Siem Offshore Inc. Rights Offering of 454,430,000 New Shares Subscription Price: NOK 1.80 per New Share

Subscription Period: From 19 August 2015 to 16:30 hours (CET) on 2 September 2015

Trading in Subscription Rights: From 19 August 2015 until the end of trading on the Oslo Stock Exchange on 31 August 2015

________________________ Siem Offshore Inc. (the "Company", and, together with its consolidated subsidiaries, "Siem Offshore" or the "Group") is offering 454,430,000 new shares in the Company (the "New Shares") with a nominal value of USD 0.01 each, at a subscription price of NOK 1.80 per New Share (the "Subscription Price"). Holders of the Company’s shares registered in the Norwegian Central Securities Depository (the "VPS") as of 18 August 2015 (the "Existing Shareholders") are being granted transferable subscription rights (the "Subscription Rights") that, subject to applicable law, provide preferential rights to subscribe for and be allocated New Shares at the Subscription Price (such offering of New Shares upon the exercise of Subscription Rights, the "Rights Offering"). Each Existing Shareholder will be granted 1.1724 Subscription Rights for each share registered as held by such Existing Shareholder as of 18 August 2015 (the "Record Date"). Each Subscription Right will give the right to subscribe for and be allocated one New Share. The subscription period commences on 19 August 2015 and expires at 16:30 hours, Central European Time ("CET"), on 2 September 2015 (the "Subscription Period"). The Subscription Rights will be listed and tradable on the Oslo Børs (the "Oslo Stock Exchange") under the ticker code SIOFF T from 19 August 2015 until the end of trading on the Oslo Stock Exchange on 31 August 2015. Subscription Rights that are not used to subscribe for New Shares before the expiry of the Subscription Period, or that are not sold before the end of trading on the Oslo Stock Exchange on 31 August 2015, will have no value and will lapse without compensation to the holder. After the expiry of the Subscription Period, any New Shares that have not been subscribed for and allocated in the Rights Offering will be subscribed and paid for at the Subscription Price by Siem Europe S.a r.l (the "Underwriter"), subject to the terms and conditions of the Underwriting Agreement between the Company and the Underwriter dated 11 August 2015 (the "Underwriting Agreement"). The Company is not taking any action to permit a public offering of the Subscription Rights or the New Shares in any jurisdiction outside of Norway. The New Shares are being offered only in those jurisdictions in which, and only to those persons to whom, offers and sales of the New Shares (pursuant to the exercise of the Subscription Rights or otherwise) may lawfully be made. The Subscription Rights and the New Shares have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "US Securities Act"), or under the securities laws of any state of the United States and may not be offered or sold (i) within the United States, except in transactions exempt from registration under the US Securities Act, or (ii) outside the United States, except in offshore transactions in reliance on Regulation S. The Rights Offering will not be made to persons who are residents of Australia, Canada, Hong Kong or Japan or in any jurisdiction in which such offering would be unlawful. For more information regarding restrictions in relation to the Rights Offering pursuant to this Prospectus, please see Section 14, "Selling and transfer restrictions" . Investing in the Company’s shares (the "Shares"), including the New Shares, and trading in the Subscription Rights involves certain risks. See Section 2, "Risk Factors" beginning on page 13. The Company’s existing shares (the "Existing Shares") are listed on the Oslo Stock Exchange under the ticker code "SIOFF".

Lead Manager Swedbank

Receiving Agent

DNB Markets

The date of this Prospectus is 17 August 2015

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IMPORTANT INFORMATION This Prospectus has been prepared solely for use in connection with the Rights Offering and the Listing. Please see Section 16, "Definitions and glossary" for definitions of terms used throughout this Prospectus. The Prospectus has been prepared to comply with the Norwegian Securities Trading Act of 29 June 2007 No. 75 (the "Norwegian Securities Trading Act") and related secondary legislation, including the Commission Regulation (EC) No. 809/2004 implementing Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 regarding information contained in prospectuses, as amended, and as implemented in Norway (the "Prospectus Directive"). This Prospectus has been prepared solely in the English language. The Financial Supervisory Authority of Norway (the "Norwegian FSA") has reviewed and approved this Prospectus in accordance with sections 7-7 and 7-8 of the Norwegian Securities Trading Act. The Norwegian FSA has not controlled or approved the accuracy or completeness of the information given in this Prospectus. The approval given by the Norwegian FSA only relates to the information included in accordance with pre-defined disclosure requirements. The Norwegian FSA has not made any form of control or approval relating to corporate matters described or referred to in this Prospectus. The Company has engaged Swedbank as Manager and DNB Markets as Receiving Agent in the Rights Offering. Swedbank and DNB Markets are acting for the Company and no one else in relation to the Rights Offering or the Listing. Swedbank and DNB Markets will not be responsible to anyone other than the Company for providing the protections afforded to their clients or for providing advice in relation to the listing. No person is authorised to give information or to make any representation concerning the Group or in connection with the Rights Offering other than as contained in this Prospectus. If any such information is given or made, it must not be relied upon as having been authorised by the Company, the Manager or the Receiving Agent or by any of the affiliates, advisors or selling agents of any of the foregoing. The distribution of this Prospectus and the offer and sale of the New Shares may be restricted by law in certain jurisdictions. This Prospectus does not constitute an offer of, or an invitation to purchase, any of the New Shares in any jurisdiction in which such offer or sale would be unlawful. No one has taken any action that would permit a public offering of the Shares to occur outside of Norway. Accordingly neither this Prospectus nor any advertisement or any other offering material may be distributed or published in any jurisdiction except under circumstances that will result in compliance with applicable laws and regulations. Persons in possession of this Prospectus are required to inform themselves about, and to observe, any such restrictions. In addition, the Shares are subject to restrictions on transferability and resale in certain jurisdictions and may not be transferred or resold except as permitted under applicable securities laws and regulations. Investors should be aware that they may be required to bear the financial risks of this investment for an indefinite period of time. Any failure to comply with these restrictions may constitute a violation of applicable securities laws. For further information on the sale and transfer restrictions of the Shares, see Section 14, "Selling and transfer restrictions". The information contained herein is current as at the date hereof and subject to change, completion and amendment without notice. In accordance with section 7-15 of the Norwegian Securities Trading Act, significant new factors, material mistakes or inaccuracies relating to the information included in this Prospectus, which are capable of affecting the assessment of the Shares between the time of approval of this Prospectus by the Norwegian FSA and the Listing of the Shares on the Oslo Stock Exchange, will be included in a supplement to this Prospectus. The publication of this Prospectus shall not under any circumstances create any implication that there has been no change in the Group's affairs or that the information herein is correct as of any date subsequent to the date of this Prospectus. Neither the Company, the Manager nor the Receiving Agent, or any of their respective affiliates, representatives, advisers or selling agents, are making any representation to any subscriber or purchaser of New Shares regarding the legality or suitability of an investment in the New Shares. Each investor should consult with his or her own advisors as to the legal, tax, business, financial and related aspects of a subscription or purchase of the New Shares. In the ordinary course of their businesses, the Manager and the Receiving Agent and certain of their respective affiliates have engaged, and may continue to engage, in investment and commercial banking transactions with the Company and its subsidiaries. This Prospectus and the terms and conditions of the Rights Offering as set out herein shall be governed by and construed in accordance with Norwegian law. The courts of Norway, with Oslo as legal venue, shall have exclusive jurisdiction to settle any dispute which may arise out of or in connection with the Rights Offering or this Prospectus.

NOTICE TO NEW HAMPSHIRE RESIDENTS

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

NOTICE TO INVESTORS IN THE UNITED STATES

Because of the following restrictions, prospective investors are advised to consult legal counsel prior to making any offer, resale, pledge or other transfer of the Shares. The New Shares have not been and will not be registered under the U.S. Securities Act or with any securities regulatory authority of any state or other jurisdiction in the United States and may not be offered, sold, pledged or otherwise transferred within the United States except pursuant to an exemption from, or in a

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transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable state securities laws. Accordingly, the New Shares will not be offered or sold within the United States, except in reliance on the exemption from the registration requirements of the U.S. Securities Act under Rule 144A. The New Shares will be offered outside the United States in compliance with Regulation S. Prospective purchasers are hereby notified that sellers of New Shares may be relying on the exemption from the provisions of Section 5 of the U.S. Securities Act provided by Rule 144A under the U.S. Securities Act. See Section 14.2.1 "Selling and transfer restrictions—Selling restrictions—United States".

Any Shares offered or sold in the United States will be subject to certain transfer restrictions as set forth under Section 14.3.1 "Selling and transfer restrictions—Transfer restrictions—United States".

The securities offered hereby have not been recommended by any United States federal or state securities commission or regulatory authority. Further, the foregoing authorities have not passed upon the merits of the Rights Offering or confirmed the accuracy or determined the adequacy of this Prospectus. Any representation to the contrary is a criminal offense under the laws of the United States.

In the United States, this Prospectus is being furnished on a confidential basis solely for the purposes of enabling a prospective investor to consider purchasing the particular securities described herein. The information contained in this Prospectus has been provided by the Company and other sources identified herein. Distribution of this Prospectus to any person other than the offeree specified by the Manager or its representatives, and those persons, if any, retained to advise such offeree with respect thereto, is unauthorised and any disclosure of its contents, without prior written consent of the Company, is prohibited. This Prospectus is personal to each offeree and does not constitute an offer to any other person or to the public generally to purchase New Shares or subscribe for or otherwise acquire any Shares.

NOTICE TO UNITED KINGDOM INVESTORS

This Prospectus is only being distributed to and is only directed at (i) persons who are outside the United Kingdom (the "UK") or (ii) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or (iii) high net worth companies, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as "Relevant Persons"). The New Shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such Shares will be engaged in only with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this Prospectus or any of its contents.

NOTICE TO INVESTORS IN THE EEA

In any member state of the European Economic Area (the "EEA") that has implemented the Prospectus Directive, other than Norway (each, a "Relevant Member State"), this communication is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive. The Prospectus has been prepared on the basis that all offers of New Shares outside Norway will be made pursuant to an exemption under the Prospectus Directive from the requirement to produce a prospectus for offer of shares. Accordingly, any person making or intending to make any offer within the EEA of New Shares which is the subject of the Rights Offering contemplated in this Prospectus within any EEA member state (other than Norway) should only do so in circumstances in which no obligation arises for the Company or the Manager to publish a prospectus or a supplement to a prospectus under the Prospectus Directive for such offer. Neither the Company nor the Manager have authorised, nor do they authorise, the making of any offer of Shares through any financial intermediary, other than offers made by the Manager which constitute the final placement of New Shares contemplated in this Prospectus.

Each person in a Relevant Member State other than, in the case of paragraph (a), persons receiving offers contemplated in this Prospectus in Norway, who receives any communication in respect of, or who acquires any New Shares under, the offers contemplated in this Prospectus will be deemed to have represented, warranted and agreed to and with the Manager and the Company that:

a) it is a qualified investor as defined in the Prospectus Directive, and

b) in the case of any New Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) such New Shares acquired by it in the Rights Offering have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than qualified investors, as that term is defined in the Prospectus Directive, or in circumstances in which the prior consent of the Manager has been given to the offer or resale; or (ii) where such New Shares have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those New Shares to it is not treated under the Prospectus Directive as having been made to such persons.

For the purposes of this provision, the expression an "offer to the public" in relation to any of the New Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any Shares to be offered so as to enable an investor to decide to purchase any of the New Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State, and the expression " Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in each Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.

See Section 14, "Selling and Transfer Restrictions" for certain other notices to investors.

ENFORCEMENT OF CIVIL LIABILITIES

The Company is a company limited by shares incorporated under the laws of the Cayman Islands. As a result, the rights of holders of the Company’s Shares will be governed by the laws of the Cayman Islands and the Company’s articles of association (the "Articles of Association"). The rights of shareholders under the laws of the Cayman Islands may differ from the rights of shareholders of companies incorporated in other jurisdictions. The majority of the members of the Company’s board of directors (the "Board Members" and the "Board of Directors", respectively) and the members of the senior management of the Group (the "Management") are not residents of the United States, and all of the

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Company’s assets are located outside the United States. As a result, it may be difficult for investors in the United States to effect service of process on the Company or its Board Members and members of Management in the United States or to enforce in the United States judgments obtained in U.S. courts against the Company or those persons, including judgments based on the civil liability provisions of the securities laws of the United States or any State or territory within the United States. Uncertainty exists as to whether courts in Norway will enforce judgments obtained in other jurisdictions, including the United States, against the Company or its Board Members or members of Management under the securities laws of those jurisdictions or entertain actions in the Cayman Islands against the Company or its Board Members or members of Management under the securities laws of other jurisdictions. In addition, awards of punitive damages in actions brought in the United States or elsewhere may not be enforceable in the Cayman Islands. The United States and the Cayman Islands do not currently have a treaty providing for reciprocal recognition and enforcement of judgements (other than arbitral awards) in civil and commercial matters.

AVAILABLE INFORMATION

The Company has agreed that, for so long as any of the New Shares are "restricted securities" within the meaning of Rule 144(a)(3) under the U.S. Securities Act, it will during any period in which it is neither subject to Sections 13 or 15(d) of the U.S. Securities Exchange Act of 1934, as amended (the "U.S. Exchange Act"), nor exempt from reporting pursuant to Rule 12g3-2(b) under the U.S. Exchange Act, provide to any holder or beneficial owners of Shares, or to any prospective purchaser designated by any such registered holder, upon the request of such holder, beneficial owner or prospective owner, the information required to be delivered pursuant to Rule 144A(d)(4) of the U.S. Securities Act.

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TABLE OF CONTENTS

1. EXECUTIVE SUMMARY ........................................................................................................................... 1

2. RISK FACTORS ....................................................................................................................................... 13

3. RESPONSIBILITY FOR THE PROSPECTUS .................................................................................... 19

4. GENERAL INFORMATION .................................................................................................................... 20

5. PRESENTATION OF SIEM OFFSHORE INC. .................................................................................. 22

6. INDUSTRY OVERVIEW ......................................................................................................................... 39

7. CAPITALISATION AND INDEBTEDNESS ........................................................................................ 50

8. SELECTED FINANCIAL INFORMATION ........................................................................................... 53

9. BOARD OF DIRECTORS, MANAGEMENT, EMPLOYEES AND CORPORATE GOVERNANCE 60

10. CORPORATE INFORMATION .............................................................................................................. 70

11. SECURITIES TRADING IN NORWAY ............................................................................................... 81

12. TAXATION ................................................................................................................................................. 85

13. THE RIGHTS OFFERING ...................................................................................................................... 88

14. SELLING AND TRANSFER RESTRICTIONS ................................................................................. 100

15. ADDITIONAL INFORMATION ........................................................................................................... 105

16. DEFINITIONS AND GLOSSARY ....................................................................................................... 107 Appendix A: Memorandum and Articles of Association Appendix B: Annual financial statements 2014 Appendix C: Subscription Form

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1. EXECUTIVE SUMMARY

Summaries are made up of disclosure requirements known as "Elements". These elements are numbered in Sections A – E (A.1 – E.7). This summary contains all the Elements required to be included in a summary for this type of securities and issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of securities and issuer, it is possible that no relevant information can be given regarding the Element. In this case a short description of the Element is included in the summary with the mention of "not applicable". Section A – Introduction and warnings A.1 Warning This summary should be read as an introduction to the

Prospectus; any decision to invest in the securities should be based on consideration of the Prospectus as a whole by the investor; where a claim relating to the information contained in the Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the Member States, have to bear the costs of translating the Prospectus before the legal proceedings are initiated; and civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of the prospectus or it does not provide, when read together with the other parts of the Prospectus, key information in order to aid investors when considering whether to invest in such securities.

A.2 Consent to use of the prospectus

Not applicable; financial intermediaries are not entitled to use the prospectus for subsequent resale or final placement of securities.

Section B – Issuer B.1 Legal and

commercial name

Siem Offshore Inc.

B.2 Domicile and legal form, legislation and country of incorporation

Siem Offshore Inc. is an exempted company limited by shares incorporated under the laws of Cayman Islands with corporate registration no. 140468.

B.3 Current operations, principal activities and markets

Siem Offshore’s primary activity is to own and operate offshore support vessels for the offshore energy service industry. The Group's fleet comprises of platform supply vessels, anchor-handling, tug, supply vessels, offshore subsea construction vessels and a variety of other support vessels. The Company’s fleet comprises of 55 offshore support vessels, of which 9 vessels are under construction. In addition to its primary activity, the Company has also established a business division for its industrial investments. The

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Group's industrial investment division includes the Group's services as a contractor within the European offshore wind farm and offshore cable laying market, the development of applications for managed pressure drilling, a scientific core drilling vessel, specialized engineering to develop and implement combat management systems for navy vessels and certain other investments.

B.4a Significant recent trends affecting the Company and the industries in which it operates

The North Sea PSV and AHTS vessel market is continuing to experience soft rates and utilization. Additional vessels have entered the North Sea from other regions and as rig activity is reduced, this places pressure on vessel utilization and fixture rates. Vessel owners have placed vessels in lay-up and owners are considering additional lay-ups. The market for OSVs in Brazil has significantly softened following lower demand activity from Petroleo Brasileiro SA (“Petrobras”). When disclosing its five year business plan, Petrobras announced reduced capital expenditures and highlighted cost cutting measures with the intension to reduce leverage going forward. In order for Petrobras to reduce its cost base, there is an increased risk that Petrobras will initiate renegotiation of existing contracts with suppliers, including vessel owners. It is in the opinion of the Company that an increased risk of such contract renegotiations or even contract cancellations for certain vessels of the Company exists. The outlook for the OSV market is expected to remain soft for several years due to reduced investments in the offshore oil and gas industry following lower current and future commodity prices for oil and gas, which again reduces the demand for vessels and puts pressure on utilisation and fixture rates, coupled with increased supply of vessels as more vessels under construction are delivered from yards. In response to the soft OSV market, the Company has decided to take two vessels out of operations and place into lay-up. Siem Offshore Contractors experience steady tendering activity in the offshore windfarm market (“OWF”) with scheduled marine installation activities taking place in 2017 and 2018 and for operations and maintenance contracts to be awarded in 2015. There has been no significant change in the financial or trading position of the Company since the end of the last financial period for which interim financial information has been published. The Company has in connection with preparing the reporting of its second quarter 2015 results considered the fair value of its assets versus the respective book values. It is clear that such considerations will result in impairments on vessel values in the second quarter 2015 results. There has been no material adverse change in the prospects of the issuer since the date of its last published audited financial statements.

B.5 Description of the Group

Siem Offshore Inc. is a holding company with no employees and is therefore depended on services from its subsidiaries. These services consist of administrative, operational and corporate

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services provided by Siem Offshore Management AS and Siem Offshore AS. The Group's vessels are owned by several companies within the Group. Siem Offshore Rederi AS currently owns all Norwegian, Polish and German built vessels, except the OSCV “Siem Spearfish” which is owned by Siem Offshore Construction Vessels AS. Further, Siem Offshore Rederi AS owns 51% of Siem Offshore Ghana International AS, which owns the PSV “Siem Sasha”, and owns 51% of Siem Meling Offshore DA which owns two PSVs. Siem Offshore Do Brazil S.A. owns the locally built Brazilian fleet. Siem Offshore Canada Inc. owns 50% of Secunda Canada LP, which again owns 6 Canadian flagged vessels and has 1 vessel under construction. Siem Offshore Contractors GmbH, which will utilize the cable lay vessel “Siem Aimery” and has the installation support vessel “Siem Moxie” on a time charter, is owned 100% by Siem Offshore Invest AS. Siem AHTS Pool AS manages a pool of 10 AHTS sister vessels (including 2 from a pool partner) in accordance with a partner agreement. The Group's industrial investments business division consists of the subsidiaries Siem Offshore Contractors GmbH and Siem WIS AS, Overseas Drilling Limited which owns the scientific core drilling vessel “JOIDES Resolution” and certain property investments, which are owned 100% by Siem Offshore Invest AS. In addition, the combat management business in Siem Offshore do Brasil SA is included in this business division.

B.6 Interests in the Company and voting rights

Shareholders owning 5% or more of the Shares have an interest in the Company's share capital which is notifiable pursuant to the Norwegian Securities Trading Act. As of the date of this Prospectus, Siem Europe S.a r.l. owns 133,279,421 shares in the Company, equal to 34.4% of the issued Shares. Siem Europe S.a r.l. is the main shareholder of Siem Offshore Inc. and is controlled by a trust whose potential beneficiaries include members of Kristian Siem’s immediate family. Kristian Siem is a Board Member of the Company. Siem Europe S.a r.l. has underwritten the Rights Offering. If, as a result of the underwriting, Siem Europe’s ownership interest is increased above its current ownership interest and such new ownership interest is not reduced by the sale of Shares down to or below the level of the current ownership interest within four weeks, then Siem Europe will be required to make a mandatory offer for all Shares in accordance with existing regulations.

The Company is not aware of any other agreements that at a later stage may lead to change of control of the Company.

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B.7 Selected historical key financial information

The table below sets out selected data from the Group’s consolidated income statement for the year ended 31 December 2014 and for the three months period ended 31 March 2015.

Consolidated Income Statements 2015 2014

(Amounts in USD 1 000) Jan-Mar Jan-DecUnaudited Audited

Operating revenues 125 995 491 312Operating expenses -77 096 -250 153Administration expenses -10 160 -47 033Operating margin 38 739 194 125Depreciation and amortisation -26 750 -96 883Impairment of vessels - -29 000Gain (loss) on sales of fixed assets -15 18 728Gain of sale of interest rate derivatives (CIRR) 92 368Gain (loss) on currency derivative contracts -36 052 -3 023Operating profit -23 986 84 316

Financial revenues 2 249 9 091Financial expenses -11 934 -55 868Result from associated companies -553 1 808Net currency gain (loss) 10 022 34 092Net financial items -216 -10 877

Profit/(loss) before taxes -24 203 73 439

Tax benefit / (expense) -1 360 -2 729Net profit/(loss) -25 562 70 710Net profit/ (loss) attributable to non-controlling interest -49 12 563Net profit/ (loss) attributable to shareholders -25 612 58 147Weighted average number of shares outstanding ('000) 387 591 387 591Earnings(loss) per share (basic and diluted) -0.07 0.15

Comprehensive Income Statements 2015 2014(Amounts in USD 1 000) 1Q Jan-Dec

Unaudited AuditedNet profit/(loss) -25 562 70 710Other comprehensive income (expense)Items that will not be reclassified to profit or lossPension remeasurement gain (loss) - 1 510Items that may be subsequently reclassified to profit or lossCash flow hedges -32 392 -14 622Currency translation differences -3 797 -11 100Total comprehensive income for the period -61 751 46 499Net profit/ (loss) attributable to non-controlling interest -48 12 271Net profit/ (loss) attributable to shareholders -61 799 34 228

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The table below sets out selected data from the Group’s consolidated statement of financial position as of 31 December 2014 and 31 March 2015.

Consolidated Statements of Financial Position

(Amounts in USD 1 000) 31.03.2015 31.12.2014Unaudited Audited

Non-current assetsVessels and equipment 1 596 220 1 743 693Vessels under construction 127 035 130 515Capitalised project cost 10 022 10 965Investment in associates and other long-term receivables 35 051 43 654CIRR loan deposit 1) 26 145 28 453Deferred tax asset 12 587 12 591Intangible assets 23 905 25 937Total non-current assets 1 830 966 1 995 809Debtors, prepayments and other current assets 130 875 147 152Asset held-for-sale 104 110 -Cash and cash equivalents 89 668 117 623Total current assets 324 654 264 774

Total assets 2 155 619 2 260 584

EquityPaid-in capital 526 236 526 236Other reserves -86 796 -45 491Retained earnings 279 060 304 237Shareholders´ equity 718 500 784 982Non-controlling interest 36 497 38 666Total equity 754 997 823 649LiabilitiesBorrowings 971 402 1 087 757CIRR loan 1) 26 145 28 453Other non-current liabilities 40 985 38 532Total non-current liabilities 1 038 532 1 154 742Borrowings 192 624 126 603Accounts payable and other current liabilities 169 467 155 590Total current liabilities 362 091 282 193

Total liabilities 1 400 623 1 436 935

Total equity and liabilities 2 155 619 2 260 584

1) Commercial Interest Reference Rate

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The table below sets out selected data from the Group’s consolidated statements of cash flows for the year ended 31 December 2014 and for the three months period ended 31 March 2015.

Consolidated Statements of Cash Flows2015 2014

(Amounts in USD 1 000) Jan-Mar Jan-DecUnaudited Audited

Cash flow from operationsProfit before taxes, excluding interest -12 435 117 702Interest paid -13 092 -46 362Taxes paid -1 360 -8 957Results from associated companies 553 -1 808Loss/(gain) on sale of assets 15 -18 728Value of employee services 336 2 462Depreciation and amortisation 26 750 96 883Impairments of vessels - 29 000Effect of unreal. currency exchange forward contracts 27 264 5 612Change in short-term receivables and payables -5 538 19 918CIRR -92 -368Other changes 5 400 -11 010

Net cash flow from operations 27 802 184 345

Cash flow from investing activities Interest received 956 4 171Investments in fixed assets -16 730 -525 674Proceeds from sale of fixed assets 0 76 290 Dividend from associated companies - 278Investment in associated companies -2 251 -12 201

Cash flow from investing activities -18 024 -457 136

Cashflow from financing activitiesProceeds from issue of new equity - 1 336Dividend payment - -6 533Contribution from non-controlling interests of consolidated subsidiaries - -Proceeds from bank overdraft -1 309 5 624Proceeds from new long-term borrowing 1 335 447 701Repayment of long-term borrowing -25 489 -131 936

Cash flow from financing activities -25 463 316 192

Net change in cash -15 686 43 400

Cash at bank start of period 117 621 101 206Effect of exchange rate differences -12 267 -26 985

Cash at bank end of period 89 668 117 621

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The table below sets out selected data from the Group’s consolidated statement of changes in equity for the year ended 31 December 2014 and for the three months period ended 31 March 2015.

B.8 Selected key

pro forma financial information

Not applicable. There is no pro forma financial information.

B.9 Profit forecast or estimate

Not applicable. No profit forecasts or estimates are made.

B.10

Audit report qualifications

Not applicable. There are no qualifications in the audit reports.

B.11

Working capital

As of the annual reporting for the fiscal year 2014, the Company was of the opinion that it had sufficient working capital for the next 12 months based on the assumptions of the OSV market at that time. Based on an unfavourable development and assumed continued soft OSV market, the shortfall for the Company’s working capital is currently expected to materialize in second half of 2015 given regular debt schedule payments and payments related to the existing newbuilding program. Accordingly, it is the Company's opinion that the Group at present time does not have sufficient working capital for its current requirements, i.e. for the next 12 months. In order to prepare the Company for the expected soft OSV market and meet the Group's current debt obligations and make payments under the Group's newbuilding program for a period of twelve months from the date of this Prospectus, the Company is dependent on additional financing of approximately USD 100 million. The additional financing will be raised through the fully underwritten Rights Offering as described in this Prospectus.

Consolidated Statement of Changes in Equity

(Amounts in USD 1 000)Total no. of

shares Share capital

Share premium reserves

Other reserves

Retained earnings

Share-holders'

equity

Non- Controlling

interest Total equityEquity on January 1, 2015 387 591 380 3 876 522 361 -45 491 304 237 784 983 38 666 823 649Change previous periods 0 0 0Net profit to shareholders -25 513 -25 513 -49 -25 562Value of employee services 336 336 336Cash flow hedge -32 392 -32 392 -32 392Currency translation differences -8 913 -8 913 1 -8 912Total comprehensive income / (expense) 0 0 -41 305 -25 177 -66 482 -48 -66 531Share issues in partially owned subsidiaries 0 152 152Capital reduction in partially owned subsidiaries -2 274 -2 274Equity on March 31, 2015 387 591 380 3 876 522 361 -86 796 279 060 718 501 36 496 754 997

(Amount in USD 1 000)Total no. of

shares Share capital

Share premium reserves

Other reserves

Retained earnings

Share-holders'

equity

Non- Controlling

interest Total equityEquity on January 1, 2014 387 591 380 3 876 522 361 -19 769 250 161 756 629 37 260 793 888Change previous periods -1 510 -1 510 -1 510Net profit to shareholders 58 147 58 147 12 563 70 710Value of employee services 2 462 2 462 2 462Pension remeasurement 1 510 1 510 1 510Currency translation differences -25 721 -25 721 -293 -26 014Total comprehensive income / (expense) 0 0 -25 721 60 609 34 887 12 271 47 158Share issues in partially owned subsidiaries 0 1 336 1 336Capital reduction in partially owned subsidiaries -12 201 -12 201Buy back of shares 0 0 0 0Dividend paid -6 533 -6 533 -6 533Shares issues in Siem Offshore Inc 0 0Equity on December 31, 2014 387 591 380 3 876 522 361 -45 491 304 237 784 983 38 666 823 649

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Section C – Securities C.1 Type and class

of securities admitted to trading and identification numbers

Listing of New Shares to be issued in the Rights Offering. The Company has one class of Shares and all shares are equal in all respects. The New Shares will have the same VPS registrar and the same International Securities Identification Number (“ISIN”) as the Company’s other shares (ISIN KYG813131011). The Company's Shares are listed on the Oslo Stock Exchange and are traded under the ticker symbol "SIOFF". The Subscription Rights will be fully tradable and listed on the Oslo Stock Exchange with ticker code "SIOFF T" and with ISIN KYG812291097 from 19 August 2015 until the end of trading on the Oslo Stock Exchange on 31 August 2015.

C.2 Currency The Shares are issued in USD, but trading activity is denominated in NOK.

C.3 Number of shares and par value

The issued share capital of the Company as of the date of this Prospectus is USD 3,875,913.80 divided into 387,591,380 Shares each with a nominal value of USD 0.01 fully paid. Following the Rights Offering, the issued share capital will be USD 8,420,213.80 divided into 842,021,380 Shares.

C.4 Right attached to the securities

The Company has one class of Shares, and each Share carries one vote and has equal rights to dividend. All the Shares are validly issued and fully paid. All of the Company’s shareholders have equal voting rights.

C.5 Restrictions on transferability

Not applicable. The Shares are freely transferable according to Cayman Islands law and the Company’s Articles of Association.

C.6 Admission to trading

The Shares are listed on the Oslo Stock Exchange, under Oslo Børs ticker symbol “SIOFF”. The listing on the Oslo Stock Exchange of the New Shares is subject to the approval of the Prospectus by the Norwegian Financial Supervisory Authority (Norwegian: Finanstilsynet) under the rules of the Norwegian Securities Trading Act. Such approval was granted on 17 August 2015. The first day of trading of the New Shares on the Oslo Stock Exchange, will be on or about 18 September 2015.

C.7 Dividend policy

The priorities for the use of Company funds are determined by the Board of Directors and recommendations of Management influenced by existing conditions. At present, priorities for use of funds in order of importance are repayment of debt, investment opportunities in the business, and the return of capital to the shareholders in form of share buy-back or dividends.

Section D – Risks D.1 Key risks

specific to the Group or its industry

Prospective investors should consider, among other factors, the following financial risks relating to the Group:

• The Group is financed by debt and equity. If the Group requires additional equity financing, it may be unable to raise new equity, or arrange new borrowing facilities, on favorable terms and in amounts necessary to conduct its ongoing and future operations.

• The Group is exposed to currency risk as part of the revenue and costs are denominated in other currencies

9

than USD. • The Group is exposed to changes in interest rates as a

portion of the long-term interest-bearing debt is subject to floating interest rates with the remaining amount subject to fixed interest rates.

• The Group's vessels operate in several jurisdictions and the Group may not be able to minimize withholding taxes when operating vessels abroad, avoiding double taxation, and minimizing corporate tax.

Prospective investors should consider, among other factors, the following risks relating to the Group and its business:

• Demand for the Group’s services and products is sensitive to oil and gas price fluctuations, low production levels and disappointing exploration results and possible political incidents.

• The Group's business is subject to possible liabilities caused by technical, operational and commercial actions, harsh weather, capsizing, groundings, collisions, engine problems, technical problems, navigation errors and other conditions beyond the Company’s control.

• Claims brought against the Group could result in a court judgment or settlement or a nature or in an amount that is not covered, in whole or in part, by the Group’s insurance or that it is in excess of the limits of the Company’s insurance coverage.

• The Group is subject to the risk of not receiving the vessels currently under construction on time, at budget and with agreed specifications.

• There is a risk that the process of integrating the new vessels into the Group will provoke unforeseen challenges which may not be effectively manageable by the organization.

• The Group's vessels' service life may be shorter than expected.

• The market balance for offshore support vessels has recently been negatively influenced by excessive newbuild activity, which has led to a stronger growth in supply of vessels than in the demand for vessels.

• The Group's operations involve the use and handling of materials that can be environmentally hazardous.

If any of the abovementioned risks were to continue or materialise, individually or together with other circumstances, they could have a material and adverse effect on the Group and/or its business, financial condition, results of operations, cash flows and/or prospects, which could cause a decline in the value and trading price of the New Shares, resulting in the loss of all or part of an investment in the New Shares.

D.3 Key risks specific to the securities

Prospective investors should consider, among other factors, the following risks relating to the securities described herein:

• To the extent that an existing shareholder does not exercise its Subscription Rights prior to the expiry of the Subscription Period, such shareholder will have their holdings and voting interests diluted.

• An active trading market in the Subscription Rights may

10

not develop on the Oslo Stock Exchange. • Certain existing shareholders may be unable to take up

and exercise their Subscription Rights as a matter of applicable law.

• The Company's shares are subject to price volatility for a number of reasons, including the Company's financial results and general market conditions outside the Company's control.

• If the Company raises additional funds by issuing additional equity securities, the holdings and voting interests of existing shareholders could be diluted.

If any of the abovementioned risks were to materialise, individually or together with other circumstances, they could have a material and adverse effect on the Group and/or its business, financial condition, results of operations, cash flows and/or prospects, which could cause a decline in the value and trading price of the New Shares, resulting in the loss of all or part of an investment in the New Shares.

Section E – Offer E.1 Net proceeds

and estimated expenses

The subscription price per share is NOK 1.80, amounting to an aggregate subscription price and gross proceeds of approximately USD 100 million under the Rights Offering. The Rights Offering is fully underwritten by Siem Europe S.a r.l. The total expenses which will be covered by the Company in connection with the Rights Offering is expected to amount to approximately NOK 9 million.

E.2a Reasons for the Offering and use of proceeds

The Company intends to use the net proceeds to serve interest and instalments on its debt in accordance with its repayment schedules and thereby continue to reduce the Company's debt leverage.

E.3 Terms and conditions of the Offering

The Subscription Price in the Rights Offering is NOK 1.80 per New Share. The Subscription Price represents a discount of approximately 14.29% to the closing price of NOK 2.10 per Share as quoted on 10 June 2015. The Subscription Period will commence on 19 August 2015 and end on 2 September 2015 at 16:30 hours (CET). The Subscription Period may not be extended. Shareholders who are registered in the Company’s shareholder register in the VPS as of 18 August 2015 (the Record Date) will receive Subscription Rights. Provided that the delivery of traded Shares is made with ordinary T+2 settlement in the VPS, Shares that are acquired until and including 14 August 2015 will give the right to receive Subscription Rights, whereas Shares that are acquired from and including 17 August 2015 will not give the right to receive Subscription Rights. Existing Shareholders will be granted Subscription Rights giving a preferential right to subscribe for and be allocated New Shares in the Rights Offering. Each Existing Shareholder will be granted 1.1724 Subscription Rights for each Existing Shares registered as

11

held by such Existing Shareholder on the Record Date. The number of Subscription Rights granted to each Existing Shareholder will be rounded down to the nearest whole Subscription Right. Each Subscription Right will, subject to applicable securities laws, give the right to subscribe for and be allocated one New Share in the Rights Offering. The Subscription Rights will be credited to and registered on each Existing Shareholder’s VPS account on or about 19 August 2015 under the International Securities Identification Number (ISIN) KYG812291097. The Subscription Rights will be distributed free of charge to Existing Shareholders. The Subscription Rights may be used to subscribe for New Shares in the Rights Offering before the expiry of the Subscription Period on 2 September 2015 at 16:30 hours (CET) or be sold before the end of trading on the Oslo Stock Exchange on 31 August 2015. Acquired Subscription Rights will give the same right to subscribe for and be allocated New Shares as Subscription Rights held by Existing Shareholders on the basis of their shareholdings on the Record Date. The Subscription Rights, including acquired Subscription Rights, must be used to subscribe for New Shares before the end of the Subscription Period (i.e., 2 September 2015 at 16:30 hours (CET)) or be sold before the end of trading on the Oslo Stock Exchange on 31 August 2015. Subscription Rights which are not sold before the end of trading on the Oslo Stock Exchange on 31 August 2015 or exercised before 2 September 2015 at 16:30 hours (CET) will have no value and will lapse without compensation to the holder. Holders of Subscription Rights (whether granted or acquired) should note that subscriptions for New Shares must be made in accordance with the procedures set out in this Prospectus. The Subscription Rights will be fully tradable and listed on the Oslo Stock Exchange with ticker code "SIOFF T" from 19 August 2015 until the end of trading on the Oslo Stock Exchange on 31 August 2015. The Rights Offering will be completed. If the Rights Offering is not fully subscribed, the Underwriting Agreement will remain in full force and effect and secure a fully subscribed Rights Offering.

E.4 Material and conflicting interests

The Manager or its affiliates have provided from time to time, and may provide in the future, investment and commercial banking services to the Company and its affiliates in the ordinary course of business, for which they may have received and may continue to receive customary fees and commissions. The Manager, its employees and any affiliate may currently own Existing Shares in the Company. Further, in connection with the Rights Offering, the Manager, its employees and any affiliate acting as an investor for its own account may receive Subscription Rights (if they are Existing Shareholders) and may exercise its right to take up such Subscription Rights and acquire New Shares, and, in that capacity, may retain, purchase or sell Subscription Rights or New Shares and any other securities of the Company or other investments for its own account and may offer or sell such securities (or other investments) otherwise than in connection

12

with the Rights Offering. The Manager does not intend to disclose the extent of any such investments or transactions otherwise than in accordance with any legal or regulatory obligation to do so.

E.5 Selling Shareholders and lock-up

Not applicable.

E.6 Dilution resulting from the Offering

The dilutive effect following the Rights Offering represents an immediate dilution of approximately 54% for Existing Shareholders who do not participate in the Rights Offering.

E.7 Estimated expenses charged to investor

Not applicable. The Company will not charge any costs, expenses or taxes directly to any shareholder or to any investor in connection with the Rights Offering.

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2. RISK FACTORS

An investment in the Company and the New Shares involves inherent risks. Before making an investment decision with respect to the New Shares, investors should carefully consider the risk factors set forth below and all information contained in this Prospectus, including the Financial Statements and related notes. The risks and uncertainties described in this Section 2 are the principal known risks and uncertainties faced by the Group as of the date hereof that the Company believes are relevant to an investment in the New Shares. An investment in the New Shares is suitable only for investors who understand the risks associated with this type of investment and who can afford to lose all or part of their investment. The absence of negative past experience associated with a given risk factor does not mean that the risks and uncertainties described in that risk factor are not a genuine potential threat to an investment in the New Shares. If any of the following risks were to materialise, individually or together with other circumstances, they could have a material and adverse effect on the Group and/or its business, financial condition, results of operations, cash flows and/or prospects, which could cause a decline in the value and trading price of the New Shares, resulting in the loss of all or part of an investment in the New Shares. The order in which the risks are presented does not reflect the likelihood of their occurrence or the magnitude of their potential impact on the Group’s business, financial condition, results of operations, cash flows and/or prospects. The risks mentioned herein could materialise individually or cumulatively. The information in this Section 2 is as of the date of this Prospectus. Furthermore, risks that the Company currently feels are not material could in the future prove to become significant to the Group.

