; or (c) if the Executive’s employment is terminated as a result of the Executive’sdeath or Disability, the date of such death or the date of determination of such Disability pursuant to Section 1.11, asthe case may be.

Section 1.11 Disability. “Disability” shall be deemed to have occurred if the Executive is renderedincapable of satisfactorily discharging his duties and responsibilities to the Company because of physical or mentalillness, and either (a) the Executive becomes eligible to receive benefits under the Company’s long-term disabilityplan as in effect on the Date of Termination, or (b) if the Company has no long-term disability plan in effect duringsuch period, Executive shall be incapable of performing his duties for a period of 90 consecutive days or 120 or morenon-consecutive days within any consecutive 365-day period. In the event of a dispute between the Company andthe Executive as to whether the Executive has a Disability, the determination shall be made by a licensed medicaldoctor selected by the Company and agreed to by the Executive. If the parties cannot agree on a medical doctor, eachparty shall select a medical doctor and the two doctors shall select a third who shall be the approved medical doctorfor this purpose. The Executive agrees to submit to such tests and examinations as such medical doctor shall deemappropriate.

Section 1.12 Good Reason. “Good Reason” shall mean any of the following events or conditions, providedthat (a) the Executive shall have provided written notice to the Company within 90 days of the initial existence of thecondition described in this Section 1.12, (b) such event or condition continues uncured for a period of 30 days afterwritten notice thereof is given by the Executive to the Company, and (c) the Date of Termination is no later than 180days following the date of the initial existence of the condition described in this Section 1.12 that constitutes GoodReason:

(i) A material reduction by the Company of the Executive's base salary that is then ineffect, without his prior consent, except, in the case of a termination under Article 3 hereof only, a reduction that ispart of, and consistent in amount, percentage and/or application with, an across-the-board reduction in the basesalaries of the senior executives of the Company;

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(ii) A material diminution in the Executive's duties and status as an officer of the

Company;

(iii) A failure in any material respect by the Company to perform any of its obligations tothe Executive under this Agreement; or

(iv) The relocation by the Company of the Executive’s principal place of employment bythe Company to a location that is more than 75 miles from the location of the Executive’s principal place ofemployment by the Company as of the Agreement Date; provided that the Company shall not be deemed to haverelocated the Executive’s principal place of employment if the Company requires the Executive to perform hisnormal duties outside of the above location for less than an aggregate of 120 days during any consecutive period of365 days, as long as no more than 30 days of any such 120 days are consecutive.

Section 1.13 Person. “Person” shall mean a natural person or entity, and shall also mean any partnership,limited partnership, limited liability company, syndicate, or other group that would be treated as a Person underSections 13(d)(3) or 14(d)(2) of the Exchange Act because it had been formed for the purpose of acquiring, holding,or disposing of a security; provided that “Person” shall not include an underwriter temporarily holding a securitypursuant to an offering of the security.

Section 1.14 Prohibited Territories. “Prohibited Territories” shall mean those jurisdictions listed onAppendix A attached hereto, as it may be amended or modified from time to time in accordance with the provisionsof Section 5.2 hereof.

Section 1.15 Section 409A. “Section 409A” shall mean Section 409A of the Internal Revenue Code of1986, as amended, and all regulations and guidance issued thereunder.

Section 1.16 Target Bonus. “Target Bonus” shall refer to the target bonus established for the Executive forthe year in which the termination occurs (waiving any subjective performance criteria and assuming achievement bythe Company of all objective performance goals of the bonus plan at exactly 100%).

Section 1.17 Protected Period. “Protected Period” shall mean the period beginning with the date of theChange of Control and continuing through the date that is 18 months thereafter.

Section 1.18 Termination Bonus. “Termination Bonus” shall mean an amount equal to the product of (a)the Target Bonus and (b) the fraction derived (expressed as a decimal) by dividing (i) the number of days in the yearof termination that preceded the Date of Termination by (ii) 365.

Section 1.19 Voting Power. “Voting Power” shall mean the rights vested, by law or the Parent’s articlesof association, in the shareholders, or in one or more classes of shareholders, to vote with respect to the election ofdirectors.

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ARTICLE 2

TERM

Section 2.1 Agreement Term. This Agreement shall commence on the Agreement Date and continue ineffect through December 31, 2017, provided, however, that, commencing on January 1, 2018 and each secondJanuary 1st thereafter (January 1, 2020, January 1, 2022, etc.), the term of this Agreement shall automatically beextended for two additional years unless, not later than 90 days prior to the expiration date, the Company or theExecutive shall give written notice that it does not wish to extend the term of this Agreement, in which case theAgreement shall, subject to Section 2.2, be terminated as of the expiration date. For avoidance of doubt, if neitherparty shall have given timely written notice of termination of this Agreement prior to December 31, 2017, then theAgreement shall automatically be extended through December 31, 2019, and so forth.

Section 2.2 Company Decision to not Renew Agreement. (a) If during the one-year period immediatelyfollowing the expiration of the term of this Agreement as a result of the Company having given to the Executive anon-extension notice under Section 2.1, the Company terminates the Executive’s employment without Cause or theExecutive terminates his employment for Good Reason prior to a Change of Control, then the Executive shall beentitled to the same benefits as are provided under Section 3.1.

(b) If a non-extension notice is given by the Company under Section 2.1, and a Change ofControl of the Company shall occur during, or within six months following the expiration of, the term of thisAgreement, this Agreement shall continue in effect through the Protected Period following the Change of Controland if the Company terminates the Executive’s employment without Cause or the Executive terminates hisemployment for Good Reason during such Protected Period, then the Executive shall be entitled to the same benefitsas are provided under Section 4.1.

ARTICLE 3TERMINATION PRIOR TO CHANGE OF CONTROL

Section 3.1 Termination of Employment by the Company without Cause or by Executive for GoodReason. If during the term of this Agreement, and prior to a Change of Control, the Company terminates theExecutive’s employment without Cause, or the Executive terminates his employment for Good Reason, theExecutive shall be entitled to the following:

(a) In addition to the sums payable in accordance with Section 3.3, an amount equal to the sum of(i) the Executive’s annual base salary in effect for the fiscal year that the Date of Termination occurs and (ii) theTermination Bonus, which the Company shall pay in a lump sum no later than 10 days after the Date of Termination.

(b) An amount equal to the sum of the Company contributions that would be made for 12 monthsof group life, long-term disability and health insurance benefits (collectively, the “Group Benefits”) calculated basedon monthly Company contributions as of the Date of Termination with respect to coverage that was provided to theExecutive and his or

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her dependents as of such date. The Company shall pay such amount in a lump sum no later than 10 days followingthe Date of Termination.

(c) Automatic acceleration of the vesting of any stock options, restricted stock or restricted stockunits granted to the Executive by the Company or Parent that were scheduled to vest by their terms within one yearfollowing the Date of Termination; provided however, that payment of any such awards shall not be acceleratedunless permitted under Section 409A, if applicable. To the extent this Section 3.1(c) changes the terms of stockoptions, restricted stock or restricted stock units held by the Executive now or in the future in a manner that isbeneficial to the Executive, this Section 3.1(c) shall be deemed to be an amendment to the agreement between theCompany and the Executive setting forth the terms of such awards and shall form a part of such agreement.

Section 3.2 Termination for Other Reasons. If during the term of this Agreement, the Executive’semployment is terminated by the Company for Cause, by the Executive without Good Reason, or as a result ofExecutive’s death or Disability, this Agreement shall terminate without further obligation by the Company to theExecutive other than as provided in Section 3.3 hereof.

Section 3.3 Accrued Obligations and Other Benefits. Upon the termination of Executive’s employmentfor any reason, the Company shall promptly pay the Executive or his legal representatives, in addition to any otherbenefits provided herein, (a) the Executive’s base salary accrued through the Date of Termination, and (b) anyaccrued vacation pay, in each case to the extent not previously paid.

Section 3.4 Stock Options and Other Incentives. The benefits provided for in this Article 3 are inaddition to the value or benefit of any stock options, restricted stock, performance shares or similar awards, theexercisability, vesting or payment of which is accelerated or otherwise enhanced pursuant to the terms of any stockincentive plan or agreement heretofore or hereafter adopted by any member of the Group upon a termination ofExecutive’s employment.

ARTICLE 4TERMINATION FOLLOWING A CHANGE OF CONTROL

Section 4.1 Termination of Employment by the Company without Cause or by the Executive forGood Reason. If a Change of Control occurs during the term of this Agreement and following the Change ofControl, the Company during the Protected Period terminates the Executive’s employment without Cause, or theExecutive terminates his employment for Good Reason, the Executive shall be entitled to the following:

(a) In addition to sums payable under Section 4.3, an amount equal to the sum of two times (i) theExecutive’s annual base salary in effect for the fiscal year in which the Date of Termination occurs and (ii) theTarget Bonus. The Company shall pay such amount in a lump sum no later than 10 days following the Date ofTermination.

(b) An amount equal to the sum of the Company contributions that would be made for 24 monthsof Group Benefits, calculated based on monthly Company contributions as

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of the Date of Termination with respect to coverage that was provided to the Executive and his or her dependents asof such date. The Company shall pay such amount in a lump sum no later than 10 days following the Date ofTermination.

(c) Automatic acceleration of the vesting of all stock options, restricted stock or restricted stockunits granted to the Executive by the Company or Parent prior to the Date of Termination; provided however, thatpayout of any such awards shall not be accelerated unless permitted under Section 409A, if applicable. To the extentthis Section 4.1(c) changes the terms of stock options, restricted stock or restricted stock units held by the Executivenow or in the future in a manner that is beneficial to the Executive, this Section 4.1(c) shall be deemed to be anamendment to the agreement between the Company and the Executive setting forth the terms of such awards andshall form a part of such agreement.

Section 4.2 Termination for Other Reasons. If during the Protected Period, the Executive’s employmentis terminated by the Company for Cause, by the Executive without Good Reason, or as a result of Executive’s deathor Disability, this Agreement shall terminate without further obligation by the Company to the Executive other thanas provided in Section 4.3 hereof.

Section 4.3 Accrued Obligations and Other Benefits. Upon the termination of Executive’s employmentfor any reason, the Company shall promptly pay the Executive or his legal representatives, in addition to any otherbenefits provided herein, (a) the Executive’s base salary accrued through the Date of Termination and (b) anyaccrued vacation pay, in each case to the extent not previously paid.

Section 4.4 Stock Options and Other Incentives. The benefits provided for in this Article 4 are inaddition to the value or benefit of any stock options, restricted stock, performance shares or similar awards, theexercisability, vesting or payment of which is accelerated or otherwise enhanced pursuant to the terms of any stockincentive plan or agreement heretofore or hereafter adopted by any member of the Group upon a termination ofExecutive’s employment.

Section 4.5 Excise Tax Provision.

(a) Notwithstanding any other contrary provisions in any plan, program or policy of any memberof the Group, if all or any portion of the benefits payable under this Agreement, either alone or together with otherpayments and benefits that the Executive receives or is entitled to receive from any member of the Group, wouldconstitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, asamended (the “Code”), the Company shall reduce the Executive’s payments and benefits payable under thisAgreement to the extent necessary so that no portion thereof shall be subject to the excise tax imposed bySection 4999 of the Code, but only if, by reason of such reduction, the net after-tax benefit shall exceed the net after-tax benefit if such reduction were not made. “Net after-tax benefit” for these purposes shall mean the sum of (i) thetotal amount payable to Executive under this Agreement, plus (ii) all other payments and benefits which Executivereceives or is then entitled to receive from any member of the Group that, alone or in combination with the paymentsand benefits payable under this Agreement, would constitute a “parachute payment”

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within the meaning of Section 280G of the Code (each such benefit hereinafter referred to as an “AdditionalParachute Payment”), less (iii) the amount of federal income taxes payable with respect to the foregoing calculated atthe maximum marginal income tax rate for each year in which the foregoing shall be paid to the Executive (basedupon the rate in effect for such year as set forth in the Code at the time of the payment under this Agreement), less(iv) the amount of excise taxes imposed with respect to the payments and benefits described in (i) and (ii) above bySection 4999 of the Code. The parachute payments reduced shall be those that provide Executive the best economicbenefit and to the extent any parachute payments are economically equivalent with each other, each shall be reducedpro rata; provided, however, that the Executive may elect to have the noncash payments and benefits due theExecutive reduced (or eliminated) prior to any reduction of the cash payments due under this Agreement.

(b) All determinations required to be made under this Section 4.5 shall be made by the accountingfirm that was the Parent’s independent auditor prior to the Change of Control or any other third party acceptable tothe Executive and the Company (the “Accounting Firm”). The Accounting Firm shall provide detailed supportingcalculations both to the Company and the Executive. All fees and expenses of the Accounting Firm shall be bornesolely by the Company. Absent manifest error, any determination by the Accounting Firm shall be binding upon theCompany and the Executive.

(c) For purposes of determining whether and the extent to which any payments would constitute a“parachute payment” (i) no portion of any payments or benefits that the Executive shall have waived at such time andin such manner as not to constitute a “payment” within the meaning of section 280G(b) of the Code shall be takeninto account, (ii) no portion of the payments shall be taken into account which, in the opinion of tax counsel (“TaxCounsel”) reasonably acceptable to the Executive and selected by the Accounting Firm, does not constitute a“parachute payment” within the meaning of section 280G(b)(2) of the Code (including by reason of section 280G(b)(4)(A) of the Code) and, in calculating the excise tax, no portion of such payments shall be taken into account which,in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within themeaning of section 280G(b)(4)(B) of the Code, in excess of the “base amount” (within the meaning set forth insection 280G(b)(3) of the Code) allocable to such reasonable compensation, and (iii) the value of any non‑cashbenefit or any deferred payment or benefit included in the payments shall be determined by the Accounting Firm inaccordance with the principles of sections 280G(d)(3) and (4) of the Code.

Section 4.6 Certain Pre-Change-of-Control Terminations. Notwithstanding any other provision of thisAgreement, the Executive’s employment shall be deemed to have been terminated following a Change of Control bythe Company without Cause or by the Executive for Good Reason, if:

(a) the Executive’s employment is terminated by the Company without Cause or by theExecutive for Good Reason and such termination without Cause or the act, circumstance or event which constitutesGood Reason occurred after either: (i) the Company has signed a letter of intent or an agreement with respect to atransaction that if consummated would result in a Change of Control, or (ii) a public announcement is made of aproposed transaction that if consummated would result in a Change of Control, or

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(b) the Executive’s employment is terminated by the Company without Cause or by the

Executive for Good Reason and on or before the earlier of the date that is six months following the Date ofTermination or March 10 of the year following the Date of Termination: (i) a Change of Control occurs, (ii) theCompany signs a letter of intent or agreement with respect to a transaction that if consummated would result in aChange of Control, or (iii) a public announcement is made of a proposed transaction that if consummated wouldresult in a Change of Control.

If the conditions of Section 4.6(a) are met as of the Date of Termination, the Executive shall be entitled to thepayments and benefits provided under and as set forth in Section 4.1 in lieu of the payments and benefits providedunder Section 3.1. If the conditions of Section 4.6(b) are met, the Executive shall be entitled to the payments andbenefits provided under Section 4.1, less any payments and benefits previously received by the Executive underSection 3.1, and any such additional payments shall be paid to the Executive as soon as practicable following theapplicable triggering event set forth in Section 4.6(b), but in no event later than March 15 of the year following theDate of Termination.

ARTICLE 5NONDISCLOSURE, NONCOMPETITION AND NONSOLICITATION

Section 5.1 Nondisclosure of Confidential Information. Executive acknowledges and agrees that in thecourse of his employment, he has been in a position to have access to and develop Confidential Information. TheCompany promises to continue to provide Confidential Information to Executive during his tenure as an employee ofthe Company. As long as Executive is an employee of the Company, the Executive shall hold in a fiduciary capacityfor the benefit of the Company all Confidential Information which the Executive obtained during the Executive’semployment (whether prior to or after the Agreement Date) and shall use such Confidential Information solely in thegood faith performance of his duties for the Company. If the employment of the Executive is terminated for anyreason, then, commencing with the Date of Termination and continuing perpetually thereafter, the Executive shall (a)not communicate, divulge or make available to any Person (other than the Company) any such ConfidentialInformation, except with the prior written consent of the Company or as may be required by law or legal process, and(b) deliver promptly to the Company upon its written request any Confidential Information in his possession,including any duplicates thereof and any notes or other records the Executive has prepared with respect thereto,provided that Executive need not deliver to the Company, and may retain, one copy of any personal diaries,calendars, rolodexes or personal notes of correspondence. If the provisions of any applicable law or the order of anycourt would require the Executive to disclose or otherwise make available any Confidential Information to agovernmental authority or to any other third party, the Executive shall give the Company, unless it is unlawful to doso, prompt prior written notice of such required disclosure and an opportunity to contest the requirement of suchdisclosure or apply for a protective order with respect to such Confidential Information by appropriate proceedings. Nothing in this Agreement shall be deemed to restrict Executive from communicating directly with the staff of theSEC about a possible securities law violation pursuant to the “whistleblower” provisions of the Dodd-Frank WallStreet Reform and Consumer Protection Act and regulations adopted pursuant thereto, or making any disclosures to agovernment official that are protected under “whistleblower” provisions of federal or state law.

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th

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Section 5.2 Noncompetition; Nonsolicitation. The Executive acknowledges that in the course of his

employment with the Company he has become familiar, and will become familiar, with such ConfidentialInformation, that he has developed the goodwill of the Group and will continue to be in a position to develop thegoodwill of the Group, and that his services have been and will be of special, unique and extraordinary value to theGroup.

Therefore, the Executive agrees that during the Term of this Agreement and for a period following the Dateof Termination of six months, the Executive will not:

(a) other than any shares or other ownership interest in any such Person owned by the Executiveon the Agreement Date, directly or indirectly, engage or invest in, own, manage, operate, finance, control, or acquirean interest in, be employed by or render services to, or otherwise engage, participate in, or be associated or in anymanner connected with (whether as a proprietor, partner, stockholder, member, director, officer, employee, jointventurer, investor, consultant, agent, sales representative, broker or other participant) any Person engaged in orplanning to become engaged in any business in competition with the Business within the Prohibited Territories;

(b) contact any customer of any member of the Group to solicit, divert or entice away the businessof such customer, or otherwise disrupt the relationship between such customer and any member of the Group;

(c) solicit, induce, influence or attempt to influence any supplier, lessor, lessee, licensor, partner,joint venturer, potential acquiree or any other person who has a business relationship with any member of the Group,or who on the Date of Termination is engaged in discussions or negotiations to enter into a business relationship withany member of the Group, to discontinue, reduce or limit the extent of such relationship with any member of theGroup; or

(d) make contact with any employee of any member of the Group for the purpose of solicitingsuch employee for hire, whether as an employee, independent contractor, consultant or otherwise, or otherwisedisrupting such employee’s relationship with any member of the Group, except that Executive shall not be precludedfrom hiring any employee of any member of the Group who (A) initiates discussions regarding such employmentwithout any direct or indirect solicitation by the Executive, (B) responds to any public advertisement placed by theExecutive, or (C) resigns or has been terminated by any member of the Group prior to commencement ofemployment discussions between the Executive and such person.

The Executive agrees that he will, at any time prior to the Date of Termination, and at the Company’s request,promptly execute any amendment or modification of the Prohibited Territories (by amending Appendix A) that isnecessary to reflect the appropriate jurisdictions, including, without limitation, to add any additional jurisdictionswhere the Group engages in the Business in the future. All references to Appendix A in this Agreement shall bedeemed to refer to Appendix A as so amended or modified.

The Executive agrees that: (i) the covenants and agreements set forth in this Section 5.2 are reasonable bothin scope of geographical area and duration, (ii) the Company would not have entered into this Agreement but forsuch covenants of the Executive, (iii) such covenants have

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been made in order to induce the Company to enter into this Agreement, and (iv) such covenants and agreements arereasonable and necessary for the protection of the Confidential Information, assets, goodwill and business acquiredby the Group. To the extent permitted by applicable law, Executive covenants and agrees not to institute, maintain,prosecute or in any way aid in the institution, maintenance or prosecution of any lawsuit, action, claim, arbitration orother proceeding against the Company or any of its Affiliates with respect to the enforceability of the covenantscontained in this Section 5.2 and Executive hereby irrevocably waives all defenses otherwise available to theExecutive with respect to the strict enforcement of such covenants and agreements by the Company.

Section 5.3 Injunctive Relief; Forfeiture of Future Payments and Benefits; Other Remedies. TheExecutive acknowledges that a breach by the Executive of Sections 5.1 or 5.2 herein would cause immediate andirreparable harm to the Company for which an adequate monetary remedy does not exist; hence, the Executive agreesthat, in the event of a breach or threatened breach by the Executive of the provisions of Sections 5.1 or 5.2 hereinduring the Term of this Agreement or after the Date of Termination, the Company shall be entitled to injunctiverelief restraining the Executive from such violation without the necessity of proof of actual damage or the posting ofany bond, except as required by non-waivable, applicable law. Nothing herein, however, shall be construed asprohibiting the Company from pursuing any other remedy at law or in equity to which the Company may be entitledunder applicable law in the event of a breach or threatened breach of this Agreement by the Executive, includingwithout limitation the recovery of damages and/or costs and expenses, such as reasonable attorneys’ fees, incurred bythe Company as a result of any such breach or threatened breach. In addition to the foregoing remedies, theCompany shall have the right upon the occurrence of any breach of any nondisclosure, noncompetition ornonsolicitation covenant contained in this Article 5, to cancel any unpaid severance payments, salary, bonus,commissions or reimbursements otherwise outstanding at the Date of Termination, including the suspension orelimination of payments and benefits under Articles 3 and 4. The Executive acknowledges that any such suspensionor elimination of payments would not constitute, and should not be characterized as, liquidated damages.

Section 5.4 Governing Law of this Article 5; Consent to Jurisdiction.

(a) Any dispute regarding the reasonableness of the covenants and agreements set forth in thisArticle 5 or the territorial scope or duration thereof or the remedies available to the Company upon any breach ofsuch covenants and agreements, shall be governed by and interpreted in accordance with the laws of the State ofTexas. The parties agree that it is their mutual intent that the provisions of this Agreement be enforced to the fullestextent permitted under applicable law, whether now or hereafter in effect, and, to the extent permitted by applicablelaw, the parties waive any provision of applicable law that would render any provision of Article 5 invalid orunenforceable.

(b) The Executive expressly, knowingly and voluntarily agrees that the covenants and agreementsof Section 5.2 will be governed by and interpreted in accordance with the laws of the State of Texas, and theExecutive expressly, knowingly and voluntarily consents to jurisdiction in state or federal court in Harris County,Texas, for any disputes arising out of or related to the covenants and agreements set forth in Section 5.2.

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Section 5.5 The Executive’s Understanding of this Article. The Executive represents to the Company

that he has read and understands, and agrees to be bound by, the terms of this Article 5 (including Appendix Ahereto). The Executive acknowledges that the covenants contained in Article 5 are the result of arm’s-lengthbargaining and are fair and reasonable in light of (a) the importance of the functions performed by the Executive andthe length of time it would take the Company to find and train a suitable replacement, and (b) the nature and scope ofthe operations of the Group.

ARTICLE 6MISCELLANEOUS

Section 6.1 Binding Effect; Successors.

(a) This Agreement shall be binding upon and inure to the benefit of the Company and itssuccessors or assigns, but the Company may assign this Agreement only (i) to an Affiliate or (ii) pursuant to a mergeror consolidation in which the Company is not the continuing entity, or the sale or liquidation of all or substantially allof the assets of the Company, provided that the assignee or transferee is the successor to all or substantially all of theassets of the Company; and such assignee or transferee assumes the liabilities, obligations and duties of the Companyunder this Agreement, either contractually or as a matter of law.

(b) This Agreement is personal to the Executive and shall not be assignable by the Executivewithout the consent of the Company (there being no obligation to give such consent) other than such rights orbenefits as are transferred by will or the laws of descent and distribution.

(c) The Company shall require any successor to or assignee of (whether direct or indirect, bypurchase, merger, consolidation or otherwise) all or substantially all of the assets or businesses of the Company toassume unconditionally in writing this Agreement.

(d) The Company shall also require all entities that control or that after a transaction will control(directly or indirectly) the Company or any such successor or assignee to agree in writing to cause to be performedall of the obligations under this Agreement.

Section 6.2 Notices. All notices, claims, demands, or consents contemplated hereunder must be in writingand shall be deemed to have given upon receipt of delivery by: (a) hand (against a receipt therefor), (b) certified orregistered mail, postage prepaid, return receipt requested, (c) a nationally recognized overnight courier service(against a receipt therefor) or (d) facsimile transmission with confirmation of receipt. All such notices must beaddressed as follows:

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If to the Company, to:

Pacific Drilling Manpower, Inc.11700 Katy Freeway, Suite 175Houston, Texas 77079Facsimile: 832-201-9883Attention: Lisa M. Buchanan

SVP & General Counsel If to the Executive, to:

____________________________________________________________________________________________________________________________________________________________

or such other address as to which any party hereto may have notified the other in writing.

Section 6.3 Governing Law. This Agreement shall be construed and enforced in accordance with andgoverned by the internal laws of the State of Texas without regard to principles of conflict of laws.

Section 6.4 Withholding. The Executive agrees that the Company has the right to withhold, from theamounts payable pursuant to this Agreement, all amounts required to be withheld under applicable income and/oremployment tax laws, or as otherwise stated in documents granting rights that are affected by this Agreement.

Section 6.5 Amendment, Waiver. No provision of this Agreement may be modified, amended or waivedexcept by an instrument in writing signed by both parties.

Section 6.6 Severability of Article 5. If any term or provision of Article 5 of this Agreement, or theapplication thereof to any person or circumstance, shall at any time or to any extent be invalid, illegal orunenforceable in any respect as written, the Executive and the Company intend for any court construing the termsand provisions of Article 5 to modify or limit such provision so as to render it valid and enforceable to the fullestextent allowed by law. Any such provision that is not susceptible of such reformation shall be ignored so as to notaffect any other term or provision of Article 5, and the remainder of this Agreement, or the application of such termor provision to persons or circumstances other than those as to which it is held invalid, illegal or unenforceable, shallnot be affected thereby.

Section 6.7 Waiver of Breach. The waiver by either party of a breach of any provision of this Agreementshall not constitute a waiver of any subsequent breach thereof.

Section 6.8 Remedies Not Exclusive. No remedy specified herein shall be deemed an exclusive remedy,and accordingly, in addition to all of the rights and remedies provided for in this Agreement, the parties shall have allother rights and remedies available by applicable law.

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Section 6.9 Company’s Reservation of Rights. The Executive serves at the pleasure of the Parent’s

Board of Directors and the Company has the right at any time to terminate the Executive’s employment by theCompany, or to change or diminish his status, subject to the rights of the Executive to claim the benefits conferred bythis Agreement.

Section 6.10 Counterparts. This Agreement may be executed in one or more counterparts, each of whichshall be deemed to be an original but all of which together shall constitute one and the same instrument.

Section 6.11 Release. Notwithstanding anything in this Agreement to the contrary, Executive shall not beentitled to receive any payments pursuant to Articles 3 and 4 of this Agreement until Executive has executed ageneral release of all claims Executive may have against all members of the Group in a form reasonably acceptableto the Company.

Section 6.12 Mutual Nondisparagement. Each party agrees that, following the Executive’s termination ofemployment, such party will not make any public statements which materially disparage the otherparty. Notwithstanding the foregoing, nothing in this Section 6.12 shall prohibit any person from making truthfulstatements when required by law, order of a court or other body having jurisdiction.

Section 6.13 Assistance with Claims. Executive agrees that, consistent with the Executive’s business andpersonal affairs, during and after his employment by the Company, he will assist the Company and its Affiliates inthe defense of any claims, or potential claims that may be made or threatened to be made against them in any legal,arbitration or governmental proceeding or investigation (a “Proceeding”), and will assist the Company and itsAffiliates in the prosecution of any claims that may be made by the Company or its Affiliates in anyProceeding. The Company shall reimburse Executive for all of Executive’s reasonable out-of-pocket expensesassociated with such assistance, including travel expenses and any attorneys’ fees and, following the Date ofTermination, shall pay a reasonable per diem fee that is commensurate with the services required of the Executive.

Section 6.14 No Set-Off; No Mitigation Obligation. The obligations of the Company to make thepayments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected byany set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have againstthe Executive other than as set forth in Section 5.3 hereof. In no event shall the Executive be obligated to seek otheremployment or take any other action to mitigate the amounts or benefits payable to the Executive under any of theprovisions of this Agreement.

Section 6.15 Resignation from Board of Directors. If the Executive is a director of the Parent or anymember of the Group, and his status as an employee is terminated for any reason other than death, the Executiveshall, if requested by the Company, and as a condition to be paid or reimbursed any amounts or benefits hereunder,immediately resign as a director of the Parent or other member of the Group.