2.1 Financial risks

2.1.1 Financial leverage

The companies in the Group are financed by debt and equity. If the Group fails to repay or refinance its loan facilities, additional equity financing may be required. There can be no assurance that the Group will be able to repay its debts or extend their re-payment schedule through re-financing of the loan agreements or not experience net cash flow shortfalls exceeding the Group’s available funding sources or to comply with a minimum cash requirements, nor can there be any assurance that the Group will be able to raise new equity, or arrange new borrowing facilities, on favorable terms and in amounts necessary to conduct its ongoing and future operations, should this be required. In the event of insolvency, liquidation or similar event relating to a subsidiary of the Company, all creditors of such subsidiary would be entitled to payment in full out of the assets of such subsidiary before the Company, as a shareholder, would be entitled to any payments. Defaults by, or the insolvency of, a subsidiary of the Company could result in the obligation of the Company to make payments under parent company guarantees issued in favour of such subsidiary.

2.1.2 Interest rates and currency fluctuations

For the Company, USD is the functional and reporting currency. The Group is exposed to currency risk as part of the revenue and costs are denominated in other currencies than USD. The Group is also exposed to currency risk due to future yard instalments in relation to shipbuilding contracts and long-term debt in various currencies other than USD. The Company is exposed to foreign exchange risk of its subsidiaries, including the development of the Brazilian real. The Shares listed on the Oslo Stock Exchange are quoted in NOK. There is a foreign exchange risk associated with conversion from the reporting currency to NOK.

14

The Group is exposed to changes in interest rates as a portion of the long-term interest-bearing debt is subject to floating interest rates with the remaining amount subject to fixed interest rates. This may affect the Company’s financial results significantly.

2.1.3 Risks related to loan agreements, restrictions on dividends and distribution

The Group’s current and future loan agreements may include terms, conditions and covenants which impose restrictions on the operations of the Group. These restrictions may negatively affect the Group’s operations, hereunder, but not limited to, the Group’s ability to meet the fierce competition in the market in which it operates.

2.1.4 Additional capital requirements

The Company may require additional capital in the future due to unforeseen liabilities or in order for it to take advantage of business opportunities. There can be no assurance that the Company will be able to obtain necessary financing in a timely manner on acceptable terms. Future share issues may result in the existing shareholders of the Company sustaining dilution to their relative proportion of the equity in the Company.

2.1.5 Risks related to possible tax liabilities

The Group will seek to optimize its tax structure to minimize withholding taxes when operating vessels abroad, avoiding double taxation, and minimizing corporate tax paid by optimally making use of the shipping taxation rules that applies. It is, however, a challenging task to optimize taxation, and there is always a risk that the Group may end up paying more taxes than the theoretical minimum, which may in turn affect the financial results negatively.

2.2 Commercial risks

2.2.1 Market risks

Demand for offshore support vessel services in connection with exploration, development and production in the offshore oil and gas industry is particularly sensitive to oil and gas price fluctuations, low production levels and disappointing exploration results as well as possible political incidents. Demand for the Group’s services and products may also be negatively impacted by increased supply of similar or other complementary vessels into the markets where the Group operates.

2.2.2 Possible liabilities

Offshore support operations are associated with considerable risks and responsibilities, including technical, operational, environmental, commercial and political risks. In addition, offshore operations may be affected by harsh weather, capsizing, groundings, collisions, engine problems, technical problems, navigation errors and other conditions beyond the Group’s control.

2.2.3 Inadequate insurance

Although the Group maintains liability insurance coverage it believes to be in line with industry practice, any claim that may be brought against the Group could result in a court judgment or settlement or a nature or in an amount that is not covered, in whole or in part, by the Group’s insurance or that it is in excess of the limits of the Company’s insurance coverage. The Group’s insurance policies also have various exclusions, including for certain geographic regions, gross negligence caused by the Company or its employees or vessel personnel and for certain pollution or environmental damage. The Group will have to pay any amounts awarded by a court or negotiated in a settlement that exceed the Company’s coverage limitations or that are not covered by the Group’s insurance, and the Group may not have, or be able to obtain, sufficient capital to pay such amounts. This may have a material adverse effect on the Group’s business, revenue, profit and financial condition.

15

2.2.4 Dependence on key employees

The development of the Company is dependent on the ability of the senior management to manage the current project portfolio and obtain new and profitable contracts. Although no single person is solely instrumental in fulfilling either of these business objectives, there is no guarantee that they will be achieved to the degree expected. The Group’s business and prospects depend to a significant extent on the continued services of its key personnel. Financial difficulties and other factors could negatively impact the Group’s ability to retain key employees. The loss of any of the members of its senior management or other key personnel or the inability to attract a sufficient number of qualified employees could adversely affect its business and results of operations.

2.2.5 Delivery of vessels under construction

The Group currently has 9 vessels under construction. The process for construction of new offshore vessels is associated with numerous risks. Among the most critical risk factors in relations to such construction is the risk of not receiving the vessels on time, at budget and with agreed specifications. In addition, there is the risk of the different yards experiencing financial or operational difficulties resulting in bankruptcy or otherwise adversely affecting the construction process. The Group has obtained certain guarantees of financial compensation including refund guarantees in case of delays and non-delivery, and it has the right to cancel contracts if delivery of vessels is significantly delayed. However, no assurance can be given that all risks have been fully covered. Delays and non-delivery of the vessels under construction are likely to result in a loss of income for the Group, and could also possibly lead to breach of contract in respect of contracts entered into between the Group and third parties concerning employment of vessels.

2.2.6 Integration of vessels under construction

With 9 vessels under construction, including one under construction by the 50% owned company Secunda, and the subsequent delivery of the vessels, the scale and complexity of operations at the Group will increase going forward. There is a risk that the process of integrating the new vessels into the Group will provoke unforeseen challenges which may not be effectively manageable by the organization.

2.2.7 Service life and technical and operational risks

The service life of modern offshore support vessels is generally considered to exceed thirty years, but may ultimately depend on its efficiency and demand for such equipment. There can be no guarantees that the Group’s current and future fleet will have a long service life. The vessels may have particular unforeseen technical problems or deficiencies, new environmental requirements may be enforced, or new technical solutions or vessels may be introduced that are more in demand than the Group’s vessels, causing less demand and use of these vessels.

2.2.8 New capacity entering the market

It typically takes approximately 12-18 months from the time an offshore support vessel is ordered until it is delivered, depending on its complexity and the order backlog at the ship yards. The market balance for offshore support vessels has recently been negatively influenced by excessive newbuild activity, which has led to a stronger growth in supply of vessels than in the demand for vessels. This may consequently negatively affect the results and asset values of the Group.

16

2.2.9 The risk of new technological developments

The market for oil and gas technologies has developed towards a single competitive market for concepts and technological solutions. Companies with the best solutions will therefore achieve a strong competitive position in both markets. In the long run, a competitive advantage in products and services for offshore services will be achieved through continuous development and commercialization of new technical solutions. There can be no assurance that the Group will be able to maintain its current competitive position in this respect. The Group’s ability to secure its intangible rights legally is important since the development of the Group will to some extent depend on its technological advances. Third parties might act in violation of these rights and it is not possible to achieve protection of intangible rights in certain countries. There can be no assurance that the Group will be able to sufficiently secure its intellectual property and other intangible rights.

2.3 Other risks

2.3.1 Political risks

The Group has among others operations and investments in countries that are regarded as unsafe and politically unstable. Activities in these countries will often involve greater risk, including unfavorable changes in tax laws and other laws, partial or full expropriation, currency volatility and restrictions on currency transfer, disruption of operations because of labour disputes or political riots or wars, and some individual countries’ requirements for some local ownership interests. The Group’s operations are moreover subject to laws, regulations and supervisory rules in the country where the activity is performed. The operations of the Group may be negatively affected by changes in environmental laws and other regulations that can result in large expenses in, for example, modification of vessels and changes in the operation of vessels.

2.3.2 Environmental risks

The Group’s operations involve the use and handling of materials that can be environmentally hazardous. Environmental legislation has in general become stricter in the countries in which the Group operates. These laws and regulations might expose the Group to liability due to events caused by others or by it, even though the actions were consistent with existing laws at the time. In the event of liability arising due to the action of a customer, the Group would expect to get some contractual compensation from that customer through contractual regulations for events such as pollution and other environmental damage. However, there can be no assurance that the compensation granted in such events, if at all granted, will cover the losses suffered.

2.4 Risks related to the Shares and the Rights Offering

2.4.1 Dilution as a result of non-participation in Rights Offering.

Subscription Rights that are not exercised by the end of the Subscription Period will automatically expire without compensation to the holder. To the extent that an existing shareholder does not exercise its Subscription Rights prior to the expiry of the Subscription Period, whether by choice or due to a failure to comply with procedures set forth in Section 13, "The Rights Offering", or to the extent that an existing shareholder is not permitted to subscribe for New Shares, such existing shareholders’ proportionate ownership and voting interests in the Company after the completion of the Rights Offering will be diluted. Even if an existing shareholder elects to sell its unexercised Subscription Rights, or such Subscription Rights are sold on its behalf, the consideration it receives on the trading market for the Subscription Rights may not reflect the

17

immediate dilution in its shareholding as a result of the completion of the Rights Offering.

2.4.2 Absence of active trading market in Subscription Rights.

An active trading market in the Subscription Rights may not develop on the Oslo Stock Exchange. In addition, because the trading price of the Subscription Rights depends on the trading price of the Shares, the price of the Subscription Rights may be volatile and subject to the same risks as described for the Shares in the below risk factors. The existing volatility of the Shares may also have an effect on the volatility of the Subscription Rights.

2.4.3 Sales of Subscription Rights.

Certain existing shareholders may be unable to take up and exercise their Subscription Rights as a matter of applicable law. The Subscription Rights of such existing shareholders, with the exception of Subscription Rights held through financial intermediaries, will, to the extent possible, be sold on their behalf in the market by the Manager and the Receiving Agent pursuant to instructions from the Company, but no assurance can be given as to whether such sales may actually take place or as to the price that may be achieved. Other existing shareholders may also choose not to exercise their Subscription Rights and therefore sell them in the market. The sale of Subscription Rights by or on behalf of existing shareholders could cause significant downward pressure on, and may result in a substantial reduction in, the price of the Subscription Rights and the Shares.

2.4.4 Volatility of the share price

The trading price of the Shares could fluctuate significantly in response to quarterly variations in operating results, adverse business developments, interest rate, changes in financial estimates by securities analysts, matters announced in respect of major customers or competitors, or changes to the regulatory environment in which the Company operates. The market price of the Shares could decline due to sales of large numbers of Shares in the market or the perception that such sales could occur. Such sales could also make it more difficult for the Company to offer equity securities in the future at a time and at a price that are deemed appropriate. In recent years, the securities markets in Norway and elsewhere in Europe, have experienced a high level of price and volume volatility, and the market price of securities of many companies have experienced wide fluctuations in price which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. There can be no assurance that continual fluctuations in price will not occur. It is likely that the quoted market price for the Shares will be subject to market trends generally, notwithstanding the financial and operational performance of the Company.

2.4.5 Difficulties for foreign investors to enforce civil liabilities in Cayman Islands

The Company is organized under the laws of Cayman Islands. The rights of holders of Shares are governed by Cayman Islands law and by the Articles of Association. These rights may differ from the rights of shareholders in other jurisdictions, including Norway. As a result, it may, inter alia, be difficult for a shareholder to take legal action against the Company and/or its directors in the investor’s own jurisdiction, or to enforce against them judgments obtained in non-Cayman Islands courts.

18

2.4.6 Restrictions on ability to transfer or resell the Shares without registration under applicable securities laws

The Shares are being offered and sold pursuant to an exemption from registration under the U.S. and applicable state securities laws. Therefore, the Shares may only be transferred or resold in the U.S. in a transaction registered under or exempt from the registration requirements of the applicable securities laws, and U.S. Shareholders may be required to bear the risk of their investment for an indefinite period of time. The Company does not currently anticipate registering any resale transaction under applicable securities laws.

2.4.7 Dilution as a result of future share issue

The Company may in the future decide to offer additional Shares or other securities in order to finance new capital-intensive projects, in connection with unanticipated liabilities or expenses or for any other purposes. There is no assurance the Company will not decide to conduct further offerings of securities in the future. Depending on the structure of any future offering, certain existing shareholders may not have the ability to purchase additional equity securities. If the Company raises additional funds by issuing additional equity securities, the holdings and voting interests of existing shareholders could be diluted.

19

3. RESPONSIBILITY FOR THE PROSPECTUS

This Prospectus has been prepared in connection with the Rights Offering described herein. The Board of Directors of Siem Offshore Inc. accepts responsibility for the information contained in this Prospectus. The members of the Board of Directors confirm that, after having taken all reasonable care to ensure that such is the case, the information contained in this Prospectus is, to the best of their knowledge, in accordance with the facts and contains no omissions likely to affect its import.

, _____ 2015

Eystein Eriksrud Chairman

Kristian Siem Board member

Michael Delouche Board member

David Mullen Board member

John C. Wallace Board member

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4. GENERAL INFORMATION

4.1 Presentation of financial and other information

4.1.1 Financial information

See section 8.2, "Selected financial information–Summary of accounting policies and principles" for further details regarding the basis for the Group's financial information. 4.1.2 Industry and market data

This Prospectus contains statistics, data, statements and other information relating to markets, market sizes, market shares, market positions and other industry data pertaining to the Group's business and the industries and markets in which it operates. Unless otherwise indicated, such information reflects the Group's estimates based on analysis of multiple sources, including data compiled by professional organisations, consultants and analysts and information otherwise obtained from other third party sources, such as annual and interim financial statements and other presentations published by listed companies operating within the same industry as the Group, as well as the Group's internal data and its own experience, or on a combination of the foregoing. Unless otherwise indicated in the Prospectus, the basis for any statements regarding the Group's competitive position is based on the Company's own assessment and knowledge of the market in which it operates. Although the industry and market data is inherently imprecise, the Company confirms that where information has been sourced from a third party, such information has been accurately reproduced and that as far as the Company is aware and is able to ascertain from information published by that third party, no facts have been omitted that would render the reproduced information inaccurate or misleading. Where information sourced from third parties has been presented, the source of such information has been identified. The Company does not intend, and does not assume any obligations to, update industry or market data set forth in this Prospectus. Industry publications or reports generally state that the information they contain has been obtained from sources believed to be reliable, but the accuracy and completeness of such information is not guaranteed. The Company has not independently verified and cannot give any assurances as to the accuracy of market data contained in this Prospectus that was extracted from these industry publications or reports and reproduced herein. Market data and statistics are inherently predictive and subject to uncertainty and not necessarily reflective of actual market conditions. Such statistics are based on market research, which itself is based on sampling and subjective judgments by both the researchers and the respondents, including judgments about what types of products and transactions should be included in the relevant market. As a result, prospective investors should be aware that statistics, data, statements and other information relating to markets, market sizes, market shares, market positions and other industry data in this Prospectus and projections, assumptions and estimates based on such information may not be reliable indicators of the Company's future performance and the future performance of the industry in which it operates. Such indicators are necessarily subject to a high degree of uncertainty and risk due to the limitations described above and to a variety of other factors, including those described in Section 2, "Risk factors" and elsewhere in this Prospectus. 4.1.3 Rounding

Certain figures included in this Prospectus have been subject to rounding adjustments (by rounding to the nearest whole number or decimal or fraction, as the case may be). Accordingly, figures shown for the same category presented in different tables may vary slightly. As a result of rounding adjustments, the figures presented may not add up to the total amount presented.

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4.2 Forward-Looking Statements

This Prospectus includes forward-looking statements, including, without limitation, projections and expectations regarding the Group's future financial position, business strategy, plans and objectives. All forward-looking statements included in the Prospectus are based on information available to the Company, and views and assessments of the Company, as at the date of this Prospectus. Except as required by the applicable stock exchange rules or applicable law, the Company does not intend, and expressly disclaims any obligation or undertaking, to publicly update, correct or revise any of the information included in this Prospectus, including forward-looking information and statements, whether to reflect changes in the Company's expectations with regard thereto or as a result of new information, future events, changes in conditions or circumstances or otherwise on which any statement in this Prospectus is based. When used in this document, the words "anticipate", "assume", "believe", "can", "could", "estimate", "expect", "intend", "may", "might", "plan", "should", "will", "would" or, in each case, their negative, and similar expressions, as they relate to the Company, its subsidiaries or its management, are intended to identify forward-looking statements. The Company can give no assurance as to the correctness of such forward-looking statements and investors are cautioned that any forward-looking statements are not guarantees of future performance. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company and its subsidiaries, or, as the case may be, the industry, to materially differ from any future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Company and its subsidiaries operate. Factors that could cause the Company's actual results, performance or achievements to materially differ from those in the forward-looking statements include but are not limited to, the competitive nature of the markets, in which the Company operates, technological developments, government regulations, changes in economic conditions or political events. These forward-looking statements reflect only the Company's views and assessment as at the date of this Prospectus. Factors that could cause the Company's actual results, performance or achievements to materially differ from those in the forward-looking statements include, but are not limited to, those described in Section 2, "Risk factors" and elsewhere in the Prospectus. Given the aforementioned uncertainties, prospective investors are cautioned not to place undue reliance on any of these forward-looking statements. Forward looking statements are found in sections 2, "Risk Factors", 4, "General information, 5, "Presentation of Siem Offshore Inc.", 6, "Industry Overview", 7 "Capitalisation and indebtedness", 8, "Selected financial information, 9, "Board of directors, management , employees and corporate governance", 10, "Corporate information", 11 "Securities trading in Norway", 12, "Taxation", 13, "The Rights Offering", 14, "Selling and transfer restrictions and 15, "Additional information"..

  

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5. PRESENTATION OF SIEM OFFSHORE INC.

5.1 Overview

The Group’s primary business activity is to own and operate offshore support vessels ("OSVs") for the offshore energy service industry. The OSV fleet comprises of platform supply vessels ("PSVs"), anchor-handling, tug, supply vessels ("AHTS vessels"), offshore subsea construction vessels ("OSCVs") and a variety of other support vessels. The Company’s fleet comprises of 55 offshore support vessels, of which 9 vessels are under construction. In addition to its primary activity, the Company has also established a business division for industrial investments. The Group's industrial investment division includes the Group's services as a contractor within the European offshore wind farm and offshore cable lay market, the development of applications for managed pressure drilling, a scientific core drilling vessel, specialized engineering to develop and implement combat management systems for navy vessels and certain other investments. The Company’s headquarter and corporate management team is located in Kristiansand, Norway and additional subsidiary offices are located in Brazil, Germany, the Netherlands, Ghana, USA, Poland and Australia. The Company is tax resident in Norway.

5.2 Group structure

The chart below shows a simplified structure of the Group:

Siem Offshore Inc. is a holding company with no employees and is therefore dependent on service from its subsidiaries. These services consist of administrative, operational and corporate services provided by Siem Offshore Management AS and Siem Offshore AS. The Group's vessels are owned by several companies within the Group. Siem Offshore Rederi AS currently owns all Norwegian, Polish and German built vessels, except the OSCV “Siem Spearfish” which is owned by Siem Offshore Construction Vessels AS.

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Further, Siem Offshore Rederi AS owns 51% of Siem Offshore Ghana International AS, which owns the PSV “Siem Sasha”, and 51% of Siem Meling Offshore DA which owns two PSVs. Siem Offshore Do Brazil S.A. owns the locally built Brazilian fleet. Siem Offshore Canada Inc. owns 50% of Secunda Canada LP ("Secunda"), which owns 6 Canadian flagged vessels and has 1 vessel under construction. Siem Offshore Contractors GmbH, which will utilize the cable lay vessel (“CLV”) “Siem Aimery” and has the installation support vessel (“ISV”) “Siem Moxie” on a time charter, is owned 100% by Siem Offshore Invest AS. Siem AHTS Pool AS manages a pool of 10 AHTS sister vessels (including 2 from a pool partner) in accordance with a partner agreement. The Group's industrial investments business division consists of the subsidiaries Siem Offshore Contractors GmbH and Siem WIS AS, Overseas Drilling Limited which owns the scientific core drilling vessel “JOIDES Resolution” and certain other investments, which are owned 100% by Siem Offshore Invest AS. In addition the combat management business in Siem Offshore do Brasil SA is included in this business division. Below is a list of directly owned subsidiaries of the Company:

Company Registered office

Ownership and voting

share

Siem Offshore AS Kristiansand, Norway 100 % Siem Offshore Invest AS Kristiansand, Norway 100 % Siem Offshore Rederi AS Kristiansand, Norway 100 % Siem Offshore Construction Vessels AS Kristiansand, Norway 100 % Siem Offshore do Brasil SA Rio de Janeiro, Brazil 100 % Siem Offshore US Inc. Delaware, USA 100 % Siem AHTS Pool AS Kristiansand, Norway 100 % DSND Subsea Ltd London, UK 100 % Siem Offshore Services AS Kristiansand, Norway 100 % Siem Offshore Management AS Kristiansand, Norway 100 % Siem Offshore Management (US) Inc. Texas, USA 100 % Siem Offshore US Holding AS Kristiansand, Norway 100 % Siem Offshore Crewing (CI) Inc. Cayman Islands 100 %

In addition, the subsidiaries own the following companies;

Company Registered office

Share and voting rights

Consub Delaware LLC Delaware, USA 100 % Aracaju Serviços Auxiliares Ltda Rio de Janeiro, Brazil 100 % Siem Offshore Crewing AS Kristiansand, Norway 100 % Siem Meling Offshore DA Stavanger, Norway 51 % Næringsbygg Indrettsveien 13 DA Fjell, Norway 95 % Siem WIS AS Bergen, Norway 60 % Siem Offshore Maritime Personnel AS Kristiansand, Norway 100 % Siem Offshore Contractors GmbH Leer, Germany 100 % SOC Equipment and Personnel Services BV Groningen, The Netherlands 100 % AHMTEC GmbH Leer, Germany 100 % Overseas Drilling Ltd Groningen, The Netherlands 100 % Siem Offshore Canada Inc. Halifax, Canada 100 % Siem Offshore Poland Sp.z.O.O Gdynia, Poland 100 % Siem Offshore Australia Pty Ltd Perth, Australia 100 %

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Company Registered office

Share and voting rights

Siem Offshore Real Estate GmbH Leer, Germany 100 % Siem Offshore Contractors UK Ltd London, UK 100 % Siem Offshore Ghana International AS Kristiansand, Norway 51%

The Company also holds ownership interests in certain non-material subsidiaries and joint ventures.

5.3 History

The Company traces its roots back to Det Søndenfjeldske-Norske Dampskipselskap AS ("DSND"), which was established in 1854. The main activity in DSND until 1964 was shipping operations, with a focus on passenger transportation. In 1964, DSND’s passenger lines service between Hamburg and Oslo was closed down, and DSND’s activity level was then limited until 1985. DSND operated as an investment company between 1985 and 1995, with investments mostly in offshore related activities. By early 1990, DSND had taken ownership of several dynamically positioned ("DP") offshore vessels. As a consequence, the board wanted to cultivate DSND’s investment profile and strategy, and other non-offshore related investments were gradually sold or spun-off from the company. By 1995, the DSND owned six special offshore vessels, of which two were used for offshore construction, two for well maintenance and two for geo-technical drilling. The company planned for further expansion into these three business areas through the addition of technology and human capital. DSND conducted eight acquisitions of assets or businesses between 1995 and 2002, which gave the company a significant position within the area of offshore maintenance and construction, both in terms of geography and resources. The acquisition provided DSND the skills and equipment to complete total construction contracts for deep water subsea installations, as well as the install of pipelines, floating production, units and riser systems, and link-up and completion of subsea production installations. On 18 October 2001, DSND announced that they were in discussions with Halliburton on combining their respective activities within subsea construction and related services. On 23 May 2002, the two companies announced that they had completed a final agreement for the creation of the 50/50 joint venture company Subsea 7 Holding Inc. (formerly named Subsea 7 Inc.), registered in the Cayman Islands. The agreement involved all substantial subsea-related assets, personnel and existing contracts from both companies to be included in the joint venture. After the merger in May 2002, both Halliburton and DSND actively contributed to the further industrial development of the Subsea 7 Holding Inc. business. During this period Subsea 7 also consolidated its non-subsea activities through the divestment of loss-making activities and by a more concentrated focus. The holding company was further relocated from Norway to the Cayman Islands in the fourth quarter of 2002 through a share swap. In 2002, DSND was renamed Siem Offshore Inc. which again subsequently changed its name to Subsea 7 Inc. in 2005. In 2004, the Company was incorporated under the name of Siem Supply Inc. as a subsidiary of the company then named Siem Offshore Inc. (now Subsea 7 Inc.). In July 2005, Subsea 7 decided that it would be beneficial for the further development of both its subsea business and its non-subsea business, as well as enhance shareholder value, to separate the subsea and the non-subsea business and give them the

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opportunity to develop in distinct companies and under separate management. As a consequence, the Company acquired the non-subsea assets of Subsea 7 not already held by the Company and the Company was spun-off from Subsea 7. The Company listed the Shares on the Oslo Stock Exchange in August 2005. Early in 2006, the Company completed a merger with Rovde Shipping AS which owned or operated six vessels, whereof three standby vessels which have subsequently been sold. Also, during 2006, the Company acquired a majority shareholding in Siem WIS AS. Further, the Company acquired the newbuilding contract for the vessel Siem Mariner from OH Meling & Co AS, and entered into the joint venture Siem Meling Offshore DA which controlled an additional two vessels. The Company also contracted four MRSVs from Kleven Verft AS. In 2010, Petrobras chartered four AHTS vessels from the Company for a firm period of four years. The contract value for the firm period was approximately USD 285 million (NOK 1.9 billion), net of local taxes. The contracts for the four AHTS vessels were added to the Brazilian activities of ten vessels in operation and eight vessels under construction at that time. The contracts marked growth of operations in Brazil and an important step in becoming a first class operator in Brazil. In 2011, the company acquired the remaining 50% ownership interest in the shares of ODL from a subsidiary of Transocean Ltd. In the same year, the Company announced the entry into the business for submarine cable installation, repair and maintenance projects. The Company and the shareholders of Five Oceans Services ("FOS"), later to be renamed Siem Offshore Contractors GmbH, reached an agreement whereby the Company acquired all shares in FOS. The transaction combined the marine operating capacities of the Company with the engineering capabilities and project execution expertise of FOS and formed a strong entity to meet the forecasted market growth and customer requirements. In 2012, Siem Offshore Contractors, the wholly owned subsidiary of the Company, announced that it had been awarded the first contract for the renewable energy market for the installation of the inner array grid cables as well as associated services for the Amrumbank West offshore wind farm ("OWF") project. The contract award marked the entry into the Offshore Renewable Energy Market for the Group. Subsequently, Siem Offshore Contractors has been successful in winning additional contracts for OWF projects. In 2013, the Company acquired 50% of Secunda. Secunda had more than two decades of offshore experience in serving the oil and gas industry and at the time of the acquisition Secunda owned and operated a fleet of six offshore support vessels on Canada’s east coast. The ownership in Secunda provided the Company with a strategic position in Canada’s east coast offshore sector with the aim to grow the business of Secunda and also to develop the Company’s current business through the position represented by Secunda. In 2014, the Company entered into agreements with a client to provide two well-intervention vessels ("WIVs" or "Well-Intervention Vessels"). The vessels are under construction in Germany and have an overall length of 158 meters, a beam of 31 meters, and built in compliance with the MODU-class (Marine Offshore Drilling Units). The agreements represented a targeted entry for the Company as vessel provider into the segment for Well-Intervention Vessels. In 2015, the Company decided to streamline its business by forming one dedicated organisation for its core offshore vessel business named "Siem Offshore OSV". The remaining business consisting of Siem Offshore Contractors, “JOIDES Resolution”, Siem WIS, the combat management business in Brazil and certain other investments will be

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organisationally separated and operated under the name of "Siem Offshore Industrial Investments". In the period 2006 to 2015, the fleet of vessels in operation has grown from 21 to 46 vessels. The fleet growth has mainly been achieved through the construction of vessels. The vessel fleet is set to increase further with the delivery of the 9 vessels currently under construction.

5.4 Business objectives and strategy

The objective of the Company is to maintain and develop the Offshore Support Vessel (OSV) activities, continue to strengthen the Contracting Business providing services for the Offshore Windfarm Renewable Industry and other cable laying activities, and to find strategic solutions for its other investments. The Company intends to pursue a strategy of continued consolidation and growth, with the aim of becoming one of the leading owners and operators of high specification OSV’s on a global basis, and the leading contractor for the Offshore Windfarm Renewable Industry.

5.4.1 Advanced fleet

The fleet consists of 55 advanced high-end offshore support vessel, of which 9 of these are under construction. The fleet includes large Anchor Handling Tug Supply vessels, Platform Supply Vessels, Multipurpose field & ROV Support Vessel and Offshore Subsea Construction Vessels designed to meet the most challenging environments. The latest addition to the fleet is two Well-Intervention Vessels currently under construction. The Company aims at meeting the market’s demand for modern and advanced support vessels for the global offshore oil and gas industry. This is supported by the newbuilding activity undertaken by the Group, which will strengthen the Group’s offshore fleet with additional modern and, environmentally friendly and technically advanced offshore support vessels.

5.4.2 Industrial Investments

The primary activities for Siem Offshore Contractors GmbH ("SOC") include the installation, post-lay trenching, termination and testing of submarine composite cables forming the inner array grid of an OWF. SOC has been technically successful in executing its planned work scope by utilising its chartered fleet of large and high quality DP-2 installation vessels, in combination with its experienced offshore and onshore organisation. SOC will also focus on other cable laying opportunities. Siem WIS AS has designed and developed a pressure control device ("PCD") which can improve managed pressure drilling ("MPD") operations. These services are increasing due to global challenges with depleted reservoirs, drilling of additional and infield wells, and the demand to achieve a more constant well pressure during drilling and tripping operations. Global energy demand growth, combined with an increasing number of deep sea and high pressure high temperature ("HPHT") reservoirs, and increasing emphasis on safety management will lead to increased demand for MPD services. The “JOIDES Resolution” is a scientific core sampling research vessel. Its mission is to explore the Earth below the oceans of the world in order to investigate the origin and the evolution of the Earth. The ship is a dynamically positioned non-riser drilling/coring vessel capable of operating in water depths of 7,000 meters, and with holes cored to depths of 2,000 meters below the seafloor.

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5.4.3 Professional and cost effective operations

The Group will maintain a strong focus on operating its fleet professionally and cost-effectively and in accordance with relevant laws and regulations. The Company has, and will continue to have, a small team of dedicated staff focusing on core activities such as marketing, chartering, technical supervision, finance, business development and investor relations, and may outsource services within the areas of technical management, construction supervision and certain administrative functions to well-qualified suppliers of such services.

5.5 Business activities

5.5.1 Introduction

The Company's business is split into two divisions:

• Siem Offshore OSV, which comprises the Group's core offshore vessel business • Siem Offshore Industrial Investments, which comprises the Group's other

businesses

5.5.2 Siem Offshore OSV

Siem Offshore OSV’s primary activity is to own and operate OSVs for the offshore energy service industry. The OSV fleet comprises PSVs, AHTS vessels, OSCVs, and a variety of other support vessels including but not limited to an ISV, Brazilian built vessels including oil spill recovery vessels ("OSRVs"), fast supply vessels ("FSVs") and fast crew vessels ("FCVs"). Fleet The Group’s fleet comprises 46 vessels in operation. In addition, the Group has entered into firm contracts for the construction of another 9 vessels, including one vessel under construction by Secunda. The vessels under construction are to be delivered in the period 2015 to 2016. The average age of main vessel types in operation are five years for AHTS vessels, two years for OSCVs and eight years for PSVs. The below table summarizes the main characteristics of the Group’s current fleet:

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Delivery of vessels under construction The following list summarizes the scheduled time of delivery of the Group’s vessels under construction as of end first quarter 2015:

Note 1) Vessel under construction in the 50% owned entity Secunda.

20151Q 2Q 3Q 4Q

20161Q 2Q 3Q 4Q

20171Q 2Q 3Q 4Q

OSRV, Siem Marataizes

CLV, Siem Aimery

PSV DF, Siem Pride

PSV DF, ”TBN 1”

PSV DF, ”TBN 2”

PSV DF, ”TBN 3”

WIV, Siem Helix 1

WIV, Siem Helix 2

AHTS, Avalon Sea (Note 1)

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Contract coverage for vessels under construction The following list summarizes the contract coverage of the Group’s vessels under construction as of end first quarter 2015:

Of the 9 vessels under construction, the OSRV will enter into an eight year firm contract upon delivery from yard, the CLV will enter an internal time charter with a subsidiary of the Company and the PSV “Siem Pride” will commence on a five year firm time charter with AS Norske Shell. The two Well-Intervention Vessels under construction in Germany, with delivery in 1Q and 3Q 2016, have both been chartered out on seven year firm charter contracts plus options. The AHTS, “Avalon Sea” under construction by Secunda has secured a five year firm contract plus options. The three dual fuelled PSVs currently under construction in Poland, with delivery in 2016, have yet to secure firm contracts. The Company has obtained certain guarantees of financial compensation including refund guarantees for pre-delivery instalments related to vessels under construction in Poland and parts of the pre-delivery instalments related to vessels under construction in Germany in case of delays and non-delivery. Further, the Company has the right to cancel contracts if delivery of vessels is significantly delayed. However, no assurance can be given that all risks have been fully covered. There are no guarantees of financial compensation or refund guarantees with respect to the OSRV under construction in Brazil. Contract coverage and operations of current fleet The Group’s vessels are currently operating in the North Sea, off the Brazilian coast, the Mediterranean, West Africa and the Gulf of Mexico/the US Golf.

2015 2016 2017 2018

Vessel Type Ownership 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Brazil, Siem Marataizes OSRV 100%

Poland, Siem Aimery CLV 100%

Poland, Siem Pride PSV 100%

Poland, ”TBN 1” PSV 100%

Poland, ”TBN 2” PSV 100%

Poland, ”TBN 3” PSV 100%

Germany, Siem Helix 1 WIV 100%

Germany, Siem Helix 2 WIV 100%

Poland, Avalon Sea (Note 1) AHTS 50%

Under Construction Contract Contract option Contract with subsidiary

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Below is an overview of the firm contracts and options for the Group’s fleet of PSVs, OSCVs, AHTSs and ISV in operation as of end first quarter 2015:

1) Employment for “Siddis Mariner” includes firm time charter for Siem Offshore Contractors. 2) The backlog for “Siem Daya 1” includes an assumption of completion of sale in August 2015. 3) “Siem Aquamarine” and “Siem Diamond” are currently in lay-up 4) Employment for “Siem Garnet” and “Siem Emerald” includes firm time charter for Siem Offshore

Contractors 5) The ISV “Siem Moxie” shall primarily be utilized by the subsidiary Siem Offshore Contractors for cable

installation projects within the offshore wind-farm segment. 6) “Siem Sasha” was sold to a company owned 51% by Siem Offshore in June 2015.

In April 2015 the Company announced that it had agreed to sell the OSCV “Siem Daya 1” to Daya Materials Berhad (“Daya”). The purchase price for the vessel has been agreed at USD 120 million. In addition, the Company is entitled to a 60/40 profit share in the Company’s favour based on the profit Daya makes on the vessel limited to an additional USD 10 million. USD 30 million of the purchase price for the vessel will be financed by a sellers credit from Siem Offshore in the form of a convertible bond to Daya with 4 years duration and a coupon of 5%, and a conversion price of 15 Malaysian sen per share. The sale is subject to certain conditions and the cancelling date for the completion of the sale is 31 August 2015. If the vessel is not sold and delivered to Daya, the vessel will continue on the remaining 3 year term period of the initial 5 year term contract with Daya, which commenced upon delivery of the vessel from yard in August 2013. Secunda Canada LP The 50%-owned company, Secunda, has ownership in a fleet of six offshore support vessels which operate offshore Canada. Secunda is engaged in support services for platform supply, anchor handling, rescue standby and towage in its primary area of operation outside the coast of Eastern Canada. Secunda has one vessel under construction with scheduled delivery in 2015.

2015 2016 2017 2018

Vessel Type Ownership 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Siem Sasha 6) PSV 51 %Sophie Siem PSV 100 %Siem Louisa PSV 100 %Siem Hanne PSV 100 %Siem Carrier PSV 100 %Siem Supplier PSV 100 %Hugin Explorer PSV 100 %Siem Atlas PSV 100%Siem Giant PSV 100%Siem Symphony PSV 100%Siem Pilot PSV 51%Siddis Mariner 1) PSV 51%Siem Marlin OSCV 100%Siem N-Sea OSCV 100%Siem Daya 1 2) OSCV 100%Siem Daya 2 OSCV 100%Siem Spearfish OSCV 100%Siem Stingray OSCV 100%Siem Pearl AHTS 100%Siem Emerald 4) AHTS 100%Siem Sapphire AHTS 100%Siem Aquamarine 3) AHTS 100%Siem Ruby AHTS 100%Siem Topaz AHTS 100%Siem Diamond 3) AHTS 100%Siem Amethyst AHTS 100%Siem Garnet 4) AHTS 0%Siem Opal AHTS 0%Siem Moxie 5) ISV 100%

Total order backlog in % and USD mill. 51% 141 36% 137 23% 95 11% 52

Agreed sold

Contract Contract option Spot work Contract with subsidiary

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Big Orange XVIII The Company has a 41%-ownership in the "Big Orange XVIII", which is a DP-2 well stimulation vessel. Siem Offshore Do Brazil S.A. (trademark: Siem Consub SA ) The Company’s subsidiary Siem Consub SA in Brazil is an owner and operator of offshore support vessels and crew boats in the Brazilian market. Siem Consub’s head office is located in Rio de Janeiro in addition to bases located along the Brazilian coast. With more than 26 years of experience in Brazil, Siem Consub is focused on offshore support operations, submarine cable maintenance and installation, engineering and systems integration for the defence market. Siem Consub further undertakes projects that comprise underwater and naval technology, high quality resources and qualified professionals. Unique solutions have been implemented but each new project brings new challenges to overcome. View the company web at www.consub.com.br Below is an overview of the firm contracts and options for Big Orange XVIII, five Canadian flagged vessels currently in operation and the smaller Brazilian flagged vessels as of end first quarter 2015:

*The MPSV “Ryan Leet” which is owned by Secunda has not been included in the overview above, as the vessel is currently not in operation. *The OSRV “Marati”, which has been operating in Brazil, is currently not in operation. The vessel is not marketed for new employment and will be phased out of the fleet. The vessel is 100% equity financed and has been fully depreciated in the fixed assets.

2015 2016 2017 2018

Vessel Type Ownership 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Big Orange XVIII WSV 41 %Burin Sea AHTS 50%

Panuke Sea PSV 50%

Trinity Sea AHTS 50%

Venture Sea AHTS 50%

Scotian Sea MPSV 50%

Total order backlog in % and USD mill. 90% 24 35% 13 18% 7 0% 0

Marati OSRV 100 %Siem Maragogi OSRV 100%Parnaiba FSV 100 %Propriá FSV 100 %Capela FSV 100 %Siem Piatã FCV 100 %Siem Pendotiba FCV 100%Siem Caetes FSP 100%Siem Carajas FSP 100%

Total order backlog in % and USD mill. 90% 20 89% 26 89% 26 73% 24

Contract Contract option Spot work Contract with subsidiary

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Existing contract coverage and contract backlog for Siem Offshore OSV

The existing contract coverage for each of the vessel categories as of end first quarter 2015 is as follows:

Existing contract coverage, % 2015 2016 2017 PSVs 64% 43% 23% OSCVs * 89% 80% 72% AHTS vessels 13% 5% Brazilian-flagged vessels 90% 89% 89% Secunda 90% 35% 18% Big Orange XVIII 100% 8% - * Existing contract coverage reflects the sale of "Siem Daya 1" in August 2015.

The total contract backlog of firm contracts for the Offshore Support Vessels segment at 31 March 2015 was USD1.41 billion, including Big Orange XVIII, Secunda and the vessels under construction, and is allocated as follows:

2017 (Amounts in USD millions) 2015 2016 onwards Backlog 194 258 955

5.5.3 Siem Offshore Industrial Investments

Siem Offshore Industrial Investments consists of Siem Offshore Contractors, “JOIDES Resolution”, Siem WIS, the combat management business in Brazil and certain other investments. Siem Offshore Contractors (SOC) SOC is an experienced submarine cable and umbilical installation, repair and maintenance contractor serving the worldwide offshore oil and gas as well as renewable energy industries. SOC, a German company with its head office situated in the City of Leer, was formed in 2003. SOC has gained great experience in providing its service to the demanding worldwide offshore oil and gas industry, meeting the highest industry standards for quality, health, safety and environmental protection. This has been of value when winning contracts in the renewable energy sector. Based on its in-house resources as well as experience, SOC can install, maintain and repair submarine cables as well as subsea umbilical in many water depths and geographical areas. View the company web at www.siemoffshorecontractors.com

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Below is an overview of the main projects of SOC as if end first quarter 2015:

*The Nordsee One OWF project reached financial close in April 2015 but was awarded to SOC in April 2014. Overseas Drilling Ltd. (“JOIDES Resolution”) The vessel “JOIDES Resolution” is owned 100% by Overseas Drilling Limited, of which the Company owns 100%. The vessel is a highly specialized research drill ship, whose primary mission is to recover core samples for scientific purposes. The vessel is currently on contract with Texas A&M Research Foundation ("TAMRF") for the use as a scientific core drilling vessel for the International Ocean Discovery Program. The operational firm phase of the contract ended in fourth quarter 2013, and TAMRF has since then exercised three of the initial 10 yearly options. In June 2015, TAMRF declared the third one year option for the vessel, and the current option period under the existing contract will expire at the end of September 2016. A series of seven 1-year option periods is still to be exercised by the TAMRF. Below is an overview of the firm contracts and options for “JOIDES Resolution” as of end first quarter 2015*:

* The option period declared by TAMRF has been graphically included in the above overview, but not reflected in the total order backlog in terms of USD million and per cent. Siem WIS AS Siem WIS AS is 60% owned by Siem Offshore, and is a Norwegian Oil Service Company which has developed and commercialized new unique drilling technology for Underbalanced Operations ("UBO") and MPD. Subject to a successful development, the products will enable safer and more efficient drilling and well maintenance services, including riser-less subsea intervention services from vessels.

Amrumbank West OWF Baltic 2 OWF Nordsee One Nordsee One OWF

Project

Project phase

Vessel utilisation

Profit recognition

Awarded

Installation of 86 submarine cables providing the inner-array grid connecting

All cables have been installed with cable termination, testing and post-lay trenching works ongoing.

PSV “Siddis Mariner”

ISV “Siem Moxie”

AHTS “Siem Garnet”

3rd Party Vessel

The project is scheduled to be completed within 2Q 2015 with a positive margin.

Mar, 2012

Consortium EPIC contract for the 155kV export cable system Nordsee One

Planning, preparation and engineering. The project remains on track for mechanical completion by 3Q 2016.

Utilising the resources within the Siem Offshore Group

At minimum 25% completion. No margin will be recorded prior to installation activities. Project scheduled for completion during 4Q 2016.

Dec, 2012

Installation of 86 submarine cables providing the inner-array grid connecting

All cables have been installed with cable -termination, testing and post-lay trenching works completed in May 2015.

PSV “Siddis Mariner”

ISV “Siem Moxie”

AHTS “Siem Garnet”

3rd Party Vessel

The project is scheduled to be completed during 3Q 2015 with a positive margin.

Feb, 2013

Turnkey EPIC package of the inner array grid cable system for 54 wind turbine generators

Planning, preparation and engineering expected complete in 2Q 2015. Offshore installation from 2Q 2016.

Utilising the resources within the Siem Offshore Group

At minimum 25% completion. No margin will be recorded prior to installation activities in 2016. Project scheduled for completion during 1Q 2017.

Apr, 2014 *)

Veja Mate OWF

Turnkey EPIC package of the inner array grid cable system for the 67 wind turbine generators

Planning, preparation and engineering.

Utilising the resources within the Siem Offshore Group

At minimum 25% completion. No margin will be recorded prior to installation activities in 2016. Project scheduled for completion during 2017.

Apr, 2015

2015 2016 2017 2018

Vessel Type Ownership 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

Joides Resolution SPV 100 %

Total order backlog in % and USD mill. 66% 13 0% 0 0% 0 0% 0

Contract Contract option Spot work Contract with subsidiary

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With the technology, challenging reservoirs such as HPHT (High Pressure High Temperature) and ERD (Extended Reach Drilling) wells, will be drilled with better control of your first barrier. These companies services are increasing due to global challenges with depleted reservoirs, drilling of additional and infield wells, and the demand to achieve a more constant well pressure during drilling and tripping operations. View the company web at www.siemwis.com Contract Backlog for Siem Offshore Industrial Investments The total contract backlog for the Industrial Investments segment at 31 March 2015 was USD 166 million and is allocated as follows:

2017 (Amounts in USD millions) 2015 2016 onwards Siem Offshore Contractors 69 76 8 JOIDES Resolution 13 - -

The backlog of Siem Offshore Contractors is normally based on lump sum contracts, while the backlog of “JOIDES Resolution” is based on a firm contract period with an agreed charter rate per day.

5.6 Material agreements

The Company believes that all of its contracts, including its financing arrangements and newbuilding contracts are material for its business. However, the Company does not consider itself dependent upon any one contract in particular.

5.7 Recent trends developments

The North Sea PSV and AHTS vessel markets are continuing to experience soft rates and utilization. Additional vessels have entered the North Sea from other regions and as rig activity is reduced, this places pressure on vessel utilization and fixture rates. Vessel owners have placed vessels in lay-up and owners are considering additional lay-ups. The market for OSVs in Brazil has significantly softened following lower demand activity from Petroleo Brasileiro SA (“Petrobras”). When disclosing its five year business plan, Petrobras announced reduced capital expenditures and highlighted cost cutting measures with the intension to reduce leverage going forward. In order for Petrobras to reduce its cost base, there is an increased risk that Petrobras will initiate renegotiation of existing contracts with suppliers, including vessel owners. It is in the opinion of the Company that an increased risk of such contract renegotiations or even contract cancellations for certain vessels of the Company exists. The outlook for the OSV market is expected to remain soft for several years due to reduced investments in the offshore oil and gas industry following lower current and future commodity prices for oil and gas, which again reduces the demand for vessels and puts pressure on utilisation and fixture rates, coupled with increased supply of vessels as more vessels under construction are delivered from yards. In response to the soft OSV market, the Company has decided to take two vessels, “Siem Aquamarine” and “Siem Diamond”, out of operations and into lay-up. Siem Offshore Contractors experience steady tendering activity in the OFW market with scheduled marine installation activities taking place in 2017 and 2018 and for operations and maintenance contracts to be awarded in 2015. There has been no significant change in the financial or trading position of the Company since the end of the last financial period for which interim financial information has been published. The Company has in connection with preparing the reporting of its second

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quarter 2015 results considered the fair value of its assets versus the respective book values. It is clear that such considerations will result in impairments on vessel values in the second quarter 2015 results. There has been no material adverse change in the prospects of the issuer since the date of its last published audited financial statements.

5.8 Investments

The Company has 9 vessels under construction, of which six vessels are under construction in Poland with Remontowa Shipbuilding, two in Germany with Flensburger Schiffbau-Gesellschaft and one in Brazil with ETP Shipyard with completion at Wilson & Sons. These 9 vessels include one OSRV scheduled for delivery in 2015, four dual-fuel PSVs with one for delivery in 2015 and three in 2016, one Cable-Lay Vessel ("CLV") for delivery in 2016, one AHTS vessel for delivery in 2015 and two Well-Intervention vessels for delivery in 2016. All of the vessels under construction will be financed with a combination of mortgage debt and equity. Yard instalments for shipbuilding contracts are normally paid with 20% during construction and 80% at delivery, alternatively 10% during construction and 90% at delivery. The below table provides an overview of the Company’s committed future yard instalments per end of first quarter 2015 and associated secured mortgage debt financing; Amounts in USD million Committed Future Yard Instalments 2015 2016 Total OSRVs – Brazil 8.1 0.0 8.1 PSVs - Poland 54.5 103.3 157.8 CLV – Poland 0.0 55.5 55.5 WIV - Germany 61.2 220.0 281.2 Total Committed Future Yard Instalments 123.8 378.8 502.6

Mortgage Debt Facilities 2015 2016 Total OSRVs – Brazil 4.9 0.0 4.9 PSVs - Poland 44.5 103.3 147.8 CLV – Poland 0.0 53.8 53.8 WIV - Germany 30.6 208.2 238.8 Total Mortgage Debt Facilities 80.0 365.2 445.2 Financed by Equity 43.8 13.6 57.4

The AHTS vessel under construction for Secunda, which is consolidated in the financial statements of the Group according to the equity method, is not included in the table above. Total committed future yard instalments for this vessel is approximately EUR 40 million, the equivalent of approx. USD 45 million. Mortgage debt financing is also secured for this vessel. For an overview of the scheduled time of delivery of the Company’s vessels under construction, please refer to Section 5.5.2 "Presentation of Siem Offshore Inc.—Business activities—Siem Offshore OSV". The Group has made pre-delivery instalments of approximately EUR 31 million, the equivalent of USD 33.7 million, related to vessels under construction since latest audited published financial statements.

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5.9 Principal markets

The principal markets for the Company is currently the North Sea, Brazil, the Gulf of Mexico, the Mediterranean and West Africa. The following is the management’s assessment of the Company’s position in different areas:

5.9.1 The North Sea

Siem Offshore holds a strong position and market share in this region, with focus on supply services by AHTS, PSV and OSCV. Furthermore, Siem Offshore recently delivered its first dual fuelled PSV, for the use of either LNG or Marine Diesel Oil, to Total E&P Norge AS and a "sister vessel" will be delivered to A/S Norske Shell in second half of 2015. Both vessels will have the most modern solutions for fire-fighting and emergency preparedness and are chartered out on multiple year contracts.

5.9.2 Brazil

General

The Brazilian market is highly regulated and only locally established companies are allowed to operate there. Currently there are approximately 490 vessels operating, of which approximately 50% is Brazilian flagged, while the foreign vessels are all under temporary import conditions. There are offshore drilling and production activities all along the thousands of miles of the Brazilian coast, but the main oil provinces are Campos Basin, offshore Macaé (by far the largest), Sergipe Basin offshore Aracaju and Rio Grande do Norte, offshore Guamaré. Siem Offshore Do Brazil has onshore facilities in Macaé and Aracaju. Promising new areas are Santos Basin and Vitória Basin. The main client is Petrobras, the state-controlled oil company, but there are other oil companies expanding its offshore activities in Brazil, among them Shell, BP, TOTAL, CHEVRON, STATOIL, Queiroz Galvão, etc. Most of the contracts are long term, being up to eight years term for new building vessels to two/four years for foreign vessels. The spot market is still limited, but is expected to develop in the coming years. There are currently 150 Offshore Support Shipping companies duly authorized by ANTAQ governmental agency, however, the main players are in the number of 50 companies and several are subsidiary of major international players. The Company has during 2015 scaled down its operations in Brazil following four AHTS vessels ending firm contracts with Petrobras without further extension.

Engineering Services

Siem Offshore Do Brazil is also a main provider of specialized engineering services to the Brazilian Navy. Among its successfully contracts are: the Combat Management Systems supply for six frigates of Niteroi class, the Combat Management Systems supply for the Barroso corvette, the Combat Management Systems supply for the aircraft carrier São Paulo, and several other jobs related to system integration, simulators and navy specialized training. Besides, there are actions on course to apply these engineering capabilities on the oil and gas market, seeking future opportunities.

5.9.3 The Gulf of Mexico, the Mediterranean and West Africa

The Company has successfully entered into the market in West Africa, which is expected to grow over the coming years, with demand for different types of vessels for general support, maintenance and special services.

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The Company has successfully operated in the market in the Gulf of Mexico for about two years. It is expected that this market will grow over the coming years, with strong demand for different types of vessels for general support, maintenance and special services.

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6. INDUSTRY OVERVIEW

This section discusses the industry in which the Group operates, which is the offshore support vessel industry. Certain parts of the information in this Section relating to market environment, market developments, growth rates, market trends, industry trends, competition and similar information are estimates based on data compiled by professional organizations, consultants and analysts; in addition to market data from other external and publicly available sources, and the Company's knowledge of the markets, see Section 4.1.2 "General information—Industry and market data". The following discussion contains Forward-looking Statements, see Section 4.3 "General information—Forward-looking statements". Any forecast information and other Forward-looking Statements in this Section are not guarantees of future outcomes and these future outcomes could differ materially from current expectations. Numerous factors could cause or contribute to such differences, see Section 2 "Risk factors" for further details.

6.1 Introduction

Offshore support vessels perform a wide range of services related to construction and decommissioning work, pipe laying, support of drilling rigs and floating and fixed installations. Offshore support vessels can be divided into three main segments; AHTS, PSVs, and various types of offshore subsea vessels (OSCVs), which are further described in Section 6.3, "—The Offshore Support Vessel market". The Group owns vessels in all of the above segments. Demand for PSVs are mainly related to support of offshore platforms, rigs and floating production units, with respect to transporting cargo between such installations/units and supply bases onshore. PSVs have liquid tanks, dry bulk tanks and deck area for transportation of various cargoes such as mud, brine, cement, water, oil, diesel, pipes food, and other supplies related to production/operation of the offshore rigs/platforms. AHTS vessels can perform the same duties, but are equipped with winches and towing capacity, enabling them to lift and position anchors, tow rigs and floating production units that either cannot propel themselves, or where towing is more economical due to fuel costs. Towing of new fixed platforms or cargo barges are also relatively frequent tasks for these vessels. A large portion of AHTSs’ duties is related to anchoring up offshore rigs and floating production units. Even though many new rigs have DP systems that enable them to hold their position using navigation systems and own thrusters, and thus do not necessarily require the use of anchors, such DP systems require the constant use of the rig’s engines, it is often more economical to be anchored up, especially if the rig is expected to be in the same position for several weeks. OSCVs comprise of pipelay vessels, dive support vessels, heavylift / derrick barges, offshore construction vessels, seismic support vessels, Well-Intervention Vessels and survey vessels. These types of vessels are normally utilized in the installation, light construction, inspection, and maintenance and decommissioning of subsea equipment related to the development of oil and gas offshore. The vessels may also be utilized within certain non-oil and gas related segment, e.g. the offshore wind industry.

6.2 Demand and key drivers

The key demand drivers for offshore support vessels are the level of activity and investments in the oil and gas sector. The oil companies’ exploration and production activities, normally referred to as “E&P spending”, are based on the world’s demand for oil and gas. Furthermore, demolition of old platforms and installations and remedial work (e.g. in the US Gulf after hurricane damages) are new important areas of work for offshore support vessels. Together with a massive growing maintenance requirement on existing drilling units, installations and pipelines worldwide due to ageing and corrosion and need for repair and upgrading, this also has great influence on the demand for

  

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offshore support vessels. The below chart shows the Brent oil price development since 2010 as well as the forward curve. Brent oil price (USD/bbl)

Source: Managers Research, Ecowin, Bloomberg (June 2015) In the years 2011 to 2013, oil prices (Brent) have traded in the USD 90/bbl to USD 120/bbl range, with yearly averages being stable around USD 110/bbl. This was a supportive level for an increasing spending environment. In mid 2014 the oil price peaked at around USD 115/bbl and from there the oil price saw a dramatic fall down to about USD 50/bbl around year end 2014. During 2015 oil prices have been volatile and trading in the range of around USD 50-65/bbl. The forward curve shows points to a gradual and modest increase in oil prices over the next years, with an average price of USD 68 and 70/bbl for 2016 and 2017, respectively. The level of E&P spending is a function of the prevailing oil prices. Naturally, the dramatic fall in the oil price has forced oil companies to reduce their investments and overall offshore activity. With years of stable oil prices above USD 100/bbl, the oil companies budgeting prices have increased and hence, with the current oil price environment, many projects that previously were profitable are now under review. On the other hand, reduced activity and oil production should over time help the market balance and gradually provide support for increasing oil prices again. Below table shows the historic global E&P spending growth. Global E&P spending growth

Source: Mangers Research, based on IHS, Schlumberger, Citigroup (June 2015)

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As seen in the above chart one saw strong growth in E&P spending in the years prior to the financial crisis with annual growth rates of 15-21% in the period 2005-2008. Following the financial crisis E&P spending saw a 12% decline in 2009 before bouncing back to double digit growth in the period 2010-2012. In 2014 E&P spending growth was down to 2% while 2015 is expected to show a double digit decline. Going forward, E&P spending growth is naturally dependent on the development in oil prices. Currently there is a lot of uncertainty in the market with oil companies holding back on their investments and hence providing limited support for a quick rebound to historic growth. Another key driver for the offshore support vessel market is the offshore drilling activity. Floater rigs demand (# rigs)

Jack-up rigs demand (# rigs)

Source: Managers Research, based on HIS Petrodata (June 2015) As seen from the above charts, the demand for drilling rigs has declined substantially over the last months, both for floaters and jack-ups, and thus providing a challenging market backdrop for the offshore support vessels.

6.3 The Offshore Support Vessel market

6.3.1 General introduction

The offshore support vessel (OSV) market can be divided into several categories and segments. The main categories are platform supply vessel (PSV), anchor-handling tugs supply (AHTS) and offshore subsea construction vessels (OSCV). In addition, there are various niche segments being more specialized. The Group owns and operates vessels within all these categories. The market for offshore support vessels is fragmented across segments and regions, with many owners owning/controlling fleets that can be characterized small to medium in terms of both size and global reach. Excluding the smaller sizes in PSV and AHTS and extracting PSV > 3,000 dwt and AHTS > 12,000, the top 5 operators controlled 29% of the global fleet. Top 3 players Edison Chouest (US), Tidewater (US) and Bourbon Offshore (FR) each control 5-10% of the global fleet. An overview of the larger companies within the PSV/AHTS market is shown below. Siem Offshore ranks among the top 15 within this group, but with the larger operators controlling significantly more

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vessels. Within the OSCV segment there is various sub segments, including pipelay vessels, dive support vessels, offshore construction vessels, survey vessels, Well-Intervention Vessels etc. Below is a graphic showing examples of large suppliers of PSV/AHTS vessels (not exhaustive). Largest operators, combined AHTS/PSV (>3000 Dwt and > 12000 BHP)

Source: Managers Research, based on HIS Petrodata (June 2015)

6.3.2 Regional overview

The North Sea area consists mainly of the continental shelfs of Norway, United Kingdom, Denmark and Netherlands. Due to the large number of oil companies and limited distances in the region (Barents Sea being an exception), the market has seen a large spot market both within the PSV and AHTS segment develop since the 80s. In addition, the market provides opportunities for various term contract lengths various from months to several years. While Statoil has a large share of the market in Norway, the market is well diversified in terms of oil- and service-companies. With the well functioning spot market, the region is often referred to as a reasonable proxy on the overall global supply/demand balance since idle vessels in other regions (mainly Med’, West-Africa and Brazil) tend to migrate into the region. Brazil is one of the key markets for offshore support vessels. The market is characterized by the national oil company Petrobras being the dominant player and historically offering long-term contract opportunities in various segments, attracting operators on a global basis. The region has a limited spot market and term contracts have been in the range of 1-8 years. The country offers preference towards locally built tonnage both on contract duration and by differentiating tender processes. Brazil is also highly regulated in terms of local content requirements. USGOM is characterized by the Jones Act regulation for the PSV and AHTS segment, which means operators need to comply with this act to be able to qualify for operations in this region. Consequently, the region is only served by US operators. With the Jones Act follows also a large domestic shipbuilding industry. The region holds a large spot market as well as a term market with various contract durations. West Africa holds various regional markets related to each country in the region. The largest markets being Angola and Nigeria. Each market is unique in terms of local

0 20 40 60 80 100 120 140 160Edison Chouest

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content requirements. The region offers smaller spot markets, but by nature is characterized as various terms markets. The region may offer certain challenges related to logistics, including dry-docking and maintenance of vessels/equipment. Asia is similar to West Africa in terms of various local/regional markets. While the port of Singapore provides a regional hub for vessels standing idle or in-between contracts, there is no single spot market in the region and also term markets are characterized by the country of operation. The market is also characterized by being the largest new build market in the offshore support vessel industry with the key build country being China.

6.3.3 Platform Supply Vessels

The supply vessel market is usually divided into two main areas, namely vessels for towing and anchor handling, and for general supply to offshore units (rigs, barges, fixed installations or shore bases), in the industry called general supply duties. Such tasks can be carried out by both AHTS vessels and PSVs. However, the operation of a PSV is as a main rule limited to carry out storage duties and supply duties. Both categories of vessels can be divided further into sub segments according to their capabilities, as a number of such vessels do have cross-over capacities into other categories and related segments. Oil Recovery, Fire Fighting, ROV Surveys and Standby ERRV services are some examples of such capacities. The market for offshore vessels was very strong in most of 2005-2008, reaching record levels in the North Sea. The market has been more volatile since 2009 with generally lower and more fluctuating fleet utilization, and as a result, also fluctuating day rates for the vessels. PSVs are specifically designed for transport of all required supplies, either as deck cargo or under deck in dedicated tank systems to and from offshore installations. On deck the vessels may carry containers, drill pipes and other equipment. Under deck the vessels may carry a variety of different fluids in separate tanks, like mud & brine, cement or other dry bulk, fresh water, fuel and/or special products like methanol and drill cuttings for the drilling program. PSVs are mainly classified according to the following capacities:

- Size of free deck area

- Total carrying capacity in dead weight tons (dwt)

- Type and capacity of special tanks carrying mud & brine, fuel, dry bulk, methanol etc.

Historically, a PSV with dwt above 2,000 have been considered large. However, as the trend continues towards larger and larger vessels, PSVs with dwt between 3,000 and 4,000 are now considered medium-sized and vessels with a carrying capacity above 4,000 dwt are considered large. Classified by deck area, this corresponds to approximately 500-800 m2 for medium-sized vessels, and above 800 m2 for large vessels. Siem Offshore currently has twelve PSVs in operation, of which six can be classified as medium size, and six are classified as large. Furthermore, Siem Offshore has four large PSVs under construction. The PSV segment has seen substantial contracting of newbuilds over the last years and there are still quite a large number of vessels with scheduled delivery in 2015 and 2016. It is worth mentioning that a substantial part of the order book consists of smaller and less advanced vessels mainly under construction in the Far East and one should expect

44

significant delays as well as potential cancellations. Potentially mitigating the order book is the relatively significant number of vessels built in the 1980s still in service. We have already seen an increasing number of older vessels being phased out, and given the current challenging market, this trend is likely to continue. Worldwide PSV fleet by building year

Source: Managers Research, based on IHS Petrodata (June 2015)

6.3.4 Anchor Handling Tug-Supply vessels

AHTS vessels are specifically designed for towing and anchor handling operations of rigs and other offshore units. Furthermore, the vessels are often prepared for fire fighting (FiFi), rescue operations (standby) and oil recovery (ORO) capabilities, as well as additional opportunities like crane for ROV operations, A-frame, large AHC crane for construction and deepwater work. The AHTS is, like a PSV, also used for general supply service between shore bases and platforms, transporting different types and grades of cargo both on deck, as well as under deck in tank systems. In the case where the oil activity is in deeper waters, the anchor handling operations become heavier and focus is put on the power of the AHTS vessels, station keeping and winch capabilities, in addition to the vessels stability, capacities and functionality in general. A general trend for the segment has been to provide for safer and more efficient operations in more challenging conditions, as well as various HSE issues for safer operations for the vessels crew. AHTS vessels are mainly rated according to their towing and anchor handling capacities and capabilities, propulsion and bollard pull. Break horse power (BHP) is the most common parameter for categorizing AHTS vessels. The AHTS fleet is normally divided into vessels with less than 12,000 BHP (small sized), between 12,000 and 16,000 BHP (medium size), between 16,000 and 20,000 BHP (large) and above 20,000 BHP (very large). Owners have traditionally focused on vessels with between 12,000 and 18,000 BHP, but with a push in recent years for the larger vessels above 20,000 BHP. Due to the fact that the offshore industry has increased its presence in deeper water and outer areas where more and special capacity will be required, and also to be able to work in various markets, Siem Offshore has decided to focus on the high-end of the AHTS market, i.e. vessels above 20,000 BHP. In 2011 Siem Offshore completed a new build program of ten AHTS vessels in the category "very large", of which eight vessels are owned by Siem Offshore. The AHTS newbuilds are of VS 491 design, which meets the current and future requirements of the industry serving the next generation of drilling rigs and floaters for global offshore and deep water work. The AHTS vessels are of designs promoting favorable fuel consumption and consequently low emissions as a result of their optimal hull lines, Selective Catalysts Reduction (SCR) and hybrid propulsion, high speed and large all round capacities. The

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AHTS newbuilds have bollard pull of 275 tons, prepared for ROV operations, 60 men accommodation and have a lot of optionality such as A-frame (300t), large AHC crane (300t) etc. Similar to the PSV market, there are also quite a number of AHTS vessels under construction with the majority being scheduled for delivery in 2015 and 2016. Also for the AHTS vessels, a large number of vessels are smaller and less sophisticated vessels being built in the Far East where one should expect delays and potential cancellations. There are also a large number of AHTS vessels that are built in the early 1980s which in the current market environment are obvious phase out candidates. Worldwide AHTS fleet by building year

Source: Managers Research, based on IHS Petrodata (June 2015)

6.3.5 Offshore Subsea Construction Vessels

OSCV, often quoted as subsea vessels, are utilized in the installation, light construction, inspection and maintenance of subsea equipment related to the extraction of oil and gas offshore. The vessels may also be utilized within certain non-oil and gas related segment, e.g. the offshore wind industry. The OCSVs can further be divided into various subcategories:

- Pipelay Vessels; - Dive Support Vessels - Heavylift/Derrick Barges - Offshore Construction Vessels - Seismic Support Vessels - Well-Intervention Vessels - Survey Vessels

Siem Offshore currently has a wide range of vessels in the OSCV category, including a series of four vessels operating in the subsea support/IMR role along with two MRSV (Multipurpose field & ROV support vessels). The Group also has certain vessels in operation and under construction targeting the offshore wind market and the well intervention market. The OSCV segment in today’s form is a relatively new segment as the majority of vessels have been ordered since the mid 2000s following the oil company’s focus on subsea solutions. There are however quite a few older vessels, but these are generally less sophisticated and not comparable to standards seen on modern vessels. Prior to the financial crisis there was large ordering activity with vessels being delivered in 2008 and 2010. Newbuild deliveries then saw a drop to around 40 vessels per year in 2011 to 2013

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before increasing to around 50 vessels in 2014. For 2015 and 2016 the number of vessels scheduled for delivery is estimated to increase to around 70-80 per year. Delivery of construction vessels*

Source: Managers Research, based on HIS Petrodata June 2015) *Accommodation, Bury/Trench, Derrick, Derrick Pipelay, Diving support, Multiservice, Pipelay, ROV Support, Support, Well Intervention Over the last years there has been a lot of subsea activity. The chart below shows the total subsea order intake for the three major subsea contractors from 2003 to 2014 which represents a good indication with respect to demand for subsea vessels. As seen from the chart their order intake was relatively stable at around USD 15 billion per year in the period 2006 to 2010, while increasing to around USD 26 billion in 2014. Following the collapse in oil prices lately, 2015 is likely to show a significant decline compared to 2014. Subsea order intake (USDbn)

Source: Managers Research (June 2015)

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6.4 Rate development and utilisation

The offshore support vessel market is cyclical, and spot market rates in the North Sea region are characterized by significant volatility. This relates mostly to the underlying cyclicality of the business, but also to variations between summer and winter season and to changes within shorter time periods. In particular, the summer season is generally characterized by high activity levels. To a large extent, this can be attributed to the weather conditions in the North Sea Region. The current spot rates for PSVs in the North Sea are very low and insufficient to cover costs. The weak market has triggered several operators to lay up vessels in order to cut losses. Rates for longer contracts generally fluctuate less, but is highly correlated with the spot market. As mentioned above, the regions outside the North Sea do not have as visible and efficient spot market. The development and status in the North Sea region gives a good indication of the conditions of charters elsewhere in the world. Other regions are characterized more by medium to long term charters, but facing the same negative trends on both rates and utilization as seen in the North Sea area. While the industry trend has been operators having preference for newer and more efficient vessels (both fuel and operational) and consequently improving utilization vs. older tonnage, the weak market trends are seen across vessel segments (size and age). The following chart shows monthly average spot rates from 2002 until today for large AHTS vessels: AHTS spot dayrates (monthly average, GBP/d)

Source: Managers Research, based on Clarksons (June 2015) North Sea AHTS rates have seen large fluctuations in recent years with a gradually softening late 2014 and into 2015, although shorter periods of tightness are still observed. With softer activity levels, market participants also prepare for soft markets by stacking vessels as also is the case in the PSV segment.

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The figure below shows the corresponding data for large PSV vessels: PSV spot dayrates (monthly average, GBP/d)

Source: Managers Research, based on Clarksons (June 2015) The PSV spot market has been weak since late 2014 and North Sea PSV rates are touching levels not seen since 2002-04 and briefly in 2009-10. On an overall basis the combined utilization of AHTS and PSVs have been around 90% in the years following the financial crisis except for 2014 when utilization dropped to around 88%. The market has further deteriorated in 2015 and currently a significant number of vessels have been put in lay-up as a consequence of lower activity amongst oil companies and too many available vessels in the market. Overall PSV /AHTS fleet utilization chart (North Sea)

Source: Managers Research, based on IHS Petrodata (June 2015)

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The below table shows the overall contract awards for construction vessels, both shown for number of awards as well as volume measured in days. While the number of awards has increased relatively steadily since 2007, the average contract length (volume) has declined sharply since 2013, potentially reflecting tougher competition. Contract awards construction vessels*

Source: Managers Research, based on HIS Petrodata June 2015) *Accommodation, Bury/Trench, Derrick, Derrick Pipelay, Diving support, Multiservice, Pipelay, ROV Support, Support, Well Intervention

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7. CAPITALISATION AND INDEBTEDNESS

The information presented below should be read in conjunction with the other parts of this Prospectus, in particular Section 8 "Selected financial and other information", and the Group's financial statements and the notes related thereto, included in Appendix B of this Prospectus. Other than as set forth as above, there has been no material change to the Group’s unaudited consolidated capitalisation and net financial indebtedness since 31 March 2015.

7.1 Capitalisation

The following table sets forth information about the Group’s consolidated capitalisation as at 31 March 2015.

As of 31 March 2015

In USD 1000 (unaudited)

Indebtedness

Total current debt: 362 091

Guaranteed and secured ....................................................................... 192 624

Guaranteed but unsecured .................................................................... 0

Secured but unguaranteed .................................................................... 0

Unguaranteed and unsecured ................................................................ 169 467

Total non-current debt: 1 038 532

Guaranteed and secured ....................................................................... 877 830

Guaranteed but unsecured .................................................................... 0

Secured but unguaranteed .................................................................... 0

Unguaranteed and unsecured ................................................................ 160 702

Total indebtedness ............................................................................ 1 400 623

Shareholders’ equity

Paid in capital ...................................................................................... 526 236

Other reserves ..................................................................................... -86 796

Retained earnings ................................................................................ 279 060

Non-controlling interests ....................................................................... 36 497

Total shareholders’ equity ................................................................. 754 997

Total capitalisation ............................................................................ 2 155 619

7.2 Net financial indebtedness

The following table sets forth information about the Group’s net financial indebtedness as at 31 March 2015. As of

31 March 2015

In USD 1000 (unaudited)

(A) Cash ........................................................................................... 89 668

(B) Cash equivalent (Detail) ................................................................ 0

(C) Trading securities ......................................................................... 0

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As of 31 March 2015

In USD 1000 (unaudited)

(D) Liquidity (A)+(B)+(C) ............................................................... 89 668

(E) Current Financial Receivable ..................................................... 234 985

(F) Current Bank debt ........................................................................

192 624

(G) Current portion of non-current debt ................................................ 0

(H) Other current financial debt ........................................................... 169 467

(I) Current Financial Debt (F)+(G)+(H) ......................................... 362 091

(J) Net Current Financial Indebtedness (I)-(E)-(D) ........................ 37 437

(K) Non current Bank loans ................................................................. 810 700

(L) Bonds issued ............................................................................... 160 702

(M) Other non-current loans ................................................................ 0

(N) Non-current Financial Indebtedness (K)+(L)+(M) .................... 971 402

(O) Net Financial Indebtedness (J)+(N) .......................................... 1 008 839

The loan facilities established to finance the construction and acquisitions of the Company's vessels are secured by, a first priority mortgage on the applicable vessels, and in most cases also security in earnings, charter contracts, insurance and hedging arrangements. As of end first quarter 2015, the Company had approximately USD 160 million in outstanding unsecured bond debt with maturity in January 2018 and March 2019.

7.3 Working Capital Statement

As of the annual reporting for the fiscal year 2014, the Company was of the opinion that it had sufficient working capital for the next 12 months based on the assumptions of the OSV market at that time. Based on an unfavourable development and assumed continued soft OSV market, the shortfall for the Company’s working capital is currently expected to materialize in second half of 2015 given regular debt schedule payments and payments related to the existing newbuilding program. Accordingly, it is the Company's opinion that the Group at present time does not have sufficient working capital for its current requirements, i.e. for the next 12 months. In order to prepare the Company for the expected soft OSV market and meet the Group's current debt obligations and make payments under the Group's newbuilding program for a period of twelve months from the date of this Prospectus, the Company is dependent on additional financing of approximately USD 100 million. The additional financing will be raised through the fully underwritten Rights Offering as described in this Prospectus. As further described in Section 13.20 "The Rights Offering—The underwriting", the underwriting commitment of Siem Europe S.a r.l. for the Rights Offering is conditional upon certain events not taking place. The Company is confident that the Rights Offering will be successful, or that if it is unsuccessful, that the Company may call upon the underwriting commitment.

52

7.4 Debt instalments falling due over the next 5 years, as of year-end 2014.

The book value of mortgaged assets consisted of non-current tangible assets and portion of the accounts receivables and amounted to USD 1,764 million at year end 2014. For the first 3 months of 2015 the company has repaid debt in the amount of approximately USD 25 million and drawn approximately USD 1 million. Current cost of debt is approximately 4.5% p.a., including the effect of interest rate derivatives. In July 2015, the company announced that it had received approval from all of its financing banks for the finance plan of the Company. The approvals includes a three year extension of the Company's NOK 2.5 billion credit facility for six anchor handling tug supply vessels, which was due to expire in November 2015. As a result of this, a balloon repayment of approximately USD 200 million maturing in 2015 in the table above will not materialize, but the facility will continue on existing repayment profile until 2018. Thus, accordingly reducing the applicable balloon repayment in 2018. The Company will finance its debt and yard commitments, for the remaining period with vessels under construction, through the proceeds of this Rights Offering, existing capital and revenue generated through the ordinary course of business

7.5 Contingent and Indirect Indebtedness

As at 31 December 2014 the Group had the following contingent or indirect indebtedness in the form of guarantees.

1) Contractual guarantees to the Brazilian Navy are issued by Siem Offshore do Brasil SA. 2) Contractual guarantees provided by the Company are security for contracting parties of Siem Offshore Contractors GmbH. Such guarantees are for advance payments received at USD 27.3 million and performance guarantees at USD 109.3 million and guarantees related to tax cases in Brazil of USD 4.7 million.

Parent Company ConsolidatedInstalments per December 31, 2014 Mortgage Other interest

(USD 1000’) falling due over the next 5 years debt bearing debt Total

- 2015 308 902 - 308 902 - 2016 99 623 - 99 623 - 2017 118 926 - 118 926

80 719 2018 282 909 80 719 363 628 94 172 2019 75 975 94 172 170 147

- Thereafter 166 380 - 166 380 174 891 Total 1 052 714 174 891 1 227 605

Parent company Consolidated12/31/2014 12/31/2013 (Amounts in USD 1,000) 12/31/2014 12/31/2013

- - Contractual guarantees to Brazilian Navy (1) 593 4 304 106 131 120 291 Contractual guarantees other (2) 141 315 150 014 106 131 120 291 Total guarantees 141 908 154 317

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8. SELECTED FINANCIAL INFORMATION

8.1 Introduction and Basis for Preparation

The following selected financial information have been extracted from the Group's audited consolidated financial statements for the year ended 31 December 2014 and for the three months periods ended 31 March 2014 and 2015. These financial statements are prepared under the International Financing Reporting Standards ("IFRS") as approved by the European Union. The interim financial statements for the three months periods ended 31 March 2014 and 2015 are unaudited.

8.2 Summary of Accounting Policies and Principles

For information regarding the Group’s accounting policies under IFRS and the use of estimates and judgements, please refer to the notes of the Group's consolidated financial statements prepared under IFRS for the year ended 31 December 2014, included in this Prospectus as Appendix B.

54

8.3 Consolidated Income Statements

The table below sets out selected data from the Group’s consolidated income statements for the year ended 31 December 2014 and for the three months period ended 31 March 2015.

Consolidated Income Statements 2015 2014

(Amounts in USD 1 000) Jan-Mar Jan-DecUnaudited Audited

Operating revenues 125 995 491 312Operating expenses -77 096 -250 153Administration expenses -10 160 -47 033Operating margin 38 739 194 125Depreciation and amortisation -26 750 -96 883Impairment of vessels - -29 000Gain (loss) on sales of fixed assets -15 18 728Gain of sale of interest rate derivatives (CIRR) 92 368Gain (loss) on currency derivative contracts -36 052 -3 023Operating profit -23 986 84 316

Financial revenues 2 249 9 091Financial expenses -11 934 -55 868Result from associated companies -553 1 808Net currency gain (loss) 10 022 34 092Net financial items -216 -10 877

Profit/(loss) before taxes -24 203 73 439

Tax benefit / (expense) -1 360 -2 729Net profit/(loss) -25 562 70 710Net profit/ (loss) attributable to non-controlling interest -49 12 563Net profit/ (loss) attributable to shareholders -25 612 58 147Weighted average number of shares outstanding ('000) 387 591 387 591Earnings(loss) per share (basic and diluted) -0.07 0.15

Comprehensive Income Statements 2015 2014(Amounts in USD 1 000) 1Q Jan-Dec

Unaudited AuditedNet profit/(loss) -25 562 70 710Other comprehensive income (expense)Items that will not be reclassified to profit or lossPension remeasurement gain (loss) - 1 510Items that may be subsequently reclassified to profit or lossCash flow hedges -32 392 -14 622Currency translation differences -3 797 -11 100Total comprehensive income for the period -61 751 46 499Net profit/ (loss) attributable to non-controlling interest -48 12 271Net profit/ (loss) attributable to shareholders -61 799 34 228

55

8.4 Selected Statements of Financial Position

The table below sets out selected data from the Group’s consolidated statements of financial position as of 31 December 2014 and 31 March 2015.