Section 6.16 Mediation; Preservation of Legal Rights. Except as may be otherwise provided in Article 5of this Agreement, any dispute or controversy arising under or in

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connection with this Agreement (“Dispute”) shall be settled in accordance with the procedures described in thisSection 6.16.

(a) The parties shall attempt in good faith to resolve any Dispute promptly by discussionsbetween Executive and executives or members of the Board of Directors of Parent (“Company Representatives”)who have authority to settle the Dispute. Either party may give to the other party notice (a “Dispute Notice”) of anyDispute not resolved in the normal course of business. Within five days after delivery of such notice, the Executiveand Company Representatives shall agree upon a mutually acceptable time and place to meet and shall meet at thetime and place agreed, and thereafter as often as they reasonably deem necessary, to exchange relevant informationand to attempt to resolve the Dispute. The first such meeting shall take place within 30 days of the DisputeNotice. If the parties are unable to resolve the Dispute within 30 days of the first meeting, or if the parties fail toagree on a time and place for an initial meeting within five days of delivery of the Dispute Notice, either party mayinitiate mediation and litigation of the Dispute as provided hereinafter. If a party intends to be accompanied at anymeeting by an attorney, the other party shall be given at least three business days’ notice of that intention and mayalso be accompanied by an attorney. All discussions pursuant to this Section 6.16 shall be treated as compromise andsettlement negotiations for the purposes of applicable rules of evidence and procedure.

(b) If the Dispute is not resolved through discussion as provided in Section 6.16(a), eitherdisputing party may require the other to submit to non-binding mediation with the assistance of a neutral, unaffiliatedmediator. If the parties are unable to agree upon a neutral party, they shall seek the assistance of the Company’soutside counsel in the selection process.

(c) If the parties are unable to resolve the Dispute through the foregoing non-binding procedures,each party shall have the full right to seek resolution of the Dispute through legal action. Any lawsuit relating to aDispute arising out of or relating to this Agreement that is not resolved by the non-binding procedures providedabove must be brought in a state or federal court located in Harris County, Texas. The parties agree to waive trial byjury.

(d) Notwithstanding the Dispute resolution provisions of this Section 6.16, either party may bringan action in a court of competent jurisdiction in an effort to enforce the provisions of this Section 6.16 and to seekinjunctive relief to protect the party’s rights pending resolution of a Dispute pursuant to Section 6.16.

Section 6.17 Company’s Representations. The Company represents and warrants that it is fullyauthorized to enter into this Agreement, that the Agreement has been duly authorized by all necessary corporateaction, that the performance of its obligations under this Agreement will not violate any agreement between it andany other person, firm or organization or any applicable law or regulation and that this Agreement is enforceable inaccordance with its terms.

Section 6.18 Entire Agreement. This Agreement constitutes the entire agreement between the partiesconcerning the subject matter hereof and supersedes all prior and contemporaneous agreements, if any, between theparties relating to the subject matter hereof.

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Section 6.19 Deferred Compensation Laws. This Agreement is intended to comply with Section 409A or

an exemption thereunder and shall be construed and administered in accordance with Section 409A, including anydelay in payment that may be required if the Executive is a “specified employee” under Section409A. Notwithstanding any other provision of this Agreement, payments provided hereunder may only be madeupon an event and in a manner that complies with Section 409A or an applicable exemption. Any payments underthis Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separationfrom service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. Anypayments to be made under this Agreement upon a termination of employment shall only be made upon a “separationfrom service” under Section 409A. Notwithstanding the foregoing, the Company makes no representations that thepayments and benefits provided under this Agreement comply with Section 409A and in no event shall the Companybe liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by theExecutive on account of non-compliance with Section 409A.

Section 6.20 Survival. Notwithstanding the expiration of the term of this Agreement by virtue of Section2.1 or otherwise, any provision of this Agreement which by its terms is intended to have continuing effect beyond thedate on which the term of this Agreement expires, shall continue in full force and effect and shall be enforceable inaccordance with its terms by the parties hereto.

IN WITNESS WHEREOF, the Company and the Executive have caused this Agreement to be executed as ofthe Agreement Date.

COMPANY: PACIFIC DRILLING MANPOWER, INC. By: EXECUTIVE:

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GUARANTEE

In accordance with the provisions of Section 6.1(d) hereof, Parent hereby guarantees the performance of, andagrees to cause to be performed, all of the obligations of the Company under this Agreement.

PACIFIC DRILLING S.A. By:

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Appendix A

JURISDICTIONS(as of the Agreement Date)

The State of Texas, USA

The State of Mississippi, USA

The State of Alabama, USA

The State of Louisiana, USA

Nigeria

Brazil

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Exhibit 10.20

INDEMNITY AGREEMENT

This INDEMNITY AGREEMENT is made as of ____________ (the “Agreement Date”), by and between PacificDrilling S.A., a public limited liability company (société anonyme) organized under the laws of the Grand Duchy ofLuxembourg registered with the Luxembourg register of commerce and companies under registration number B159658,having its registered office at 8-10 Avenue de la Gare, L-1610, Luxembourg (the “Company”), and Pacific DrillingManpower, Inc., a Delaware corporation and an indirect wholly-owned subsidiary of the Company (“PDMI”), on the onehand, and _______________ (“Indemnitee”), on the other hand.

WITNESSETH

WHEREAS, the Company is engaged, through its direct and indirect subsidiaries (collectively, and including theCompany, the “Group”), in the business of providing offshore drilling services through the use of high-specification floatingrigs;

WHEREAS, PDMI provides management services to the Company;

WHEREAS, the Indemnitee has been appointed to serve as a director of the Company, and may be appointed toserve as a director of other members of the Group at the request of the Board (as defined below);

NOW, THEREFORE, In consideration of Indemnitee’s service after the date hereof, the Company and Indemniteeagree as follows:

1. Definitions. As used in this Agreement:

(a) The term “Ad Hoc Group” means, collectively, each of the “Avenue Parties,” “SVP Parties” and“Other Lenders” (as such terms are defined in that certain Governance Agreement, dated on or about November 19, 2018, byand among the Company and the other parties thereto (the “Governance Agreement”)).

(b) The term “Affiliate” of a Person shall mean any other Person controlled by, controlling, or undercommon control with, such Person.

(c) The term “Board” shall mean the Board of Directors of the Company.

(d) The term “Change of Control” shall mean the first to occur of any of the following:

(i) the acquisition by any Person (other than any one or more members of the Ad Hoc Groupprior to the Nomination Termination Time as defined in the Governance Agreement) of beneficial ownership (within themeaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”)) of 50% or more ofthe Company’s outstanding shares (the “Common Shares”); provided, however, that for purposes of this subsection (i), thefollowing events shall not constitute a Change of Control:

(A) any issuance or sale by the Company of its Common Shares to a Person;

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(B) any acquisition of Common Shares by the Company; or

(C) any acquisition of Common Shares by any employee benefit plan (or related trust)sponsored or maintained by the Company or one of its Affiliates; or

(ii) the Incumbent Board ceases for any reason to constitute a majority of the Board; or

(iii) the consummation of an Acquisition (as defined in the Articles of Association of theCompany); or

(iv) approval by the shareholders of the Company of a complete liquidation or dissolution of theCompany.

(e) The term “Claim” shall mean a claim related to any Proceeding, or any separate issue or mattertherein, as the context requires, in which Indemnitee is or will be, or is threatened to be, involved as a party, as a witness orotherwise, by reason of his Corporate Status, provided that no claim asserted in any Proceeding brought by the Indemniteeagainst the Company, PDMI or another member of the Group or directors or officers of the Company, PDMI or anothermember of the Group, other than a Proceeding brought by Indemnitee to enforce his rights under this Agreement, shall bedeemed a Claim without prior approval of a majority of the Impartial Directors.

(f) The term “Comparable Policy” shall have the meaning provided in Section 3(a).

(g) The term “Corporate Status” shall mean the status of a person as a (i) director or officer of theCompany, PDMI or any other member of the Group, (ii) fiduciary with respect to any employee benefit plan of theCompany, PDMI or any other member of the Group, or (iii) director, officer, partner, employee or agent of any othercorporation, partnership, joint venture, trust or other for-profit or not-for-profit entity or enterprise, if such position is or washeld at the request of the Board, in each case whether such position was held before or after the Agreement Date.

(h) The term “Determining Body” shall mean (i) the Impartial Directors, as long as there is at least oneImpartial Director, (ii) if the Impartial Directors so elect, the Independent Directors or (iii) if there are no Impartial Directors,the Impartial Directors so elect or Indemnitee so requests following a Change of Control in accordance with Section 7(a) and(b), Independent Counsel.

(i) The term “Enforcement Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,transcript costs, fees of experts and witnesses, travel expenses, and all other costs, disbursements or expenses of the typescustomarily incurred in connection with an action to enforce indemnification or advancement rights, or an appeal from suchaction, including, without limitation, the premium, security for and other costs relating to any cost bond, supersedes bond orother appeal bond or its equivalent.

(j) The term “Expenses” shall mean any expenses or costs including, without limitation, reasonableattorney’s fees and retainers, court costs, transcript costs, fees of experts and witnesses, travel expenses, and all othercustomary costs, disbursements and expenses incurred by or on behalf of the Indemnitee in connection with prosecuting ordefending, or preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise participatingin any Proceeding with respect to, a Claim. If any of the foregoing amounts paid on behalf of Indemnitee are includiblewithin Indemnitee’s taxable income for federal or state income tax purposes, the Company will reimburse Indemnitee for any

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taxes incurred with respect thereto by paying to Indemnitee an amount which, after taking into account taxes on suchamount, equals Indemnitee’s incremental tax liability. Expenses shall not be deemed to include judgments, penalties, fines oramounts paid in settlement by an Indemnitee, and shall be determined after taking into account any amounts that havealready been paid directly to the Indemnitee, or to a third party at Indemnitee’s request, either (i) pursuant to the InsurancePolicy or a Comparable Policy or (ii) subject to Section 10, by another entity or enterprise of a type described in clause (iii)of the definition of “Corporate Status” that relate to such Claim.

(k) The term “Impartial Directors” shall mean the directors who are not parties to a Claim for whichindemnification is being sought.

(l) The term “Incumbent Board” shall mean individuals who, as of the close of business on theAgreement Date, constitute the Board; provided, however, that any individual who becomes a director of the Company afterthe Agreement Date through an election by the Company’s shareholders following a nomination of such individual by thevote of a majority of the directors then comprising the Incumbent Board, or through nomination pursuant to the GovernanceAgreement prior to the Nomination Termination Time as defined therein, shall be considered a member of the IncumbentBoard, unless such individual’s initial assumption of office is a result of an actual or threatened election contest with respectto the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of aPerson other than the Incumbent Board.

(m) The term “Indemnifiable Costs” shall mean Expenses, judgments, fines, penalties or amounts paid insettlement that are incurred or paid by or on behalf of Indemnitee in connection with prosecuting or defending, or preparingto prosecute or defend a Claim, or serving as a witness with respect to a Claim, but shall not include any amounts that havealready been paid directly to the Indemnitee pursuant to the Insurance Policy or a Comparable Policy.

(n) The term “Independent Counsel” shall mean a law firm, or a partner (or, if applicable, member) ofsuch a law firm, that is experienced in matters of Delaware corporation law and neither presently is, nor in the past five yearshas been, retained to represent: (i) any member of the Group or Indemnitee in any matter material to any such party (otherthan with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similarindemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicablestandards of professional conduct then prevailing, would have a conflict of interest in representing either the Company orIndemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonablefees and expenses of the Independent Counsel and to fully indemnify such counsel against any and all expenses, claims,liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

(o) The term “Independent Directors” shall mean the members of the Board that are “independentdirectors” as defined by Section 303A of the New York Stock Exchange Listed Company Manual or successor provision forpurposes of determining whether a majority of the board of directors is independent, whether or not the Common Shares arethen listed on the New York Stock Exchange (the “NYSE”), and whether or not the Company is subject to the requirementthat a majority of its directors be independent; except that if the Company’s Common Shares are principally listed on anothersecurities exchange that defines director independence for purposes of determining whether a majority of the directors areindependent, then the definition of director independence used by such other principal exchange shall apply.

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(p) The term “Insurance Policy” shall mean, collectively, (i) the Primary Directors’ and Officers’

Liability Policy that the Company has obtained from Zurich Insurance PLC, (ii) the Excess Directors’ and Officers’ LiabilityPolicy that the Company has obtained from various insurers including Certain Underwriters at Lloyds, (iii) the Side A DICLiability Policy that the Company has obtained from various insurers including Certain Underwriters at Lloyds, for a total of$75 million of coverage on behalf of its directors and officers, for the policy period commencing November 19, 2019 andending November 18, 2020, or any successor directors’ and officers’ liability insurance policy that the Company from timeto time maintains.

(q) The term “Law” shall mean (i) the law of August 10, 1915 on commercial companies, as amended,of the Grand Duchy of Luxembourg and (ii) the Delaware General Corporation Law.

(r) The term “Person” shall mean any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).

(s) The term “Proceeding” shall mean any threatened, pending or completed action, suit, arbitration,alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened orcompleted proceeding, including appeals, whether brought in the right of the Company or PDMI or otherwise, whether civil,criminal, administrative, arbitrative or investigative in nature, and whether made judicially or extra-judicially.

(t) “Secondary Indemnitors” shall have the meaning provided in Section 10(a).

(u) The term “Standard of Conduct” shall mean, with respect to any Claim that is asserted, conduct bythe Indemnitee that was in good faith and in a manner that the Indemnitee reasonably believed to be in, or not opposed to, thebest interest of the Company or PDMI, and, in the case of a Claim which is, or which is related to, a criminal action orproceeding, conduct that Indemnitee had no reasonable cause to believe was unlawful. The termination of any Claim byjudgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create apresumption that Indemnitee did not meet the Standard of Conduct.

2. Limitation of Liability. To the fullest extent provided by Law and Article Nine of the Articles ofAssociation of the Company (as amended and restated by the Extraordinary General Meeting of the shareholders of theCompany on November 19, 2018, the “Articles of Association”) and Article 13 of the Certificate of Incorporation (the“Certificate of Incorporation”) of PDMI (as each is in effect on the Agreement Date), Indemnitee shall not be liable to theCompany, PDMI or any other member of the Group, or to the shareholders of the Company, PDMI or any other member ofthe Group, for any breach of his mandate or fiduciary duty. If and to the extent such provisions of such Articles ofAssociation or Certificate of Incorporation are amended to permit further limitations of liability, Indemnitee shall not beliable for any breach of his mandate or fiduciary duty to the fullest extent permitted after taking into account any suchamendment.