Consolidated Statements of Financial Position

(Amounts in USD 1 000) 31.03.2015 31.12.2014Unaudited Audited

Non-current assetsVessels and equipment 1 596 220 1 743 693Vessels under construction 127 035 130 515Capitalised project cost 10 022 10 965Investment in associates and other long-term receivables 35 051 43 654CIRR loan deposit 1) 26 145 28 453Deferred tax asset 12 587 12 591Intangible assets 23 905 25 937Total non-current assets 1 830 966 1 995 809Debtors, prepayments and other current assets 130 875 147 152Asset held-for-sale 104 110 -Cash and cash equivalents 89 668 117 623Total current assets 324 654 264 774

Total assets 2 155 619 2 260 584

EquityPaid-in capital 526 236 526 236Other reserves -86 796 -45 491Retained earnings 279 060 304 237Shareholders´ equity 718 500 784 982Non-controlling interest 36 497 38 666Total equity 754 997 823 649LiabilitiesBorrowings 971 402 1 087 757CIRR loan 1) 26 145 28 453Other non-current liabilities 40 985 38 532Total non-current liabilities 1 038 532 1 154 742Borrowings 192 624 126 603Accounts payable and other current liabilities 169 467 155 590Total current liabilities 362 091 282 193

Total liabilities 1 400 623 1 436 935

Total equity and liabilities 2 155 619 2 260 584

1) Commercial Interest Reference Rate

56

8.5 Selected Statements of Cash Flows

The table below sets out selected data from the Group’s consolidated statements of cash flows for the year ended 31 December 2014 and for the three months period ended 31 March 2015.

Consolidated Statements of Cash Flows2015 2014

(Amounts in USD 1 000) Jan-Mar Jan-DecUnaudited Audited

Cash flow from operationsProfit before taxes, excluding interest -12 435 117 702Interest paid -13 092 -46 362Taxes paid -1 360 -8 957Results from associated companies 553 -1 808Loss/(gain) on sale of assets 15 -18 728Value of employee services 336 2 462Depreciation and amortisation 26 750 96 883Impairments of vessels - 29 000Effect of unreal. currency exchange forward contracts 27 264 5 612Change in short-term receivables and payables -5 538 19 918CIRR -92 -368Other changes 5 400 -11 010

Net cash flow from operations 27 802 184 345

Cash flow from investing activities Interest received 956 4 171Investments in fixed assets -16 730 -525 674Proceeds from sale of fixed assets 0 76 290 Dividend from associated companies - 278Investment in associated companies -2 251 -12 201

Cash flow from investing activities -18 024 -457 136

Cashflow from financing activitiesProceeds from issue of new equity - 1 336Dividend payment - -6 533Contribution from non-controlling interests of consolidated subsidiaries - -Proceeds from bank overdraft -1 309 5 624Proceeds from new long-term borrowing 1 335 447 701Repayment of long-term borrowing -25 489 -131 936

Cash flow from financing activities -25 463 316 192

Net change in cash -15 686 43 400

Cash at bank start of period 117 621 101 206Effect of exchange rate differences -12 267 -26 985

Cash at bank end of period 89 668 117 621

57

8.6 Selected Statement of Changes In Equity

The table below sets out selected data from the Group’s consolidated statement of changes in equity for the year ended 31 December 2014 and for the three months period ended 31 March 2015.

8.7 Segment Information

The Company identifies its reportable segments and discloses segment information under IFRS 8 Operating Segments which requires Siem Offshore Inc. to identify its segments according to the organization and reporting structure used by management. Operating segments are components of a business that are evaluated regularly by the chief operating decision maker for the purpose of assessing performance and allocating resources. The Company’s chief operating decision maker is the management board, comprised of the CEO of Siem Offshore Inc., CFO and Commercial Director. Generally, financial information is required to be disclosed on the same basis that is used by the chief operating decision maker. The Company’s operating segments represent separately managed business areas with unique products serving different markets. The reportable segments are Siem Offshore OSV and Siem Offshore Industrial Investments, with the seven sub segment business areas PSV, OSCV, AHTS Vessels, Other Vessels in Brazil, Submarine Power Cable Installation, Combat Management Systems, Scientific Core-Drilling and Siem WIS. Under Siem Offshore OSV, the PSV segment includes 12 Platform Supply Vessels. The OSCV segment includes four Offshore Subsea Construction Vessels and two Multipurpose field and ROV Support Vessels. The AHTS segment includes ten Anchor Handling Tug Supply Vessels. The Segment of Other Vessels in Brazil consists of one Oil Spill Recovery Vessel and eight smaller Platform Supply Vessels. Under Siem Offshore Industrial Investments, the Submarine Power Cable Installation comprises the activities of installation and maintenance of subsea power cables for offshore windfarms. Combat Management Systems is the activity of supplying software

Consolidated Statement of Changes in Equity

(Amounts in USD 1 000)Total no. of

shares Share capital

Share premium reserves

Other reserves

Retained earnings

Share-holders'

equity

Non- Controlling

interest Total equityEquity on January 1, 2015 387 591 380 3 876 522 361 -45 491 304 237 784 983 38 666 823 649Change previous periods 0 0 0Net profit to shareholders -25 513 -25 513 -49 -25 562Value of employee services 336 336 336Cash flow hedge -32 392 -32 392 -32 392Currency translation differences -8 913 -8 913 1 -8 912Total comprehensive income / (expense) 0 0 -41 305 -25 177 -66 482 -48 -66 531Share issues in partially owned subsidiaries 0 152 152Capital reduction in partially owned subsidiaries -2 274 -2 274Equity on March 31, 2015 387 591 380 3 876 522 361 -86 796 279 060 718 501 36 496 754 997

(Amount in USD 1 000)Total no. of

shares Share capital

Share premium reserves

Other reserves

Retained earnings

Share-holders'

equity

Non- Controlling

interest Total equityEquity on January 1, 2014 387 591 380 3 876 522 361 -19 769 250 161 756 629 37 260 793 888Change previous periods -1 510 -1 510 -1 510Net profit to shareholders 58 147 58 147 12 563 70 710Value of employee services 2 462 2 462 2 462Pension remeasurement 1 510 1 510 1 510Currency translation differences -25 721 -25 721 -293 -26 014Total comprehensive income / (expense) 0 0 -25 721 60 609 34 887 12 271 47 158Share issues in partially owned subsidiaries 0 1 336 1 336Capital reduction in partially owned subsidiaries -12 201 -12 201Buy back of shares 0 0 0 0Dividend paid -6 533 -6 533 -6 533Shares issues in Siem Offshore Inc 0 0Equity on December 31, 2014 387 591 380 3 876 522 361 -45 491 304 237 784 983 38 666 823 649

58

for a management system to the Brazilian Navy. Scientific Core-Drilling is comprised of the activity of the scientific drillship, “JOIDES Resolution” which performs core drilling. Siem WIS develops applications for MPD, and certain other investments. The Company uses two measures of segment results, operating revenue and operating profit. Intersegment sales and transfers reflect arm’s length prices as if sold or transferred to third parties at the time of inception of the internal contract, which may cover several years. Transfers of businesses or fixed assets within or between the segments are reported without recognizing gains or losses. Results of activities not considered part of the Company’s main operations as well as unallocated revenues, expenses, liabilities and assets are reported together with Other under the caption Other and intercompany eliminations. The following tables include information about the Company’s operating segments. Segment Reporting by Business Area

2015 2014(Amounts in USD 1 000) 1Q Jan-Dec

Unaudited AuditedOperating revenue by business areaPlatform Supply Vessels (1) 24 619 104 423Offshore Subsea Construction Vessels 30 356 104 844Anchor Handling Tug Supply Vessels (1) 15 480 142 480Other vessels in Brazil 6 715 19 351Other/Intercompany elimination -1 496 -15 854Operating revenue, OSV segment 75 674 355 244

Submarine Power Cable activities 41 023 101 479Combat Management Systems 2 243 6 075Scientific Core-Drilling 6 474 25 914Siem WIS 580 2 601Operating revenue, Industial Investments segment 50 321 136 069

Total operating revenue 125 995 491 312

2015 2014(Amounts in USD 1 000) 1Q Jan-Dec

Unaudited AuditedOperating profit by business areaPlatform Supply Vessels 8 042 35 437Offshore Subsea Construction Vessels 14 238 48 073Anchor Handling Tug Supply Vessels -9 974 39 232Other vessels in Brazil 1 578 -35 343Other/Intercompany elimination 2 628 2 521Operating profit, OSV segment 16 512 89 919

59

8.8 Auditor

The Company’s auditor is PricewaterhouseCoopers AS, with registration number 987 009 713 and business address at Dronning Eufemias gate 8, 0191 Oslo, Norway. PricewaterhouseCoopers AS is a member of Den Norske Revisorforeningen (The Norwegian Institute of Public Accountants). PricewaterhouseCoopers AS has been the Group’s auditor throughout the period covered by financial information included in the Prospectus. PricewaterhouseCoopers AS' audit reports on the annual financial statements for the Company for 2014 are included together with the annual financial statements for the Company for 2014 in Appendix B. PricewaterhouseCoopers AS has not audited, reviewed or produced any report on any other information provided in this Prospectus.

p g p g

Submarine Power Cable activities 3 069 15 581Combat Management Systems -25 -8Scientific Core-Drilling 2 666 9 429Siem WIS -73 355Operating profit, Industial Investments segment 5 637 25 357

Administration expenses -10 160 -47 033Currency gain / (loss) -35 976 16 074Total operating profit -23 986 84 316

(1) Platform Supply Vessel category and Anchor Handling Tug Supply Vessel category includeI/C revenue from contracting work for the 100% owned subsidiary "Siem Offshore Contractors GmbHwhich is included in the I/C eliminations in the table above.

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9. BOARD OF DIRECTORS, MANAGEMENT, EMPLOYEES AND CORPORATE

GOVERNANCE

9.1 Board of Directors

9.1.1 Overview

The Articles of Association provide that the Board of Directors shall consist of a minimum of three and a maximum of seven members. As at the date of this Prospectus, the Company's Board of Directors consists of the following: Name of director Director since Current term expires

Eystein Eriksrud (Chairman) 2010 2016

Kristian Siem 2005 2017

Michael Delouche 2005 2016

David Mullen 2008 2017

John C. Wallace 2012 2016

The Board of Directors is in compliance with the independence requirements of the Norwegian Code of Practice for Corporate Governance dated 30 October 2014 (the "Corporate Governance Code"), meaning that (i) the majority of the shareholder-elected members of the Board of Directors is independent of the Company’s executive management and material business contacts, (ii) at least two of the shareholder-elected members of the Board of Directors are independent of the Company’s main shareholders, and (iii) no members of the Company’s executive management are on the Board of Directors. Eystein Eriksrud, Kristian Siem and Michael Delouche represent the Company's main shareholders, Siem Europe S.a r.l., and are not considered as independent. David Mullen and John C. Wallace are both considered as independent Board Members. The following serves as the business address for the members of the Board of Directors in relation to their directorships in the Company: Siem Offshore Management AS Nodeviga 14 4610 Kristiansand Norway 9.1.2 Brief biographies of the members of the Board Directors

Eystein Eriksrud (born 1970), Chairman Mr. Eriksrud is the Deputy CEO of Siem Industries Inc., the Company’s main shareholder. He is further the chairman of Electromagnetic Geoservices ASA, Flensburger Schiffbaugesellschaft mbH & Co KG and a director of Subsea 7 S.A. Prior to joining Siem Industries in October 2011, he was partner of the Norwegian law firm Wiersholm Mellbye & Bech since 2005 working as a business lawyer with an internationally oriented practice in mergers and acquisitions, company law and securities law, particularly in the shipping, offshore and oil service sectors. He was Group Company Secretary of the Kvaerner Group from 2000-2002 and served as Group General Counsel of the Siem Industries Group from 2002-2005. He has served on the boards of Veripos Inc., Privatbanken ASA and Tinfos AS as well as a number of other boards. Eriksrud is a Norwegian citizen.

61

Kristian Siem (born 1949), Board member Mr. Siem is chairman of Siem Industries Inc., Subsea 7 S.A. and Siem Industrikapital AB and a director of Siem Shipping Inc., Flensburger Schiffbau-Gesellschaft mbH & Co. KG, North Atlantic Smaller Companies Investment Trust plc. and NKT Holding A/S. Mr. Siem is a Norwegian citizen.

Michael Delouche (born 1957), Board member Mr. Delouche is the president and the secretary of Siem Industries Inc. and is in charge of the Company's operations at the registered office in George Town, Cayman Islands. He is a director of Siem Shipping Inc. and a former director of Subsea 7 Inc. Mr. Delouche received degrees in civil engineering (structural) and business and was previously an audit manager with KPMG Peat Marwick LLP. Mr. Delouche is a US citizen.

David Mullen (born 1958), Board member David Mullen is the founder and CEO of Shelf Drilling, an international shallow water drilling contractor. Since the company's inception in November 2012, David has lead Shelf Drilling through a series of complex transactions in establishing Shelf Drilling with a fleet of 37 Jack-ups and 1 swamp barge and 2 new build rigs under construction. Prior to Shelf Drilling, David was CEO of Wellsteam Holdings PLC, a UK-listed company that designs, manufactures and services subsea pipeline products. From 2008 – 2010, David served as CEO of Ocean Rig ASA, a Norway-listed ultra-deep water drilling contractor. Prior to 2008 David held executive management positions with Transocean and Schlumberger Limited, including a 23 year career with Schlumberger Limited.

Mr. Mullen holds a degree in geology from Trinity College, Dublin, and a master degree in geophysics from the University College Galway, Ireland. Mr. Mullen is an Irish citizen.

John C. Wallace (born 1938), Board member John C. Wallace is a Chartered Accountant having qualified with PricewaterhouseCoopers in Canada in 1963, after which he joined Baring Brothers & Co., Limited in London, England. Prior to his retirement in 2010, he served for over twenty-five years as Chairman of Fred. Olsen Ltd., a London-based corporation that he joined in 1968 and which specializes in the business of shipping, renewable energy and property development. He received his B. Comm degree majoring in Accounting and Economics from McGill University in 1959. In November 2004, he successfully completed the International Uniform Certified Public Accountant Qualification Examination and has received a CPA Certificate from the State of Illinois. Mr. Wallace also retired from the board of directors of Ganger Rolf ASA and Bonheur ASA, Oslo, both publicly-traded shipping companies with interests in offshore energy services and renewable energy. He is a Director of Callon Petroleum Co , USA where he is Chairman of the Audit Committee. He was inducted as a 2011 Industry Pioneer by the Offshore Energy Centre in Houston. Mr. Wallace is a Canadian citizen.

9.1.3 Remuneration

The remuneration paid to the members of the Board of Directors (acting in capacity as board members) in 2014 was USD 440,000.

9.1.4 Shares and options held by members of the Board of Directors

As at the date of this Prospectus, the Chairman Eystein Eriksrud holds 45 000 Shares in the Company through his wholly-owned company Laburnum AS. None of the other members of the Board of Directors holds any Shares or options for Shares in the Company.

The main shareholder of the Company, Siem Europe S.a r.l. is controlled by a trust where certain members of Kristian Siem’s family are potential beneficiaries.

9.2 Management

9.2.1 Overview

62

The senior management of the Company consists of four individuals. The names of the members of the Management as at the date of this Prospectus, and their respective positions, are presented in the table below: Name Position Served since Idar Hillersøy Chief Executive Officer August 2015 Dagfinn B. Lie Chief Financial Officer October 2007 Bernt Omdal Chartering Director July 2011 Tore B. Johannessen Organization and HR Director May 2012

The following serves as the business address for the members of Management in relation to their positions in the Company: Siem Offshore Management AS Nodeviga 14 4610 Kristiansand Norway 9.2.2 Brief biographies of the members of the Management

Set out below are brief biographies of the members of the Management, including their relevant management expertise and experience, an indication of any significant principal activities performed by them outside the Company and names of companies and partnerships of which a member of the Management is or has been a member of the administrative, management or supervisory bodies or partner the previous five years (not including directorships and management positions in subsidiaries of the Company). Idar Hillersøy (born 1963) – Chief Executive Officer Mr. Idar Hillersøy was appointed CEO of Siem Offshore with effect from 1 August 2015. Mr. Hillersøy joined the Company in April 2015 as CEO of Siem Offshore OSV. Idar Hillersøy is also the President and CEO of Secunda Canada (50% owned by Siem Offshore). He has OSV Management and Project Management experience from Simon Møkster Shipping AS (CCO), Seabrokers (General Manager), Norwegian Contractors and Stolt Offshore. Idar Hillersøy holds an engineering degree from Høgskolen i Sør Trøndelag (HiST) and an MBA from Heriot-Watt University. Idar Hillersøy is a Norwegian citizen and resident in Stavanger and Kristiansand, Norway. Dagfinn B. Lie (born 1972) – Chief Financial Officer Mr. Dagfinn B. Lie joined Siem Offshore in October 2007 as Controller and was appointed CFO with effect from 1 January 2009. Dagfinn B. Lie has a Master in Finance & Accounting and an MBA from the Norwegian School of Economics and Business Administration. Prior to his current employment in Siem Offshore he has gained experience from, among others, the companies Wallenius Wilhelmsen Logistics and ABB Offshore. Dagfinn B. Lie is a Norwegian citizen and resident in Vennesla, Norway. Bernt Omdal (born 1966) – Chartering Director Mr. Bernt Omdal was appointed as head of chartering 1 July 2011. Bernt Omdal has been the Chartering Director of the company since November 2008 and has more than 20 years of experience within the maritime industry, including chartering, operations and shipbroking. Bernt Omdal is a Norwegian citizen and resident in Kristiansand, Norway. Tore B. Johannessen (born 1955) – Organization and HR Director Mr. Tore B. Johannessen was appointed Global HR Director for Siem Offshore with effect of 15 May 2012. He has a long and diverse experience from the oil and gas industry. He came from the position as Senior Vice President HR & Organization in TTS Energy AS. He has also previous experience from position as Regional General Manager in DnB, Norway and Vice President HR & Organization in Hydralift AS. Tore B. Johannessen is a Norwegian citizen and resident in Kristiansand, Norway.

63

9.2.3 Remuneration and benefits

The remuneration paid to the members of the Management in 2014 was TUSD 2,421.4. The table below sets out salaries and other benefits to the members of the Management in 2014 (all in USD 1,000). Name Salary paid Pension

premium Other

benefits Share

options Terje Sørensen* 610.6 33.8 55.9 3,600,000 Dagfinn B. Lie 310.5 31.1 12.5 2,400,000 Svein Erik Mykland* 452.4 40.6 9.0 2,400,000 Bernt Omdal 391.4 37.2 3.1 2,400,000 Tore B. Johannessen 388.6 41.0 3.7 2,400,000 *Terje Sørensen will leave the Company after a transition phase following the stock exchange notice on 31st of July 2015 where Idar Hillersøy was appointed new CEO of Siem Offshore Inc. Svein Erik Mykland will further step down as Chief Operating Officer and take over responsibility for the follow up and development of Siem Offshore Contractors. A new Chief Operating Officer will be employed. 9.2.4 Long-term incentive program

The Company has entered into two Share based option programs, the first in 2013 and the second in 2014. On the 13 January 2013, the Company entered into Share option agreement with selected employees. The Board of Directors awarded 14,000,000 share options to eight key employees of the Company. The exercise price is NOK 8.45 per share. The exercise price of the granted options is equal to the market price of the shares on the date of the grant. On the 2 April 2014, the Company entered into Share option agreement with selected employees. The Board of Directors awarded 3,000,000 share options to ten key employees of the Company. The exercise price is NOK 9.07 per share. The exercise price of the granted options is equal to the market price of the shares on the date of the grant. 9.2.5 Shares held by members of the Management

As of the date of this Prospectus, the members of the Management own Shares as follows: Name Shares owned Share options Dagfinn B. Lie 428,161 2,400,000 Bernt Omdal 0 2,400,000 Tore B. Johannessen 0 2,400,000 Idar Hillesøy 0 0 Other key employees 240,000 5,000,000

9.3 Directorships and management positions held by the Board Members and the senior management

The following table sets forth all companies and partnerships in which the members of the Board of Directors and senior management have been members of the administrative, management and supervisory bodies in the previous five years (not including subsidiaries within the Group).

64

Overview Board Members

Name of officer Positions Company or partnership

Kristian Siem Current:

Director

Chairman

Director

Director

Chairman

Deputy Chairman

Director

Director

Siem Offshore Inc.

Siem Industries Inc.

Frupor S.A

Siem Shipping Inc.

Subsea 7 S.A

NKT Holding A/S

North Atlantic Smaller Companies Investment Trust plc

Flensburger Schiffbau-Gesellschaft mbH & Co. KG

Eystein Eriksrud Current:

Chairman

Director

Chairman

Chairman

Chairman

Director

Director

Director

Director

Chairman

Director

Director

Director

Director

Director

Chairman

Director

Terminated:

Chairman

Siem Offshore Inc.

Subsea 7 S.A

Electromagnetic Geoservices ASA

Siem Kapital AS

Flensburger Schiffbau-Gesellschaft mbH & Co. KG

VSK Finance Ltd.

VSK Holdings Ltd

Ember VRM S.a r.l.

Siem Car Carriers AS

Laburnum AS

Siem Europe S.a r.l.

Siem Capital UK Ltd.

Epistates Ltd.

Siem WIS AS

SCC Shipowning II DA

SCC Shipowning I AS

Star Reefers AS

Veripos Inc.

65

John Wallace Current:

Director

Director

Director

Director

Director

Terminated:

Director

Director

Director

Siem Offshore Inc.

Callon Petroleum Co.

LNG Direct Rail Ltd.

Secunda Holdings GP Inc.

Secunda Operations GP Inc.

Bonheur ASA

Ganger Rolf ASA

Fred. Olsen Ltd.

David Mullen Current:

Director

Chairman

Director

CEO & Director

Terminated:

CEO & Director

Director

Director

Director

CEO & Director

Director

Director

Director

Director

Siem Offshore Inc.

Shelf Drilling Midco Ltd.

Shelf Drilling Ltd. and its wholly owned subsidiary companies.

Shelf Drilling Holdings Ltd.

Ocean Rig AS

Ocean Rig Ltd

Ocean Rig UK Ltd

Tercel Oilfield Products Ltd.

Wellstream Holdings PLC

Wellstream International Ltd

Ocean Rig Ghana Ltd

Wellstream Finance Ltd

Wellstream (Trustee) Ltd

Michael Delouche

Current:

Director

Director

President

Manager A

Director

Director

Director

Director

Siem Offshore Inc.

Siem Shipping Inc.

Siem Industries Inc.

Siem Europe S.a r.l.

Deep Seas Insurance Ltd.

VSK Holdings Inc.

VSK Finance Inc.

Various Cayman Island subsidiaries of Subsea 7 S.A.

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Overview Senior Management

Name of officer Positions Company or partnership

Idar Hillersøy Current:

CEO

Director

Siem Offshore Inc.

EAH Holding AS

Dagfinn B. Lie Current:

CFO

Chairman

Siem Offshore Inc.

DG – Invest AS

Bernt Omdal Current:

Chartering Director

Director

Director

Siem Offshore Inc.

Chr.Th.Boe & Søn AS

Stiftelsen Sørlandets Seilende Skoleskibs Institution

Tore B. Johannessen

Current:

Organization & HR Director

Director

Director

Terminated:

Senior Vice President HR & Organization

Director

Siem Offshore Inc.

Sørlandet Shipping Association

Sørlandsreklame AS

TTS Energy, division of TTS Group ASA

Kristiansand Chamber of Commerce

9.4 Benefits upon termination

There are no specific benefits upon termination of engagement for board members or senior management.

9.5 Pension and retirement benefits

The Company has a defined benefit plan for its employees in Norway and its senior management. The pension scheme is financed through contributions to insurance companies or pension funds. A defined benefit plan defines the amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

9.6 Loans and guarantees

Loans on December 31, 2014 Amount Interest Comment Loans to senior management 3,331 - Share loan Total 3,331 - The loans are repayable by the employee when the employee's shares in the Company are realized or if the employee leaves the Company. The loans are secured by pledges in relevant shares.

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9.7 Audit committee

The following Directors are currently members of the Company’s audit committee: • John C. Wallace

• Michael Delouche

The agenda for each audit committee meeting is pre-planned to ensure that each aspect of the committee’s responsibilities is discharged as part of an annual cycle. The main responsibilities of the audit committee are to: • monitor the integrity and clarity of the financial information and of the major

financial statements of the Company, and to review any significant financial reporting issues and judgments those statements contain;

• approve the annual external audit plan and to review with the external auditors the nature, scope and results of their audit, and any control issues raised by them;

• make recommendations as to the appointment, terms of engagement and remuneration of the external auditors and review any question of their resignation or removal, and to review the effectiveness of the external auditors and their independence;

• review the consistency of and any changes to accounting policies, the application of appropriate accounting standards, and the methods used to account for significant or unusual transactions;

• review the Company’s internal controls and systems and practices for the identification and management of risk; and

• monitor compliance with the Company’s policies to prevent illegal and questionable corporate conduct and to review arrangements for ‘whistle-blowing’.

The external auditors attend meetings of the committee, other than when their appointment or performance is being reviewed, and the chief financial officer and members of the finance function attend as appropriate. It is the intention of the committee to meet with the auditors in the absence of management at least twice a year. The external auditors are appointed annually at the annual general meeting. The Board audit committee considers the reappointment of the auditors and reports its findings to the Board. The Board audit committee periodically considers the performance, cost and independence of the external auditors, including a comparison of audit fees with similar trading companies and reviews the level of service provided by the audit team throughout the Group.

9.8 Compensation Committee

The Compensation Committee consists of two Directors, Kristian Siem and Eystein Eriksrud. The mandate of the committee is to review and approve the compensation of the CEO and any bonuses to all executive personnel.

9.9 Conflicts of interests

The main shareholder of the Company, Siem Europe S.a r.l. is controlled by a trust where certain members of Kristian Siem’s family are potential beneficiaries. Kristian Siem, who is a member of the Board of the Company, is also inter alia the chairman of the board of directors of Siem Industries Inc. and of Subsea 7 S.A., the charterer of the OSCV "Siem Stingray". The contract between the Company and Subsea 7 S.A. is made on arms length terms.

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In September 2014 Siem Industries Inc., which is the beneficial owner of Siem Europe S.a r.l., announced the acquisition of Flensburger Schiffbau-Gesellschaft mbH & Co. KG which is building the two Well-Intervention Vessels under construction by the Company. The contract between Flensburger Schiffbau-Gesellschaft mbH & Co. KG and the Company is made on arm's length terms. In November 2014, the Company provided a loan of EUR 15 million to Siem Industries Inc. as part of the restructuring of Flensburger Schiffbau-Gesellschaft mbH & Co. KG. The loan was provided to ensure delivery of the two Well-Intervention Vessels under construction and shall be utilized to finance the yard. EUR 10 million of the funding of the loan was provided by Helix Energy Solutions Group Inc. by way of prepayment of charter hire for the two Well-Intervention Vessels. The loan is at market terms and matures when the last of the two Well-Intervention Vessels have been delivered from the yard. At the end of 2014 a short term loan of USD 60 million was drawn by the Company under a credit facility provided by Siem Industries Inc. The short term loan is on market terms. In June 2015, a short term loan of USD 15 million was provided by Siem Industries Inc. to the Company. The short term loan is on market terms. The Company has currently not drawn on the short term loan, and any undrawn portion of the USD 15 million commitment will be cancelled, and any drawn amounts will mature, when the proceeds from the Rights Offering has been received by the Company. Except from the above, there are no potential conflicts of interest between the Directors and members of managements’ duties to the Company and their private interests and other duties.

9.10 Convictions for fraudulent offences, bankruptcy etc.

None of the members of the Board of Directors or the Management have during the last five years preceding the date of this Prospectus:

• any convictions in relation to indictable offences or convictions in relation to fraudulent offences;

• received any official public incrimination and/or sanctions by any statutory or

regulatory authorities (including designated professional bodies) or been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of a company or from acting in the management or conduct of the affairs of any company; or

• been declared bankrupt or been associated with any bankruptcy, receivership or liquidation in his/her capacity as a founder, director or senior manager of a company or partner of a limited partnership.

9.11 Employees

9.11.1 Overview

As at the date of this Prospectus, the Company had a total of 876 employees.

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The following table illustrates the number of employees as per the end of each calendar year for 2014 and 2013 and 2012 split by the geographical areas. Geographical area 2014 2013 2012 Norway 333 468 451 Germany 82 66 21 Holland 58 54 70 Brazil 552 514 525 Poland 9 4 0 Australia 1 1 0 Ghana n.a n.a 5 USA 3 3 4 India 0 0 2 Total 1,038 1,110 1,078

9.12 Corporate governance

The Company complies with the Corporate Governance Code. As a company incorporated in the Cayman Islands, Siem Offshore Inc. is an exempted company duly incorporated under the laws of the Cayman Islands and subject to Cayman Islands laws and regulations with respect to corporate governance. Cayman Islands corporate law is to a great extent based on English Law. In addition, due to the Company’s listing on the Oslo Stock Exchange, certain aspects of Norwegian Securities law apply to the Company and there is a requirement to adhere to the Corporate Governance Code. Due to new provisions implemented in the Norwegian Accounting Act, compliance with the regulations for corporate governance reporting is now a legal requirement provided that it does not conflict with the Cayman Islands laws and regulations. The Company endeavours to maintain high standards of corporate governance and is committed to ensuring that all shareholders of the Company are treated equally and the same information is communicated to all shareholders at the same time. Corporate governance is subject to annual assessment and review by the Board of Directors. Code of Conduct It is the policy of the Company to conduct its business in accordance with all applicable laws and regulations and in an ethically responsible manner. The Company’s code of conduct guidelines applies to all directors, officers, hired staff, temporary employees and employees of the Company. It enables the Company to continue to operate ethically, honestly and to comply with law.

The Company’s code of conduct guidelines sets out minimum required standards and it is a line management responsibility to communicate and implement the Company’s code of conduct guidelines and associated Siem Offshore policies. The Company has a policy of zero tolerance for corruption and other illegal business means, and will not accept that our people use improper influence on any individual or entity. Due to the international nature of our business, we are subject to several anti-corruption laws. Corruption is a threat to fair business, it undermines legitimate business activities, and any violation within our organisation will be a threat to our reputation and credibility in the market.

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10. CORPORATE INFORMATION

10.1 Incorporation and address

Siem Offshore Inc. is an exempted company limited by shares incorporated under the laws of Cayman Islands with corporate registration no. 140468. The Company was incorporated on 12 October 2004 under the name Siem Supply Inc. The Company’s commercial name is Siem Offshore. The Company and its activities are primarily governed by the Companies Law (2013 Revision) and the Company’s Memorandum and Articles of Association. Certain elements of Norwegian securities law regulations will apply in addition, since the Company’s shares are listed on the Oslo Stock Exchange. The registered address of Siem Offshore Inc. is as follows: Siem Offshore Inc. PO Box 309 Ugland House South Church Street George Town Grand Cayman KY1-1104 Cayman Islands The Company maintains executive offices in the Cayman Islands at the following address: Siem Offshore Inc. P.O.Box 10718 George Town Grand Cayman KY1-1006 Cayman Islands Telephone: + 1 345 949 1030 Telefax: + 1 345 946 3342 The Company’s headquarter and corporate management team is located at the following address: Siem Offshore Management AS Nodeviga 14 4610 Kristiansand Norway

10.2 Listing and registration

The Company's Shares are listed on the Oslo Stock Exchange and are trade under the ticker symbol "SIOFF". The Shares are registered in the Norwegian Central Securities Depository (VPS). The Company's registrar is Nordea Bank Norge ASA, Oslo, Norway, Middelthunsgate 17, 0368 Oslo, Norway. The Shares carry the ISIN number KYG813131011.

10.3 Share capital and Share capital history

The authorized share capital of the Company is USD 5,500,000 divided into 550,000,000 shares of a nominal value of USD 0.01 each.

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The issued share capital of the Company as of the date of this Prospectus is USD 3,875,913.80 divided into 387,591,380 Shares each with a nominal value of USD 0.01. All the Shares are validly issued and fully paid.

On 16 July 2015, the Company called for an extraordinary general meeting to be held on 14 August 2015 in order to increase the Company's authorised share capital from USD 5,500,000 to USD 10,000,000 by the creation of an additional 450,000,000 Shares. The increase in share capital is meant to facilitate the Rights Offering. Following the Rights Offering, the issued share capital will be USD 8,420,213,80 divided into 842,021,380 Shares. There has not been any development in the Company's issued share capital for the periods covered by the historical financial information included in the Prospectus as Appendix B.

10.4 Own shares

As of the date of this Prospectus, the Company does not own any Shares.

10.5 Shareholder agreements

The Company is not aware of any shareholders' agreements in relation to the Shares.

10.6 Outstanding authorizations

The Board of Siem Offshore currently holds authorization to issue 612,408,620 new Shares in the Company. Following the Rights Offering, the Board will be authorised to issue 157,978,620 new Shares in the Company.

10.7 Convertible instruments, warrants and share options

On the 13 January 2013, the Company entered into a Share option agreement with selected employees. The Board of Directors of Siem Offshore Inc. has authorized the award of 14,000,000 share options to eight key employees of the Company. The exercise price is NOK 8.45 per share. The exercise price of the granted options is equal to the market price of the shares on the date of the grant. The Options can be exercised as follows: 2014: 20% of the total number beginning on January 18th 2014. 2015: 40% of the total number beginning on January 18th 2015, less any options previously issued. 2016: 60% of the total number beginning on January 18th 2016, less any options previously issued. 2017: 80% of the total number beginning on January 18th 2017, less any options previously issued. 2018: 100% of the total number beginning on June 18th 2018, less any options previously issued.

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The exercise period shall in no event be later than the date falling 10 years after the award date. The group has no legal or constructive obligation to repurchase or settle the options in cash. No options were exercised during 2013 or 2014. On 2 April 2014, the Company entered into a second Share option agreement with selected employees. The Board of Directors has authorized the award of 3,000,000 share options to ten key employees of the Company. The exercise price is NOK 9.07 per share. The exercise price of the granted options is equal to the market price of the shares on the date of the grant.

The Options can be exercised as follows:

2017:

60% of the total number beginning on 2 April 2017, less any options previously issued.

2018:

80% of the total number beginning on 2 April 2018, less any options previously issued.

2019:

100% of the total number beginning on 2 April 2019, less any options previously issued.

The exercise period shall in no event be later than the date falling 10 years after the award date.

Except as set out above, neither the Company nor any of its subsidiaries has issued any options, warrants, convertible loans or other instruments that would entitle a holder of any such instrument to subscribe for any shares in the Company or its subsidiaries. Further, neither the Company nor any of its subsidiaries has issued subordinated debt or transferable securities other than the Shares and the shares in its subsidiaries which will be held, directly or indirectly, by the Company.

10.8 Dividend policy

The priorities for the use of Company funds are determined by the Board of Directors and recommendations of Management influenced by existing conditions. At present, priorities for use of funds in order of importance are repayment of debt, investment opportunities in the business, and the return of capital to the shareholders in form of share buy-back or dividends. The Company paid out NOK 0.10 per Share (approximately NOK 38.8 million in total) in respect of 2013.

10.9 Shareholders

The table below sets out the top 20 shareholders registered in the VPS as of 11 August 2015:

Number of shares

Share % Name of Shareholder Account Nationality

133 279 421 34.39 SIEM EUROPE S.A R.L LUX 76 780 808 19.81 Ace Crown Internatio C/O SINGA STAR PTE L VGB 35 211 458 9.08 EUROCLEAR BANK S.A./25% CLIENTS NOM BEL 8 510 767 2.20 WATERMAN HOLDING LTD GBR 8 036 317 2.07 SKAGEN VEKST NOR

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Number of shares

Share % Name of Shareholder Account Nationality

7 959 178 2.05 FONDSFINANS NORGE NOR 5 415 687 1.40 MP PENSJON PK NOR 5 313 000 1.37 OJADA AS NOR 3 951 600 1.02 NORDEA BANK FINLAND EGENHANDELSKONTO

PROPRIETARY SECURITI FIN

3 727 644 0.96 Merrill Lynch,Pierce S/A MLPF & S HOLD NOM USA 3 366 602 0.87 FONDSAVANSE AS NOR 3 253 700 0.84 EGD CAPITAL AS NOR 3 142 574 0.81 PUMPØS A/S NOR 3 123 151 0.81 Alta Invest SA PAN 2 850 000 0.74 BERGEN KOMMUNALE PEN NOR 2 550 000 0.66 ROVDEFRAKT AS NOR 2 422 023 0.62 KLP AKSJE NORGE VPF NOR 2 376 000 0.61 DnB NOR MARKETS, AKS DNB Bank ASA NOR 2 269 897 0.59 MUST INVEST AS NOR 2 082 966 0.54 FR FALCK FRÅS AS NOR

Siem Europe S.a r.l. currently owns 133,279,421 shares in the Company, equal to 34.4% of the issued Shares. Siem Europe S.a r.l. is the main shareholder of Siem Offshore Inc. and is controlled by a trust whose potential beneficiaries include members of Kristian Siem’s immediate family. Kristian Siem is a Board Member of the Company.

Siem Europe S.a r.l. has underwritten the Rights Offering as further described in Section 13.20, "The Rights Offering—The Underwriting". If as a result of the underwriting, Siem Europe’s ownership interest is increased above its current ownership interest and such new ownership interest is not reduced by the sale of Shares down to or below the level of the current ownership interest within four weeks, then Siem Europe S.a r.l. will be required to make a mandatory offer for all Shares in accordance with existing regulations described in Section 11.8 "Securities trading in Norway—Mandatory offer requirements".

The Company is not aware of any other agreements that at a later stage may lead to change of control of the Company.

In addition to Siem Europe S.a r.l., Ace Crown International and Euroclear Bank S.A., as nominee, holds more than 5% of the issued Shares in the Company with ownership interests of 19.81% and 9.08% respectively.

Shareholders with ownership exceeding 5% must comply with disclosure obligations according to the Norwegian Securities Trading Act section 4-3. For more detailed description please see section 11.7 "Securities trading in Norway—Disclosure obligations".

10.10 The Articles of Association and certain aspects of Cayman Islands law

The Company is an exempted company incorporated with limited liability in the Cayman Islands. This means that the Company may not trade in the Cayman Islands with any person, firm or corporation, except in furtherance of the business of the Company carried on outside of the Cayman Islands.

The Company and its activities are primarily governed by the Companies Law (2013 Revision), the Company's memorandum of association and the Articles of Association. As the Company is listed on the Oslo Stock Exchange, certain aspects of its activities are governed by Norwegian law.

The constitutional documents of the Company consist of the Company's memorandum of association and the Articles of Association. The Articles of Association are significantly more extensive than the articles of association of a Norwegian company. The Articles of

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Association deal primarily with the Company's administration, internal regulation and the distribution of rights and authorities between the shareholders and the directors.