3. Maintenance of Insurance. (a) The Company represents and warrants that it presently maintains in fullforce and effect the Insurance Policy, a copy of which it has made available to the Indemnitee. Subject to Section 3(b)hereof, the Company hereby agrees that, so long as Indemnitee shall continue to be a director or officer of the Company,PDMI or any other member of the Group and for any period thereafter as the Indemnitee is subject to a Claim, the Companyshall maintain in effect for the benefit of Indemnitee one or more valid and enforceable policies of directors and officersliability insurance

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providing, in all respects, coverage favorably comparing to that currently provided to Indemnitee under the Insurance Policy(a “Comparable Policy”).

(b) The Company shall not be required to maintain the Insurance Policy or a Comparable Policy if, inthe reasonable business judgment of a majority of Independent Directors of the Company, either (i) the premium cost forsuch insurance is excessive when compared to the amount and benefits of coverage provided, or (ii) the coverage providedby such insurance is so limited by exclusions, retentions, deductibles or otherwise that there is insufficient benefit to theCompany or its directors and officers from such insurance, in which event the Company shall use its reasonable best effortsto obtain the maximum amount of coverage as may be obtained for an annual premium not exceeding 110% of the annualpremium paid by the Company for the most recent annual renewal of the Insurance Policy.

(c) If the Company does not purchase and maintain in effect the Insurance Policy or a ComparablePolicy, the Company agrees, to the extent permitted by law, to hold harmless and indemnify Indemnitee to the full extent ofthe coverage that would otherwise have been provided for the benefit of Indemnitee pursuant to the Insurance Policy.

4. Indemnification of Indemnitee. The Company and PDMI each agrees to hold harmless and indemnify theIndemnitee as follows:

(a) Indemnity in Connection with Claims Other than Claims by or in the Right of the Company, PDMI,or any member of the Group. To the fullest extent permissible under applicable Law, with respect to any Claim against theIndemnitee that is not by or in the right of the Company, PDMI, or another member of the Group, the Company and PDMIshall indemnify and hold harmless Indemnitee against such Indemnifiable Costs as they are actually and reasonably incurred,if the Indemnitee has met the Standard of Conduct.

(b) Indemnification for Proceedings by or in the Right of the Company, PDMI or any member of theGroup. With respect to any Claim by or in the right of the Company, PDMI, or any member of the Group, the Company andPDMI shall indemnify and hold harmless Indemnitee against any Expenses as they are actually and reasonably incurred, ifthe Indemnitee has met the Standard of Conduct; provided that no indemnification shall be made under this Section 4(b)with respect to any Claim as to which the Indemnitee shall have been adjudged to be liable to the Company, PDMI or anymember of the Group unless and to the extent that a court of competent jurisdiction determines that such indemnificationshall be made.

(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding, andwithout limiting, any other provision of this Agreement, to the extent that the Indemnitee is successful in whole or in part inthe defense of any Claim on the merits or otherwise, the Company and PDMI shall indemnify the Indemnitee against allExpenses actually and reasonably incurred by the Indemnitee with respect to the Claim to the fullest extent permitted byLaw. For purposes of this paragraph and without limitation, the termination of any Claim by dismissal, with or withoutprejudice, shall be deemed to be a successful result as to such Claim. For avoidance of doubt, to the extent a Proceedinginvolves or involved more than one Claim, this Section 4(c) shall apply separately to each such Claim.

(d) Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement,to the extent that Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to which Indemnitee is not aparty and is not threatened to be made a party, Indemnitee shall be indemnified against all Expenses actually and reasonablyincurred by him or on his behalf in connection therewith.

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5. Additional Indemnity. In addition to, and without regard to any limitations on, the indemnification

provided for in Section 4 of this Agreement, the Company and PDMI shall, to the fullest extent permitted by Law, andhereby do agree to indemnify and hold harmless Indemnitee against all Indemnifiable Costs as they are actually andreasonably incurred by the Indemnitee, if, by reason of his Corporate Status, he is a party to any Claim (including a Claim byor in the right of the Company, PDMI or any member of the Group). The phrase “to the fullest extent permitted by Law”shall include, but not be limited to, (a) to the fullest extent permitted by Article 10.2 of the Articles of Association of theCompany, Article 13 of the Certificate of Incorporation of PDMI, and any provision of the Law that authorizes or permitsadditional indemnification by agreement, or the corresponding provision of any amendment or replacement of such provisionof the Law, and (b) to the fullest extent authorized by any amendments to or replacements of provisions of the Law thatexpand the extent to which a public limited liability company (société anonyme) or corporation, as applicable, mayindemnify its directors and officers. Any amendment or repeal of any provision of the Law that limits the rights of directorsor officers to indemnification shall be deemed to have prospective effect only and shall not limit or eliminate the rights of theIndemnitee hereunder with respect to any Claim involving any act, occurrence or omission, or alleged act, occurrence oromission that took place prior to the date of such amendment or repeal.

6. Contribution. (a) If the indemnification provided for in this Agreement is unavailable to Indemniteein respect of any Claim for any reason whatsoever (including without limitation because indemnification is prohibited byvirtue of the Law, U.S. federal securities laws or an applicable court decision), then the Company and PDMI, in lieu ofindemnifying Indemnitee, shall contribute to the amount of Indemnifiable Costs actually and reasonably incurred and paid orpayable by or on behalf of Indemnitee in connection with such Claims in such proportion as is deemed fair and reasonable inlight of all of the circumstances in order to reflect (i) the relative benefits received by the Group and Indemnitee inconnection with the event(s) and/or transaction(s) giving rise to such Claims and/or (ii) the relative fault of the Group(including any Group member’s directors, officers, employees and agents other than Indemnitee), on the one hand, andIndemnitee, on the other hand, in connection with such event(s) and/or transaction(s). The Company and PDMI agree that itwould not be just and equitable if contribution pursuant to this Section 6 were determined by pro rata allocation or any othermethod of allocation that does not take into account the foregoing considerations.

(b) The Company and PDMI hereby agree to fully indemnify and hold Indemnitee harmless from anyclaims of contribution which may be brought by officers, directors, employees or agents of any Group member, other thanIndemnitee, who may be jointly liable with Indemnitee.

7. Certain Procedures.

(a) Procedures for Notification and Defense of Claims. To obtain indemnification under thisAgreement, Indemnitee shall submit to the Company a written request therefor and, if a Change of Control has occurred andIndemnitee so chooses, such written request shall also include a request for the right to indemnification to be determined byIndependent Counsel. The Company shall be entitled to participate in the Proceeding in respect of the Claim for whichindemnification is sought at the Company’s own expense.

(b) Procedure Upon Application for Indemnification.

(i) Upon receipt of a written request for indemnification pursuant to Section 7(a), adetermination, if such determination is required by applicable Law, with respect to Indemnitee’s entitlement thereto (whichentitlement shall be limited to whether Indemnitee met the Standard of Conduct with respect to the Claim for whichindemnification is sought) shall be made in the specific case by the Determining Body. All determinations and judgmentsmade by the Determining Body

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hereunder shall be made in good faith. In the event that the Determining Body is Independent Counsel, such determinationshall be made by Independent Counsel in a written opinion to the Board, a copy of which written opinion shall be deliveredto Indemnitee. If the determination of the Determining Body is that Indemnitee is entitled to indemnification, payment toIndemnitee shall be made within 10 days after such determination.

(ii) Indemnitee shall cooperate with the Determining Body in making its determination withrespect to Indemnitee’s entitlement to indemnification, including by providing, upon reasonable advance request, anydocumentation or information as is not privileged or otherwise protected from disclosure, is reasonably available toIndemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled toindemnification. Any costs or expenses (including attorney’s fees and disbursements) incurred by Indemnitee in socooperating with the Determining Body shall be borne by the Company (irrespective of the determination as to Indemnitee’sentitlement to indemnification), and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

(iii) In the event that a Change of Control has occurred and Indemnitee exercises his right tohave his entitlement to indemnification determined by Independent Counsel pursuant to Section 7(a), the IndependentCounsel shall be selected by Indemnitee. The Company may, within ten (10) days after written notice of such selection,deliver to Indemnitee a written objection to such selection; provided, however, that such objection may be asserted only onthe ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined inSection 1 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent aproper and timely objection, the Person so selected shall act as Independent Counsel. If such written objection is so made andsubstantiated, the Person so selected may not serve as Independent Counsel unless and until such objection is withdrawn or acourt of competent jurisdiction has determined that such objection is without merit. If, within 20 days after the later of(i) submission by Indemnitee of a written request for entitlement to indemnification to be determined by IndependentCounsel pursuant to Section 7(a) and (ii) the final disposition of the Proceeding in respect of the Claim(s) for whichindemnification is sought, no Independent Counsel shall have been selected without objection, Indemnitee may petition acourt of competent jurisdiction for resolution of any objection which shall have been made by the Company to the selectionof Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such otherPerson as the court shall designate. The Person with respect to whom all objections are so resolved or the Person soappointed shall act as Independent Counsel under this Section 7.

(c) Presumptions and Effect of Certain Proceedings. In making a determination with respect toentitlement to indemnification hereunder, it shall be presumed that Indemnitee is entitled to indemnification under thisAgreement if Indemnitee has submitted a request for indemnification in accordance with Section 7(a), and the DeterminingBody shall have the burden of proof to overcome that presumption in connection with the making of any determinationcontrary to that presumption. Neither (i) the failure of the Determining Body to have made a determination prior to thecommencement of any action by Indemnitee to enforce this Agreement that indemnification is proper in the circumstancesbecause Indemnitee has met the Standard of Conduct, nor (ii) an actual determination by the Determining Body thatIndemnitee has not met the Standard of Conduct, shall be a defense to such action or create a presumption that Indemniteehas not met the Standard of Conduct. The termination of any Proceeding or of any Claim therein by judgment, order,settlement or conviction, or upon a plea of guilty, nolo contendere or its equivalent, shall not (except as otherwise expresslyprovided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption thatIndemnitee did not satisfy the Standard of Conduct. The knowledge and/or actions, or failure to act, of any director, officer,agent or employee of any member of the Group shall not be imputed to Indemnitee for purposes of determining the right toindemnification under this Agreement.

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8. Advancement of Expenses. Notwithstanding any other provision of this Agreement, the Company shall

advance all Expenses incurred by or on behalf of Indemnitee in connection with the prosecution or defense of any Claimwithin 30 days after the receipt by the Company or PDMI of a statement or statements from Indemnitee requesting suchadvance or advances from time to time, whether prior to or after final disposition of the Claim. The Company shall advancethe amount of Expenses requested without regard to the Indemnitee’s ability to repay and without regard to Indemnitee’sultimate entitlement to indemnification under the other provisions of this Agreement. Any request for advancement ofExpenses submitted by Indemnitee shall reasonably evidence the Expenses incurred by Indemnitee (provided, that in the caseof evidence of Expenses for legal services, any references to legal work performed or to expenditures made that would causeIndemnitee to waive any privilege accorded by applicable law shall not be included with such evidence) and, to the extentrequired by applicable Law, shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee torepay any Expenses advanced if and to the extent that it shall ultimately be determined by a court of competent jurisdictionin a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified against such Expenses. Anyadvances and undertakings to repay pursuant to this Section 8 shall be unsecured and interest free. The right to advancesunder this Section 8 shall in all events continue until final disposition of any Proceedings, including any appeal therein, inrespect of each Claim for which advancement of Expenses is sought. Nothing in this Section 8 shall limit Indemnitee’s rightto advancement pursuant to Section 9(e).

9. Remedies of Indemnitee.

(a) Subject to Section 9(f), in the event that (1) the Determining Body determines pursuant toSection 7(b) that Indemnitee is not entitled to indemnification under this Agreement, (2) advancement of Expenses isnot timely made pursuant to Section 8 of this Agreement, (3) no determination of entitlement to indemnification shallhave been made pursuant to Section 7(b) within 60 days after receipt by the Company of the request forindemnification that does not include a request for Independent Counsel, (4) payment of indemnification is not madepursuant to Section 4(c) or 4(d) or the last sentence of Section 7(b)(ii) within 10 days after receipt by the Companyof a written request therefor or (5) payment of indemnification pursuant to Section 4(a), 4(b) or 5 is not made withinten (10) days after a determination has been made that Indemnitee is entitled to indemnification, then Indemniteeshall be entitled to an adjudication by a court of his entitlement to such indemnification or advancement. Indemniteeshall commence such proceeding seeking an adjudication within the applicable statute of limitations following thedate on which Indemnitee first has the right to commence such proceeding pursuant to this Section 9(a). Neither theCompany nor PDMI shall oppose Indemnitee’s right to seek any such adjudication.

(b) In the event that the Determining Body shall have determined pursuant to Section 7(b) thatIndemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 9 shall beconducted in all respects as a de novo trial on the merits, and Indemnitee shall not be prejudiced by reason of that adversedetermination. In any judicial proceeding commenced pursuant to this Section 9, the Company and PDMI shall have theburden of proving Indemnitee is not entitled to indemnification or advancement, as the case may be.

(c) If a determination shall have been made by the Determining Body pursuant to Section 7(b) thatIndemnitee is entitled to indemnification, the Company and PDMI shall be bound by such determination in any judicialproceeding commenced pursuant to this Section 9, absent a misstatement by Indemnitee of a material fact, or an omission ofa material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request forindemnification.

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(d) The Company and PDMI shall be precluded from asserting in any judicial proceeding commenced

pursuant to this Section 9 that the procedures and presumptions of this Agreement are not valid, binding and enforceable andshall stipulate in any such court that the Company and PDMI are bound by all the provisions of this Agreement.

(e) The Company and PDMI shall indemnify Indemnitee against any and all Enforcement Expenses and,if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, tothe extent not prohibited by applicable Law, such Enforcement Expenses to Indemnitee, which are incurred by Indemnitee inconnection with any action brought by Indemnitee for indemnification or advancement from the Company and/or PDMIunder this Agreement or under any directors’ and officers’ liability insurance policies (whether or not the Insurance Policy orany Comparable Policy) maintained by the Company or PDMI, regardless of whether Indemnitee ultimately is determined tobe entitled to such indemnification, advancement or insurance recovery, as the case may be, in the suit for whichindemnification or advancement is being sought, provided that Indemnitee shall not be entitled to be so indemnified and shallrepay any such advances if it is judicially determined that such action was not brought or maintained by Indemnitee in goodfaith.

(f) Notwithstanding anything in this Agreement to contrary, the Determining Body shall not be requiredto make a determination as to Indemnitee’s entitlement to indemnification under this Agreement prior to the final dispositionof the Proceeding, including any appeal therein, in respect of the Claim for which indemnification is sought hereunder.

10. Primacy of Indemnification; Subrogation. (a) The Company and PDMI each hereby acknowledges thatIndemnitee may have certain rights to indemnification, advancement of expenses and/or insurance provided by Indemnitee’semployer or certain of its Affiliates (collectively, the “Secondary Indemnitors”). The Company and PDMI each herebyagrees (i) that it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of theSecondary Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred byIndemnitee are secondary), (ii) that it shall be required to advance the full amount of expenses incurred by Indemnitee andshall be liable for the full amount of all Expenses, judgments, penalties, fines and amounts paid in settlement to the extentlegally permitted and as required by the terms of this Agreement and the Articles of Association of the Company and theCertificate of Incorporation or Bylaws of PDMI (or any other agreement between the Company, PDMI and Indemnitee),without regard to any rights Indemnitee may have against the Secondary Indemnitors, and (iii) that it irrevocably waives,relinquishes and releases the Secondary Indemnitors from any and all claims against the Secondary Indemnitors forcontribution, subrogation or any other recovery of any kind in respect thereof. The Company and PDMI each further agreesthat no advancement or payment by the Secondary Indemnitors on behalf of Indemnitee with respect to any Claim for whichIndemnitee has sought indemnification from the Company or PDMI shall affect the foregoing and the Secondary Indemnitorsshall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights ofrecovery of Indemnitee against the Company or PDMI. The Company, PDMI and Indemnitee agree that the SecondaryIndemnitors are express third party beneficiaries of the terms of this Section 10(a).

(b) Except as provided in paragraph (a) above, in the event of any payment under this Agreement, theCompany and PDMI shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee (otherthan against the Secondary Indemnitors), who shall execute all papers required and take all action necessary to secure suchrights, including execution of such documents as are necessary to enable the Company and/or PDMI to bring suit to enforcesuch rights.

(c) Except as provided in paragraph (a) above, neither the Company nor PDMI shall be liable under thisAgreement to make any payment of amounts otherwise indemnifiable hereunder if and

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to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreementor otherwise.

(d) Except as provided in paragraph (a) above, if the Claim against Indemnitee relates to a CorporateStatus that he holds for another entity or enterprise that is described in clause (iii) of the definition of “Corporate Status,” andif Indemnitee is or may be entitled to indemnification with respect to such Claim from such entity or enterprise, Indemniteeshall, following a request from the Company or PDMI that he do so, apply to such entity or enterprise for indemnificationwith respect to the Claim, and the Company's or PDMI’s obligation to indemnify or advance Expenses hereunder toIndemnitee related to such Corporate Status for such other entity or enterprise shall be reduced by any amount Indemniteehas actually received as indemnification or advancement of expenses from such other entity or enterprise.

11. Saving Clause. If any provision of this Agreement is determined by a court having jurisdiction over thematter to violate or conflict with applicable law, the court shall be empowered to modify or reform such provision so that, asmodified or reformed, such provision provides the maximum indemnification permitted by law and such provision, as somodified or reformed, and the balance of this Agreement, shall be applied in accordance with their terms. Without limitingthe generality of the foregoing, if any portion of this Agreement shall be invalidated on any ground, the Company and PDMIshall nevertheless indemnify Indemnitee to the full extent permitted by any applicable portion of this Agreement that shallnot have been invalidated and to the full extent permitted by law with respect to that portion that has been invalidated.

12. Non-Exclusivity. (a) The indemnification and advancement of Expenses provided by or granted pursuant tothis Agreement shall not be deemed exclusive of any other rights to which Indemnitee is or may become entitled under anystatute, Articles of Association, Certificate of Incorporation, by-law, authorization of shareholders or directors, agreement, orotherwise.

(b) It is the intent of the Company and PDMI by this Agreement to indemnify and hold harmlessIndemnitee to the fullest extent permitted by law, so that if applicable law would permit the Company and PDMI to providebroader indemnification rights than are currently permitted, the Company and PDMI shall indemnify and hold harmlessIndemnitee to the fullest extent permitted by applicable law notwithstanding that the other terms of this Agreement wouldprovide for lesser indemnification.

13. Confidentiality. The Company and Indemnitee shall keep confidential to the extent permitted by law andtheir fiduciary obligations all information and determinations provided pursuant to or arising out of the operations of thisAgreement and the Company, PDMI and Indemnitee shall instruct its or his agents and employees to do likewise.

14. Counterparts. This Agreement may be executed in any number of counterparts, each of which shallconstitute an original but all of which taken together shall be deemed to constitute a single instrument

15. Applicable Law. This Agreement shall be governed by and construed in accordance with the substantivelaws of the State of Delaware, USA. The Company, PDMI and Indemnitee hereby irrevocably and unconditionally (i) agreethat any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Court ofChancery of the State of Delaware or, if such court lacks jurisdiction, another state or federal court located in the State ofDelaware (such court, as applicable, the “Delaware Court”), and not in any other state or federal court in the United States ofAmerica or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court forpurposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to thelaying of venue of any such action or proceeding in the Delaware Court, and (iv) waive,

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and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has beenbrought in an improper or inconvenient forum.

16. Successors and Assigns. This Agreement shall be binding upon Indemnitee and upon the Company andPDMI, and each of their successors and assigns, and shall inure to the benefit of Indemnitee’s heirs, personal representatives,and assigns and to the benefit of the Company, PDMI and each of their successors and assigns. The Company shall requireand cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger,consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, bywritten agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform thisAgreement in the same manner and to the same extent that the Company would be required to perform if no such successionhad taken place.

17. Amendment. No amendment, modification, termination or cancellation of this Agreement shall be effectiveunless made in writing signed by the Company, PDMI and Indemnitee. Notwithstanding any amendment, modification,termination or cancellation of this Agreement or any portion hereof, but except as may be expressly set forth therein,Indemnitee shall be entitled to indemnification in accordance with the provisions hereof with respect to any acts or omissionsof Indemnitee which occur prior to such amendment, modification, termination or cancellation.

18. Gender. All pronouns and variations thereof used in this Agreement shall be deemed to refer to themasculine, feminine or neuter gender, singular or plural, as the identity of the person, persons, entity or entities referred tomay require.

19. Acknowledgments. Each of the Company and PDMI expressly confirms and agrees that it has entered intothis Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve or continue to serveas a director or officer of the Company, PDMI and/or other members of the Group, and acknowledges that Indemnitee isrelying upon this Agreement in agreeing to serve or in continuing to serve as a director or officer of the Company, PDMIand/or other members of the Group, and that this Agreement shall be effective for the Indemnitee as of the very moment hebegins his mandate as a director or officer of the Company prior to the publication of his appointment as such in the OfficialGazette (Memorial). Both the Company and PDMI, on the one hand, and Indemnitee, on the other hand, acknowledge thatin certain instances, U.S. Federal law or public policy may override applicable law and prohibit the Company or PDMI fromindemnifying its directors and officers under this Agreement or otherwise. For example, the Company, PDMI andIndemnitee acknowledge that the Securities and Exchange Commission (the “SEC”) has taken the position thatindemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibitsindemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company and PDMI haveundertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court incertain circumstances for a determination of the Company’s or PDMI’s right under public policy to indemnify Indemnitee.

20. Exceptions. Notwithstanding any other provision herein to the contrary, neither the Company nor PDMIshall be obligated pursuant to the terms of this Agreement to indemnify Indemnitee in respect of remuneration paid to theIndemnitee if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation oflaw.

[Remainder of Page Intentionally Blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and signed as of thedate and year first above written.

PACIFIC DRILLING S.A. By: Bernie G. Wolford Chief Executive Officer PACIFIC DRILLING MANPOWER, INC. By: Bernie G. Wolford Chief Executive Officer Indemnitee

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Exhibit 10.21

INDEMNITY AGREEMENT

This INDEMNITY AGREEMENT is made as of _____________ (the “Agreement Date”), by and between PacificDrilling S.A., a public limited liability company (société anonyme) organized under the laws of the Grand Duchy ofLuxembourg registered with the Luxembourg register of commerce and companies under registration number B159658,having its registered office at 8-10 Avenue de la Gare, L-1610, Luxembourg (the “Company”), and Pacific DrillingManpower, Inc., a Delaware corporation and an indirect wholly-owned subsidiary of the Company (“PDMI”), on the onehand, and __________ (“Indemnitee”), on the other hand.

WITNESSETH

WHEREAS, the Company is engaged, through its direct and indirect subsidiaries (collectively, and including theCompany, the “Group”), in the business of providing offshore drilling services through the use of high-specification floatingrigs;

WHEREAS, PDMI provides management services to the Company;

WHEREAS, the Indemnitee has been appointed to serve as an officer of the Company, and may be appointed toserve as an officer and/or a director of other members of the Group at the request of the Board (as defined below);

NOW, THEREFORE, in consideration of Indemnitee’s service after the date hereof, the Company and Indemniteeagree as follows:

1. Definitions. As used in this Agreement:

(a) The term “Ad Hoc Group” means, collectively, each of the “Avenue Parties,” “SVP Parties” and“Other Lenders” (as such terms are defined in that certain Governance Agreement, dated on or about November 19, 2018, byand among the Company and the other parties thereto (the “Governance Agreement”)).

(b) The term “Affiliate” of a Person shall mean any other Person controlled by, controlling, or undercommon control with, such Person.

(c) The term “Board” shall mean the Board of Directors of the Company.

(d) The term “Change of Control” shall mean the first to occur of any of the following:

(i) the acquisition by any Person (other than any one or more members of the Ad Hoc Groupprior to the Nomination Termination Time as defined in the Governance Agreement) of beneficial ownership (within themeaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934 (the “Exchange Act”)) of 50% or more ofthe Company’s outstanding shares (the “Common Shares”); provided, however, that for purposes of this subsection (i), thefollowing events shall not constitute a Change of Control:

(A) any issuance or sale by the Company of its Common Shares to a Person;

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(B) any acquisition of Common Shares by the Company; or

(C) any acquisition of Common Shares by any employee benefit plan (or related trust)sponsored or maintained by the Company or one of its Affiliates; or

(ii) the Incumbent Board ceases for any reason to constitute a majority of the Board; or

(iii) the consummation of an Acquisition (as defined in the Articles of Association of theCompany); or

(iv) approval by the shareholders of the Company of a complete liquidation or dissolution of theCompany.

(e) The term “Claim” shall mean a claim related to any Proceeding, or any separate issue or mattertherein, as the context requires, in which Indemnitee is or will be, or is threatened to be, involved as a party, as a witness orotherwise, by reason of his Corporate Status, provided that no claim asserted in any Proceeding brought by the Indemniteeagainst the Company, PDMI or another member of the Group or directors or officers of the Company, PDMI or anothermember of the Group, other than a Proceeding brought by Indemnitee to enforce his rights under this Agreement, shall bedeemed a Claim without prior approval of a majority of the Impartial Directors.

(f) The term “Comparable Policy” shall have the meaning provided in Section 3(a).

(g) The term “Corporate Status” shall mean the status of a person as a (i) director or officer of theCompany, PDMI or any other member of the Group, (ii) fiduciary with respect to any employee benefit plan of theCompany, PDMI or any other member of the Group, or (iii) director, officer, partner, employee or agent of any othercorporation, partnership, joint venture, trust or other for-profit or not-for-profit entity or enterprise, if such position is or washeld at the request of the Board, in each case whether such position was held before or after the Agreement Date.

(h) The term “Determining Body” shall mean (i) the Impartial Directors, as long as there is at least oneImpartial Director, (ii) if the Impartial Directors so elect, the Independent Directors or (iii) if there are no Impartial Directors,the Impartial Directors so elect or Indemnitee so requests following a Change of Control in accordance with Section 7(a) and(b), Independent Counsel.

(i) The term “Enforcement Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,transcript costs, fees of experts and witnesses, travel expenses, and all other costs, disbursements or expenses of the typescustomarily incurred in connection with an action to enforce indemnification or advancement rights, or an appeal from suchaction, including, without limitation, the premium, security for and other costs relating to any cost bond, supersedes bond orother appeal bond or its equivalent.

(j) The term “Expenses” shall mean any expenses or costs including, without limitation, reasonableattorney’s fees and retainers, court costs, transcript costs, fees of experts and witnesses, travel expenses, and all othercustomary costs, disbursements and expenses incurred by or on behalf of the Indemnitee in connection with prosecuting ordefending, or preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise participatingin any Proceeding with respect to, a Claim. If any of the foregoing amounts paid on behalf of Indemnitee are includiblewithin Indemnitee’s taxable income for federal or state income tax purposes, the Company will reimburse Indemnitee for any

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taxes incurred with respect thereto by paying to Indemnitee an amount which, after taking into account taxes on suchamount, equals Indemnitee’s incremental tax liability. Expenses shall not be deemed to include judgments, penalties, fines oramounts paid in settlement by an Indemnitee, and shall be determined after taking into account any amounts that havealready been paid directly to the Indemnitee, or to a third party at Indemnitee’s request, either (i) pursuant to the InsurancePolicy or a Comparable Policy or (ii) subject to Section 10, by another entity or enterprise of a type described in clause (iii)of the definition of “Corporate Status” that relate to such Claim.

(k) The term “Impartial Directors” shall mean the directors who are not parties to a Claim for whichindemnification is being sought.

(l) The term “Incumbent Board” shall mean individuals who, as of the close of business on theAgreement Date, constitute the Board; provided, however, that any individual who becomes a director of the Company afterthe Agreement Date through an election by the Company’s shareholders following a nomination of such individual by thevote of a majority of the directors then comprising the Incumbent Board, or through nomination pursuant to the GovernanceAgreement prior to the Nomination Termination Time as defined therein, shall be considered a member of the IncumbentBoard, unless such individual’s initial assumption of office is a result of an actual or threatened election contest with respectto the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of aPerson other than the Incumbent Board.

(m) The term “Indemnifiable Costs” shall mean Expenses, judgments, fines, penalties or amounts paid insettlement that are incurred or paid by or on behalf of Indemnitee in connection with prosecuting or defending, or preparingto prosecute or defend a Claim, or serving as a witness with respect to a Claim, but shall not include any amounts that havealready been paid directly to the Indemnitee pursuant to the Insurance Policy or a Comparable Policy.