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Company objective Pursuant to section 3 of the Company's memorandum of association, the objective of the Company is unrestricted and the Company shall have full power to carry out any objective not prohibited by law. General Meeting Under Cayman Islands law, there is no requirement to hold an annual general meeting. However, pursuant to the Articles of Association, the Company shall hold annual General Meetings each year. Any annual General Meeting shall be held at the time and place as decided by the board of directors. All General Meetings other than annual General Meetings shall be called extraordinary General Meetings. The annual General Meeting shall be called by the board of directors. Additionally, the Board of Directors shall, on the requisition of a shareholder or shareholders’ holding in aggregate no less than 10% of the issued Shares which as at that date carry the right to vote at the General Meeting, forthwith proceed to convene an extraordinary General Meeting. A General Meeting shall be called by not less than 14 clear days notice in writing, except when consent to a shorter period is given in accordance with the provisions set out in the Articles of Association. The notice shall specify the time, place, and agenda of the meeting, particulars of the resolutions to be considered at the meeting and the general nature of that business to be conducted at the General Meeting. The notice convening a General Meeting to pass a special resolution shall specify the intention to propose the resolution as a special resolution. For all purposes a quorum for a General Meeting is constituted by one or more members present in person holding not less than one third of the issued shares of the Company. A resolution of a General Meeting is adopted by ordinary resolution unless the Companies Law (2013 Revision) or the Articles of Association specify otherwise. "Ordinary resolution" means a resolution passed by a simple majority of the shareholders as, being entitled to do so, vote in person or by proxy, at a General Meeting, and includes a unanimous written resolution. In computing the majority when a poll is demanded regard shall be had to the number of votes to which each member is entitled by the Articles of Association. "Special Resolution" means a resolution passed by a majority of at least two thirds of the shareholders as, being entitled to do so, vote in person or by proxy, at a General Meeting. Each of the Shares represents one vote on a poll in a General Meeting. Shareholders may be represented in person or by proxy. In the case of an equality of votes the chairman of the meeting shall be entitled to a second or casting vote. Amendments of the Articles of Association Subject to the provisions of the Companies Law (2013 Revision) and the provisions of the Articles of Association as regards the matters to be dealt with by ordinary resolution, the Articles of Association may be amended by the passing of a special resolution.

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Equity and share capital increases The Companies Law, the Company's memorandum of association and the Articles of Association draws a distinction between authorised and issued share capital. The Company’ authorised share capital dictates the maximum number of shares which the Company is authorised to issue and such information is set out in the Articles of Association. The authorised share capital of the Company may be increased by the passing of an ordinary resolution at the General Meeting. The Board of Directors may allot, issue, grant options over or otherwise dispose of shares to such persons, at such times and on such other terms as they think proper (subject to the Companies Law (2013 Revision) and the Articles of Association) without any further consent or approval by the shareholders. Shareholders in the Company do not have pre-emptive rights in later capital increases. Capital reductions A reduction of the share capital is subject to the passing of a special resolution at the General Meeting. The same majority is required for a reduction of the Company’s capital redemption reserve fund. Classes of shares The Shares are currently not divided into different classes. However, the Articles of Association establish a right to divide the share capital into different classes of shares with varied rights attaching to the shares of such different classes. According to the Articles of Association, modifications in the rights attached to the Shares, such as dividing the shares into different classes of shares with different rights attached, require the written consent of at least 2/3 of the holders of the issued shares of that class or the passing of a resolution passed by a majority of not less than two thirds of the votes cast at a separate meeting of the holders of the shares of the applicable class. Purchase of shares Subject to the Companies Law (2013 Revision), to relevant regulations of any securities exchange or other system on which the shares of the Company may be listed or otherwise authorised for trading (an, "Exchange"), and to any rights conferred on the holders of any class of shares, the Company has the power:

(i) to purchase or otherwise acquire any of its own shares, provided either:

(a) the manner of purchase has first been authorised by the Company in general meeting;

(b) such purchases are made in open market transactions on an Exchange;

(c) such purchases may be effected from time to time, as authorised by the Company in general meeting, at a price per share no higher than the average of the closing prices of said shares on an Exchange, for the five days on which said shares are traded immediately preceding any such purchase (the “Average Market Price”);

(d) such purchases may be effected from time to time, as authorised

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by the Company in general meeting at a price per share in excess of the Average Market Price, provided that: the shares to be purchased shall be in blocks consisting of a number equal to or greater than five per cent. of the number of shares then outstanding and the price to be paid therefore shall have been found to be fair in a written opinion of independent investment bankers who have been selected for the purpose by a disinterested committee of Directors; or

(e) an offer is made to all shareholders of the Company to purchase a specified number of shares at a specified price, all tenders of shares made in response to such offer to be accepted pro rata in the event that more shares are to be tendered than the Company has offered to purchase, except that all tenders of 99 shares or less may be accepted in full at the discretion of the Directors,

provided that, the Company shall not, in any 12 month period, purchase in aggregate more than such number of shares as shall be equal to 10 per cent. of the lowest number of shares in issue during such period except to the extent authorised by special resolution;

(ii) to purchase or otherwise acquire warrants for the subscription or purchase of its own shares; and

(iii) to give, directly or indirectly, by means of a loan, a guarantee, a gift, an indemnity, the provision of security or otherwise howsoever, financial assistance for the purpose of or in connection with a purchase or other acquisition made or to be made by any person of any shares or warrants in the Company. The Company may pay for such shares or warrants in any manner authorised or not prohibited by law, including out of capital. Should the Company purchase or otherwise acquire its own shares or warrants, neither the Company nor the Board shall be required to select the shares or warrants to be purchased or otherwise acquired rateably or in any other manner as between the holders of shares or warrants of the same class or as between them and the holders of shares or warrants of any other class or in accordance with the rights as to dividends or capital conferred by any class of shares.

Transfer of shares The Shares are generally freely transferable and there are no restrictions on trading in the Shares. The Shares are registered in the VPS, and are tradable in the same manner as other VPS registered shares. The Board of Directors may, however, in its absolute discretion, refuse to register a transfer of any shares which are not fully paid up or on which the Company has a lien. In accordance with the Articles of Association, the board of directors shall decline to register the transfer of any share to a person where the board of directors is of the opinion that such transfer might breach any law or requirement of any authority or any approved stock exchange until it has received such evidence as it may require satisfying itself that no such breach would occur. Dividends Subject to the Companies Law (2013 Revision) and the Articles of Association, the Board of Directors may declare dividends and distributions on the Company’s issued Shares and authorise payment of the same out of the funds which are lawfully available. Dividends or

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distributions are payable only out of the profits, realised or unrealised, or out of the share premium account or as otherwise permitted by law. Each of the Shares carries equal rights to dividend and equal rights to any surplus in the event of liquidation. The Shares will be eligible for any dividends being declared and paid immediately upon the share issue. A Share will be deemed to be issued at the time that the Company's register of shareholders is updated to reflect such issue and the details of the applicable shareholder. The Articles of Association provide that the Company may deduct from any dividend or distribution payable to any shareholder all sums of money (if any) presently payable by him to the Company on account of calls or otherwise. The Companies Law (2013 Revision) and the Articles of Association do not provide for any time limit after which entitlement to dividends lapses. Subject to various exceptions, Cayman Islands law provides a limitation period of three years from the date on which an obligation is due. Any future payments of dividends on the Shares will be denominated in NOK, and will be paid to the shareholders through the VPS. Board of directors According to the Articles of Association, the Board of Directors shall consist of not less than three or more than seven persons (exclusive of alternate directors). The Company may, by ordinary resolution, increase or reduce the limits in the number of directors and may appoint and remove any director from the Board of Directors. A resolution in writing (in one or more counterparts) signed by each and every one of the Directors or all the members of a committee of the Directors shall be as valid and effectual as if it had been passed at a meeting of the Directors, or committee of Directors as the case may be, duly convened and held. The powers of the Board of Directors Subject to limitations in the Companies Law (2013 Revision), the Articles of Association and any direction given by special resolution by the General Meeting, the business of the Company shall be managed by the board of directors who may exercise all the powers of the Company. A duly convened meeting of the Board of Directors at which a quorum is presented may exercise all powers exercisable by the Board of Directors. The Board of Directors has full power to charge any of the Company’ assets and to borrow money without any sanction by the members at a General Meeting. The Board of Directors may, by power of attorney or otherwise, appoint a company, firm, person or body of persons to be the attorney or authorised signatory of the Company for such purposes and with such powers, authorities and discretions as the Board of Directors thinks fit, provided however that this does not exceed the powers vested in the Board of Directors by the Articles of Association. The Board of Directors may also authorise any attorney or authorised signatory to sub-delegate any or all powers, authorities and discretions vested in him. Furthermore, the Board of Directors may delegate any of its powers, authorities and discretions, including the power to sub-delegate, to any committees consisting of one or more directors. Every committee so formed shall conform to any regulations that may from time to time be imposed upon it by the Board of Directors.

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Directors’ interests A Director may be engaged by the Company for the purpose of performing services which go beyond his ordinary duties as a director, but he may not be the auditor of the Company. The director performing such services for the Company is entitled to such extra remuneration as the board of directors may decide. A Director or a company owned by him may also enter into commercial agreements with the Company provided that the relevant Director declares his interest in such contract at the board meeting where the contract is first considered. Subject to the provisions of the Articles of Association, a Director (or his alternate director in his absence) shall be at liberty to vote in respect of any contract or transaction in which he is interested provided that the nature of the interest of any director or alternate director in any such contract or transaction shall be disclosed by him at or prior to its consideration and any vote thereon. Members of the administrative, management and supervisory bodies The management of the business of the Company is vested in the Board of Directors, whom may establish any committees or any person to be manager or agent for the Company’ affairs. Furthermore, the Board of Directors may appoint a secretary for such term, at such remuneration and upon such conditions as it may think fit, and any secretary so appointed may be removed by the Board of Directors. Annual accounts According to the Articles of Association, the financial year shall end on 31 December and begin on 1 January in each year, unless otherwise prescribed by the Board of Directors. The auditor shall audit the profit and loss account and the balance sheet of the Company and shall prepare a report which shall be laid before the shareholders at the annual General Meeting each year. The auditor’s report shall be open for inspection by any shareholder. Winding up According to the Articles of Association, in case of a liquidation of the Company the following shall apply; (i) if the assets available for distribution amongst the members shall be insufficient to repay whole of the Company’ issued share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the members in proportion to the par value of the shares held by them, and (ii) if the assets available for distribution amongst the members shall be more than sufficient to repay the whole of the Company’ issued share capital at the commencement of the liquidation, the surplus shall be distributed amongst the members in portion to the par value of the shares held by them subject to a deduction from those shares in respect of which there are monies due, of all monies payable to the Company for unpaid calls or otherwise.

10.11 Compulsory acquisition

Schemes of Arrangement The Companies Law (2013 Revision) of the Cayman Islands allow for schemes of arrangement. A scheme of arrangement is a flexible form of corporate restructuring and involves a range of transactions aimed to reorganise Cayman Islands companies. The schemes may be effected by a court-supervised scheme if an amalgamation or reconstruction is required or schemes of arrangement can be put in place either between a company and its shareholders in various forms, including takeovers, spin-offs, amalgamations, mergers, de-mergers, re-domicilings, restating net asset values, de-mutualisations, and/or between a company and its creditors, also in various forms such as debt-for-debt, debt-for-equity and debt-for-assets swaps, and the re-organisations of

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options and warrants. A scheme is a collective procedure. It operates both as a contract and a court order and has statutory effect. Provided the necessary majorities are obtained, the terms of a scheme become binding on all members of shareholders/creditors of the company, whether or not they (i) received notice of the scheme; (ii) voted at the meeting; (iii) voted for or against the scheme; and (iv) changed their minds afterwards. The range of possible objections that can be raised is very narrow. Dissenting shareholders have no statutory rights in any scheme, however, if such rights are thought desirable then the terms of the scheme itself may make such provision. The required majority is a super-majority of each class of members voting at the meeting (present in person or by proxy) being: 50% + one in number (i.e. a headcount vote); and 75% in value (i.e. the number of shares voted). Power to acquire shares In accordance with the Companies Law (2013 Revision), where a scheme or contract involving the transfer of shares or any class of shares in a company (in this section referred to as "the transferor company") to another company, whether a company within the meaning of the Companies Law (2013 Revision) or not (in this section referred to as "the transferee company") has, within four months after the making of the offer in that behalf by the transferee company, been approved by the holders of not less than 90% in value of the shares affected, the transferee company may, at any time within two months after the expiration of the said four months, give notice in the prescribed manner to any dissenting shareholder that it desires to acquire his shares, and where such notice is given the transferee company shall, unless on an application made by the dissenting shareholder within one month from the date on which the notice was given, the court thinks fit to order otherwise, be entitled and bound to acquire those shares on the terms on which under the scheme or contract the shares of the approving shareholders are to be transferred to the transferee company. Where a notice has been given by the transferee company and the Grand Court of the Cayman Islands has not, on an application made by the dissenting shareholder, ordered to the contrary, the transferee company shall, on the expiration of one month from the date on which the notice has been given or, if an application to the Grand Court of the Cayman Islands by the dissenting shareholder is then pending, after that application has been disposed of, transmit a copy of the notice to the transferor company and pay or transfer to the transferor company the amount or other consideration representing the price payable by the transferee company for the shares which that company is entitled to acquire, and the transferor company shall thereupon register the transferee company as the holder of those shares.

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11. SECURITIES TRADING IN NORWAY

This Section 11 includes certain aspects of rules pertaining to securities trading in Norway in a Norwegian incorporated company pursuant to Norwegian legislation, but is however not a full or complete description of the matters described herein. The following summary does not purport to be a comprehensive description of all the legal considerations that may be relevant to a decision to purchase, own or dispose of Shares. Investors are advised to consult their own legal advisors concerning the overall legal consequences of their ownership of Shares.

11.1 Introduction

Oslo Børs was established in 1819 and is the principal market in which shares, bonds and other financial instruments are traded in Norway. Oslo Børs is operated by Oslo Børs ASA, which also operates the regulated marketplace Oslo Axess. Oslo Børs has entered into a strategic cooperation with the London Stock Exchange group with regards to, inter alia, trading systems for equities, fixed income and derivatives.

11.2 Trading and settlement

Trading of equities on Oslo Børs is carried out in the electronic trading system Millenium Exchange. This trading system was developed by the London Stock Exchange and is in use by all markets operated by the London Stock Exchange as well as by the Borsa Italiana and the Johannesburg Stock Exchange. Official trading on Oslo Børs takes place between 09:00 hours (CET) and 16:20 hours (CET) each trading day, with pre-trade period between 08:15 hours (CET) and 09:00 hours (CET), closing auction from 16:20 hours (CET) to 16:25 hours (CET) and a post-trade period from 16:25 hours (CET) to 17:30 hours (CET). Reporting of after exchange trades can be done until 17:30 hours (CET). The settlement period for trading on Oslo Børs is two trading days (T+2). This means that securities will be settled on the investor’s account in the VPS two days after the transaction, and that the seller will receive payment after two days. Oslo Clearing ASA, a wholly-owned subsidiary SIX x-clear Ltd, a company in the Six Group, has a license from the Norwegian FSA to act as a central clearing service, and has from 18 June 2010 offered clearing and counterparty services for equity trading on Oslo Børs. Investment services in Norway may only be provided by Norwegian investment firms holding a license under the Norwegian Securities Trading Act, branches of investment firms from an EEA member state or investment firms from outside the EEA that have been licensed to operate in Norway. Investment firms in an EEA member state may also provide cross-border investment services into Norway. It is possible for investment firms to undertake market-making activities in shares listed in Norway if they have a license to this effect under the Norwegian Securities Trading Act, or in the case of investment firms in an EEA member state, a license to carry out market-making activities in their home jurisdiction. Such market-making activities will be governed by the regulations of the Norwegian Securities Trading Act relating to brokers' trading for their own account. However, market-making activities do not as such require notification to the Norwegian FSA or Oslo Børs except for the general obligation of investment firms being members of Oslo Børs to report all trades in stock exchange listed securities.

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11.3 Information, control and surveillance

Under Norwegian law, Oslo Børs is required to perform a number of surveillance and control functions. The Surveillance and Corporate Control unit of Oslo Børs monitors market activity on a continuous basis. Market surveillance systems are largely automated, promptly warning department personnel of abnormal market developments. The Norwegian FSA controls the issuance of securities in both the equity and bond markets in Norway and evaluates whether the issuance documentation contains the required information and whether it would otherwise be unlawful to carry out the issuance. Under Norwegian law, a company that is listed on a Norwegian regulated market, or has applied for listing on such market, must promptly release any inside information directly concerning the company (i.e. precise information about financial instruments, the issuer thereof or other matters which are likely to have a significant effect on the price of the relevant financial instruments or related financial instruments, and which are not publicly available or commonly known in the market). A company may, however, delay the release of such information in order not to prejudice its legitimate interests, provided that it is able to ensure the confidentiality of the information and that the delayed release would not be likely to mislead the public. Oslo Børs may levy fines on companies violating these requirements.

11.4 The VPS and transfer of Shares

The Company's shareholder register is operated through the VPS. The VPS is the Norwegian paperless centralised securities register. It is a computerised bookkeeping system in which the ownership of, and all transactions relating to, Norwegian listed shares must be recorded. All transactions relating to securities registered with the VPS are made through computerised book entries. No physical share certificates are, or may be, issued. The VPS confirms each entry by sending a transcript to the registered shareholder irrespective of any beneficial ownership. To give effect to such entries, the individual shareholder must establish a share account with a Norwegian account agent. Norwegian banks, authorised securities brokers in Norway and Norwegian branches of credit institutions established within the EEA are allowed to act as account agents. The entry of a transaction in the VPS is generally prima facie evidence in determining the legal rights of parties as against the issuing company or any third party claiming an interest in the given security. The VPS is liable for any loss suffered as a result of faulty registration or an amendment to, or deletion of, rights in respect of registered securities unless the error is caused by matters outside the VPS’ control which the VPS could not reasonably be expected to avoid or overcome the consequences of. Damages payable by the VPS may, however, be reduced in the event of contributory negligence by the aggrieved party. The VPS must provide information to the Norwegian FSA on an on-going basis, as well as any information that the Norwegian FSA requests. Further, Norwegian tax authorities may require certain information from the VPS regarding any individual’s holdings of securities, including information about dividends and interest payments.

11.5 Foreign investment in shares listed in Norway

Foreign investors may trade shares listed on Oslo Børs through any broker that is a member of Oslo Børs, whether Norwegian or foreign.

11.6 Disclosure obligations

If a person's, entity's or consolidated group's proportion of the total issued shares and/or rights to shares in an issuer with its shares listed on a regulated market in Norway (with Norway as its home state, which will be the case for the Company) reaches, exceeds or

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falls below the respective thresholds of 5%, 10%, 15%, 20%, 25%, 1/3, 50%, 2/3 or 90% of the share capital or the voting rights of that issuer, the person, entity or group in question has an obligation under the Norwegian Securities Trading Act to notify Oslo Børs and the issuer immediately. The same applies if the disclosure thresholds are passed due to other circumstances, such as a change in the Company's share capital.

11.7 Insider trading

According to Norwegian law, subscription for, purchase, sale or exchange of financial instruments that are listed, or subject to the application for listing, on a Norwegian regulated market, or incitement to such dispositions, must not be undertaken by anyone who has inside information, as defined in section 3-2 of the Norwegian Securities Trading Act. The same applies to the entry into, purchase, sale or exchange of options or futures/forward contracts or equivalent rights whose value is connected to such financial instruments or incitement to such dispositions.

11.8 Mandatory offer requirement

The Norwegian Securities Trading Act requires any person, entity or consolidated group that becomes the owner of shares representing more than one-third of the voting rights of a Norwegian issuer with its shares listed on a Norwegian regulated market to, within four weeks, make an unconditional general offer for the purchase of the remaining shares in that issuer. A mandatory offer obligation may also be triggered where a party acquires the right to become the owner of shares that, together with the party's own shareholding, represent more than one-third of the voting rights in the issuer and Oslo Børs decides that this is regarded as an effective acquisition of the shares in question. The mandatory offer obligation ceases to apply if the person, entity or consolidated group sells the portion of the shares that exceeds the relevant threshold within four weeks of the date on which the mandatory offer obligation was triggered. When a mandatory offer obligation is triggered, the person subject to the obligation is required to immediately notify Oslo Børs and the issuer in question accordingly. The notification is required to state whether an offer will be made to acquire the remaining shares in the issuer or whether a sale will take place. As a rule, a notification to the effect that an offer will be made cannot be retracted. The offer is subject to approval by Oslo Børs before the offer is submitted to the shareholders or made public. The offer price per share must be at least as high as the highest price paid or agreed to be paid by the offeror for the shares in the six-month period prior to the date the threshold was exceeded. If the acquirer acquires or agrees to acquire additional shares at a higher price prior to the expiration of the mandatory offer period, the acquirer is required to restate its offer at such higher price. A mandatory offer must be in cash or contain a cash alternative at least equivalent to any other consideration offered. In case of failure to make a mandatory offer or to sell the portion of the shares that exceeds the relevant mandatory offer threshold within four weeks, Oslo Børs may force the acquirer to sell the shares exceeding the threshold by public auction. Moreover, a shareholder who fails to make an offer may not, as long as the mandatory offer obligation remains in unfulfilled, exercise rights in the issuer, such as voting on shares at general meetings of the issuer's shareholders, without the consent of a majority of the remaining shareholders. The shareholder may, however, exercise its rights to dividends and pre-emption rights in the event of a share capital increase. If the shareholder neglects his duty to make a mandatory offer, Oslo Børs may impose a cumulative daily fine that accrues until the circumstance has been rectified. Any person, entity or consolidated group that owns shares representing more than one-third of the votes in a Norwegian issuer with its shares listed on a Norwegian regulated

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market is required to make an offer to purchase the remaining shares of the issuer (repeated offer obligation) if the person, entity or consolidated group through acquisition becomes the owner of shares representing 40% or more of the votes in the issuer. The same applies correspondingly if the person, entity or consolidated group through acquisition becomes the owner of shares representing 50% or more of the votes in the issuer. The mandatory offer obligation ceases to apply if the person, entity or consolidated group sells the portion of the shares which exceeds the relevant threshold within four weeks of the date on which the mandatory offer obligation was triggered. Any person, entity or consolidated group that has passed any of the above mentioned thresholds in such a way as not to trigger the mandatory bid obligation, and has therefore not previously made an offer for the remaining shares in the company in accordance with the mandatory offer rules is, as a main rule, required to make a mandatory offer in the event of a subsequent acquisition of shares in the company.

11.9 Foreign exchange controls

There are currently no foreign exchange control restrictions in Norway that would potentially restrict the payment of dividends to a shareholder outside Norway, and there are currently no restrictions that would affect the right of shareholders of a Norwegian issuer who are not residents in Norway to dispose of their shares and receive the proceeds from a disposal outside Norway. There is no maximum transferable amount either to or from Norway, although transferring banks are required to submit reports on foreign currency exchange transactions into and out of Norway into a central data register maintained by the Norwegian customs and excise authorities. The Norwegian police, tax authorities, customs and excise authorities, the National Insurance Administration and the Norwegian FSA have electronic access to the data in this register.

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12. TAXATION

The following is a summary of certain Norwegian tax considerations relevant to the acquisition, ownership and disposition of shares by holders that are residents of Norway for purposes of Norwegian taxation ("Resident Shareholders") and holders that are not residents of Norway for such purposes ("Non-resident Shareholders"). The summary is based on applicable Norwegian laws, rules and regulations as they exist as at the date of this Prospectus. Such laws, rules and regulations may be subject to changes after this date, possibly on a retroactive basis for the same tax year. The summary is of a general nature and does not purport to be a comprehensive description of all the tax considerations that may be relevant to the Shareholders and does not address foreign tax laws. Please note that special rules apply for shareholders that cease to be tax resident in Norway or that for some reason are no longer considered taxable to Norway in relation to their shareholding. Each Shareholder should consult with and rely upon their own tax advisor to determine the particular tax consequences for him or her and the applicability and effect of any Norwegian or foreign tax laws and possible changes in such laws. For the purpose of the summary below, a reference to a Norwegian or foreign shareholder or company refers to tax residency rather than nationality.

12.1 Taxation of dividends

12.1.1 Resident corporate Shareholders

Norwegian corporate shareholders (i.e. limited liability companies, mutual funds, savings banks, mutual insurance companies or similar entities resident in Norway for tax purposes) are generally exempt from tax on dividends received on shares in Norwegian limited liability companies, pursuant to the participation exemption (Norwegian: Fritaksmetoden). However, 3% of dividend income is generally deemed taxable as general income at a flat rate of 27%, implying that dividends distributed from the Company to resident corporate Shareholders are effectively taxed at a rate of 0.81%. 12.1.2 Resident personal Shareholders

Personal shareholders tax resident in Norway are in general tax liable to Norway for their worldwide income. Dividends distributed to personal Shareholders who are individuals resident in Norway for tax purposes, are taxed as ordinary income at a flat rate of 27% to the extent the dividends exceed a statutory tax-free allowance (Norwegian: Skjermingsfradrag). The allowance is calculated on a share-by-share basis, and the allowance for each share is equal the cost price of the share multiplied by a determined risk-free interest rate based on the effective rate after tax of interest on treasury bills (Norwegian: "Statskasseveksler") with three months maturity. The allowance is allocated to the Shareholder owning the share on 31 December in the relevant income year. Norwegian personal shareholders who transfer shares during an income year will thus not be entitled to deduct any calculated allowance related to the year of transfer. The Directorate of Taxes announces the risk free-interest rate in January the year after the income. The risk-free interest rate for 2014, was 0.9%. Any part of the calculated allowance one year exceeding dividend distributed on the same share ("excess allowance") can be carried forward and set off against future dividends received on, or capital gains upon realization of the same share. Furthermore, excess allowance can be added to the cost price of the share and included in basis for calculating

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the allowance on the same share the following year. 12.1.3 Non-resident Shareholders

Dividends distributed to Shareholders not resident in Norway for tax purposes are in general subject to withholding tax at a rate of 25%, unless otherwise provided for in an applicable tax treaty or the recipient is covered by the specific regulations for corporate shareholders tax-resident within the EEA (ref. the section below for more information on the EEA exemption). The company distributing the dividend is responsible for the withholding. Norway has entered into tax treaties with approximate 80 countries. In most tax treaties the withholding tax rate is reduced to 15%. In accordance with the present administrative system in Norway, the Norwegian distributing company will normally withhold tax at the regular rate or reduced rate according to an applicable tax treaty, based on the information registered with the VPS with regard to the tax residence of the Non-resident Shareholder. Dividends paid to Non-resident Shareholders in respect of nominee- registered shares will be subject to withholding tax at the general rate of 25% unless the nominee, by agreeing to provide certain information regarding beneficial owners, has obtained approval for a reduced or zero rate from the Central Office for Foreign Tax Affairs ("COFTA") (Norwegian: Sentralskattekontoret for utenlandssaker). Non-resident Shareholders who are exempt from withholding tax and Shareholders who have been subject to a higher withholding tax than applicable in the relevant tax treaty, may apply to the Norwegian tax authorities for a refund of the excess withholding tax. The application is to be filed with COFTA. If a Foreign Shareholder is engaged in business activities in Norway, and the shares are effectively connected with such business activities, dividends distributed to such shareholder will generally be subject to the same taxation as that of Norwegian Shareholders, cf. the description of tax issues related to Resident Shareholders above. Non-resident Shareholders should consult their own advisers regarding the availability of treaty benefits in respect of dividend payments, including the ability to effectively claim refunds of withholding tax. 12.1.4 Non-resident Shareholders tax-resident within the EEA

Non-resident Shareholders who are individuals tax-resident within the EEA ("Foreign EEA Personal Shareholders") are upon request entitled to a deductible allowance. The shareholder shall pay the lesser amount of (i) withholding tax according to the rate in an applicable tax treaty or (ii) withholding tax at 25% of taxable dividends after allowance. Foreign EEA Personal Shareholders may carry forward any unused allowance, if the allowance exceeds the dividends. Foreign Shareholders that are corporations tax-resident within the EEA for tax purposes ("Foreign EEA Corporate Shareholders") are exempt from Norwegian tax on dividends distributed from Norwegian limited liability companies, provided that the Foreign EEA Corporate Shareholder in fact is genuinely established within the EEA and performs real economic activity within the EEA.

12.2 Taxation upon realization of shares

12.2.1 Resident corporate Shareholders

Norwegian corporate Shareholders are generally exempt from tax on capital gains upon the realization of shares in Norwegian limited liability companies. Losses upon the realization and costs incurred in connection with the purchase and realization of such shares are not deductible for tax purposes.

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12.2.2 Resident personal Shareholders

Norwegian individual shareholders are taxable in Norway for capital gains upon the realization of shares, and have a corresponding right to deduct losses that arise upon such realization. The tax liability applies irrespective of time of ownership and the number of shares realised. Gains are taxable as general income in the year of realization, and losses can be deducted from general income in the year of realization. The tax rate for general income is currently 27%. The taxable gain or loss is calculated per share as the difference between the consideration received and the cost price of the share, including any costs incurred in relation to the acquisition or realization of the share. Any unused allowance on a share (ref. above) may be set off against capital gains related to the realization of the same share, but may not lead to or increase a deductible loss i.e. any unused allowance exceeding the capital gain upon the realization of the share will be lost. Furthermore, unused allowance may not be set of against gains from realization of other shares. If a Shareholder disposes of shares acquired at different times, the shares that were first acquired will be deemed as first sold (the FIFO-principle) when calculating a taxable gain or loss. 12.2.3 Non-resident Shareholders

As a general rule, capital gains generated by Non-resident Shareholders are not taxable in Norway unless (i) the shares are effectively connected with business activities carried out or

managed in Norway (in which case capital gains will generally be subject to the same taxation as that of Norwegian Shareholders, cf the description of tax issues related to Norwegian Shareholders above), or

(ii) the shares are held by an individual who has been a resident of Norway for tax purposes with unsettled/postponed exit tax calculated on the shares at the time of cessation as Norwegian tax resident.

12.3 Net wealth tax

Norwegian limited liability companies and certain similar entities are exempt from Norwegian net wealth tax. For other resident Shareholders (i.e. Shareholders who are individual), the shares will form part of the basis for the calculation of net wealth tax. The current marginal net wealth tax rate is 0.85% of taxable values. Listed shares are valued at 100% of their quoted value on 1 January in the assessment year (the year following the income year).

12.4 Inheritance tax

As of 1 January 2014 the Norwegian Inheritance Tax was abolished. However, the heir acquires the donor's tax input value of the shares based on principles of continuity. Thus, the heir will be taxable for any increase in value in the donor's ownership, at the time of the heir's realization of the shares. However, in the case of gifts distributed to other persons than heirs according to law or testament, the recipient will be able to revalue the received shares to market value.

12.5 Stamp duty

There is currently no Norwegian stamp duty or transfer tax on the transfer or issuance of shares.

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13. THE RIGHTS OFFERING

13.1 Overview

The Rights Offering consists of an offer by the Company to issue 454,430,000 New Shares at a Subscription Price of NOK 1.80 per New Share, thereby raising gross proceeds of approximately USD 100 million. The Company intends to use the net proceeds to serve interest and instalments on its debt in accordance with its repayment schedules and thereby continue to reduce the Company's debt leverage. In addition the net proceeds will be used to make payments under the Company's newbuilding program. Existing Shareholders will be granted tradable Subscription Rights providing a preferential right to subscribe for and be allocated New Shares in the Rights Offering. Oversubscription and subscription without Subscription Rights will be permitted; however, there can be no assurance that New Shares will be allocated for such subscriptions. The largest shareholder of the Company, Siem Europe S.a r.l., has entered into an underwriting agreement with the Company, whereby it will subscribe for any New Shares not otherwise subscribed for in the Rights Offering. See Section 13.20, "The Rights Offering—The Underwriting" for more details. No action will be taken to permit a public offering of the New Shares in any jurisdiction outside of Norway.

13.2 Resolution to Issue the New Shares

On 14 August 2015, an extraordinary general meeting of the Company passed the following resolution to increase the authorized share capital of the Company in connection with the Rights Offering:

To approve the increase of the authorised share capital of the Company from US$5,500,000 divided into 550,000,000 Common Shares of par value US$0.01 each to US$10,000,000 divided into 1,000,000,000 Common Shares of par value US$0.01 each, by the creation of an additional 450,000,000 Common Shares of par value US$0.01 each to rank pari passu in all respects with the existing shares.

On 14 August 2015, the Board of Directors passed the following resolution to issue New Shares in connection with the Rights Offering:

The Board of Directors had earlier approved the Rights Issue in principle at its 10 June 2015 meeting held in Oslo and the purpose of this meeting was to approve the terms of the Rights Issue.

Pursuant to the Rights Issue, the Company will offer 454,430,000 new Common Shares in the Company (the "New Shares") with a nominal value of USD 0.01 each, at a subscription price of NOK 1.80 per New Share (the "Subscription Price"). It was also noted that holders of the Company’s shares registered in the Norwegian Central Securities Depository (the "VPS") as of 18 August 2015 (the "Existing Shareholders") are being granted transferable subscription rights (the "Subscription Rights") that, subject to applicable law, provide preferential rights to subscribe for and be allocated New Shares at the Subscription Price.

Each Existing Shareholder will be granted 1.1724 Subscription Rights for each share registered as held by such Existing Shareholder as of 18 August 2015 (the "Record Date"). Further, each Subscription Right will give the right to subscribe

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for and be allocated one New Share.

The Company has proposed that the subscription period shall commence on 19 August 2015 and expire at 16:30 hours, Central European Time ("CET"), on 2 September 2015 (the "Subscription Period"). If the Subscription Period is postponed, then the Subscription Period shall commence on the second trading day following approval of the Prospectus and end at 16.30 CET on the 14th day thereafter if the Prospectus is not approved in time for the Subscription Period to commence on 19 August 2015. Any New Shares which shall be subscribed for by the underwriters shall be subscribed for within 2 trading days after expiry of the Subscription Period.

The Subscription Rights will be listed and tradable on the Oslo Børs (the "Oslo Stock Exchange") under the ticker code SIOFF T from 19 August 2015 until the end of trading on the Oslo Stock Exchange on 31 August 2015.

The Prospectus is required to be approved by the Norwegian Financial Supervisory Authority in connection with the Rights Issue. Unless the Directors decide otherwise, the Prospectus shall not be registered with or approved by any foreign authorities. The New Shares cannot be subscribed by investors in jurisdictions in which it is not permitted to offer New Shares to the investors in question without the registration or approval of a Prospectus, unless such registration or approval has taken place pursuant to a resolution by the Directors. With respect to Subscription Rights issued to any shareholder that in the Company’s view is not entitled to subscribe for New Shares due to limitations imposed by laws or regulations of the jurisdiction where such shareholder is a resident or citizen, the Company (or someone appointed or instructed by it) may sell such shareholder's Subscription Rights against transfer of the net proceeds from such sale to the shareholder.

The allocation of New Shares shall be made by the Directors and that the following allocation criteria shall apply:

(i) The allocation will be made to subscribers on the basis of granted and acquired Subscription Rights which have been validly exercised during the Subscription Period. Each Subscription Right will give the right to subscribe for and be allocated 1 New Share;

(ii) If not all Subscription Rights are validly exercised in the Subscription Period, subscribers having exercised their Subscription Rights and who have over-subscribed will have the right to be allocated the remaining New Shares pro rata based on the number of Subscription Rights exercised by the subscriber. In the event that pro rata allocation is not possible, the Company will determine the allocation by lot drawing;

(iii) any remaining New Shares not allocated pursuant to the criteria in items (i) and (ii) above, will be allocated to subscribers not holding Subscription Rights. Allocation will be made pro rata based on the respective subscription amounts, provided, however, that such allocation may be rounded down; and

(iv) if the subscription amount of approximately USD 100,000,000 has not been subscribed and allocated pursuant to the criteria in items (i), (ii) and (iii) above, the outstanding amount will be subscribed by and allocated to the underwriters, based on and in accordance with their respective underwriting obligations. They will receive a

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guarantee commission of 1% on the guaranteed amount.

The due date for payment of the New Shares is 14 September 2015 or the third trading day on Oslo Børs after expiry of the Subscription Period if the Subscription Period is postponed as noted above.

The New Shares will give full shareholder rights in the Company, including the right to dividends, from the time the share capital increase is registered with the Register of Business Enterprises.

The Company's estimated costs in connection with the capital increase are approx. NOK9 million, of which approx. NOK8 million will be consideration for the underwriting guarantee established through separate agreements with the respective underwriter.

13.3 Conditions for Completion of the Rights Offering

The completion of the Rights Offering is subject to the condition that, unless the Rights Offering is fully subscribed, the Underwriting Agreement remaining in full force and effect. Please refer to Section 13.20 "—The Underwriting") below for a description of the underwriting and the Underwriting Agreement and the Shareholder Commitments, including the conditions and termination rights to which the underwriting is subject. If it becomes clear that the above conditions will not be fulfilled, the Rights Offering will be withdrawn. If the Rights Offering is withdrawn, all Subscription Rights will lapse without value, any subscriptions for, and allocations of, New Shares that have been made will be disregarded and any payments for New Shares made will be returned to the subscribers without interest or any other compensation. The lapsing of Subscription Rights shall be without prejudice to the validity of any trades in Subscription Rights, and investors will not receive any refund or compensation in respect of Subscription Rights purchased in the market.

13.4 Timetable

The timetable set out below provides certain indicative key dates for the Rights Offering: Last day of trading in the Shares including Subscription Rights

14 August 2015

First day of trading in the Shares excluding Subscription Right

17 August 2015

Record Date 18 August 2015 Subscription Period commences 19 August 2015 Trading in Subscription Rights commences on the Oslo Stock Exchange 19 August 2015 Trading in Subscription Rights ends End of trading on the Oslo Stock

Exchange on 31 August 2015 Subscription Period ends 2 September 2015 at 16:30 hours (CET) Allocation of the New Shares Expected on or about 4 September 2015 Distribution of allocation letters Expected on or about 4 September 2015 Payment Date 14 September 2015 Delivery of the New Shares Expected on or about 17 September 2015 Listing and commencement of trading in the New Shares on the Oslo Stock Exchange Expected on or about 18 September 2015

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13.5 Subscription Price

The Subscription Price in the Rights Offering is NOK 1.80 per New Share. The Subscription Price represents a discount of approximately 14.29% to the closing price of NOK 2.10 per Share as quoted on 10 June 2015.

13.6 Subscription Period

The Subscription Period will commence on 19 August 2015 and end on 2 September 2015 at 16:30 hours (CET). The Subscription Period may not be extended.

13.7 Record Date

Shareholders who are registered in the Company’s shareholder register in the VPS as of 18 August 2015 (the Record Date) will receive Subscription Rights. Provided that the delivery of traded Shares is made with ordinary T+2 settlement in the VPS, Shares that are acquired until and including 14 August 2015 will give the right to receive Subscription Rights, whereas Shares that are acquired from and including 17 August 2015 will not give the right to receive Subscription Rights.

13.8 Subscription Rights

Existing Shareholders will be granted Subscription Rights giving a preferential right to subscribe for and be allocated New Shares in the Rights Offering. Each Existing Shareholder will be granted 1.1724 tradable Subscription Rights for each Existing Shares registered as held by such Existing Shareholder on the Record Date. The number of Subscription Rights granted to each Existing Shareholder will be rounded down to the nearest whole Subscription Right. Each Subscription Right will, subject to applicable securities laws, give the right to subscribe for and be allocated one New Share in the Rights Offering. The Subscription Rights will be credited to and registered on each Existing Shareholder’s VPS account on or about 19 August 2015 under the International Securities Identification Number (ISIN) KYG812291097. The Subscription Rights will be distributed free of charge to Existing Shareholders. The Subscription Rights may be used to subscribe for New Shares in the Rights Offering before the expiry of the Subscription Period on 2 September 2015 at 16:30 hours (CET) or be sold before the end of trading on the Oslo Stock Exchange on 31 August 2015. Acquired Subscription Rights will give the same right to subscribe for and be allocated New Shares as Subscription Rights held by Existing Shareholders on the basis of their shareholdings on the Record Date. The Subscription Rights, including acquired Subscription Rights, must be used to subscribe for New Shares before the end of the Subscription Period (i.e., 2 September 2015 at 16:30 hours (CET)) or be sold before the end of trading on the Oslo Stock Exchange on 31 August 2015. Subscription Rights which are not sold before the end of trading on the Oslo Stock Exchange on 31 August 2015 or exercised before 2 September 2015 at 16:30 hours (CET) will have no value and will lapse without compensation to the holder. Holders of Subscription Rights (whether granted or acquired) should note that subscriptions for New Shares must be made in accordance with the procedures set out in this Prospectus. Subscription Rights of Existing Shareholders resident in jurisdictions where the Prospectus may not be distributed and/or with legislation that, according to the Company’s assessment, prohibits or otherwise restricts subscription for New Shares (the "Ineligible Shareholders") will initially be credited to such Ineligible Shareholders’ VPS accounts. Such credit specifically does not constitute an offer to Ineligible Shareholders.