(n) The term “Independent Counsel” shall mean a law firm, or a partner (or, if applicable, member) ofsuch a law firm, that is experienced in matters of Delaware corporation law and neither presently is, nor in the past five yearshas been, retained to represent: (i) any member of the Group or Indemnitee in any matter material to any such party (otherthan with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similarindemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder.Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicablestandards of professional conduct then prevailing, would have a conflict of interest in representing either the Company orIndemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonablefees and expenses of the Independent Counsel and to fully indemnify such counsel against any and all expenses, claims,liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

(o) The term “Independent Directors” shall mean the members of the Board that are “independentdirectors” as defined by Section 303A of the New York Stock Exchange Listed Company Manual or successor provision forpurposes of determining whether a majority of the board of directors is independent, whether or not the Common Shares arethen listed on the New York Stock Exchange (the “NYSE”), and whether or not the Company is subject to the requirementthat a majority of its directors be independent; except that if the Company’s Common Shares are principally listed on anothersecurities exchange that defines director independence for purposes of determining whether a majority of the directors areindependent, then the definition of director independence used by such other principal exchange shall apply.

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(p) The term “Insurance Policy” shall mean, collectively, (i) the Primary Directors’ and Officers’

Liability Policy that the Company has obtained from Zurich Insurance PLC, (ii) the Excess Directors’ and Officers’ LiabilityPolicy that the Company has obtained from various insurers including Certain Underwriters at Lloyds, (iii) the Side A DICLiability Policy that the Company has obtained from various insurers including Certain Underwriters at Lloyds, for a total of$75 million of coverage on behalf of its directors and officers, for the policy period commencing November 19, 2019 andending November 18, 2020, or any successor directors’ and officers’ liability insurance policy that the Company from timeto time maintains.

(q) The term “Law” shall mean (i) the law of August 10, 1915 on commercial companies, as amended,of the Grand Duchy of Luxembourg and (ii) the Delaware General Corporation Law.

(r) The term “Person” shall mean any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).

(s) The term “Proceeding” shall mean any threatened, pending or completed action, suit, arbitration,alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened orcompleted proceeding, including appeals, whether brought in the right of the Company or PDMI or otherwise, whether civil,criminal, administrative, arbitrative or investigative in nature, and whether made judicially or extra-judicially.

(t) The term “Standard of Conduct” shall mean, with respect to any Claim that is asserted, conduct bythe Indemnitee that was in good faith and in a manner that the Indemnitee reasonably believed to be in, or not opposed to, thebest interest of the Company or PDMI, and, in the case of a Claim which is, or which is related to, a criminal action orproceeding, conduct that Indemnitee had no reasonable cause to believe was unlawful. The termination of any Claim byjudgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create apresumption that Indemnitee did not meet the Standard of Conduct.

2. Limitation of Liability. To the fullest extent provided by Law and Article Nine of the Articles ofAssociation of the Company (as amended and restated by the Extraordinary General Meeting of the shareholders of theCompany on November 19, 2018, the “Articles of Association”) and Article 13 of the Certificate of Incorporation (the“Certificate of Incorporation”) of PDMI (as each is in effect on the Agreement Date), Indemnitee shall not be liable to theCompany, PDMI or any other member of the Group, or to the shareholders of the Company, PDMI or any other member ofthe Group, for any breach of his mandate or fiduciary duty. If and to the extent such provisions of such Articles ofAssociation or Certificate of Incorporation are amended to permit further limitations of liability, Indemnitee shall not beliable for any breach of his mandate or fiduciary duty to the fullest extent permitted after taking into account any suchamendment.

3. Maintenance of Insurance. (a) The Company represents and warrants that it presently maintains in fullforce and effect the Insurance Policy, a copy of which it has made available to the Indemnitee. Subject to Section 3(b)hereof, the Company hereby agrees that, so long as Indemnitee shall continue to be a director or officer of the Company,PDMI or any other member of the Group and for any period thereafter as the Indemnitee is subject to a Claim, the Companyshall maintain in effect for the benefit of Indemnitee one or more valid and enforceable policies of directors and officersliability insurance providing, in all respects, coverage favorably comparing to that currently provided to Indemnitee underthe Insurance Policy (a “Comparable Policy”).

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(b) The Company shall not be required to maintain the Insurance Policy or a Comparable Policy if, in

the reasonable business judgment of a majority of Independent Directors of the Company, either (i) the premium cost forsuch insurance is excessive when compared to the amount and benefits of coverage provided, or (ii) the coverage providedby such insurance is so limited by exclusions, retentions, deductibles or otherwise that there is insufficient benefit to theCompany or its directors and officers from such insurance, in which event the Company shall use its reasonable best effortsto obtain the maximum amount of coverage as may be obtained for an annual premium not exceeding 110% of the annualpremium paid by the Company for the most recent annual renewal of the Insurance Policy.

(c) If the Company does not purchase and maintain in effect the Insurance Policy or a ComparablePolicy, the Company agrees, to the extent permitted by law, to hold harmless and indemnify Indemnitee to the full extent ofthe coverage that would otherwise have been provided for the benefit of Indemnitee pursuant to the Insurance Policy.

4. Indemnification of Indemnitee. The Company and PDMI each agrees to hold harmless and indemnify theIndemnitee as follows:

(a) Indemnity in Connection with Claims Other than Claims by or in the Right of the Company, PDMI,or any member of the Group. To the fullest extent permissible under applicable Law, with respect to any Claim against theIndemnitee that is not by or in the right of the Company, PDMI, or another member of the Group, the Company and PDMIshall indemnify and hold harmless Indemnitee against such Indemnifiable Costs as they are actually and reasonably incurred,if the Indemnitee has met the Standard of Conduct.

(b) Indemnification for Proceedings by or in the Right of the Company, PDMI or any member of theGroup. With respect to any Claim by or in the right of the Company, PDMI, or any member of the Group, the Company andPDMI shall indemnify and hold harmless Indemnitee against any Expenses as they are actually and reasonably incurred, ifthe Indemnitee has met the Standard of Conduct; provided that no indemnification shall be made under this Section 4(b)with respect to any Claim as to which the Indemnitee shall have been adjudged to be liable to the Company, PDMI or anymember of the Group unless and to the extent that a court of competent jurisdiction determines that such indemnificationshall be made.

(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding, andwithout limiting, any other provision of this Agreement, to the extent that the Indemnitee is successful in whole or in part inthe defense of any Claim on the merits or otherwise, the Company and PDMI shall indemnify the Indemnitee against allExpenses actually and reasonably incurred by the Indemnitee with respect to the Claim to the fullest extent permitted byLaw. For purposes of this paragraph and without limitation, the termination of any Claim by dismissal, with or withoutprejudice, shall be deemed to be a successful result as to such Claim. For avoidance of doubt, to the extent a Proceedinginvolves or involved more than one Claim, this Section 4(c) shall apply separately to each such Claim.

(d) Indemnification for Expenses of a Witness. Notwithstanding any other provision of this Agreement,to the extent that Indemnitee is, by reason of his Corporate Status, a witness in any Proceeding to which Indemnitee is not aparty and is not threatened to be made a party, Indemnitee shall be indemnified against all Expenses actually and reasonablyincurred by him or on his behalf in connection therewith.

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5. Additional Indemnity. In addition to, and without regard to any limitations on, the indemnification

provided for in Section 4 of this Agreement, the Company and PDMI shall, to the fullest extent permitted by Law, andhereby do agree to indemnify and hold harmless Indemnitee against all Indemnifiable Costs as they are actually andreasonably incurred by the Indemnitee, if, by reason of his Corporate Status, he is a party to any Claim (including a Claim byor in the right of the Company, PDMI or any member of the Group). The phrase “to the fullest extent permitted by Law”shall include, but not be limited to, (a) to the fullest extent permitted by Article 10.2 of the Articles of Association of theCompany, Article 13 of the Certificate of Incorporation of PDMI, and any provision of the Law that authorizes or permitsadditional indemnification by agreement, or the corresponding provision of any amendment or replacement of such provisionof the Law, and (b) to the fullest extent authorized by any amendments to or replacements of provisions of the Law thatexpand the extent to which a public limited liability company (société anonyme) or corporation, as applicable, mayindemnify its directors and officers. Any amendment or repeal of any provision of the Law that limits the rights of directorsor officers to indemnification shall be deemed to have prospective effect only and shall not limit or eliminate the rights of theIndemnitee hereunder with respect to any Claim involving any act, occurrence or omission, or alleged act, occurrence oromission that took place prior to the date of such amendment or repeal.

6. Contribution. (a) If the indemnification provided for in this Agreement is unavailable to Indemniteein respect of any Claim for any reason whatsoever (including without limitation because indemnification is prohibited byvirtue of the Law, U.S. federal securities laws or an applicable court decision), then the Company and PDMI, in lieu ofindemnifying Indemnitee, shall contribute to the amount of Indemnifiable Costs actually and reasonably incurred and paid orpayable by or on behalf of Indemnitee in connection with such Claims in such proportion as is deemed fair and reasonable inlight of all of the circumstances in order to reflect (i) the relative benefits received by the Group and Indemnitee inconnection with the event(s) and/or transaction(s) giving rise to such Claims and/or (ii) the relative fault of the Group(including any Group member’s directors, officers, employees and agents other than Indemnitee), on the one hand, andIndemnitee, on the other hand, in connection with such event(s) and/or transaction(s). The Company and PDMI agree that itwould not be just and equitable if contribution pursuant to this Section 6 were determined by pro rata allocation or any othermethod of allocation that does not take into account the foregoing considerations.

(b) The Company and PDMI hereby agree to fully indemnify and hold Indemnitee harmless from anyclaims of contribution which may be brought by officers, directors, employees or agents of any Group member, other thanIndemnitee, who may be jointly liable with Indemnitee.

7. Certain Procedures.

(a) Procedures for Notification and Defense of Claims. To obtain indemnification under thisAgreement, Indemnitee shall submit to the Company a written request therefor and, if a Change of Control has occurred andIndemnitee so chooses, such written request shall also include a request for the right to indemnification to be determined byIndependent Counsel. The Company shall be entitled to participate in the Proceeding in respect of the Claim for whichindemnification is sought at the Company’s own expense.

(b) Procedure Upon Application for Indemnification.

(i) Upon receipt of a written request for indemnification pursuant to Section 7(a), adetermination, if such determination is required by applicable Law, with respect to Indemnitee’s entitlement thereto (whichentitlement shall be limited to whether Indemnitee met the Standard of Conduct with respect to the Claim for whichindemnification is sought) shall be made in the specific case by the Determining Body. All determinations and judgmentsmade by the Determining Body

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hereunder shall be made in good faith. In the event that the Determining Body is Independent Counsel, such determinationshall be made by Independent Counsel in a written opinion to the Board, a copy of which written opinion shall be deliveredto Indemnitee. If the determination of the Determining Body is that Indemnitee is entitled to indemnification, payment toIndemnitee shall be made within 10 days after such determination.

(ii) Indemnitee shall cooperate with the Determining Body in making its determination withrespect to Indemnitee’s entitlement to indemnification, including by providing, upon reasonable advance request, anydocumentation or information as is not privileged or otherwise protected from disclosure, is reasonably available toIndemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled toindemnification. Any costs or expenses (including attorney’s fees and disbursements) incurred by Indemnitee in socooperating with the Determining Body shall be borne by the Company (irrespective of the determination as to Indemnitee’sentitlement to indemnification), and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

(iii) In the event that a Change of Control has occurred and Indemnitee exercises his right tohave his entitlement to indemnification determined by Independent Counsel pursuant to Section 7(a), the IndependentCounsel shall be selected by Indemnitee. The Company may, within ten (10) days after written notice of such selection,deliver to Indemnitee a written objection to such selection; provided, however, that such objection may be asserted only onthe ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined inSection 1 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent aproper and timely objection, the Person so selected shall act as Independent Counsel. If such written objection is so made andsubstantiated, the Person so selected may not serve as Independent Counsel unless and until such objection is withdrawn or acourt of competent jurisdiction has determined that such objection is without merit. If, within 20 days after the later of(i) submission by Indemnitee of a written request for entitlement to indemnification to be determined by IndependentCounsel pursuant to Section 7(a) and (ii) the final disposition of the Proceeding in respect of the Claim(s) for whichindemnification is sought, no Independent Counsel shall have been selected without objection, Indemnitee may petition acourt of competent jurisdiction for resolution of any objection which shall have been made by the Company to the selectionof Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the court or by such otherPerson as the court shall designate. The Person with respect to whom all objections are so resolved or the Person soappointed shall act as Independent Counsel under this Section 7.

(c) Presumptions and Effect of Certain Proceedings. In making a determination with respect toentitlement to indemnification hereunder, it shall be presumed that Indemnitee is entitled to indemnification under thisAgreement if Indemnitee has submitted a request for indemnification in accordance with Section 7(a), and the DeterminingBody shall have the burden of proof to overcome that presumption in connection with the making of any determinationcontrary to that presumption. Neither (i) the failure of the Determining Body to have made a determination prior to thecommencement of any action by Indemnitee to enforce this Agreement that indemnification is proper in the circumstancesbecause Indemnitee has met the Standard of Conduct, nor (ii) an actual determination by the Determining Body thatIndemnitee has not met the Standard of Conduct, shall be a defense to such action or create a presumption that Indemniteehas not met the Standard of Conduct. The termination of any Proceeding or of any Claim therein by judgment, order,settlement or conviction, or upon a plea of guilty, nolo contendere or its equivalent, shall not (except as otherwise expresslyprovided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption thatIndemnitee did not satisfy the Standard of Conduct. The knowledge and/or actions, or failure to act, of any director, officer,agent or employee of any member of the Group shall not be imputed to Indemnitee for purposes of determining the right toindemnification under this Agreement.

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8. Advancement of Expenses. Notwithstanding any other provision of this Agreement, the Company shall

advance all Expenses incurred by or on behalf of Indemnitee in connection with the prosecution or defense of any Claimwithin 30 days after the receipt by the Company or PDMI of a statement or statements from Indemnitee requesting suchadvance or advances from time to time, whether prior to or after final disposition of the Claim. The Company shall advancethe amount of Expenses requested without regard to the Indemnitee’s ability to repay and without regard to Indemnitee’sultimate entitlement to indemnification under the other provisions of this Agreement. Any request for advancement ofExpenses submitted by Indemnitee shall reasonably evidence the Expenses incurred by Indemnitee (provided, that in the caseof evidence of Expenses for legal services, any references to legal work performed or to expenditures made that would causeIndemnitee to waive any privilege accorded by applicable law shall not be included with such evidence) and, to the extentrequired by applicable Law, shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee torepay any Expenses advanced if and to the extent that it shall ultimately be determined by a court of competent jurisdictionin a final judgment, not subject to appeal, that Indemnitee is not entitled to be indemnified against such Expenses. Anyadvances and undertakings to repay pursuant to this Section 8 shall be unsecured and interest free. The right to advancesunder this Section 8 shall in all events continue until final disposition of any Proceedings, including any appeal therein, inrespect of each Claim for which advancement of Expenses is sought. Nothing in this Section 8 shall limit Indemnitee’s rightto advancement pursuant to Section 9(e).