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The Company will instruct the Manager to, as far as possible, withdraw the Subscription Rights from such Ineligible Shareholders’ VPS accounts, and sell them from and including 19 August 2015 until the end of trading on the Oslo Stock Exchange on 31 August 2015 for the account and risk of such Ineligible Shareholders, unless the relevant Subscription Rights are held through a financial intermediary. Please refer to Section 13.12, "—The Underwriting" below for a description of the procedures applicable to Subscription Rights held by Ineligible Shareholders through financial intermediaries. The Manager will use commercially reasonable efforts to procure that the Subscription Rights withdrawn from the VPS accounts of Ineligible Shareholders (and that are not held through financial intermediaries) are sold on behalf of, and for the benefit of, such Ineligible Shareholders during said period, provided that (i) the Manager is able to sell the Subscription Rights at a price at least equal to the anticipated costs related to the sale of such Subscription Rights, and (ii) the relevant Ineligible Shareholder has not by 16:30 hours (CET) on 2 September 2015 documented to the Company through the Manager a right to receive the Subscription Rights withdrawn from its VPS account, in which case the Manager shall re-credit the withdrawn Subscription Rights to the VPS account of the relevant Ineligible Shareholder. The proceeds from the sale of the Subscription Rights (if any), after deduction of customary sales expenses, will be credited to the Ineligible Shareholder’s bank account registered in the VPS for payment of dividends, provided that the net proceeds attributable to such Ineligible Shareholder amount to or exceed NOK 10. If an Ineligible Shareholder does not have a bank account registered in the VPS, the Ineligible Shareholder must contact the Manager to claim the proceeds. If the net proceeds attributable to an Ineligible Shareholder are less than NOK 10, such amount will be retained for the benefit of the Company. There can be no assurance that the Manager will be able to withdraw and/or sell the Subscription Rights at a profit or at all. Other than as explicitly stated above, neither the Company nor the Manager will conduct any sale of Subscription Rights not utilised before the end of the Subscription Period.

13.9 Trading in Subscription Rights

The Subscription Rights will be fully tradable and listed on the Oslo Stock Exchange with ticker code "SIOFF T" and with ISIN KYG812291097 from 19 August 2015 until the end of trading on the Oslo Stock Exchange on 31 August 2015. Subscription Rights acquired during the aforementioned trading period carry the same rights to subscribe for New Shares during the Subscription Period, as Subscription Rights received and held by Eligible Shareholders. The Subscription Rights will hence only be tradable during part of the Subscription Period. Persons intending to trade in Subscription Rights should be aware that the exercise of Subscription Rights by holders who are located in jurisdictions outside Norway may be restricted or prohibited by applicable securities laws. Please refer to Section 14, "Selling and transfer restrictions" for a description of such restrictions and prohibitions.

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13.10 Subscription Procedures

Subscriptions for New Shares must be made by submitting a correctly completed Subscription Form to the Manager or the Receiving Agent during the Subscription Period or, for Norwegian citizens, made online as further described below. Existing Shareholders will receive Subscription Forms that include information about the number of Subscription Rights allocated to the Existing Shareholder and certain other matters relating to the shareholding. Subscriptions for New Shares by subscribers who are not Existing Shareholders must be made on a Subscription Form in the form included in Annex 2 "Form of Subscription Form". Existing Shareholders may also choose to use such a Subscription Form. Correctly completed Subscription Forms must be received by the Manager or the Receiving Agent no later than 16:30 hours (CET) on 2 September 2015 at the following addresses or fax numbers: Swedbank DNB Markets Registrars Department Filipstad Brygge 1 Dronning Eufemias gate 30 P.O. Box 1441 Vika P.O. Box 1600 Sentrum N-0115 Oslo Norway

N-0021 Oslo Norway

Tel.: +47 23 23 80 00 Tel.: +47 23 26 81 01 Fax: +47 23 23 80 11 www.swedbank.no

Email: retail@dnb.no www.dnb.no/emisjoner

Subscribers who are residents of Norway with a Norwegian personal identification number (Nw. personnummer) are encouraged to subscribe for New Shares through the VPS online subscription system (or by following the links on www.swedbank.no and www.dnb.no/emisjoner which will redirect the subscriber to the VPS online subscription system). Neither the Company, the Receiving Agent nor the Manager may be held responsible for postal delays, unavailable fax lines, internet lines or servers or other logistical or technical problems that may result in subscriptions not being received in time or at all by the Manager or the Receiving Agent. Subscription Forms received after the end of the Subscription Period and/or incomplete or incorrect Subscription Forms and any subscription that may be unlawful may be disregarded at the sole discretion of the Company, Receiving Agent and/or the Manager without notice to the subscriber. Subscriptions are binding and irrevocable, and cannot be withdrawn, cancelled or modified by the subscriber after having been received by the Manager or the Receiving Agent. The subscriber is responsible for the correctness of the information filled into the Subscription Form. By signing and submitting a Subscription Form, the subscribers confirm and warrant that they have read this Prospectus and are eligible to subscribe for New Shares under the terms set forth herein. There is no minimum subscription amount for which subscriptions in the Rights Offering must be made. Oversubscription (i.e., subscription for more New Shares than the number of Subscription Rights held by the subscriber entitles the subscriber to be allocated) and subscription without Subscription Rights will be permitted. However, in each case there can be no assurance that New Shares will be allocated for such subscriptions. Multiple subscriptions (i.e., subscriptions on more than one Subscription Form) are allowed. Please note, however, that two separate Subscription Forms submitted by the same subscriber with the same number of New Shares subscribed for on both

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Subscription Forms will only be counted once unless otherwise explicitly stated in one of the Subscription Forms. In the case of multiple subscriptions through the VPS online subscription system or subscriptions made both on a Subscription Form and through the VPS online subscription system, all subscriptions will be counted.

13.11 Mandatory Anti-Money Laundering Procedures

The Rights Offering is subject to the Norwegian Money Laundering Act No. 11 of 6 March 2009 and the Norwegian Money Laundering Regulations No. 302 of 13 March 2009 (collectively the "Anti-Money Laundering Legislation"). Subscribers who are not registered as existing customers of the Manager or the Receiving Agent must verify their identity to the Manager or the Receiving Agent in accordance with requirements of the Anti-Money Laundering Legislation, unless an exemption is available. Subscribers who have designated an existing Norwegian bank account and an existing VPS account on the Subscription Form are exempted, unless verification of identity is requested by the Manager or the Receiving Agent. Subscribers who have not completed the required verification of identity prior to the expiry of the Subscription Period will not be allocated New Shares. Furthermore, participation in the Rights Offering is conditional upon the subscriber holding a VPS account. The VPS account number must be stated in the Subscription Form. VPS accounts can be established with authorised VPS registrars, who can be Norwegian banks, authorised securities brokers in Norway and Norwegian branches of credit institutions established within the EEA. However, non-Norwegian investors may use nominee VPS accounts registered in the name of a nominee. The nominee must be authorised by the NFSA. Establishment of a VPS account requires verification of identification to the VPS registrar in accordance with the Anti-Money Laundering Legislation.

13.12 Financial Intermediaries

All persons or entities holding Shares or Subscription Rights through financial intermediaries (i.e., brokers, custodians and nominees) should read this Section 13.12. All questions concerning the timeliness, validity and form of instructions to a financial intermediary in relation to the exercise, sale or purchase of Subscription Rights should be determined by the financial intermediary in accordance with its usual customer relations procedure or as it otherwise notifies each beneficial shareholder. The Company is not liable for any action or failure to act by a financial intermediary through which Shares are held. 13.12.1 Subscription Rights

If an Existing Shareholder holds Shares registered through a financial intermediary on the Record Date, the financial intermediary will customarily give the Existing Shareholder details of the aggregate number of Subscription Rights to which it will be entitled. The relevant financial intermediary will customarily supply each Existing Shareholder with this information in accordance with its usual customer relations procedures. Existing Shareholders holding Shares through a financial intermediary should contact the financial intermediary if they have received no information with respect to the Rights Offering. Subject to applicable law, Existing Shareholders holding Shares through a financial intermediary may instruct the financial intermediary to sell some or all of their Subscription Rights, or to purchase additional Subscription Rights on their behalf. Please refer to Section 14, "Selling and transfer restrictions" for a description of certain restrictions and prohibitions applicable to the sale and purchase of Subscription Rights in certain jurisdictions outside Norway.

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Existing Shareholders who hold their Shares through a financial intermediary and who are Ineligible Shareholders will not be entitled to exercise their Subscription Rights but may, subject to applicable law, instruct their financial intermediaries to sell their Subscription Rights transferred to the financial intermediary. As described in Section 13.8, "—Subscription Rights", neither the Company nor the Manager or the Receiving Agent will sell any Subscription Rights transferred to financial intermediaries. 13.12.2 Subscription Period and period for trading in Subscription Rights

The time by which notification of exercise instructions for subscription of New Shares must validly be given to a financial intermediary may be earlier than the expiry of the Subscription Period. The same applies for instructions pertaining to trading in Subscription Rights and the last day of trading in such rights (which accordingly will be a deadline earlier than the end of trading on the Oslo Stock Exchange on 31 August 2015. Such deadlines will depend on the financial intermediary. Existing Shareholders who hold their Shares through a financial intermediary should contact their financial intermediary if they are in any doubt with respect to deadlines. 13.12.3 Subscription

Any Existing Shareholder who is not an Ineligible Shareholder and who holds its Subscription Rights through a financial intermediary and wishes to exercise its Subscription Rights, should instruct its financial intermediary in accordance with the instructions received from such financial intermediary. The financial intermediary will be responsible for collecting exercise instructions from the Existing Shareholders and for informing the Manager or the Receiving Agent of their exercise instructions. A person or entity who has acquired Subscription Rights that are held through a financial intermediary should contact the relevant financial intermediary for instructions on how to exercise the Subscription Rights. Please refer to Section 14, "Selling and transfer restrictions" for a description of certain restrictions and prohibitions applicable to the exercise of Subscription Rights in certain jurisdictions outside Norway. 13.12.4 Method of payment

Any Existing Shareholder who holds its Subscription Rights through a financial intermediary should pay the Subscription Price for the New Shares that are allocated to it in accordance with the instructions received from the financial intermediary. The financial intermediary must pay the Subscription Price in accordance with the instructions in the Prospectus. Payment by the financial intermediary for the New Shares must be made to the Manager or the Receiving Agent no later than the Payment Date. Accordingly, financial intermediaries may require payment to be provided to them prior to the Payment Date.

13.13 Allocation of New Shares

Allocation of the New Shares will take place on or about 4 September 2015 in accordance with the following criteria:

i. Allocation will be made to subscribers on the basis of granted and acquired Subscription Rights, which have been validly exercised during the Subscription Period. Each Subscription Right will give the right to subscribe for and be allocated one New Share in the Rights Offering.

ii. If not all Subscription Rights are exercised, subscribers having exercised their Subscription Rights and who have oversubscribed will be allocated additional New Shares on a pro rata basis based on the number of Subscription Rights exercised

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by each such subscriber. To the extent that pro rata allocation is not possible, the Company will determine the allocation by the drawing of lots.

iii. New Shares not allocated pursuant to (i) and (ii) above will be allocated to subscribers not holding Subscription Rights. Allocation will be sought made on a pro rata basis based on the relevant subscription amounts.

iv. New Shares not allocated pursuant to (i), (ii) and (iii) above will be subscribed by, and allocated to, the Underwriter.

No fractional New Shares will be allocated. The Company reserves the right to round off, reject or reduce any subscription for New Shares not covered by Subscription Rights. Allocation of fewer New Shares than subscribed for by a subscriber will not impact on the subscriber’s obligation to pay for the number of New Shares allocated. The result of the Rights Offering is expected to be published on or about 3 September 2015 in the form of a stock exchange notification from the Company through the Oslo Stock Exchange information system and at the Company’s website (http://www.siemoffshore.com/). Notifications of allocated New Shares and the corresponding subscription amount to be paid by each subscriber are expected to be distributed in a letter from the VPS on or about 4 September 2015. Subscribers having access to investor services through their VPS account manager will be able to check the number of New Shares allocated to them from 12:00 hours (CET) on 4 September 2015. Subscribers who do not have access to investor services through their VPS account manager may contact the Manager or the Receiving Agent from 14:00 hours (CET) on 4 September 2015 to get information about the number of New Shares allocated to them.

13.14 Payment for the New Shares

The payment for New Shares allocated to a subscriber falls due on the Payment Date (14 September 2015). Payment must be made in accordance with the requirements set out in Sections 13.14.1 "—Subscribers who have a Norwegian bank account" or 13.14.2 "—Subscribers who do not have a Norwegian bank account" below. 13.14.1 Subscribers who have a Norwegian bank account

Subscribers who have a Norwegian bank account must, and will by signing the Subscription Form, provide the Manager or the Receiving Agent with a one-time irrevocable authorisation to debit a specified bank account with a Norwegian bank for the amount payable for the New Shares which are allocated to the subscriber. The specified bank account is expected to be debited on or after the Payment Date. The Manager or the Receiving Agent is only authorised to debit such account once, but reserves the right to make up to three debit attempts, and the authorisation will be valid for up to seven working days after the Payment Date. The subscriber furthermore authorises the Manager or the Receiving Agent to obtain confirmation from the subscriber’s bank that the subscriber has the right to dispose over the specified account and that there are sufficient funds in the account to cover the payment. If there are insufficient funds in a subscriber’s bank account or if it for other reasons is impossible to debit such bank account when a debit attempt is made pursuant to the authorisation from the subscriber, the subscriber’s obligation to pay for the New Shares will be deemed overdue. Payment by direct debiting is a service that banks in Norway provide in cooperation. In the relationship between the subscriber and the subscriber’s bank, the standard terms

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and conditions for "Payment by Direct Debiting – Securities Trading", which are set out on page 2 of the Subscription Form, will apply, provided, however, that subscribers who subscribe for an amount exceeding NOK 5 million by signing the Subscription Form provide the Manager or the Receiving Agent with a one-time irrevocable authorisation to directly debit the specified bank account for the entire subscription amount. 13.14.2 Subscribers who do not have a Norwegian bank account

Subscribers who do not have a Norwegian bank account must ensure that payment with cleared funds for the New Shares allocated to them is made on or before the Payment Date. Prior to any such payment being made, the subscriber must contact the Manager or the Receiving Agent for further details and instructions. 13.14.3 Overdue payments

Overdue payments will be charged with interest at the applicable rate from time to time under the Norwegian Act on Interest on Overdue Payment of 17 December 1976 No. 100, currently 9.00% per annum. If a subscriber fails to comply with the terms of payment, the New Shares will not be delivered to the subscriber.

13.15 Delivery of the New Shares

The Company expects that the New Shares will be issued on or about 17 September 2015 and that the New Shares will be delivered to the VPS accounts of the subscribers to whom they are allocated on or about the same day.

13.16 Listing of the New Shares

The Shares are listed on the Oslo Stock Exchange under ticker code "SIOFF". The New Shares will be listed on the Oslo Stock Exchange as soon as the New Shares have been issued and registered in the VPS. This is expected to take place on or about 18 September 2015. The listing of the New Shares on the Oslo Stock Exchange is expected to take place on the same day. The New Shares may not be transferred or traded before they are fully paid and said registration the VPS has taken place.

13.17 The rights conferred by the New Shares

The New Shares issued in the Rights Offering will be ordinary shares in the Company having a nominal value of USD 0.01 each and will be issued electronically in registered form. The New Shares will rank pari passu in all respects with the Existing Shares and will carry full shareholder rights in the Company from the time of issue. The New Shares will be eligible for any dividends which the Company may declare after said registration. Please refer to Section 10, "Corporate information", for a more detailed description of the Shares.

13.18 VPS registration

The Subscription Rights will be registered with the VPS under the International Securities Identification Number (ISIN) KYG812291097. The New Shares will be registered in the VPS with the same International Securities Identification Number as the Existing Shares, being ISIN KYG813131011. The Company’s registrar in the VPS is Nordea Bank Norge ASA, Postboks 1166 Sentrum, 0107 Oslo, Norway.

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13.19 Dilution

The Rights Offering will result in an immediate dilution of approximately 54% for Existing Shareholders who do not participate in the Rights Offering.

13.20 The underwriting

The largest shareholder of the Company, Siem Europe S.a r.l., having its registered address on 11-13, Boulevard de la Foire, L-1528 Luxembourg, Grand Duchy of Luxembourg, has on 11 August 2015 entered into the Underwriting Agreement with the Company whereby they undertake to guarantee for the subscription of all New Shares not subscribed for by other subscribers. Siem Europe S.a r.l. will receive an underwriting commission of 1.00% of the underwriting obligation. The underwriting obligation of Siem Europe S.a r.l. is conditional upon no change, event, effect, or condition (which shall result not only from events occurring after the signing of the Underwriting Agreement, but also as a result of, separately or in combination with, any previously undisclosed circumstances) occurring prior to such time as payment for the Offer Shares is due, that has or would be expected to have, in the opinion of Siem Europe S.a r.l., acting in good faith, individually or in the aggregate, a material adverse effect on the conditions, assets, operations, results or prospectus of the Company and its subsidiaries taken as a whole.

13.21 Net proceeds and expenses relating to the Rights Offering

The Company will bear the fees and expenses related to the Rights Offering, which are estimated to amount to approximately NOK 2 million, consisting of fees to the Manager and the Receiving Agent and other fees and expenses related to the Rights Issue. In addition the underwriters' commission is 1% of the underwriting obligation as described in Section 13.20, "—The Underwriting" above. No expenses or taxes will be charged by the Company or the Manager to the subscribers in the Rights Offering. Total net proceeds from the Rights Offering are estimated to amount to approximately USD 99 million.

13.22 Interests of natural and legal persons involved in the Rights Offering

The Manager and the Receiving Agent, or their affiliates, have provided from time to time, and may provide in the future, investment and commercial banking services to the Company and its affiliates in the ordinary course of business, for which they may have received and may continue to receive customary fees and commissions. The Manager and the Receiving Agent, their employees and any affiliate may currently own Existing Shares in the Company. Further, in connection with the Rights Offering, the Manager and the Receiving Agent, their employees and any affiliate acting as an investor for its own account may receive Subscription Rights (if they are Existing Shareholders) and may exercise its right to take up such Subscription Rights and acquire New Shares, and, in that capacity, may retain, purchase or sell Subscription Rights or New Shares and any other securities of the Company or other investments for its own account and may offer or sell such securities (or other investments) otherwise than in connection with the Rights Offering. The Manager and the Receiving Agent do not intend to disclose the extent of any such investments or transactions otherwise than in accordance with any legal or regulatory obligation to do so. The Manager and the Receiving Agent will receive a management fee in connection with the Offering and, as such, have an interest in the Offering.

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13.23 Participation of Major Existing Shareholders and Members of the Company’s Management, Supervisory and Administrative Bodies in the Rights Offering

The Company's largest shareholders, Siem Europe S.a r.l, has underwritten the Rights Offering. Please see Section 13.20, "—The Underwriting".

13.24 Publication of information relating to the Rights Offering

In addition to press releases which will be posted on the Company’s website, the Company will use the Oslo Stock Exchange information system to publish information relating to the Rights Offering.

13.25 Governing law and jurisdiction

This Prospectus, the Subscription Forms and the terms and conditions of the Rights Offering shall be governed by and construed in accordance with Norwegian law. Any dispute arising out of, or in connection with, this Prospectus or the Rights Offering shall be subject to the exclusive jurisdiction of the courts of Norway, with Oslo as legal venue.

13.26 Manager, Receiving Agent and advisors

The Rights Issue is managed by Swedbank, Filipstad Brygge 1, P.O Box 1441 Vika, N-0115 Oslo, Norway. DNB Markets, Dronning Eufemias gate 30, P.O. Box 1600 Sentrum, 0021 Oslo, Norway is acting as Receiving Agent in the Rights Issue. Advokatfirmaet Wiersholm AS has acted as the Company's legal adviser in connection with the Rights Issue.

13.27 How to proceed

The below instructions apply to subscriptions for New Shares on the basis of Subscription Rights. Please see above for further details of the Rights Offering, including details on oversubscription and subscription without Subscription Rights. Terms and conditions ................................ For each Existing Shares you own, you will

receive 1.1724 Subscription Rights. Each Subscription Right gives an entitlement to subscribe for and to be allocated one New Share.

Subscription Price ..................................... NOK 1.80 per New Share.

Record Date for determining the right to receive Subscription Rights ........................

18 August 2015 (i.e. shareholders who are registered in the Company’s shareholder register in the VPS as of 18 August 2015 will receive Subscription Rights).

Trading in Subscription Rights .................... 19 August 2015 to the end of trading on the Oslo Stock Exchange on 31 August 2015.

Subscription Period ................................... 19 August 2015 to 2 September 2015 at 16:30 hours (CET).

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14. SELLING AND TRANSFER RESTRICTIONS

14.1 General

As a consequence of the following restrictions, prospective investors are advised to consult legal counsel prior to making any offer, resale, pledge or other transfer of the Shares offered hereby.

Other than in Norway, the Company is not taking any action to permit a public offering of the Shares in any jurisdiction. Receipt of this Prospectus will not constitute an offer in those jurisdictions in which it would be illegal to make an offer and, in those circumstances, this Prospectus is for information only and should not be copied or redistributed. Except as otherwise disclosed in this Prospectus, if an investor receives a copy of this Prospectus in any jurisdiction other than Norway, the investor may not treat this Prospectus as constituting an invitation or offer to it, nor should the investor in any event deal in the Shares, unless, in the relevant jurisdiction, such an invitation or offer could lawfully be made to that investor, or the Shares could lawfully be dealt in without contravention of any unfulfilled registration or other legal requirements. Accordingly, if an investor receives a copy of this Prospectus, the investor should not distribute or send the same, or transfer Shares, to any person or in or into any jurisdiction where to do so would or might contravene local securities laws or regulations.

14.2 Selling restrictions

14.2.1 United States

The New Shares have not been and will not be registered under the U.S. Securities Act, and may not be offered or sold except: (i) within the United States to QIBs in reliance on Rule 144A; or (ii) to certain persons in offshore transactions in compliance with Regulation S under the U.S. Securities Act, and in accordance with any applicable securities laws of any state or territory of the United States or any other jurisdiction. Accordingly, each Manager has represented and agreed that it has not offered or sold, and will not offer or sell, any of the New Shares as part of its allocation at any time other than to QIBs in the United States in accordance with Rule 144A or outside of the United States in compliance with Rule 903 of Regulation S. Transfer of the New Shares will be restricted and each purchaser of the New Shares in the United States will be required to make certain acknowledgements, representations and agreements, as described under Section 18.3.1 "—Transfer restrictions—United States".

Any offer or sale in the United States will be made by affiliates of the Manager who are broker-dealers registered under the U.S. Exchange Act. In addition, until 40 days after the commencement of the Rights Offering, an offer or sale of New Shares within the United States by a dealer, whether or not participating in the Rights Offering, may violate the registration requirements of the U.S. Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A of the U.S. Securities Act and in connection with any applicable state securities laws.

14.2.2 United Kingdom

This Prospectus and any other material in relation to the Rights Offering described herein is only being distributed to, and is only directed at persons in the United Kingdom who are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive (“qualified investors”) that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); (ii) high net worth entities or other persons falling within Article 49(2)(a) to (d) of the Order; or (iii) persons to whom distributions may otherwise lawfully be made (all such persons together being referred to as “Relevant Persons”). The Offer Shares are only available to, and any investment or investment activity to which this Prospectus relates is available only to, and will be engaged in only with, Relevant Persons). This Prospectus and its contents are confidential and should not be distributed,

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published or reproduced (in whole or in part) or disclosed by recipients to any other person in the United Kingdom. Persons who are not Relevant Persons should not take any action on the basis of this Prospectus and should not rely on it.

14.2.3 European Economic Area

In relation to each Relevant Member State, with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the "Relevant Implementation Date"), an offer to the public of any New Shares which are the subject of the offering contemplated by this Prospectus may not be made in that Relevant Member State, other than the offering in Norway as described in this Prospectus, once the Prospectus has been approved by the competent authority in Norway and published in accordance with the Prospectus Directive (as implemented in Norway), except that an offer to the public in that Relevant Member State of any New Shares may be made at any time with effect from and including the Relevant Implementation Date under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

a) to legal entities which are qualified investors as defined in the Prospectus Directive;

b) to fewer than 100, or, if the Relevant Member State has implemented the relevant provisions of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the Manager for any such offer, or in any other circumstances falling within Article 3(2) of the Prospectus Directive; provided that no such offer of New Shares shall require the Company or any Manager to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive.

For the purposes of this provision, the expression an "offer to the public" in relation to any New Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any Securities to be offered so as to enable an investor to decide to purchase any New Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State the expression " Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in each Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.

This EEA selling restriction is in addition to any other selling restrictions set out in this Prospectus.

14.2.4 Additional jurisdictions

Canada This Prospectus is not, and under no circumstance is to be construed as, a prospectus, an advertisement or a public offering of the New Shares in Canada or any province or territory thereof. Any offer or sale of the New Shares in Canada will be made only pursuant to an exemption from the requirements to file a prospectus with the relevant Canadian securities regulators and only by a dealer properly registered under applicable provincial securities laws or, alternatively, pursuant to an exemption from the dealer registration requirement in the relevant province or territory of Canada in which such offer or sale is made.

Hong Kong The New Shares may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32) of Hong Kong, or (ii) to "professional

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investors" within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a "prospectus" within the meaning of the Companies Ordinance (Cap. 32) of Hong Kong, and no advertisement, invitation or document relating to the New Shares may be issued or may be in the possession of any person for the purposes of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to New Shares which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made thereunder.

Singapore This Prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this Prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the New Shares may not be circulated or distributed, nor may they be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the "SFA"), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

14.2.5 Other jurisdictions

The New Shares may not be offered, sold, resold, transferred or delivered, directly or indirectly, in or into, Japan, Australia or any other jurisdiction in which it would not be permissible to offer the New Shares.

In jurisdictions outside the United States and the EEA where the Rights Offering would be permissible, the New Shares will only be offered pursuant to applicable exceptions from prospectus requirements in such jurisdictions.

14.3 Transfer restrictions

14.3.1 United States

The New Shares have not been and will not be registered under the U.S. Securities Act and may not be offered or sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and applicable state securities laws. Terms defined in Rule 144A or Regulation S shall have the same meaning when used in this Section.

Each purchaser of the New Shares outside the United States pursuant to Regulation S will be deemed to have acknowledged, represented and agreed that it has received a copy of this Prospectus and such other information as it deems necessary to make an informed decision and that:

• The purchaser is authorised to consummate the purchase of the New Shares in compliance with all applicable laws and regulations.

• The purchaser acknowledges that the New Shares have not been and will not be registered under the U.S. Securities Act, or with any securities regulatory authority or any state of the United States, and are subject to significant restrictions on transfer.

• The purchaser is, and the person, if any, for whose account or benefit the purchaser is acquiring the New Shares was located outside the United States at the time the buy order for the New Shares was originated and continues to be

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located outside the United States and has not purchased the New Shares for the benefit of any person in the United States or entered into any arrangement for the transfer of the New Shares to any person in the United States.

• The purchaser is not an affiliate of the Company or a person acting on behalf of such affiliate, and is not in the business of buying and selling securities or, if it is in such business, it did not acquire the New Shares from the Company or an affiliate thereof in the initial distribution of such Shares.

• The purchaser is aware of the restrictions on the offer and sale of the New Shares pursuant to Regulation S described in this Prospectus.

• The New Shares have not been offered to it by means of any "directed selling efforts" as defined in Regulation S.

• The Company shall not recognise any offer, sale, pledge or other transfer of the New Shares made other than in compliance with the above restrictions.

• The purchaser acknowledges that the Company, the Manager and their respective advisers will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements.

Each purchaser of the New Shares within the United States pursuant to Rule 144A will be deemed to have acknowledged, represented and agreed that it has received a copy of this Prospectus and such other information as it deems necessary to make an informed investment decision and that:

• The purchaser is authorised to consummate the purchase of the New Shares in compliance with all applicable laws and regulations.

• The purchaser acknowledges that the New Shares have not been and will not be registered under the U.S. Securities Act or with any securities regulatory authority of any state of the United States and are subject to significant restrictions to transfer.

• The purchaser (i) is a QIB (as defined in Rule 144A), (ii) is aware that the sale to it is being made in reliance on Rule 144A and (iii) is acquiring such New Shares for its own account or for the account of a QIB, in each case for investment and not with a view to any resale or distribution to the New Shares.

• The purchaser is aware that the New Shares are being offered in the United States in a transaction not involving any public offering in the United States within the meaning of the U.S. Securities Act.

• If, in the future, the purchaser decides to offer, resell, pledge or otherwise transfer such New Shares, as the case may be, such Shares may be offered, sold, pledged or otherwise transferred only (i) to a person whom the beneficial owner and/or any person acting on its behalf reasonably believes is a QIB in a transaction meeting the requirements of Rule 144A, (ii) in accordance with Regulation S, (iii) in accordance with Rule 144 (if available), (iv) pursuant to any other exemption from the registration requirements of the U.S. Securities Act, subject to the receipt by the Company of an opinion of counsel or such other evidence that the Company may reasonably require that such sale or transfer is in compliance with the U.S. Securities Act or (v) pursuant to an effective registration statement under the U.S. Securities Act, in each case in accordance with any applicable securities laws of any state or territory of the United States or any other jurisdiction.

• The purchaser is not an affiliate of the Company or a person acting on behalf of such affiliate, and is not in the business of buying and selling securities or, if it is in such business, it did not acquire the New Shares from the Company or an affiliate thereof in the initial distribution of such Shares.

• The New Shares are "restricted securities" within the meaning of Rule 144(a) (3)

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and no representation is made as to the availability of the exemption provided by Rule 144 for resales of any New Shares, as the case may be.

• The Company shall not recognise any offer, sale pledge or other transfer of the New Shares made other than in compliance with the above-stated restrictions.

• The purchaser acknowledges that the Company, the Manager and their respective advisers will rely upon the truth and accuracy of the foregoing acknowledgements, representations and agreements.

14.3.2 European Economic Area

• Each person in a Relevant Member State (other than, in the case of paragraph (a), persons receiving offers contemplated in this Prospectus in Norway) who receives any communication in respect of, or who acquires any New Shares under, the offers contemplated in this Prospectus will be deemed to have represented, warranted and agreed to and with each Manager and the Company that:

• it is a qualified investor as defined in the Prospectus Directive; and

• in the case of any New Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the New Shares acquired by it in the offer have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than qualified investors, as that term is defined in the Prospectus Directive, or in circumstances in which the prior consent of the Manager has been given to the offer or resale; or (ii) where New Shares have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those Shares to it is not treated under the Prospectus Directive as having been made to such persons.

• For the purposes of this representation, the expression an "offer" in relation to any New Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any New Shares to be offered so as to enable an investor to decide to purchase or subscribe for the New Shares, as the same may be varied in that Relevant Member State by any measure implementing the Prospectus Directive in that Relevant Member State and the expression " Prospectus Directive" means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in each Relevant Member State and the expression "2010 PD Amending Directive" means Directive 2010/73/EU.

105

15. ADDITIONAL INFORMATION

15.1 Legal Proceedings

There are no governmental, legal or arbitration proceedings, including any such proceedings which are pending or threatened, during a period covering at least the previous 12 months which may have, or have had in the recent past significant effects on the Group’s financial position or profitability.

15.2 Material Contracts

Neither the Group nor any member of the Group has entered into any material contracts outside the ordinary course of business for the two years prior to the date of this Prospectus. Further, the Group has not entered into any other contract outside the ordinary course of business which contains any provision under which any member of the Group has any obligation or entitlement.

15.3 Related Party Transactions

Siem Industries Inc. is the parent company of Siem Europe S.a r.l. the Company’s largest shareholder with a holding of 34.39%, and is defined as a related party. The Company is obligated to Siem Industries Inc., for a fee of USD 250K (2013: USD 300K). This fee is the remuneration for the services of two of the Board Members. This fee also covers office in the Cayman Islands and administrative services. The main shareholder of the Company, Siem Europe S.a r.l. is controlled by a trust where certain members of Kristian Siem’s family are potential beneficiaries. Kristian Siem, who is a member of the Board of the Company, is also inter alia the chairman of the board of directors of Siem Industries Inc. and of Subsea 7 S.A., the charterer of the OSCV "Siem Stingray". The contract between the Company and Subsea 7 S.A is made on arm's length terms. In September 2014 Siem Industries Inc., which is the beneficial owner of Siem Europe S.a r.l., announced the acquisition of Flensburger Schiffbau-Gesellschaft mbH & Co. KG which is building the two Well-Intervention Vessels under construction by the Company. The contract between Flensburger Schiffbau-Gesellschaft mbH & Co. KG is made on arm's length terms. In November 2014, the Company provided a loan of EUR 15 million to Siem Industries Inc. as part of the restructuring of Flensburger Schiffbau-Gesellschaft mbH & Co. KG. The loan was provided to ensure delivery of the two Well-Intervention Vessels under construction and shall be utilized to finance the yard. EUR 10 million of the funding of the loan was provided by Helix Energy Solutions Group Inc. by way of prepayment of charter hire for the two Well-Intervention Vessels. The loan is at market terms and matures when the last of the two Well-Intervention Vessels have been delivered from the yard. At the end of 2014 a short term loan of USD 60 million was drawn by the Company under a credit facility provided by Siem Industries Inc. The short term loan is on market terms. In June 2015, a short term loan of USD 15 million was provided by Siem Industries Inc. to the Company. The short term loan is on market terms. The Company has currently not drawn on the short term loan, and any undrawn portion of the USD 15 million commitment will be cancelled, and any drawn amounts will mature, when the proceeds from the Rights Offering has been received by the Company.

15.4 Documents on display

Copies of the following documents will be available for inspection at the Company's offices and at the offices of Siem Offshore Management AS at Nodeviga 14, 4610

106

Kristiansand, during normal business hours from Monday to Friday each week (except public holidays) for a period of twelve months from the date of this Prospectus.

• The Company's Articles of Association and Certificate of Incorporation.

• The Group's audited consolidated annual financial statement for the year ended 31 December 2014.

• This Prospectus.

15.5 Statement regarding sources

The Company confirms that when information in this Prospectus has been sourced from a third party it has been accurately reproduced and as far as the Company is aware and is able to ascertain from the information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading.

107

16. DEFINITIONS AND GLOSSARY

The following definitions and glossary apply in this Prospectus unless otherwise dictated by the context, including the foregoing pages of this Prospectus.

AHTS Anchor-handling, tug, supply vessel.

Anti-Money Laundering Legislation

the Norwegian Money Laundering Act No. 11 of 6 March 2009 and the Norwegian Money Laundering Regulations No. 302 of 13 March 2009.

Articles of Association The memorandum and articles of association of the Company.

Board Members The members of the Board of Directors.

Board of Directors or Board The board of directors of the Company.

CET Central European Time

CLV Cable-Lay Vessel.

COFTA Central Office for Foreign Tax Affairs (Norwegian: Sentralskattekontoret for utenlandssaker).

Company Siem Offshore Inc.

Corporate Governance Code

The Norwegian Code of Practice for Corporate Governance dated 30 October 2014.

DP Dynamically positioned.

DSND Det Søndenfjeldske-Norske Dampskipselskap AS.

EEA The European Economic Area.

ERD Extended Reach Drilling.

Existing Shares The issued Shares as of the date of this Prospectus.

Existing Shareholders Holders of the Company’s shares as registered in the VPS as of 18 August 2015.

EU The European Union.

EU Prospectus Directive

Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State) and includes any relevant implementing measure in each Relevant Member State.

FCV Fast crew vessel.

Foreign EEA Corporate Shareholders

Foreign Shareholders that are corporations tax-resident within the EEA for tax purposes.

108

Foreign EEA Personal Shareholders

Non-resident Shareholders who are individuals tax-resident within the EEA.

Forward-looking statements

Statements made that are not historic and thereby predictive as defined in Section 4.3.

FOS Five Oceans Services.

FSV Fast supply vessel.

General Meeting The Company’s general meeting of shareholders.

Group The Company and its subsidiaries.

HPHT High pressure high temperature.

IFRS International Financial Reporting Standards as adopted by the EU.

Ineligible Shareholders

Existing Shareholders resident in jurisdictions where the Prospectus may not be distributed and/or with legislation that, according to the Company’s assessment, prohibits or otherwise restricts subscription for New Shares.

ISIN Securities number in the Norwegian Central Securities Depository (VPS).

ISV Installation support vessel.

Listing The listing of the New Shares on Oslo Børs.

Management The Group’s senior management team.

Manager Swedbank.

MPD Managed pressure drilling.

MPSV Multipurpose Platform Supply Vessels.

New Shares The 454,430,000 new Shares issued in connection with the Rights Offering

NOK Norwegian Kroner, the lawful currency of Norway.

Non-resident Shareholders Shareholders who are not resident in Norway for tax purposes.

Norwegian FSA The Financial Supervisory Authority of Norway (Nw.: Finanstilsynet).

Norwegian corporate shareholders

Shareholders who are limited liability companies and certain similar corporate entities resident in Norway for tax purposes.

Norwegian personal shareholders

Personal shareholders resident in Norway for tax purposes.

Norwegian Securities Trading Act

The Norwegian Securities Trading Act of 29 June 2007 no. 75 (Nw.: verdipapirhandelloven).

109

OCI Other comprehensive income.

ODL Overseas Drilling Limited.

Order The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 as amended.

OSCV Offshore subsea construction vessel.

Oslo Stock Exchange Oslo Børs ASA or, as the context may require, Oslo Børs, a Norwegian regulated stock exchange operated by Oslo Børs ASA.

OSRV Oil spill recovery vessels.

OSV Offshore support vessel.

OWF Offshore Wind Farm.

Prospectus This Prospectus.

Prospectus Directive

Commission Regulation (EC) No. 809/2004 implementing Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 regarding information contained in prospectuses, as amended, and as implemented in Norway

PCD Pressure control device.

PSV Platform supply vessel.

QIBs Qualified institutional buyers, as defined in Rule 144A under the U.S. Securities Act.

Receiving Agent DNB Markets

Record date 18 August 2015

Relevant Member State Each Member State of the EEA which has implemented the EU Prospectus Directive.

Rights Offering The offering of New Shares described in this Prospectus.

Resident Shareholders Shareholders that are residents of Norway for purposes of Norwegian taxation.

Relevant Persons

Persons in the UK that are (i) investment professionals falling within Article 19(5) of the Order or (ii) high net worth entities, and other persons to whom the Prospectus may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order.

RPCD Unique sealing technology for the existing PCD products and other arising applications, for example a seal to be used from floating drilling units.

Secunda Secunda Holdings Limited.

110

SFA The Securities and Futures Act of Singapore.

Share(s) Common shares in the share capital of the Company or any one of them.

Siem Offshore The Company and its subsidiaries

SOC Siem Offshore Contractors GmbH.

Subscription Period From 19 August 2015 to 16:30 hours (CET) on 2 September 2015.

Subscription Price The subscription price for New Shares in the Rights Offering, being NOK 1.80 per New Share.

Subscription Rights The transferable subscription rights being issued to holders of Existing Shares in connection with the Rights Offering.

TAMRF Texas A&M Research Foundation.

UBO Underbalanced Operations.

UK United Kingdom.

Underwriter Siem Europe S.a r.l.

Underwriting Agreement The Underwriting Agreement dated 11 August 2015 between the Company and the Underwriter.

USD United States Dollar, the lawful currency of the United States of America.

U.S. Exchange Act The United States Securities Exchange Act of 1934, as amended.

U.S. Securities Act The United States Securities Act of 1933, as amended.

VPS The Norwegian Central Securities Depository (Nw.: Verdipapirsentralen).

WIV or Well-Intervention Vessel Well-intervention vessel.

Appendix A: Memorandum and Articles of Association

Appendix B: Annual financial statements 2014

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

45

AN

NU

AL

RE

PO

RT

20

14

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

46

Ke

y F

igu

res

3

Hig

hli

gh

ts 2

01

45

Ne

w v

ess

els

De

live

red

in 2

01

46

Ne

wb

uil

din

gs

8

Fle

et

Lis

t M

arc

h 2

01

510

Lo

cal

pre

sen

ce in

ke

y m

ark

ets

31

.03

.20

15

12

Th

is is

Sie

m O

ffsh

ore

Inc.

14

Bo

ard

of

Dir

ect

or’

s R

ep

ort

16

Co

rpo

rate

Go

vern

an

ce22

Inco

me

Sta

tem

en

ts25

Sta

tem

en

ts o

f F

ina

nci

al

Po

siti

on

– A

sse

ts26

Sta

tem

en

ts o

f F

ina

nci

al

Po

siti

on

– E

qu

ity

an

d L

iab

ilit

ies

27

Sta

tem

en

ts o

f C

ha

ng

es

In E

qu

ity

28

Sta

tem

en

ts o

f C

ash

Flo

ws

30

No

tes

to t

he

Acc

ou

nts

32

Co

rpo

rate

So

cia

l R

esp

on

sib

ilit

y98

Au

dit

or’

s R

ep

ort

100

Re

spo

nsi

bil

ity

Sta

tem

en

t10

2

Bo

ard

of

Dir

ect

ors

103

Fin

an

cia

l C

ale

nd

ar

104

CO

NT

EN

TS

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

47

KE

Y FI

GU

RES

(Am

ount

s in

USD

1,0

00)

Con

solid

ated

INC

OM

E ST

ATEM

ENTS

Ref

2014

2013

Ope

ratin

g re

venu

e 4

91,3

12

363

,955

Ope

ratin

g ex

pens

es -

297,

187

-24

1,29

1

Ope

ratin

g m

argi

n(1

) 1

94,1

25

122

,663

Ope

ratin

g m

argi

n, %

40%

34%

Dep

reci

atio

n an

d am

ortiz

atio

n -

125,

883

-75

,841

Gai

n/(lo

ss) o

n sa

le o

f ass

ets

18,

728

29,

827

Gai

n on

sal

e of

inte

rest

rat

e de

rivat

ives

(CIR

R)

368

3

68

Gai

n/(lo

ss) o

n cu

rren

cy e

xcha

nge

forw

ard

cont

ract

s -

3,02

3 -

7,75

6

(2)

84,

316

69,

261

17%

19%

-12

,685

-

53,3

49

Res

ult f

rom

ass

ocia

ted

com

pani

es 1

,808

2

,046

73,

439

17,

959

15%

5%

-2,

729

3,5

85

70,

710

21,

544

Min

oriti

es in

tere

st 1

2,56

3 -

456

58,

147

22,

000

12%

6%

Stat

emen

ts o

f Fin

anci

al P

ositi

on12

/31/

1412

/31/

13

Non

-cur

rent

ass

ets

1,9

95,8

09

1,6

89,8

86

Cur

rent

ass

ets

264

,774

1

94,6

96

Wor

king

cap

ital

(3)

-17

,419

2

1,11

2

Tota

l ass

ets

2,2

60,5

84

1,9

02,7

02

Sha

reho

lder

s’ e

quity

784

,982

7

56,6

28

1,1

54,7

42

935

,231

282

,193

1

73,5

84

2,2

60,5

84

1,9

02,7

02

Stat

emen

ts o

f Cas

h Fl

ows

2014

2013

(4)

184

,345

5

8,98

6

(4)

43,

401

-9,

028

Key

Fig

ures

20

1420

13

Wei

ghte

d av

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87,5

91

389

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ghte

d av

erag

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d ou

tsta

ndin

g sh

ares

(1,0

00)

389

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3

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r sh

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(US

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L

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05

31/1

2/20

06

31/1

2/20

07

31/1

2/20

08

31/1

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09

31/1

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SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

45

REV

ENU

E U

SD 1

,000

49

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12

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TAX

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1,0

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73

43

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PLO

YEES

1 0

73

VESS

ELS

IN O

PER

ATIO

N

46

Con

trac

ts a

nd

vess

els:

Ja

n 14

; Agr

eed

a co

ntra

ct fo

r the

Pla

t-fo

rm S

uppl

y ve

ssel

(“PS

V”) “

Siem

Atl

as”

for a

firm

per

iod

of tw

o ye

ars,

with

opt

ions

fo

r tw

o ye

ars

to b

e m

utua

lly a

gree

d, fo

r op

erat

ions

off

shor

e B

razi

l.

Jan

14; S

old

and

deliv

ered

the

2004

-bui

lt PS

V “S

iddi

s Sk

ippe

r”.

Feb

14; O

rder

ed tw

o w

ell-

inte

rven

tion

vess

els

sche

dule

d fo

r del

iver

y in

firs

t and

th

ird q

uart

er 2

016.

The

two

vess

els

shal

l be

bui

lt at

the

Flen

sbur

ger s

hipy

ard

in

Ger

man

y. B

oth

vess

els

shal

l be

char

tere

d to

Hel

ix E

nerg

y So

lutio

ns G

roup

for a

fir

m p

erio

d of

sev

en y

ears

with

opt

ions

th

at c

an e

xten

d th

e ch

arte

r per

iod

up to

tw

enty

-tw

o ye

ars.

Apr

14;

Sie

m O

ffsh

ore

Con

trac

tors

G

mbH

(“SO

C”)

, a w

holly

ow

ned

subs

idi-

ary

of S

iem

Off

shor

e In

c. w

as a

war

ded

a co

ntra

ct fo

r the

Nor

dsee

One

Off

shor

e W

ind

Farm

.

Apr

14;

Rec

eive

d de

liver

y of

the

inst

alla

-tio

n su

ppor

t ves

sel (

“ISV”

) “Si

em M

oxie

”. Th

e ve

ssel

sha

ll pr

imar

ily b

e ut

ilise

d by

SO

C fo

r pro

ject

wor

k w

ithin

the

subm

a-rin

e po

wer

cab

le in

stal

latio

n, re

pair

and

mai

nten

ance

seg

men

t.

May

14;

Agr

eed

a ch

arte

r agr

eem

ent f

or

the

Off

shor

e Su

bsea

Con

stru

ctio

n Ve

ssel

(“

OSC

V”) “

Siem

Stin

gray

”. Th

e ag

reem

ent

was

mad

e at

mar

ket t

erm

s an

d fo

r a fi

rm

perio

d of

thre

e ye

ars

with

two

year

ly

optio

ns. T

he c

hart

er c

omm

ence

d up

on

deliv

ery

of th

e ve

ssel

from

the

Nor

weg

ian

yard

.

May

14;

Sec

unda

Can

ada

LP, w

hich

is

50%

ow

ned

by S

iem

Off

shor

e, w

as

awar

ded

a fiv

e-ye

ar fi

rm c

ontr

act f

or o

ne

new

build

AH

TS v

esse

l. Th

e ve

ssel

sha

ll be

bui

lt at

the

Rem

onto

wa

ship

yard

and

be

del

iver

ed in

four

th q

uart

er 2

015.

May

14;

Rec

eive

d de

liver

y of

the

OSC

V “S

iem

Spe

arfis

h”.

Jun

14; E

xten

ded

firm

con

trac

t for

sci

en-

tific

core

-dril

ling

vess

el “J

oide

s Re

solu

-tio

n” b

y on

e ye

ar fo

llow

ing

the

char

tere

r’s

exer

cise

of t

he s

econ

d of

ten

annu

al

optio

ns.

Jun

14; R

ecei

ved

deliv

ery

of th

e PS

V “S

iem

Gia

nt”.

July

14;

Rec

eive

d de

liver

y of

the

OSC

V “S

iem

Stin

gray

”.

July

14;

Sol

d an

d de

liver

ed th

e 20

07-b

uilt

PSV

“Sie

m S

ailo

r”.

Aug

14;

Ent

ered

into

an

agre

emen

t with

D

aya

Mat

eria

ls B

hd. (

“Day

a”) i

n A

ugus

t 20

14 fo

r the

sal

e of

the

two

2013

-bui

lt

OSC

Vs “S

iem

Day

a 1”

and

“Sie

m D

aya

2”,

whi

ch a

re c

urre

ntly

cha

rter

ed b

y D

aya.

D

aya

has

been

giv

en 1

50 d

ays

from

A

ugus

t 201

4 to

arr

ange

for fi

nanc

ing

of

the

two

vess

els

and

deliv

ery

of th

e ve

s-se

ls is

sch

edul

ed to

take

pla

ce la

test

by

mid

-Apr

il 20

15. T

he e

n-bl

oc s

ales

pric

e is

U

SD 2

82 m

illio

n. T

he s

ale

wou

ld g

ener

ate

a ga

in, w

hich

will

be

reco

rded

at t

he d

eliv

-er

y of

the

vess

els.

The

sal

es p

roce

eds

will

be

use

d to

repa

y m

ortg

age

debt

.

Nov

14;

The

PSV

“Sie

m S

ymph

ony”

w

as d

eliv

ered

from

a N

orw

egia

n ya

rd in

N

ovem

ber a

nd c

omm

ence

d a

four

yea

r co

ntra

ct.

Dec

14;

The

OSR

V “S

iem

Mar

agog

i” w

as

deliv

ered

from

a B

razi

lian

yard

in O

ctob

er

and

com

men

ced

an e

ight

-yea

r con

trac

t in

Dec

embe

r.

Dec

14;

Agr

eed

a th

ree-

year

firm

con

trac

t fo

r the

OSC

V “S

iem

N-S

ea” (

ex. “

Siem

St

ork”

) with

com

men

cem

ent 1

Jan

uary

20

15.

Dec

14;

Rec

eive

d no

tices

of t

erm

inat

ion

from

Kar

mor

neft

egaz

SA

RL in

resp

ect

of th

e se

ason

al w

ork

in K

ara

Sea

for t

he

year

201

5 fo

r the

two

AH

TS v

esse

ls “S

iem

To

paz”

and

“Sie

m A

met

hyst

” and

for t

he

PSV

“Sie

m P

ilot”

.

Dec

14;

The

cha

rter

er d

ecla

red

thre

e m

onth

ext

ensi

on u

ntil

9 Ju

ne 2

015

for t

he

PSVs

“Sie

m H

anne

” and

“Sop

hie

Siem

”.

HIG

HLI

GH

TS 2

014

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

466

NE

W V

ESS

ELS

DE

LIVE

RE

D IN

201

4

Siem

Gia

nt

– bu

ilt b

y VA

RD N

iteró

i, Br

azil,

del

iver

ed 1

6 Ju

ne 2

014

Siem

Mar

agog

i –

built

by

ETP

Ship

yard

, Bra

zil,

deliv

ered

23

Oct

ober

201

4

Siem

Sym

phon

y –

built

by

Hel

lesø

y Ya

rd, N

orw

ay, d

eliv

ered

19

Nov

embe

r 201

4

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

47

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

47

Siem

Mox

ie

– bu

ilt b

y Fj

ells

tran

d, N

orw

ay,

deliv

ered

7 A

pril

2014

Siem

Spe

arfis

h –

built

by

VARD

Bra

ttva

ag, N

orw

ay,

deliv

ered

27

May

201

4

Siem

Sti

ngra

y –

built

by

VARD

Bra

ttva

ag, N

orw

ay, d

eliv

ered

24

July

201

4

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

48

NE

WB

UIL

DIN

GS

Siem

Pri

dede

liver

y 20

15

Siem

TB

Nde

liver

y 20

16

Siem

TB

Nde

liver

y 20

16

Siem

TB

Nde

liver

y 20

16

Des

ign:

VS

441

1 D

F

Type

:PS

V

An

exc

itin

g

ne

wb

uil

din

g

pro

gra

m

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

49

Siem

Mar

atai

zes

deliv

ery

2015

Des

ign:

U

LSTE

IN P

801

Type

:O

SRV

Siem

Aim

ery

deliv

ery

2016

Des

ign:

VA

RD C

LV 0

1

Type

:C

LV

Siem

Hel

ix 1

deliv

ery

2016

Siem

Hel

ix 2

deliv

ery

2016

Des

ign:

SALT

307

WIV

Type

:W

IV

TBN

deliv

ery

2015

Des

ign:

U

T 78

2Wp

Type

:A

HTS

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

41010

VES

SE

LS IN

OP

ER

AT

ION

MA

RC

H 2

015

Pla

tfo

rm S

up

ply

Ve

ss

els

(P

SV

)

Sie

m

Sy

mp

ho

ny

Sie

m A

tla

sS

iem

G

ian

tS

iem

Ha

nn

eS

iem

Lo

uis

aS

op

hie

Sie

m

Bu

ilt:

20

1420

1320

1420

0720

0620

06

De

sig

n:

VS 4

411

DF

STX

PSV

4700

STX

PSV

4700

VS 4

70 M

K II

VS 4

70 M

K II

VS 4

70 M

K II

Dp

Cla

ss

: 2

22

22

2

LO

A:

89.2

0 m

87.

90 m

87.9

0 m

73.4

0 m

73.4

0 m

73.4

0 m

Bre

ad

th:

19.0

0 m

19.0

0 m

19.0

0 m

16.6

0 m

16.6

0 m

16.6

0 m

Dra

ug

ht:

7.

40 m

6.6

0m6.

60 m

6.42

m6.

42 m

6.42

m

Dw

t:

5,50

0 t

470

0 T

4,70

0 T

3570

T35

70 T

3570

T

Ac

co

mm

od

ati

on

: 25

3434

3434

34

Ca

rgo

De

ck

Are

a:

980

m2

1000

m2

usa

ble

1000

m2

usa

ble

680

m2 u

sabl

e68

0 m

2 usa

ble

680

m2 u

sabl

e

Ow

ne

rsh

ip:

100%

100

%10

0%10

0%10

0%10

0%

Off

sh

ore

Su

bs

ea

Co

ns

tru

cti

on

Ve

ss

el

(OS

CV

) &

Mu

ltip

urp

os

e fi

eld

& R

OV

Su

pp

ort

Ve

ss

el

(MR

SV

)

An

ch

or

Ha

nd

lin

g T

ug

Su

pp

ly V

es

se

ls (

AH

TS

)

Sie

m M

arl

inS

iem

N-S

ea

S

iem

Da

ya

1

Sie

m D

aya

2S

iem

Sp

ea

rfis

hS

iem

Sti

ng

ray

Bu

ilt:

20

0920

0920

1320

1320

1420

14

De

sig

n:

MT

6017

MK

IIM

T 60

17 M

K II

STX

OSC

V 11

LST

X O

SCV

11L

STX

OSC

V 03

STX

OSC

V 03

Dp

Cla

ss

: 2

22

22

2

LO

A:

93.6

0 m

93.6

0 m

120.

80 m

120.

80 m

120.

80 m

120.

80 m

Bre

ad

th:

19.7

0 m

19.7

0 m

22.0

0 m

22.0

0 m

23.0

0 m

23.0

0 m

Dra

ug

ht:

6.

30 m

6.30

m6.

60 m

6.60

m6.

60 m

6.60

m

Dw

t:4.

500

t4.

500

t5.

000

t5.

000

t5.

000

t5.

000

t

Ac

co

mm

od

ati

on

: 68

6811

011

011

011

0

Ca

rgo

De

ck

Are

a:

1046

m2

1046

m2

1300

m2

1300

m2

1,30

0 m

21,

300

m2

Cra

ne

:10

0 t O

ffsh

ore/

Subs

ea c

rane

100

t Off

shor

e/Su

bsea

cra

ne25

0 t O

ffsh

ore/

Subs

ea c

rane

250

t Off

shor

e/Su

bsea

cra

ne1

X 25

0 t A

HC,

3,0

00 m

1 X

250

t AH

C, 3

,000

m

RO

V M

oo

np

oo

l-

-7.

2 X

7.2

7.2

X 7.

27.

2 X

7.2

m7.

2 X

7.2

m

Ow

ne

rsh

ip:

100%

100%

100%

100%

100%

100%

Sie

m A

me

thy

st

Sie

m O

pa

lS

iem

Ga

rne

tS

iem

Sa

pp

hir

eS

iem

Aq

ua

ma

rin

e

Bu

ilt:

20

1120

1120

1020

1020

10

De

sig

n:

VS 4

91 C

DVS

491

CD

VS 4

91 C

DVS

491

CD

VS 4

91 C

D

Dp

Cla

ss

: 2

22

22

LO

A:

91.0

0 m

91.0

0 m

91.0

0 m

91.0

0 m

91.0

0 m

Bre

ad

th:

22.0

0 m

22.0

0 m

22.0

0 m

22.0

0 m

22.0

0 m

Dra

ug

ht:

7.

95 m

7.95

m7.

95 m

7.95

m7.

95 m

Dw

t:

3800

T38

00 T

3800

T38

00 T

3800

T

Ac

co

mm

od

ati

on

: 60

6060

6060

Ca

rgo

De

ck

Are

a:

800

m2

800

m2

800

m2

800

m2

800

m2

BH

P:

2800

028

000

2800

028

000

2800

0

Bo

lla

rd P

ull

:29

7 Te

297

Te28

2 Te

301

Te28

4 Te

Ow

ne

rsh

ip:

100%

0%0%

100%

100%

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

41111

La

rge

-siz

e P

SV

s

Sie

m S

as

ha

Sid

dis

Ma

rin

er

Sie

m P

ilo

tH

ug

in E

xp

lore

rS

iem

Su

pp

lie

rS

iem

Ca

rrie

r

2005

2011

2010

2006

1999

1996

VS 4

70 M

K II

VS 4

85VS

485

MT

6000

MK

IIM

T 60

00VS

483

12

22

22

73.4

0 m

88.3

m88

.3 m

86.2

0 m

83.7

0 m

82.8

5 m

16.6

0 m

20 m

20 m

19.7

0 m

17.7

0 m

19.0

0 m

6.42

map

prox

7.0

map

prox

7.0

m6.

18 m

6.10

m6.

30 m

3570

T45

00 T

4500

T32

36 T

4250

T46

79 T

3464

6456

2023

680

m2 u

sabl

e97

0 m

297

0 m

293

5 m

291

2 m

284

0 m

2

100%

51%

51%

100%

100%

100%

Sie

m T

op

az

Sie

m R

ub

yS

iem

Dia

mo

nd

Sie

m P

ea

rlS

iem

Em

era

ld

2010

2010

2010

2009

2009

VS 4

91 C

DVS

490

CD

VS 4

91 C

DVS

491

CD

VS 4

91 C

D

22

22

2

91.0

0 m

91.0

0 m

91.0

0 m

91.0

0 m

91.0

0 m

22.0

0 m

22.0

0 m

22.0

0 m

22.0

0 m

22.0

0 m

7.95

m7.

95 m

7.95

m7.

95 m

7.95

m

3800

T38

00 T

3800

T38

00 T

3800

T

6060

6060

60

800

m2

800

m2

800

m2

800

m2

800

m2

2800

028

000

2800

028

000

2800

0

306

Te31

0 Te

284

Te28

5 Te

281

Te

100%

100%

100%

100%

100%

Oth

er

Bra

zil

31

.03

.20

15

Fle

et

of

9 v

es

se

ls

Ca

na

da

31

.03

.20

15

Fle

et

of

6 v

es

se

ls

JO

IDE

S R

ES

OL

UT

ION

BIG

OR

AN

GE

XV

III

OSR

V/FC

S/FS

VA

HTS

/PSV

/Fie

ld s

uppo

rtSc

ient

ific

Cor

e D

rillin

g Ve

s-

sel (

SCD

V)

Wel

l Stim

ulat

ion

Vess

el

(WSV

)

100%

ow

ned

50%

ow

ned

100%

ow

ned

41.3

% o

wne

d

Ins

tall

ati

on

Su

pp

ort

Ve

ss

el

(IS

V)

Sie

m M

ox

ie

Bu

ilt:

20

14

De

sig

n:

SX 1

63 X

-Bow

Dp

Cla

ss

: 2

LO

A:

74.0

0 m

Bre

ad

th:

17.0

0 m

Dra

ug

ht:

6.

40 m

Dw

t:2.

835

t

Ac

co

mm

od

ati

on

: 60

Ca

rgo

De

ck

Are

a:

200

m2 us

able

Ow

ne

rsh

ip:

100%

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

412

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

412

LOC

AL

PR

ESE

NC

E IN

KE

Y M

AR

KE

TS 3

1.03

.201

5

Ge

og

rap

ica

l

foo

tpri

nt

Kri

stia

nsan

d (H

Q)

Siem

Off

shor

e of

fices

:

• K

ristia

nsan

d (N

orw

ay)

• Ri

o de

Jan

eiro

, Mac

aé, A

raca

ju (B

razi

l)•

Leer

(Ger

man

y)•

Gro

ning

en (T

he N

ethe

rlan

ds)

• H

oust

on (U

SA)

• A

ccra

(Gha

na)

• Pe

rth

(Aus

tral

ia)

• G

dyni

a (P

olan

d)

Secu

nda

Can

ada

LP O

ffice

s(a

ssoc

iate

d co

mpa

ny):

• St

. Joh

n´s,

Hal

ifax

(Can

ada)

Leer

Gro

ning

en

Gdy

nia

St. J

ohn´

s

Hal

ifax

Hou

ston

Ara

caju

Mac

aé

Rio

de

Jane

iro

Acc

ra

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

413

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

413

Pert

h

TOTA

L EM

PLO

YEES

10

73

TOTA

L N

UM

BER

OF

VESS

ELS

55

VESS

ELS

IN O

PER

ATIO

N

46

P

SVs:

12

AH

TS:

10O

SCVs

: 6

CAN

AD

IAN

FLE

ET:

6O

THER

: 12

VESS

ELS

UN

DER

CO

NST

RU

CTI

ON 9

PSV

s: 4

AH

TS:

1W

IVs:

2O

THER

: 2

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

414

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

414

Siem

Off

shor

e ow

ns a

nd o

pera

tes

one

of th

e w

orld

’s m

ost

mod

ern

fleet

of o

ffsh

ore

supp

ort v

esse

ls, e

quip

ped

to m

eet

the

incr

ease

d re

quire

men

ts fr

om c

lient

s an

d de

man

ds fr

om

oper

atio

n in

the

hars

hest

env

ironm

ents

.

 Siem

Off

shor

e ha

d 46

ves

sels

in

oper

atio

n an

d 9

vess

els

unde

r co

nstr

uctio

n by

yea

r-en

d 20

14.

Vess

els

in o

pera

tion

incl

uded

two

anch

or h

andl

ing,

tug,

sup

ply

vess

els

oper

-at

ed o

n be

half

of a

poo

l par

tner

. By

end

Mar

ch 2

015,

the

tota

l flee

t co

mpr

ised

of 5

5 ve

ssel

s, in

clud

ing,

am

ong

othe

rs th

e fo

llow

ing

owne

d ve

s-se

ls, s

ixte

en P

latf

orm

Sup

ply

Vess

els

(PSV

s),

six

Off

shor

e Su

bsea

Con

stru

ctio

n Ve

ssel

s (O

SCVs

), ei

ght A

ncho

r Han

dlin

g,

Tug,

Sup

ply

vess

els

(AH

TS v

esse

ls),

two

Wel

l-In

terv

entio

n Ve

ssel

s (W

IVs)

, one

TH

IS IS

SIE

M O

FFS

HO

RE

INC

.

Inst

alla

tion

Supp

ort V

esse

l (IS

V), o

ne

Cab

le L

ay V

esse

l (C

LV)

and

six

Can

adia

n fla

gged

ves

sels

com

pris

ing

of b

oth

AH

TS

vess

els

and

PSVs

. The

flee

t pro

vide

s a

broa

d sp

ectr

um o

f ser

vice

s of

fere

d by

a

high

ly e

xper

ienc

ed a

nd c

ompe

tent

cre

w

with

a s

tron

g fo

cus

on H

ealth

, Saf

ety,

En

viro

nmen

t and

Qua

lity.

The

Com

pany

’s v

isio

n is

to b

ecom

e th

e le

adin

g pr

ovid

er a

nd th

e m

ost a

ttra

ctiv

e em

ploy

er o

ffer

ing

mar

ine

serv

ices

to th

e of

fsho

re e

nerg

y se

rvic

e in

dust

ry. T

he

Com

pany

sha

ll de

liver

qua

lity

and

relia

ble

cont

ract

ed s

ervi

ces

in a

tim

ely

man

ner b

y

exec

utin

g co

st-e

ffici

ent s

olut

ions

dev

el-

oped

in a

ctiv

e co

llabo

ratio

n an

d co

oper

a-tio

n w

ith o

ur c

usto

mer

s.Si

em O

ffsh

ore

com

men

ced

oper

atio

ns

with

eff

ect f

rom

1 J

uly

2005

. Th

e C

om-

pany

is re

gist

ered

in th

e C

aym

an Is

land

s an

d is

list

ed o

n th

e O

slo

Stoc

k Ex

chan

ge

(OSE

Sym

bol:

SIO

FF).

The

Com

pany

’s

head

quar

ters

is lo

cate

d in

Kris

tians

and,

N

orw

ay a

nd a

dditi

onal

sub

sidi

ary

offic

es

are

loca

ted

in B

razi

l, G

erm

any,

the

Net

her-

land

s, G

hana

, USA

, Pol

and

and

Aus

tral

ia.

The

Com

pany

is ta

x re

side

nt in

Nor

way

.

Phot

ogra

pher

: Aril

d Li

llebø

, Si

em A

met

hyst

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

41515

We

cont

inuo

usly

wor

k to

mak

e th

e va

lues

par

t of t

he

daily

life

of t

he C

ompa

ny,

in p

artic

ular

in tr

aini

ng o

f

lead

ers

thro

ugho

ut th

e

orga

niza

tion.

The

val

ues

are

esta

blis

hed

to s

uppo

rt

our p

rese

nt a

nd fu

ture

busi

ness

.

Our

Va

lues

CA

RIN

GW

e en

cour

age

team

spi

rit a

nd k

now

ledg

e sh

arin

g. W

e st

rive

to p

erfo

rm o

ur d

aily

w

ork

corr

ectly

, saf

ely

and

with

out c

aus-

ing

dam

age

to p

eopl

e, e

nviro

nmen

t and

eq

uipm

ent.

CO

MP

ET

ITIV

EW

e be

have

in a

pro

-act

ive

man

ner a

nd

we

are

inno

vativ

e in

our

way

of t

hink

ing.

C

ontin

uous

impr

ovem

ent i

s ou

r key

to

succ

ess.

CO

MM

ITT

ED

We

are

driv

en b

y in

tegr

ity. W

e st

ep u

p an

d ta

ke c

harg

e to

fulfi

l giv

en p

rom

ises

.

2005

616

20 4

8020

0679

 799

2007

87 7

3820

0857

 934

2009

74 6

4120

10

122

952

2011

REV

ENU

E

OP

ERAT

ING

MA

RG

IN

2005

13 2

3373

 554

2006

159 

342

2007

192 

773

2008

183 

558

2009

228 

302

340 

628

2010

2011

2005

331

527

2006

600

2007

642

2008

762

2009

828

2010

1 07

320

11

EMP

LOYE

ES

Am

ou

nts

in U

SD

1,0

00

110 

348

2012

368 

213

2012

1 07

820

12

363 

955

2013

122 

663

2013

1 11

020

13

491

312

2014

194

125

2014

1 07

320

14

Am

ou

nts

in U

SD

1,0

00

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

416

The

Com

pany

All

refe

renc

es to

“Sie

m O

ffsh

ore”

and

the

“Com

pany

” sha

ll m

ean

Siem

Off

shor

e In

c.

and

its s

ubsi

diar

ies

and

asso

ciat

es u

n-le

ss th

e co

ntex

t ind

icat

es o

ther

wis

e. A

ll re

fere

nces

to “P

aren

t” s

hall

mea

n Si

em

Off

shor

e In

c. a

s th

e pa

rent

com

pany

onl

y.

Siem

Off

shor

e is

regi

ster

ed in

the

Cay

-m

an Is

land

s an

d is

list

ed o

n th

e O

slo

Stoc

k Ex

chan

ge (O

SE S

ymbo

l: SI

OFF

). Th

e C

ompa

ny’s

hea

dqua

rter

s is

loca

ted

in K

ristia

nsan

d, N

orw

ay a

nd a

dditi

onal

su

bsid

iary

offi

ces

are

loca

ted

in B

razi

l, G

erm

any,

the

Net

herl

ands

, Gha

na, U

SA,

Can

ada,

Cay

man

Isla

nds

and

Aus

tral

ia.

The

pare

nt c

ompa

ny is

tax

resi

dent

in

Nor

way

.

The

Com

pany

’s p

rimar

y ac

tivity

is to

ow

n an

d op

erat

e of

fsho

re s

uppo

rt v

esse

ls

(“O

SVs”

) for

the

offs

hore

ene

rgy

serv

ice

indu

stry

. The

Com

pany

is a

lso

enga

ged

as

a co

ntra

ctor

with

in th

e Eu

rope

an o

ffsh

ore

win

d fa

rm m

arke

t thr

ough

its

subs

idi-

ary,

Sie

m O

ffsh

ore

Con

trac

tors

with

a

prim

ary

focu

s on

inst

alla

tion,

pos

t-la

y tr

ench

ing,

term

inat

ion

and

test

ing

of

The

Boar

d of

Dire

ctor

s of

Sie

m O

ffsh

ore

Inc.

(the

“Boa

rd”)

pr

esen

ts it

s re

port

for t

he y

ear e

nded

31

Dec

embe

r 201

4 to

-ge

ther

with

the

audi

ted

cons

olid

ated

fina

ncia

l sta

tem

ents

and

th

e au

dite

d fin

anci

al s

tate

men

ts fo

r the

par

ent c

ompa

ny. T

he

finan

cial

sta

tem

ents

and

rela

ted

note

s w

ere

auth

oris

ed fo

r is

sue

by th

e B

oard

on

13 A

pril

2015

and

will

be

pres

ente

d to

th

e sh

areh

olde

rs fo

r app

rova

l at t

he A

nnua

l Gen

eral

Mee

ting

to b

e he

ld 1

May

201

5. subm

arin

e co

mpo

site

cab

les.

The

OSV

flee

t com

pris

es p

latf

orm

sup

ply

vess

els

(“PS

Vs”)

, anc

hor-

hand

ling,

tug,

su

pply

ves

sels

(“A

HTS

ves

sels

”), o

ffsh

ore

subs

ea c

onst

ruct

ion

vess

els

(“O

SCVs

”)

and

a va

riety

of o

ther

ser

vice

ves

sels

. The

C

ompa

ny h

ad o

wne

rshi

p in

44

vess

els

of w

hich

9 v

esse

ls w

ere

unde

r con

stru

c-tio

n at

yea

r-en

d 20

14. T

he C

ompa

ny a

lso

oper

ates

two

AH

TS v

esse

ls o

n be

half

of

a po

ol p

artn

er.

Thes

e tw

o A

HTS

ves

sels

ar

e si

ster

ves

sels

to e

ight

ves

sels

ow

ned

by th

e C

ompa

ny, a

nd a

ll te

n ve

ssel

s ar

e op

erat

ed in

a p

ool.

Dur

ing

2014

, the

tota

l fle

et o

f OSV

s co

nduc

ted

oper

atio

ns in

the

Nor

th S

ea, A

rctic

, Wes

t Afr

ica,

Mid

dle

East

, the

U.S

. Gul

f, C

anad

a an

d Br

azil.

The

Com

pany

hol

ds 5

0% o

wne

rshi

p in

th

e co

mpa

ny S

ecun

da H

oldi

ngs

Lim

ited.

Se

cund

a ow

ns a

nd o

pera

tes

a ha

rsh-

wea

ther

flee

t of s

ix o

ffsh

ore

supp

ort v

es-

sels

and

is a

lead

er in

sup

port

ser

vice

s fo

r pl

atfo

rm s

uppl

y, a

ncho

r han

dlin

g, re

scue

st

andb

y an

d to

wag

e in

its

prim

ary

area

of

ope

ratio

n ou

tsid

e th

e co

ast o

f Eas

tern

C

anad

a.

The

Com

pany

hol

ds a

60%

ow

ners

hip

in

the

subs

idia

ry S

iem

WIS

AS.

Sie

m W

IS

deve

lops

app

licat

ions

for m

anag

ed p

res-

sure

dril

ling

base

d on

a p

aten

ted

seal

ing

tech

nolo

gy.

The

Com

pany

hol

ds 1

00%

ow

ners

hip

in

Ove

rsea

s D

rillin

g Li

mite

d (“

OD

L”),

whi

ch

owns

the

scie

ntifi

c oc

ean

drill

ship

JO

IDES

Re

solu

tion.

The

JO

IDES

Res

olut

ion

is o

ne

of th

e pr

imar

y re

sear

ch v

esse

ls u

sed

to

drill

cor

e sa

mpl

es in

the

ocea

n flo

or fo

r an

inte

rnat

iona

l res

earc

h pr

ogra

m.

In a

dditi

on to

the

owne

rshi

p an

d op

era-

tions

of O

SVs,

the

Com

pany

’s w

holly

-ow

ned

Braz

ilian

sub

sidi

ary,

Sie

m O

ffsh

ore

do B

rasi

l S.A

., pr

ovid

es s

peci

aliz

ed

engi

neer

ing

to d

evel

op a

nd im

plem

ent

com

bat m

anag

emen

t sys

tem

s fo

r ves

sels

in

the

Braz

ilian

nav

y. T

hese

act

iviti

es w

ere

part

of S

iem

Off

shor

e do

Bra

sil w

hen

it w

as in

itial

ly a

cqui

red

by th

e C

ompa

ny.

Fina

ncia

l res

ults

, Pos

itio

n an

dR

isks

IFR

S

The

finan

cial

sta

tem

ents

for t

he C

ompa

ny

and

the

Pare

nt a

re p

repa

red

in a

ccor

d-

TH

E B

OA

RD

OF

DIR

ECTO

RS

RE

PO

RT

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

417

ance

with

the

Inte

rnat

iona

l Fin

anci

al

Repo

rtin

g St

anda

rds

(“IF

RS”)

as

adop

ted

by th

e Eu

rope

an U

nion

.

Goi

ng-C

once

rnTh

e fin

anci

al s

tate

men

ts h

ave

been

pr

epar

ed u

nder

the

assu

mpt

ion

that

the

Com

pany

and

the

Pare

nt a

re g

oing

-con

-ce

rns.

Thi

s as

sum

ptio

n is

bas

ed o

n th

e C

ompa

ny’s

leve

l of c

ash

and

cash

equ

iva-

lent

s at

yea

r-en

d, fo

reca

sted

cas

h-flo

ws,

av

aila

ble

cred

it fa

cilit

ies

and

the

mar

ket

valu

e of

its

asse

ts.

Inco

me

Stat

emen

tTh

e C

ompa

ny h

ad 4

6 of

fsho

re v

esse

ls

in o

pera

tion

at y

ear-

end,

incl

udin

g tw

o A

HTS

ves

sels

ow

ned

by th

e C

ompa

ny’s

po

ol p

artn

er. T

he C

ompa

ny h

ad 9

ves

sels

un

der c

onst

ruct

ion

at th

e en

d of

201

4, o

f w

hich

six

ves

sels

wer

e un

der c

onst

ruc-

tion

in P

olan

d, tw

o in

Ger

man

y an

d on

e in

Bra

zil.

Thes

e 9

vess

els

incl

ude

one

oil

spill

reco

very

ves

sel (

“OSR

V”) s

ched

uled

fo

r del

iver

y in

201

5, fo

ur d

ual-

fuel

PSV

s w

ith o

ne fo

r del

iver

y in

201

5 an

d th

ree

in 2

016,

one

Cab

le-L

ay V

esse

l (“C

LV”)

fo

r del

iver

y in

201

6, o

ne A

HTS

ves

sel f

or

deliv

ery

in 2

015

and

two

Wel

l-In

terv

en-

tion

Vess

els

(“W

IVs”

) for

del

iver

y in

201

6.

The

Com

pany

has

sol

d tw

o PS

Vs d

urin

g 20

14 a

nd ta

ken

deliv

ery

of tw

o la

rge

OSC

Vs, o

ne P

SV, o

ne In

stal

latio

n Su

ppor

t Ve

ssel

(“IS

V”) a

nd o

ne O

SRV.

All

vess

els

deliv

ered

dur

ing

2014

hav

e co

mm

ence

d lo

ng-t

erm

con

trac

ts, w

ith th

e IS

V be

ing

utili

zed

by th

e su

bsid

iary

, Sie

m O

ffsh

ore

Con

trac

tors

.

In 2

014,

the

Com

pany

reco

rded

ope

rat-

ing

reve

nue

of U

SD 4

91.3

mill

ion

and

a ne

t pro

fit a

ttrib

utab

le to

sha

reho

lder

s of

U

SD 5

8.2

mill

ion,

or U

SD 0

.15

per s

hare

, co

mpa

red

to o

pera

ting

reve

nue

of U

SD

364.

0 m

illio

n an

d a

net p

rofit

att

ribut

able

to

sha

reho

lder

s of

USD

22.

0 m

illio

n, o

r U

SD 0

.06

per s

hare

, in

2013

.

The

Com

pany

’s o

pera

ting

mar

gin

for

2014

was

USD

194

.1 m

illio

n co

mpa

red

to

USD

122

.7 m

illio

n in

201

3. N

et o

pera

t-in

g m

argi

n as

a p

erce

ntag

e of

ope

ratin

g

reve

nue

was

40%

in 2

014

com

pare

d to

34

% in

201

3.

The

Com

pany

’s o

pera

ting

profi

t for

20

14 w

as U

SD 8

4.3

mill

ion

com

pare

d to

U

SD 6

9.3

mill

ion

in 2

013

and

incl

udes

de

prec

iatio

n an

d am

ortis

atio

n of

USD

96

.9 m

illio

n (2

013:

USD

75.

8 m

illio

n).

The

Com

pany

has

con

duct

ed a

revi

ew

of v

esse

l val

uatio

ns a

nd h

as re

cord

ed

impa

irmen

ts o

f USD

29

mill

ion

on c

erta

in

Braz

ilian

-bui

lt ve

ssel

s. N

et c

urre

ncy

exch

ange

(los

ses)

of U

SD (3

.0) m

illio

n (2

013:

USD

(7.8

) mill

ion)

wer

e re

cord

ed

on c

urre

ncy

deriv

ativ

e co

ntra

cts,

of w

hich

U

SD 5

.6 m

illio

n w

as u

nrea

lised

. The

net

ga

in o

n sa

le o

f ass

et w

as U

SD 1

8.7

mil-

lion

(201

3: U

SD 2

9.8

mill

ion)

.