9. Remedies of Indemnitee.

(a) Subject to Section 9(f), in the event that (1) the Determining Body determines pursuant toSection 7(b) that Indemnitee is not entitled to indemnification under this Agreement, (2) advancement of Expenses isnot timely made pursuant to Section 8 of this Agreement, (3) no determination of entitlement to indemnification shallhave been made pursuant to Section 7(b) within 60 days after receipt by the Company of the request forindemnification that does not include a request for Independent Counsel, (4) payment of indemnification is not madepursuant to Section 4(c) or 4(d) or the last sentence of Section 7(b)(ii) within 10 days after receipt by the Companyof a written request therefor or (5) payment of indemnification pursuant to Section 4(a), 4(b) or 5 is not made withinten (10) days after a determination has been made that Indemnitee is entitled to indemnification, then Indemniteeshall be entitled to an adjudication by a court of his entitlement to such indemnification or advancement. Indemniteeshall commence such proceeding seeking an adjudication within the applicable statute of limitations following thedate on which Indemnitee first has the right to commence such proceeding pursuant to this Section 9(a). Neither theCompany nor PDMI shall oppose Indemnitee’s right to seek any such adjudication.

(b) In the event that the Determining Body shall have determined pursuant to Section 7(b) thatIndemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Section 9 shall beconducted in all respects as a de novo trial on the merits, and Indemnitee shall not be prejudiced by reason of that adversedetermination. In any judicial proceeding commenced pursuant to this Section 9, the Company and PDMI shall have theburden of proving Indemnitee is not entitled to indemnification or advancement, as the case may be.

(c) If a determination shall have been made by the Determining Body pursuant to Section 7(b) thatIndemnitee is entitled to indemnification, the Company and PDMI shall be bound by such determination in any judicialproceeding commenced pursuant to this Section 9, absent a misstatement by Indemnitee of a material fact, or an omission ofa material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request forindemnification.

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(d) The Company and PDMI shall be precluded from asserting in any judicial proceeding commenced

pursuant to this Section 9 that the procedures and presumptions of this Agreement are not valid, binding and enforceable andshall stipulate in any such court that the Company and PDMI are bound by all the provisions of this Agreement.

(e) The Company and PDMI shall indemnify Indemnitee against any and all Enforcement Expenses and,if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefor) advance, tothe extent not prohibited by applicable Law, such Enforcement Expenses to Indemnitee, which are incurred by Indemnitee inconnection with any action brought by Indemnitee for indemnification or advancement from the Company and/or PDMIunder this Agreement or under any directors’ and officers’ liability insurance policies (whether or not the Insurance Policy orany Comparable Policy) maintained by the Company or PDMI, regardless of whether Indemnitee ultimately is determined tobe entitled to such indemnification, advancement or insurance recovery, as the case may be, in the suit for whichindemnification or advancement is being sought, provided that Indemnitee shall not be entitled to be so indemnified and shallrepay any such advances if it is judicially determined that such action was not brought or maintained by Indemnitee in goodfaith.

(f) Notwithstanding anything in this Agreement to contrary, the Determining Body shall not be requiredto make a determination as to Indemnitee’s entitlement to indemnification under this Agreement prior to the final dispositionof the Proceeding, including any appeal therein, in respect of the Claim for which indemnification is sought hereunder.

10. Subrogation. (a) In the event of any payment under this Agreement, the Company and PDMI shall besubrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers requiredand take all action necessary to secure such rights, including execution of such documents as are necessary to enable theCompany and/or PDMI to bring suit to enforce such rights.

(b) Neither the Company nor PDMI shall be liable under this Agreement to make any payment ofamounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received suchpayment under any insurance policy, contract, agreement or otherwise.

(c) If the Claim against Indemnitee relates to a Corporate Status that he holds for another entity orenterprise that is described in clause (iii) of the definition of “Corporate Status,” and if Indemnitee is or may be entitled toindemnification with respect to such Claim from such entity or enterprise, Indemnitee shall, following a request from theCompany or PDMI that he do so, apply to such entity or enterprise for indemnification with respect to the Claim, and theCompany's or PDMI’s obligation to indemnify or advance Expenses hereunder to Indemnitee related to such CorporateStatus for such other entity or enterprise shall be reduced by any amount Indemnitee has actually received as indemnificationor advancement of expenses from such other entity or enterprise.

11. Saving Clause. If any provision of this Agreement is determined by a court having jurisdiction over thematter to violate or conflict with applicable law, the court shall be empowered to modify or reform such provision so that, asmodified or reformed, such provision provides the maximum indemnification permitted by law and such provision, as somodified or reformed, and the balance of this Agreement, shall be applied in accordance with their terms. Without limitingthe generality of the foregoing, if any portion of this Agreement shall be invalidated on any ground, the Company and PDMIshall nevertheless indemnify Indemnitee to the full extent permitted by any applicable portion of this Agreement that shallnot have been invalidated and to the full extent permitted by law with respect to that portion that has been invalidated.

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12. Non-Exclusivity. (a) The indemnification and advancement of Expenses provided by or granted pursuant to

this Agreement shall not be deemed exclusive of any other rights to which Indemnitee is or may become entitled under anystatute, Articles of Association, Certificate of Incorporation, by-law, authorization of shareholders or directors, agreement, orotherwise.

(b) It is the intent of the Company and PDMI by this Agreement to indemnify and hold harmlessIndemnitee to the fullest extent permitted by law, so that if applicable law would permit the Company and PDMI to providebroader indemnification rights than are currently permitted, the Company and PDMI shall indemnify and hold harmlessIndemnitee to the fullest extent permitted by applicable law notwithstanding that the other terms of this Agreement wouldprovide for lesser indemnification.

13. Confidentiality. The Company and Indemnitee shall keep confidential to the extent permitted by law andtheir fiduciary obligations all information and determinations provided pursuant to or arising out of the operations of thisAgreement and the Company, PDMI and Indemnitee shall instruct its or his agents and employees to do likewise.

14. Counterparts. This Agreement may be executed in any number of counterparts, each of which shallconstitute an original but all of which taken together shall be deemed to constitute a single instrument

15. Applicable Law. This Agreement shall be governed by and construed in accordance with the substantivelaws of the State of Delaware, USA. The Company, PDMI and Indemnitee hereby irrevocably and unconditionally (i) agreethat any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Court ofChancery of the State of Delaware or, if such court lacks jurisdiction, another state or federal court located in the State ofDelaware (such court, as applicable, the “Delaware Court”), and not in any other state or federal court in the United States ofAmerica or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court forpurposes of any action or proceeding arising out of or in connection with this Agreement, (iii) waive any objection to thelaying of venue of any such action or proceeding in the Delaware Court, and (iv) waive, and agree not to plead or to make,any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenientforum.

16. Successors and Assigns. This Agreement shall be binding upon Indemnitee and upon the Company andPDMI, and each of their successors and assigns, and shall inure to the benefit of Indemnitee’s heirs, personal representatives,and assigns and to the benefit of the Company, PDMI and each of their successors and assigns. The Company shall requireand cause any successor, and any direct or indirect parent of any successor, whether direct or indirect by purchase, merger,consolidation or otherwise, to all, substantially all or a substantial part, of the business and/or assets of the Company, bywritten agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform thisAgreement in the same manner and to the same extent that the Company would be required to perform if no such successionhad taken place.

17. Amendment. No amendment, modification, termination or cancellation of this Agreement shall be effectiveunless made in writing signed by the Company, PDMI and Indemnitee. Notwithstanding any amendment, modification,termination or cancellation of this Agreement or any portion hereof, but except as may be expressly set forth therein,Indemnitee shall be entitled to indemnification in accordance with the provisions hereof with respect to any acts or omissionsof Indemnitee which occur prior to such amendment, modification, termination or cancellation.

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18. Gender. All pronouns and variations thereof used in this Agreement shall be deemed to refer to the

masculine, feminine or neuter gender, singular or plural, as the identity of the person, persons, entity or entities referred tomay require.

19. Acknowledgments. Each of the Company and PDMI expressly confirms and agrees that it has entered intothis Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve or continue to serveas a director or officer of the Company, PDMI and/or other members of the Group, and acknowledges that Indemnitee isrelying upon this Agreement in agreeing to serve or in continuing to serve as a director or officer of the Company, PDMIand/or other members of the Group, and that this Agreement shall be effective for the Indemnitee as of the very moment hebegins his mandate as a director or officer of the Company prior to the publication of his appointment as such in the OfficialGazette (Memorial). Both the Company and PDMI, on the one hand, and Indemnitee, on the other hand, acknowledge thatin certain instances, U.S. Federal law or public policy may override applicable law and prohibit the Company or PDMI fromindemnifying its directors and officers under this Agreement or otherwise. For example, the Company, PDMI andIndemnitee acknowledge that the Securities and Exchange Commission (the “SEC”) has taken the position thatindemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibitsindemnification for certain ERISA violations. Indemnitee understands and acknowledges that the Company and PDMI haveundertaken or may be required in the future to undertake with the SEC to submit the question of indemnification to a court incertain circumstances for a determination of the Company’s or PDMI’s right under public policy to indemnify Indemnitee.

20. Exceptions. Notwithstanding any other provision herein to the contrary, neither the Company nor PDMIshall be obligated pursuant to the terms of this Agreement to indemnify Indemnitee in respect of remuneration paid to theIndemnitee if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation oflaw.

[Remainder of Page Intentionally Blank]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and signed as of thedate and year first above written.

PACIFIC DRILLING S.A. By: Bernie G. Wolford Chief Executive Officer PACIFIC DRILLING MANPOWER, INC. By: Bernie G. Wolford Chief Executive Officer Indemnitee

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Exhibit 10.22

Pacific Drilling11700 Katy Freeway / Suite 175Houston / Texas / 77079ph / + 1(713) 334-6662 fax / +1(713) 583-5777web / www.pacificdrilling.com

March 26, 2019 Johannes Boots1940 Fountain View Drive #510Houston, Texas 77057

Re: Separation Agreement

Dear John:

This letter agreement ("Letter Agreement") sets forth the understanding between you and Pacific Drilling S.A. (the"Company") regarding your separation from the Company. Capitalized terms not otherwise defined herein have the meaningset forth in the Severance and Change in Control Agreement, dated June 1, 2016, and as thereafter amended on December15, 2016, and on October 29, 2018, by and between you and Pacific Drilling Manpower, Inc. (your "Severance Agreement").

1. Termination of Employment; Separation from Positions

Your employment with the Company will terminate on the earliest to occur of (a) the date determined by the Company,which date is on or after the date of this Letter Agreement, (b) the date you voluntarily resign or die, or (c) December 31,2019 (as applicable, the "Termination Date"). Effective as of the Termination Date, your employment is terminated from allpositions that you hold (as director, officer, manager, member or otherwise) in the Company and any of the Company'ssubsidiaries, affiliates, joint ventures and other related entities, including as the Chief Financial Officer of theCompany. You agree to execute any documents reasonably required to effectuate the foregoing.

2. Retention Award

As a separate inducement to continue in the employ of the Company, the Company will grant you, effective on the date youexecute this Letter Agreement, provided you execute and return this Letter Agreement by close of business on March 26,2019, an award of restricted stock units under the Company’s 2018 Omnibus Stock Incentive Plan representing the right toreceive up to 54,550 shares of the Company’s share capital (the “Retention Award”). The Retention Award will vest onDecember 31, 2019, although a portion of the Retention Award (as set forth in the Restricted Stock Unit Agreementevidencing the Retention Award (the “RSU Agreement”) may vest earlier if your employment is terminated in accordancewith Paragraphs 1(a) or 1(b), provided the conditions of Paragraph 4 herein and those set forth in the RSU Agreement aresatisfied. By signing this Letter Agreement, notwithstanding the language of the Severance Agreement, you acknowledgethat your rights to the Retention Award will be limited, and potentially forfeited, if you terminate your employmentvoluntarily in accordance with Paragraph 1(b). This Letter Agreement will operate as an amendment to Section

Page 2March 26, 2019

3.1(c) of the Severance Agreement with respect to the Retention Award.

3. Separation Payments

In connection with the termination of your employment with the Company, and in consideration of your obligations andagreements set forth in this Letter Agreement, you will be entitled to the following payments and benefits (in each case, lessapplicable tax withholdings):

(a) The Company will pay you, promptly after the date the release in Paragraph 4 below becomes effective (the"Release Effective Date"), which based on the terms of this Letter Agreement will be prior to March 15, 2020, a cash lumppayment equal to the sum of one times (i) your current annual base salary ($450,000) and (ii) a bonus (the “Bonus”) equal to$450,000 multiplied by a fraction (but in no event greater than 1) the numerator of which is the number of calendar days in2019 prior to and including the Termination Date and the denominator of which is 365. The Bonus shall be in lieu of theTermination Bonus due under the Severance Agreement.

(b) The Company will pay you, promptly after the Release Effective Date, a cash lump sum of $20,970.96,which is equal to the sum of 12 months of company contributions for group life, long-term disability and health insurancebenefits.

(c) Pursuant to and in accordance with the terms of the Notice of Key Employee Incentive Plan Cash Award (the“KEIP Award”) dated August 24, 2018, following ratification of the 2019 revenue performance target achievements, if andto the extent achieved, the Company will promptly pay you a pro-rated portion of the final installment of your KEIP Awardbased on time served, as calculated in the notice and at the times set forth in the notice.

(d) Pursuant to and in accordance with the terms of each of the Notice of Long Term Incentive Cash Awarddated January 1, 2017 and the Notice of Long Term Incentive Cash Award dated June 2, 2016 (your “LTI Awards”),following certification of the achievement of the applicable targets, if and to the extent achieved, the Company will pay youa pro-rated portion of the unvested installments under the LTI Awards based on time served, as calculated in each notice andat the times set forth in each notice.

(e) Pursuant to and in accordance with the terms of the retention bonus letter agreement dated February 9, 2017,the Company shall pay you, promptly after the Termination Date, the second and final tranche of the retention bonus($71,250) to the extent such amount remains unpaid as of the Termination Date.

(f) The Company will pay you, promptly after the Termination Date, a cash lump sum equal to (i) your basesalary accrued through the Termination Date and (ii) any earned but unused vacation pay, in each case to the extent notpreviously paid.

(g) The Company will pay you, promptly after submission of appropriate expense documentation, reimbursementfor any travel or business expenses through the Termination Date.

(h) The Company will continue to provide health and wellness benefits, including access to the EmployeeAssistance Program, through the end of the month of the Termination Date. You may elect to continue your health benefitsbeyond this date through COBRA by paying the required contribution. Pay Flex (888-678-7835) will notify you of yourrights and elections.

(i) If earned under the terms of the RSU Agreement, all or a portion of the Retention Award will accelerate andpay out on the Release Effective Date.

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(j) The Company will pay for the United States and Luxembourg tax preparation services for the 2018 tax year,using the Company’s preferred tax preparation service provider.

4. Release

Notwithstanding any provision hereof to the contrary, you shall not be entitled to the payments and benefits underParagraphs 3(a), (b), (c) and (i) above hereof unless you (or your estate if you are deceased) (a) execute and deliver to theCompany (without subsequent revocation) a waiver and release in the form provided by the Company (the “Release”) withinthe time-frame specified in the Release, and (b) comply with the covenants referenced in Paragraph 5(a) below. If youvalidly revoke any part of the Release, the Company will have no obligation to provide the separation payments inParagraphs 3(a), (b), (c) and (i) above, and you waive your rights to receive such payments. The Company shall provide youwith a form of the Release within five (5) days after the Termination Date.

5. Restrictive Covenants

(a) Ongoing Obligations. You agree and acknowledge that, except as noted in the next sentence, yourobligations under the nondisclosure, noncompetition, nonsolicitation and assistance with claims provisions contained inSection 7 of the Pacific Drilling Severance Plan (the “Severance Plan”) and Article 5 and Article 6, Section 6.13 of yourSeverance Agreement will continue to apply after the Termination Date for the period of time specified in such provisions.Notwithstanding the restrictions in Section 5.2(a) of the Severance Agreement, the Company hereby agrees that during thesix-month period following the Termination Date, you may accept employment with any Person engaged in any business incompetition with the Business within the Prohibited Territories, provided you are not employed as the chief financial officerof such Person. Additionally, you and the Company agree and acknowledge your respective obligations under the mutualnondisparagement provision contained in Article 6, Section 6.12 of the Severance Agreement. You affirm that suchprovisions are not unduly burdensome to you and are reasonably necessary to protect the legitimate interests of theCompany.

(b) Whistleblower Policy. You understand and agree that nothing in this Letter Agreement or the SeverancePlan limits or interferes with your right, without notice to or authorization from the Company, to file a charge or complaintwith the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety andHealth Administration, the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority, or anyother self-regulatory organization or any other federal, state or local governmental agency or commission (each a"Governmental Agency"), or to testify, assist or participate in any investigation, hearing or proceeding conducted by aGovernmental Agency. In the event you file a charge or complaint with a Government Agency, or a Government Agencyasserts a claim on your behalf, you agree that your release of Claims in this Letter Agreement shall nevertheless bar yourright (if any) to any monetary or other recovery (including reinstatement), except that you do not waive: (1) your right toreceive an award from the Securities and Exchange Commission pursuant to Section 21F of the Securities Exchange Act of1934 and (2) any other right where waiver is expressly prohibited by law.

6. Other Terms

(a) Breach. You agree and acknowledge that should you violate any term of this Letter Agreement, the amountof damages that the Company would suffer as a result of such violation would be difficult to ascertain and money damageswill not afford the Company an adequate remedy. You further agree and acknowledge that in the event of your materialbreach of any material term of this Letter Agreement, the Company's obligation to provide you with any payments pursuantto Paragraphs 3(a), (b), (c), and (i) of this Letter Agreement will immediately cease, and the Company will be entitled

Page 4March 26, 2019

to recover monetary damages and obtain all other relief provided by law or equity, including, but not limited to, injunctiverelief.

(b) No Representations and Nondisclosure. You acknowledge that you have not relied on any representations orstatements not set forth in this Letter Agreement. Except to the extent publicly disclosed by the Comapny or itsrepresentatives, you will not disclose the contents or substance of this Letter Agreement to anyone except your immediatefamily, your financial advisors or accountants and any tax, legal or other counsel that you have consulted regarding themeaning or effect hereof, and you will instruct each of the foregoing not to disclose the same; provided, that you maydisclose the contents or substance of this Letter Agreement to the extent required by law or by any court, arbitrator, oradministrative or governmental body or to the extent appropriate in connection with any dispute over this Letter Agreementor otherwise involving you and the Company. Any such disclosure by any member of your immediate family, your financialadvisors or accountants or any of your tax, legal or other counsel will be regarded as a breach of this Paragraph 6(b) by you,and you will be fully responsible for any such breach.

(c) Non-admission. Nothing contained in this Letter Agreement will be deemed or construed as an admission ofwrongdoing or liability on the part of the Company or any of the other Released Parties or by you.

(d) Entire Understanding. Except for the references to other agreements and plans set forth in this LetterAgreement, including Paragraphs 2 through 5, this Letter Agreement sets forth the entire agreement between you and theCompany regarding your termination of employment and other service relationships with the Company, and supersedes anyother severance, separation and employment agreements between you and the Company.

(e) Governing Law. This Letter Agreement will be governed by and construed in accordance with the laws ofthe State of Texas without regard to principles of conflict of laws.

(f) Severability; Counterparts. The invalidity or unenforceability of any provision of this Letter Agreement willnot affect the validity or enforceability of any other provision. If any provision of this Letter Agreement is held invalid orunenforceable in part, the remaining portion of such provision, together with all other provisions of this Letter Agreement,will remain valid and enforceable and continue in full force and effect to the fullest extent consistent with law. This LetterAgreement may be executed in several counterparts, each of which will be deemed an original, and such counterpart willconstitute one and the same instrument.

(g) Section 409A of the Code. The payments provided pursuant to this Letter Agreement are intended tocomply with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), including the short-termdeferral and separation pay exceptions thereto, and the Letter Agreement shall be construed and administered in accordancewith such intent. Provided these exceptions to Section 409A apply as expected, neither the Company nor its affiliates willreport any amounts payable in accordance with the terms of this Agreement or any plan or agreement referenced herein inbox 12 of IRS Form W-2 using code Z. Notwithstanding any other provision of this Letter Agreement, payments providedunder this Letter Agreement may only be made upon an event and in a manner that complies with Section 409A or anapplicable exemption. Any payments under this Letter Agreement that may be excluded from Section 409A either asseparation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409Ato the maximum extent possible. For purposes of Section 409A, any installment payments provided under this LetterAgreement shall each be treated as a separate payment. To the extent required under Section 409A, any payments to be madeunder this Agreement in connection with a termination of

Page 5March 26, 2019

employment shall only be made if such termination constitutes a "separation from service" under Section 409A.Notwithstanding the foregoing, the Company makes no representations that the payments and benefits provided under thisLetter Agreement comply with Section 409A and in no event shall the Company be liable for all or any portion of any taxes,penalties, interest, or other expenses that may be incurred by you on account of non-compliance with Section 409A.

[Remainder of Page Left Intentionally Blank]

Page 6March 26, 2019

To indicate your agreement with the foregoing, please sign and return this Letter Agreement to Amy Roddy, Senior VicePresident Corporate Services, at 11700 Katy Freeway, Suite 175, Houston, Texas 77079.

Very truly yours, PACIFIC DRILLING S.A. By: Name: Bernie G. Wolford, Jr. Title: CEO Accepted and Agreed: By: Name: Johannes Boots

[Signature Page to Letter Agreement re Separation]

Exhibit 21.1Subsidiaries

All subsidiaries are, indirectly or directly, wholly-owned by Pacific Drilling S.A. except as indicated below.

Entity Jurisdiction of Formation

Pacific Drilling do Brasil Investimentos Ltda. BrazilPacific Drilling do Brasil Serviços de Perfuração Ltda. BrazilPacific Drilling Services Pte. Ltd. SingaporePacific International Drilling West Africa Limited NigeriaPacific Drilling Netherlands Coöperatief U.A. The NetherlandsPacific Drilling N.V. CuracaoPacific Drilling Administrator Limited British Virgin IslandsPacific Deepwater Construction Limited British Virgin IslandsPacific Drilling International Ltd. British Virgin IslandsPacific Drilling Manpower Ltd. British Virgin IslandsPacific Drilling Operations Limited British Virgin IslandsPacific Drilling South America 1 Limited British Virgin IslandsPacific Drilling South America 2 Limited British Virgin IslandsPacific Drilling V Limited British Virgin IslandsPacific Drilling VII Limited British Virgin IslandsPacific Drilling VIII Limited British Virgin IslandsPacific Drillship Nigeria Limited British Virgin IslandsPacific Santa Ana Limited British Virgin IslandsPacific Sharav Korlátolt Felelősségű Társaság HungaryPacific Bora Ltd. LiberiaPacific Mistral Ltd. LiberiaPacific Scirocco Ltd. LiberiaPacific Drilling Limited LiberiaPacific Drilling, Inc. USA, DelawarePacific Drilling International, LLC USA, DelawarePacific Drilling Services, Inc. USA, DelawarePacific Drilling Manpower, Inc. USA, DelawarePacific Drilling Operations, Inc. USA, DelawarePacific Drilling, LLC USA, New YorkPacific Drilling Finance S.à r.l. LuxembourgPacific Drillship S.à r.l. LuxembourgPacific Drilling Manpower S.à r.l. LuxembourgPacific Sharav S.à r.l. LuxembourgPacific Drilling (Gibraltar) Limited GibraltarPacific Drillship (Gibraltar) Limited GibraltarPacific Drilling Holding (Gibraltar) Limited GibraltarPacific Santa Ana (Gibraltar) Limited GibraltarPacific Drilling Ghana Limited GhanaPacific Menergy Ghana Limited GhanaPacific Drillship México, S. de R.L. de C.V. Mexico_________________(1) 49% owned by Pacific Drilling Operations Limited. The remaining 51% is owned by Derotech Offshore Services Limited.(2) 99.9% owned by Pacific International Drilling West Africa Limited, and .1% owned by Pacific Drilling Limited.(3) 49.9% owned by Pacific Drilling Limited. The remaining 50.1% is owned by Pacific Drillship Nigeria Limited.(4) 90% owned by Pacific Drilling Ghana Limited. The remaining 10% is owned by Menergy International Ghana Limited.

(1)

(2)

(3)

(3)

(4)

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors Pacific Drilling S.A.:

We consent to the incorporation by reference in the registration statement (No. 333-228582) on Form S-8 of Pacific Drilling S.A.of our reports dated March 12, 2020, with respect to the consolidated balance sheets of Pacific Drilling S.A. as of December 31,2019 and 2018, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cashflows for the year ended December 31, 2019 (Successor), for the periods of November 20, 2018 to December 31, 2018(Successor), January 1, 2018 to November 19, 2018 (Predecessor), and for the year ended December 31, 2017 (Predecessor), andthe related notes, and the effectiveness of internal control over financial reporting as of December 31, 2019, which reports appearin the December 31, 2019 annual report on Form 10-K of Pacific Drilling S.A.

Our report dated March 12, 2020 refers to a basis for presentation as the accompanying consolidated financial statements arebeing prepared in conformity with Accounting Standards Codification 852-10, Reorganizations, for the Successor periods as anew entity with assets, liabilities, and a capital structure having carrying amounts not comparable with prior periods, whichbecame effective on November 19, 2018.

/s/ KPMG LLP

Houston, Texas March 12, 2020

Exhibit 31.1

CEO CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bernie G. Wolford Jr., certify that:

1. I have reviewed this annual report on Form 10-K of Pacific Drilling S.A.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periodspresented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (asdefined in Exchange Act Rules 13a‑15(f) and 15d‑15(f)) for the registrant and we have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designedunder our supervision, to ensure that material information relating to the registrant, including its consolidatedsubsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by thisreport based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during theregistrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that hasmaterially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or personsperforming the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financialreporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and reportfinancial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant’s internal control over financial reporting.

Date: March 12, 2020

By: /s/ Bernie G. Wolford Jr. Name: Bernie G. Wolford Jr. Title: Chief Executive Officer

Exhibit 31.2

CFO CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James W. Harris, certify that:

1. I have reviewed this annual report on Form 10-K of Pacific Drilling S.A.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, notmisleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periodspresented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a‑15(e) and 15d‑15(e)) and internal control over financial reporting (asdefined in Exchange Act Rules 13a‑15(f) and 15d‑15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designedunder our supervision, to ensure that material information relating to the registrant, including its consolidatedsubsidiaries, is made known to us by others within those entities, particularly during the period in which this report isbeing prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by thisreport based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during theregistrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that hasmaterially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or personsperforming the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financialreporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and reportfinancial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant’s internal control over financial reporting.

Date: March 12, 2020

By: /s/ James W. Harris Name: James W. Harris Title: Chief Financial Officer

Exhibit 32.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (SUBSECTIONS (a) AND (b) OF

SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18,United States Code), I, Bernie G. Wolford Jr., Chief Executive Officer of Pacific Drilling S.A., hereby certify, to my knowledge,that:

1. the Company’s annual report on Form 10-K for the year ended December 31, 2019 (the “Report”) fully complies with therequirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company.

Date: March 12, 2020

By: /s/ Bernie G. Wolford Jr. Name: Bernie G. Wolford Jr. Title: Chief Executive Officer

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a)and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Report or as a separatedisclosure document.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by theCompany and furnished to the U.S. Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

PRINCIPAL FINANCIAL OFFICER CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (SUBSECTIONS (a) AND (b) OF

SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18,United States Code), I, James W. Harris, Chief Financial Officer of Pacific Drilling S.A., hereby certify, to my knowledge, that:

1. the Company’s annual report on Form 10-K for the year ended December 31, 2019 (the “Report”) fully complies with therequirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. the information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company.

Date: March 12, 2020

By: /s/ James W. Harris Name: James W. Harris Title: Chief Financial Officer

The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a)and (b) of Section 1350, Chapter 63 of Title 18, United States Code) and is not being filed as part of the Report or as a separatedisclosure document.

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by theCompany and furnished to the U.S. Securities and Exchange Commission or its staff upon request.