The

Com

pany

’s n

et fi

nanc

ial i

tem

s w

ere

net e

xpen

ses

of U

SD (1

2.7)

mill

ion

(201

3:

USD

(53.

4) m

illio

n) a

nd in

clud

es a

reva

lu-

atio

n ga

in (l

oss)

of n

on-U

SD c

urre

ncy

item

s of

USD

34.

1 m

illio

n (2

013:

USD

(2

2.7)

mill

ion)

due

to s

tron

ger U

SD d

ur-

ing

the

perio

d. N

on-U

SD c

urre

ncy

item

s ar

e he

ld to

mat

ch s

hort

- and

long

-ter

m

liabi

litie

s, in

clud

ing

off-

bala

nce

shee

t lia

bilit

ies,

in s

imila

r cur

renc

y.

The

Com

pany

’s n

et p

rofit

att

ribut

able

to

shar

ehol

ders

was

USD

58.

1 m

illio

n or

U

SD 0

.15

per s

hare

(201

3: U

SD 2

2.0

mil-

lion,

or U

SD 0

.06

per s

hare

).

The

Pare

nt c

ompa

ny is

prim

arily

a h

old-

ing

com

pany

ow

ing

shar

es in

ope

ratin

g su

bsid

iarie

s. T

he P

aren

t Com

pany

mad

e an

acc

umul

ated

writ

e-do

wn

of U

SD 4

9 m

illio

n on

the

shar

es in

the

Braz

ilian

su

bsid

iary

and

the

subs

idia

ry o

wni

ng th

e sc

ient

ific

core

dril

ling

vess

el.

The

Boa

rd p

ropo

ses

that

the

net l

oss

of

the

Pare

nt o

f USD

(64.

5) m

illio

n fo

r 201

4 be

allo

cate

d to

reta

ined

ear

ning

s an

d th

at

no d

ivid

end

to b

e pa

id fo

r 201

4. A

s of

31

Dec

embe

r 201

4, th

e re

tain

ed e

arni

ngs

wer

e U

SD 2

58.7

mill

ion.

Fina

ncia

l Pos

ition

and

Cas

h-Fl

ows

Tota

l equ

ity fo

r the

Com

pany

was

USD

82

4 m

illio

n at

yea

r-en

d 20

14 (2

013:

USD

79

4 m

illio

n), a

nd th

e eq

uity

ratio

was

36

% (2

013:

42%

). Sh

areh

olde

rs’ e

quity

w

as U

SD 7

85 m

illio

n (2

013:

757

mill

ion)

, eq

uiva

lent

to U

SD 2

.03

per s

hare

(201

3:

USD

1.9

8 pe

r sha

re).

The

cash

pos

ition

at y

ear-

end

was

USD

11

8 m

illio

n (2

013:

USD

101

mill

ion)

.

The

Com

pany

reco

rded

USD

526

mill

ion

as g

ross

cap

ital e

xpen

ditu

res

in fi

xed

as-

sets

dur

ing

2014

, of w

hich

USD

497

mil-

lion

rela

tes

to n

ew v

esse

ls d

eliv

ered

from

ya

rds

or v

esse

ls u

nder

con

stru

ctio

n, a

nd

USD

29

mill

ion

rela

tes

to p

roje

ct s

peci

fic

inve

stm

ents

in v

esse

ls a

nd c

apita

lised

dr

y-do

ckin

gs.

The

Com

pany

had

sec

ured

deb

t-fin

anci

ng

for e

ight

of t

he n

ine

vess

els

unde

r con

-st

ruct

ion

at y

ear e

nd. T

he d

ebt fi

nanc

ing

for t

he A

HTS

ves

sel,

to b

e ow

ned

by th

e 50

% o

wne

d co

mpa

ny S

ecun

da, h

as b

een

agre

ed in

Apr

il 20

15.

The

gros

s in

tere

st-b

earin

g de

bt a

nd n

et

inte

rest

-bea

ring

debt

at y

ear-

end

wer

e eq

uiva

lent

to U

SD 1

.2 b

illio

n an

d U

SD 1

.1

billi

on, r

espe

ctiv

ely.

The

Com

pany

mad

e to

tal d

raw

ings

in th

e eq

uiva

lent

of U

SD

448

mill

ion

unde

r cre

dit f

acili

ties

durin

g th

e ye

ar. T

he w

eigh

ted

aver

age

cost

of

debt

for t

he C

ompa

ny w

as a

ppro

xim

atel

y 4.

5% p

.a. a

t yea

r-en

d.

The

Com

pany

pai

d de

bt in

stal

men

ts in

th

e eq

uiva

lent

of U

SD 1

32 m

illio

n du

ring

the

year

, of w

hich

USD

35

mill

ion

repr

e-se

nts

extr

aord

inar

y re

paym

ents

due

to

sale

s of

ves

sels

.

The

gros

s pr

ojec

t cos

t for

the

rem

aini

ng

new

build

ing

prog

ram

was

USD

550

mil-

lion

at y

ear-

end

2014

. App

roxi

mat

ely

USD

24

2 m

illio

n of

suc

h fu

ture

yar

d in

stal

-m

ents

are

sch

edul

ed fo

r pay

men

t dur

ing

2015

and

USD

308

mill

ion

are

sche

dule

d fo

r pay

men

t in

2016

.

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

418

BO

AR

D O

F D

IREC

TOR

S’ R

EP

OR

T

The

Com

pany

’s c

ash-

flow

s ar

e pr

imar

-ily

den

omin

ated

in U

SD, N

OK

, EU

R an

d BR

L. D

urin

g 20

14, t

he U

SD s

tren

gthe

ned

by 2

2.2%

to th

e N

OK

, 12.

1% to

the

BRL

and

11.8

% to

EU

R. T

he a

vera

ge re

cord

ed

exch

ange

rate

s w

ere

NO

K/U

SD 0

.157

5,

EUR/

USD

1.3

256

and

BRL/

USD

0.4

240

(201

3: N

OK

/USD

0.1

700,

EU

R/U

SD

1.33

00 a

nd B

RL/U

SD 0

.462

0).

The

Com

pany

is e

xpos

ed to

cha

nges

in in

-te

rest

rate

s as

app

roxi

mat

ely

32%

of t

he

inte

rest

-bea

ring

debt

is b

ased

on

float

ing

inte

rest

rate

s an

d pr

imar

ily d

enom

inat

ed

in U

SD a

nd N

OK

. Th

e av

erag

e 3-

mon

th

USD

LIB

OR

was

0.2

337%

p.a

. dur

ing

2014

(0

.267

2% p

.a. i

n 20

13) a

nd th

e av

erag

e 3-

mon

th N

IBO

R w

as 1

.70%

p.a

. dur

ing

2014

(1.7

5% p

.a. i

n 20

13).

The

Com

pany

he

ld U

SD 2

70 m

illio

n in

inte

rest

rate

sw

ap a

gree

men

ts a

t yea

r-en

d.

Fina

ncia

l Ris

ks

Inte

rest

risk

The

Com

pany

is e

xpos

ed to

cha

nges

in

inte

rest

rate

s as

app

roxi

mat

ely

32%

of

the

long

-ter

m in

tere

st b

earin

g de

bt w

as

subj

ect t

o flo

atin

g in

tere

st ra

tes

at y

ear-

end

2014

. Th

e re

mai

ning

par

t of t

he d

ebt

is s

ubje

ct to

fixe

d in

tere

st ra

tes.

Cur

renc

y ris

kTh

e C

ompa

ny is

exp

osed

to c

urre

ncy

risk

as re

venu

e an

d co

sts

are

deno

min

ated

in

var

ious

cur

renc

ies.

The

Com

pany

is

als

o ex

pose

d to

cur

renc

y ris

k du

e to

fu

ture

yar

d in

stal

men

ts in

rela

tion

to

ship

build

ing

cont

ract

s an

d lo

ng-t

erm

deb

t in

var

ious

cur

renc

ies.

For

war

d ex

chan

ge

cont

ract

s ar

e en

tere

d in

to in

ord

er to

re

duce

the

curr

ency

risk

rela

ted

to fu

ture

ca

sh fl

ows.

Liqu

idity

risk

The

Com

pany

is fi

nanc

ed b

y a

com

bina

-tio

n of

deb

t and

equ

ity. I

f the

Com

pany

fa

ils to

repa

y or

refin

ance

its

cred

it fa

cili-

ties,

add

ition

al e

quity

fina

ncin

g m

ay b

e re

quire

d. T

here

can

be

no a

ssur

ance

th

at th

e C

ompa

ny w

ill b

e ab

le to

repa

y its

deb

ts o

r ext

end

the

debt

repa

ymen

t

sche

dule

thro

ugh

re-fi

nanc

ing

of c

redi

t fa

cilit

ies.

The

re is

no

assu

ranc

e th

at th

e C

ompa

ny w

ill n

ot e

xper

ienc

e ca

sh fl

ow

shor

tfal

ls e

xcee

ding

the

Com

pany

’s

avai

labl

e fu

ndin

g so

urce

s or

to re

mai

n in

co

mpl

ianc

e w

ith m

inim

um c

ash

requ

ire-

men

ts o

r oth

er c

oven

ants

. Fu

rthe

r, th

ere

is n

o as

sura

nce

that

the

Com

pany

will

be

abl

e to

rais

e ne

w e

quity

or a

rran

ge

new

cre

dit f

acili

ties

on fa

vour

able

term

s an

d in

am

ount

s ne

cess

ary

to c

ondu

ct it

s on

goin

g an

d fu

ture

ope

ratio

ns s

houl

d th

is

be re

quire

d.

Yard

risk

The

proc

ess

for c

onst

ruct

ion

of n

ew v

es-

sels

is a

ssoc

iate

d w

ith n

umer

ous

risks

. A

mon

g th

e m

ost c

ritic

al ri

sk fa

ctor

s in

re

latio

n to

suc

h co

nstr

uctio

n is

the

risk

of n

ot re

ceiv

ing

the

vess

els

on ti

me,

at

budg

et a

nd w

ith a

gree

d sp

ecifi

catio

ns. I

n ad

ditio

n, th

ere

is th

e ris

k of

yar

ds e

xpe-

rienc

ing

finan

cial

or o

pera

tiona

l diffi

cul-

ties

resu

lting

in b

ankr

uptc

y or

oth

erw

ise

adve

rsel

y af

fect

ing

the

cons

truc

tion

proc

ess.

The

Com

pany

has

obt

aine

d ce

rtai

n gu

aran

tees

of fi

nanc

ial c

ompe

n-sa

tion

incl

udin

g re

fund

gua

rant

ees

for

vess

el u

nder

con

stru

ctio

n in

Pol

and

in

case

of d

elay

s an

d no

n-de

liver

y. F

urth

er,

the

Com

pany

has

the

right

to c

ance

l co

ntra

cts

if de

liver

y of

ves

sels

is s

igni

fi-ca

ntly

del

ayed

. How

ever

, no

assu

ranc

e ca

n be

giv

en th

at a

ll ris

ks h

ave

been

fully

co

vere

d.

Ope

rati

ons

Flee

t, Pe

rfor

man

ce a

nd E

mpl

oym

ent

The

fleet

in o

pera

tion

incl

uded

twel

ve

PSVs

, six

OSC

Vs, t

en A

HTS

ves

sels

of

whi

ch tw

o ar

e ow

ned

by a

poo

l-pa

rtne

r, si

x of

fsho

re s

uppo

rt v

esse

ls in

Can

ada,

a

fleet

of n

ine

crew

/sup

ply

boat

s op

erat

ed

in B

razi

l, on

e w

ell-

stim

ulat

ion

vess

el,

one

inst

alla

tion

supp

ort v

esse

l and

one

sc

ient

ific

core

dril

ling

vess

el.

The

PSV

fleet

ear

ned

oper

atin

g re

v-en

ues

of U

SD 1

04.4

mill

ion

and

had

94%

util

isat

ion

(201

3: U

SD 9

4.6

mill

ion

and

83%

). Th

e op

erat

ing

mar

gin

befo

re

adm

inis

trat

ive

expe

nses

was

USD

58.

9 m

illio

n (2

013:

USD

42.

9 m

illio

n) a

nd th

e op

erat

ing

mar

gin

as a

per

cent

age

of re

v-en

ue w

as 5

6% (2

013:

45%

). Th

e co

ntra

ct

back

log

at 3

1 D

ecem

ber 2

014

was

58%

fo

r 201

5, 4

2% fo

r 201

6 an

d 25

% fo

r 201

7.

The

OSC

V fle

et e

arne

d op

erat

ing

rev-

enue

s of

USD

104

.8 m

illio

n an

d ha

d 98

%

utili

satio

n (2

013:

USD

41.

4 m

illio

n an

d 10

0%).

The

ope

ratin

g m

argi

n be

fore

ad

min

istr

ativ

e ex

pens

es w

as U

SD 7

1.2

mill

ion

(201

3: U

SD 2

6.9

mill

ion)

and

the

oper

atin

g m

argi

n as

a p

erce

ntag

e of

rev-

enue

was

68%

(201

3: 6

5%).

The

cont

ract

ba

cklo

g w

as 8

8% fo

r 201

5, 8

3% fo

r 201

6 an

d 77

% fo

r 201

7.

The

eigh

t AH

TS v

esse

ls o

wne

d by

the

Com

pany

ear

ned

oper

atin

g re

venu

es o

f U

SD 1

42.5

mill

ion

and

had

84%

util

isat

ion

(201

3: U

SD 1

31.9

and

86%

util

izat

ion)

. Th

e op

erat

ing

mar

gin

befo

re a

dmin

istr

a-tiv

e ex

pens

es w

as U

SD 7

7.5

mill

ion

(201

3:

USD

67.

9 m

illio

n) a

nd th

e op

erat

ing

mar

-gi

n as

a p

erce

ntag

e of

reve

nue

was

54%

(2

013:

51%

). Th

e co

ntra

ct b

ackl

og w

as

15%

for 2

015

and

5% fo

r 201

6.

The

fleet

of s

mal

ler B

razi

lian-

flagg

ed

vess

els

earn

ed o

pera

ting

reve

nue

of

USD

19.

4 m

illio

n an

d ha

d 91

% u

tilis

atio

n (2

013:

USD

24.

1 m

illio

n an

d 92

%).

The

op

erat

ing

mar

gin

befo

re a

dmin

istr

ativ

e ex

pens

es w

as U

SD (3

.5) m

illio

n (2

013:

U

SD 6

.7 m

illio

n) a

nd th

e op

erat

ing

mar

gin

as a

per

cent

age

of re

venu

e w

as (1

8)%

(2

013:

28%

). Th

e co

ntra

ct b

ackl

og w

as

91%

for 2

015,

89%

for 2

016

and

89%

for

2017

.

The

“Joi

des

Reso

lutio

n” re

cord

ed o

pera

t-in

g re

venu

es o

f USD

25.

9 m

illio

n (2

013:

U

SD 3

6.9

mill

ion)

with

an

oper

atin

g m

argi

n be

fore

adm

inis

trat

ive

expe

nses

of

USD

12.

9 m

illio

n (2

013:

USD

20.

4 m

illio

n)

and

the

oper

atin

g m

argi

n as

a p

erce

ntag

e of

reve

nue

was

50%

(201

3: 5

5%).

Siem

Off

shor

e C

ontr

acto

rs re

cord

ed

oper

atin

g re

venu

es o

f USD

101

.5 m

illio

n.

The

proj

ects

with

in S

OC

are

acc

ount

ed

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

419

for u

sing

the

perc

enta

ge-o

f-co

mpl

etio

n m

etho

d. T

otal

pro

ject

mar

gin

befo

re a

d-m

inis

trat

ive

expe

nse

of U

SD 1

7.1

mill

ion

was

reco

gniz

ed o

n pr

ojec

ts d

urin

g 20

14.

Subj

ect t

o a

fore

cast

ed p

ositi

ve m

argi

n,

proj

ect r

even

ues

are

reco

rded

at a

sim

ilar

figur

e as

pro

ject

cos

ts u

ntil

the

proj

ect

has

reac

hed

min

imum

25%

com

ple-

tion.

Thi

s ha

s an

impa

ct o

n th

e ov

eral

l pe

rcen

tage

of o

pera

ting

mar

gin

for S

iem

O

ffsh

ore

on a

con

solid

ated

bas

is.

The

tota

l con

trac

t bac

klog

of fi

rm

cont

ract

s fo

r all

vess

els

at 3

1 D

ecem

ber

2014

was

USD

1.5

5 bi

llion

(201

3: U

SD

1.15

bill

ion)

, inc

ludi

ng th

e fir

m c

on-

trac

t for

the

“JO

IDES

Res

olut

ion”

, the

41

%-o

wne

rshi

p in

the

“Big

Ora

nge

XVIII

”, th

e 50

% o

wne

rshi

p in

Sec

unda

and

ves

-se

ls u

nder

con

stru

ctio

n.

The

tota

l con

trac

t bac

klog

is a

lloca

ted

w

ith U

SD 2

76 m

illio

n in

201

5, U

SD 2

03

mill

ion

in 2

016

and

USD

1.0

7 bi

llion

in

2017

and

ther

eaft

er.

The

tota

l con

trac

t bac

klog

of fi

rm c

on-

trac

ts fo

r Sie

m O

ffsh

ore

Con

trac

tors

at

31 D

ecem

ber 2

014

was

USD

118

mill

ion

(201

3: U

SD 1

73 m

illio

n). T

he c

ontr

act

back

log

is a

lloca

ted

with

USD

92

mill

ion

in 2

015

and

USD

26

mill

ion

in 2

016.

The

co

ntra

ct b

ackl

og a

t yea

r-en

d 20

14 d

oes

not i

nclu

de th

e co

ntra

ct v

alue

of a

p-pr

oxim

atel

y U

SD 7

0 m

illio

n fo

r Nor

dsee

O

ne O

WF

Inne

r Arr

ay G

rid S

yste

m p

roje

ct,

whi

ch re

ache

d its

fina

l inv

estm

ent d

eci-

sion

in M

arch

201

5, n

or th

e Ve

ja M

ate

OW

F In

ner A

rray

Grid

Sys

tem

pro

ject

in

exce

ss o

f USD

100

mill

ion

in c

ontr

act

valu

e aw

arde

d in

Apr

il 20

15.

QH

SE

The

Com

pany

’s ta

rget

incl

udes

zer

o pe

rson

al in

jurie

s, n

o da

mag

e to

the

envi

ronm

ent a

nd n

o da

mag

e to

or l

oss

of

equi

pmen

t and

pro

pert

y.Th

e go

od Q

HSE

per

form

ance

con

tinue

d in

20

14 w

ith n

o se

rious

inci

dent

s th

roug

hout

th

e fle

et. T

he s

afet

y re

cord

s fo

r the

full

year

repo

rt n

o se

rious

inju

ry to

per

sonn

el

or d

isch

arge

s to

the

envi

ronm

ent.

By

natu

re, a

ncho

r-ha

ndlin

g is

one

of

the

mos

t dem

andi

ng o

pera

tions

in th

e of

fsho

re s

ecto

r. Si

em O

ffsh

ore

puts

gre

at

emph

asis

on

a sa

fe w

ork

envi

ronm

ent

and

appr

opria

te ti

me

for a

dequ

ate

prep

a-ra

tions

for e

very

job

oper

atio

n.

An

incr

ease

is s

een

in n

umbe

r of s

afet

y re

port

s an

d th

e ex

perie

nce

feed

back

to

the

fleet

is a

wel

com

ed e

lem

ent t

o im

prov

e an

d en

sure

out

stan

ding

QH

SE

perf

orm

ance

. O

n bo

ard

and

asho

re w

e be

lieve

that

the

tran

sfer

of e

xper

ienc

e is

an

impo

rtan

t fac

tor t

o cr

eate

a p

rofe

s-si

onal

QH

SE c

ultu

re a

nd c

ontin

uous

ly

impr

ove

our Q

HSE

per

form

ance

.

Siem

WIS

Siem

WIS

has

des

igne

d an

d de

velo

ped

a pr

essu

re c

ontr

ol d

evic

e (“

PCD

”) w

hich

ca

n im

prov

e m

anag

ed p

ress

ure

drill

-in

g (“

MPD

”) o

pera

tions

. Glo

bal e

nerg

y de

man

d gr

owth

, com

bine

d w

ith th

e ne

ed

for i

ncre

ased

oil

reco

very

and

incr

ease

d nu

mbe

r of d

eep

sea

and

high

pre

ssur

e hi

gh te

mpe

ratu

re (“

HPH

T”) r

eser

voirs

, an

d gr

eate

r em

phas

is o

n sa

fety

man

age-

men

t will

lead

to in

crea

sed

dem

and

for

MPD

ser

vice

s.

The

MPD

ope

ratio

ns o

n th

e Ro

meo

wel

l co

mm

ence

d la

te O

ctob

er a

nd w

ere

com

plet

ed m

id-J

anua

ry 2

015.

The

MPD

op

erat

ion

was

suc

cess

ful a

nd th

e PC

D

syst

em is

tem

pora

rily

dem

obili

zed

due

to ri

g m

ove

and

will

be

mob

ilize

d fo

r the

Ju

lius

wel

l in

Apr

il 20

15.

The

Gud

run

proj

ect h

as b

een

post

pone

d se

vera

l tim

es, b

ut c

omm

ence

d dr

illin

g in

Feb

ruar

y 20

15.

The

proj

ect m

ight

be

com

plet

ed w

ithou

t the

requ

irem

ent o

f M

PD s

ervi

ces.

The

Vale

mon

pro

ject

has

con

clud

ed th

e re

quire

men

t for

MPD

and

mob

iliza

tion

is e

stim

ated

to c

omm

ence

in S

epte

m-

ber 2

015.

Sie

m O

ffsh

ore’

s ac

cum

ulat

ed

inve

stm

ent i

n Si

em W

IS to

tals

USD

15.6

mill

ion,

whe

reof

USD

8.8

mill

ion

is re

cord

ed a

s in

tang

ible

ass

ets

in th

e co

nsol

idat

ed a

ccou

nts.

Siem

Off

shor

e C

ontr

acto

rs

Gen

eral

Siem

Off

shor

e C

ontr

acto

rs (“

SOC

”) c

om-

men

ced

the

offs

hore

exe

cutio

n du

ring

seco

nd a

nd th

ird q

uart

er 2

014

on tw

o of

its

first

pro

ject

s w

ithin

the

Euro

pean

of

fsho

re w

ind

farm

mar

ket.

The

prim

ary

activ

ities

for S

OC

incl

ude

the

inst

alla

-tio

n, p

ost-

lay

tren

chin

g, te

rmin

atio

n an

d te

stin

g of

sub

mar

ine

com

posi

te c

able

s fo

rmin

g th

e in

ner a

rray

grid

of a

n of

fsho

re

win

d fa

rm (“

OW

F”).

SOC

has

bee

n te

chni

-ca

lly s

ucce

ssfu

l in

exec

utin

g its

pla

nned

w

ork

scop

e by

util

isin

g its

flee

t of l

arge

an

d hi

gh q

ualit

y D

P-2

inst

alla

tion

ves-

sels

, in

com

bina

tion

with

its

expe

rienc

ed

offs

hore

and

ons

hore

org

anis

atio

ns.

Safe

ty &

Env

ironm

ent

Hig

h sa

fety

and

env

ironm

enta

l sta

ndar

ds

have

bee

n a

first

prio

rity

with

in S

OC.

Ris

k as

sess

men

t pro

cess

es a

nd p

erso

nnel

tr

aini

ng e

nsur

es th

at in

tern

al p

erso

n-ne

l and

sub

cont

ract

ors

have

a c

omm

on

safe

ty fi

rst m

enta

lity,

whi

ch h

as d

eliv

ered

ze

ro lo

ss ti

me

inju

ries

this

yea

r. En

viro

n-m

enta

l im

pact

is a

key

are

a of

impo

r-ta

nce

in a

mar

ket f

ocus

sed

on re

new

able

en

ergy

. SO

C h

as d

evel

oped

sta

ndar

ds to

re

port

and

ana

lyse

the

impa

ct o

f cab

le

inst

alla

tion

activ

ities

on

the

envi

ronm

ent.

Posi

tive

feed

back

from

clie

nts

on s

afet

y pl

anni

ng a

nd e

xecu

tion

dem

onst

rate

s st

reng

th in

this

are

a.

Proj

ects

The

Am

rum

bank

Wes

t OW

F pr

ojec

t for

E.

ON

Kra

ftw

erke

Gm

bH in

volv

es th

e in

stal

latio

n, p

ost-

lay

tren

chin

g, te

rmin

a-tio

n an

d te

stin

g of

86

inne

r arr

ay g

rid

subm

arin

e co

mpo

site

cab

les

with

in th

e G

erm

an B

ight

sec

tor o

f the

Nor

th S

ea.

The

inst

alla

tion

of th

e ca

bles

was

spl

it in

tw

o ca

mpa

igns

. By

year

-end

, 53

of th

e 86

ca

bles

wer

e in

stal

led.

All

of th

e ca

bles

ar

e no

w in

stal

led

and

the

proj

ect i

s sc

hedu

led

to b

e co

mpl

eted

with

in s

econ

d

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

420

BO

AR

D O

F D

IREC

TOR

S’ R

EP

OR

T

quar

ter 2

015

with

a p

ositi

ve m

argi

n.

Dur

ing

a pe

riod

of a

vaila

bilit

y in

bet

wee

n th

e tw

o ca

mpa

igns

for t

he A

mru

mba

nk

Wes

t OW

F pr

ojec

t, SO

C p

erfo

rmed

cab

le

inst

alla

tion

wor

ks fo

r E.O

N C

limat

e &

Re-

new

able

s U

K L

td. T

he p

roje

ct in

volv

ed th

e su

cces

sful

inst

alla

tion

of 2

4 in

ner a

rray

gr

id s

ubm

arin

e co

mpo

site

cab

les

for t

he

clie

nt in

a tw

o m

onth

per

iod

in c

halle

ngin

g en

viro

nmen

tal c

ondi

tions

on

the

Hum

ber

Gat

eway

OW

F in

the

Uni

ted

Kin

gdom

Sec

-to

r of t

he N

orth

Sea

. The

pro

ject

pro

duce

d op

erat

ing

reve

nues

of a

ppro

xim

atel

y EU

R 7

mill

ion

and

with

a p

ositi

ve m

argi

n.

The

Balti

c 2

OW

F pr

ojec

t for

EnB

W B

altic

2

Gm

bH in

volv

es th

e in

stal

latio

n, p

ost-

lay

tren

chin

g, te

rmin

atio

n an

d te

stin

g of

86

inne

r arr

ay g

rid s

ubm

arin

e co

mpo

site

ca

bles

with

in th

e G

erm

an s

ecto

r of t

he

Balti

c Se

a. T

he p

lann

ed c

omm

ence

-m

ent o

f the

pro

ject

was

del

ayed

, but

the

offs

hore

exe

cutio

n be

cam

e ef

fect

ive

earl

y th

ird q

uart

er 2

014

and,

by

year

-end

, 61

of

the

86 c

able

s w

ere

inst

alle

d. A

ll ca

bles

ar

e no

w in

stal

led

and

the

proj

ect i

s sc

hed-

uled

to b

e co

mpl

eted

with

in th

ird q

uart

er

2015

. A p

ositi

ve m

argi

n w

as re

cord

ed o

n th

e pr

ojec

t in

2014

, and

a p

ositi

ve m

argi

n is

sch

edul

ed to

be

reco

rded

in 2

015.

The

Nor

dsee

One

OW

F pr

ojec

t for

Nor

d-se

e O

ne G

mbH

invo

lves

the

EPIC

-bas

ed

supp

ly a

nd in

stal

latio

n of

59

subm

arin

e co

mpo

site

cab

les

form

ing

the

inne

r arr

ay

grid

of t

he N

ords

ee O

ne O

WF.

The

pro

ject

ac

hiev

ed fi

nanc

ial c

lose

in M

arch

201

5,

whe

reby

Can

ada-

base

d N

orth

land

Pow

er

Inc.

had

pre

viou

sly

acqu

ired

an 8

5% s

hare

of

the

proj

ect c

ompa

ny, N

ords

ee O

ne

Gm

bH, f

rom

the

proj

ect d

evel

oper

RW

E In

nogy

Gm

bH in

Sep

tem

ber 2

014.

The

pr

ojec

t inv

olve

s th

e su

pply

of s

ubm

arin

e co

mpo

site

cab

les

and

rela

ted

acce

ssor

ies

as w

ell a

s ca

ble

inst

alla

tion,

pos

t-la

y tr

ench

ing,

term

inat

ion

and

test

ing

wor

ks

and

rem

ains

on

trac

k fo

r mec

hani

cal

com

plet

ion

by fo

urth

qua

rter

201

6. S

OC

ha

s si

nce

seco

nd q

uart

er 2

014

been

ac

tivel

y in

volv

ed in

eng

inee

ring

wor

ks fo

r th

is p

roje

ct, w

here

by th

ese

are

sche

dule

d

for c

ompl

etio

n w

ithin

the

seco

nd q

uart

er

2015

.

In A

pril

2015

, SO

C h

as b

een

awar

ded

the

cont

ract

by

Veja

Mat

e O

ffsh

ore

Proj

ect

Gm

bH fo

r the

EPI

C-b

ased

sup

ply

and

inst

alla

tion

of 7

3 su

bmar

ine

com

posi

te

cabl

es w

ith a

tota

l len

gth

of u

p to

97

km fo

rmin

g th

e in

ner a

rray

grid

of t

he

400

MW

Vej

a M

ate

OW

F as

loca

ted

ap-

prox

imat

ely.

115

km o

ff th

e G

erm

an c

oast

w

ithin

the

Ger

man

Big

ht s

ecto

r of t

he

Nor

th S

ea. T

he p

roje

ct in

volv

es th

e su

pply

of

sub

mar

ine

com

posi

te c

able

s an

d re

-la

ted

acce

ssor

ies

as w

ell a

s ca

ble

inst

al-

latio

n, p

ost-

lay

tren

chin

g, te

rmin

atio

n an

d te

stin

g w

orks

. The

off

shor

e in

stal

latio

n is

sc

hedu

led

to c

omm

ence

in th

ird q

uart

er

2016

with

mec

hani

cal c

ompl

etio

n be

ing

sche

dule

d fo

r sec

ond

quar

ter 2

017.

The

Nor

dsee

One

OW

F ex

port

cab

le

proj

ect f

or T

enne

T O

ffsh

ore

Gm

bH re

pre-

sent

s th

e co

nsor

tium

-bas

ed E

PIC

-bas

ed

cont

ract

for t

he N

ords

ee O

ne e

xpor

t ca

ble

syst

em in

par

tner

ship

with

J-P

ower

Sy

stem

s. C

omm

ence

men

t of t

he o

ffsh

ore

inst

alla

tion

wor

ks is

now

exp

ecte

d to

st

art i

n th

e th

ird q

uart

er 2

016,

with

com

-pl

etio

n sc

hedu

led

in fo

urth

qua

rter

201

6.

No

mar

gin

will

be

reco

rded

on

this

pro

ject

in

201

5.

Mar

ket O

utlo

okTe

nder

ing

activ

ities

incr

ease

d du

ring

the

seco

nd h

alf o

f 201

4 an

d fu

rthe

r ten

ders

ar

e ex

pect

ed d

urin

g 20

15. S

OC

has

est

ab-

lishe

d its

elf a

s a

pred

icta

ble

and

relia

ble

turn

key

cont

ract

or w

ithin

the

offs

hore

re

new

able

ene

rgy

indu

stry

and

furt

her

cont

ract

aw

ards

are

exp

ecte

d.

Shar

ehol

ders

and

Cor

pora

te

Gov

erna

nce

Shar

ehol

der I

nfor

mat

ion

The

Com

pany

’s a

utho

rised

sha

re

capi

tal i

s U

SD 5

,500

,000

.00

divi

ded

into

55

0,00

0,00

0 or

dina

ry s

hare

s of

a n

omin

al

valu

e of

USD

0.0

1 ea

ch. T

he is

sued

sha

re

capi

tal a

t 13

Apr

il 20

15, b

ased

on

the

387,

591,

640

Com

pany

sha

res

issu

ed a

nd

outs

tand

ing,

is U

SD 3

87,5

91,3

80 T

he

Com

pany

’s s

hare

s ar

e lis

ted

on th

e O

slo

Stoc

k Ex

chan

ge w

ith th

e tic

ker s

ymbo

l SI

OFF

. The

larg

est s

hare

hold

er o

f the

C

ompa

ny is

Sie

m E

urop

e S.

a r.l

., a

who

lly-

owne

d su

bsid

iary

of S

iem

Indu

strie

s In

c., w

ith 3

4.2%

of t

he s

hare

s at

13

Apr

il 20

15. D

urin

g 20

14, t

he c

losi

ng s

hare

pr

ice

reac

hed

a hi

gh o

f NO

K 1

0.40

, a lo

w

of N

OK

3.0

4, a

nd c

lose

d at

NO

K 4

.04

at

year

-end

.

Cor

pora

te G

over

nanc

eTh

e C

ompa

ny h

as im

plem

ente

d gu

idel

ines

fo

r cor

pora

te g

over

nanc

e ba

sed

on th

e re

com

men

datio

ns a

nd g

uide

lines

giv

en b

y th

e O

slo

Stoc

k Ex

chan

ge. T

he p

urpo

se o

f th

ese

guid

elin

es is

to c

larif

y th

e di

visi

on o

f ro

les

betw

een

shar

ehol

ders

, the

Gen

eral

M

eetin

g, B

oard

of D

irect

ors

and

day-

to-

day

Man

agem

ent b

eyon

d w

hat f

ollo

ws

from

the

legi

slat

ion.

A d

etai

led

sum

mar

y of

our

cor

pora

te g

over

nanc

e pr

inci

ples

m

ay b

e fo

und

in a

sep

arat

e se

ctio

n of

the

annu

al re

port

.

The

Wor

king

Env

iron

men

t and

th

e Em

ploy

ees

The

Com

pany

see

ks to

pro

vide

a w

ork-

plac

e w

ith e

qual

opp

ortu

nitie

s. W

e se

ek to

tr

eat c

urre

nt a

nd p

rosp

ectiv

e em

ploy

ees

fairl

y w

ith re

spec

t to

sala

ries,

pro

mot

ions

an

d re

crui

tmen

t. Th

e C

ompa

ny o

ffer

s its

em

ploy

ees

a so

und

wor

king

env

ironm

ent.

We

also

giv

e po

ssib

ilitie

s fo

r pro

fess

iona

l de

velo

pmen

t whe

re m

en a

nd w

omen

are

tr

eate

d eq

ually

and

whe

re th

ere

is n

o di

scrim

inat

ion.

The

sick

leav

e fo

r the

ons

hore

and

of

fsho

re e

mpl

oyee

s w

as 1

.7%

and

2.8

%,

resp

ectiv

ely.

No

inci

dent

s or

wor

k-re

late

d ac

cide

nts

resu

lted

in s

igni

fican

t mat

eria

l dam

age

or

pers

onal

inju

ry o

ccur

ed d

urin

g th

e ye

ar.

The

deve

lopm

ent o

f the

ons

hore

and

off

-sh

ore

orga

niza

tions

con

tinue

s in

ord

er to

pr

epar

e fo

r inc

reas

ed fu

ture

act

iviti

es.

The

know

ledg

e of

the

crew

is v

ital f

or a

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

421

Eyst

ein

Erik

srud

Kri

stia

n Si

emM

icha

el D

elou

che

Ch

air

ma

nD

ire

cto

rD

ire

cto

r

(Sig

n.)

(Sig

n.)

(Sig

n.)

John

C. W

alla

ceD

avid

Mul

len

Dir

ec

tor

Dir

ec

tor

(Sig

n.)

(Sig

n.)

Terj

e Sø

rens

enC

hie

f E

xec

uti

ve O

ffic

er

(Sig

n.)

13 A

pril

2015

safe

and

sec

ure

oper

atio

n of

any

ves

sel.

Such

kno

wle

dge

incl

udes

goo

d se

aman

-sh

ip a

nd u

nder

stan

ding

of t

he d

eman

d-in

g as

sign

men

ts to

be

exec

uted

. Thi

s kn

owle

dge

of c

apab

ilitie

s an

d lim

itatio

ns

of th

e ve

ssel

s an

d eq

uipm

ent,

and

resp

ect

of c

ircum

stan

ces

that

may

aff

ect a

saf

e ex

ecut

ion

is v

ital.

Out

look

Ther

e is

a h

igh

focu

s on

cos

t-cu

ttin

g am

ong

oil c

ompa

nies

follo

win

g th

e si

gnifi

-ca

nt d

eclin

e in

the

oil p

rice.

The

num

ber

of v

esse

ls tr

adin

g th

e N

orth

Sea

spo

t mar

-ke

t is

incr

easi

ng w

hile

the

activ

ity le

vel

is e

xpec

ted

to d

ecre

ase.

We

are

prep

ared

to

see

a w

eake

r mar

ket t

he n

ext c

oupl

e of

yea

rs, w

hich

may

lead

to la

y-up

of v

es-

sels

. Sc

rapp

ing

of o

lder

ves

sels

and

del

ay

or c

ance

llatio

n of

new

ves

sels

from

yar

ds

will

con

trib

ute

to a

mor

e ba

lanc

ed m

arke

t. A

ny m

ater

ial a

nd s

usta

inab

le in

crea

se in

th

e oi

l pric

e w

ill h

ave

a po

sitiv

e im

pact

on

the

dem

and

for o

ffsh

ore

supp

ort v

esse

ls.

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

422

Sta

tem

en

t o

f P

oli

cy

on

Co

rpo

rate

Go

ve

rna

nc

e

The

prin

cipl

es fo

r cor

pora

te g

over

nanc

e ad

opte

d by

the

Com

pany

are

bas

ed o

n th

e “N

orw

egia

n Re

com

men

datio

n fo

r C

orpo

rate

Gov

erna

nce”

issu

ed o

n th

e 30

Oct

ober

201

4.

As

a co

mpa

ny in

corp

orat

ed in

the

Cay

man

Is

land

s, S

iem

Off

shor

e In

c. is

an

exem

pted

co

mpa

ny d

uly

inco

rpor

ated

und

er th

e la

ws

of th

e C

aym

an Is

land

s an

d su

bjec

t to

Cay

man

Isla

nd la

ws

and

regu

latio

ns w

ith

resp

ect t

o co

rpor

ate

gove

rnan

ce. C

aym

an

Isla

nds

corp

orat

e la

w is

to a

gre

at e

xten

t ba

sed

on E

nglis

h La

w.

In a

dditi

on, d

ue to

th

e C

ompa

ny’s

list

ing

on th

e O

slo

Stoc

k Ex

chan

ge, c

erta

in a

spec

ts o

f Nor

weg

ian

Secu

ritie

s la

w a

pply

to th

e C

ompa

ny a

nd

ther

e is

a re

quire

men

t to

adhe

re to

the

Nor

weg

ian

Cod

e of

Pra

ctic

e fo

r Cor

pora

te

Gov

erna

nce.

The

Nor

weg

ian

Cod

e of

Pra

ctic

e fo

r Cor

-po

rate

Gov

erna

nce

is p

ublic

ly a

vaila

ble

at w

ww

.nue

s.no

in b

oth

Nor

weg

ian

and

Engl

ish

lang

uage

s. D

ue to

new

pro

visi

ons

impl

emen

ted

in th

e N

orw

egia

n A

ccou

nt-

ing

Act

, com

plia

nce

with

the

regu

latio

ns

for C

orpo

rate

Gov

erna

nce

repo

rtin

g is

no

w a

lega

l req

uire

men

t pro

vide

d th

at it

do

es n

ot c

onfli

ct w

ith th

e C

aym

an Is

land

s la

ws

and

regu

latio

ns.

The

Com

pany

end

eavo

urs

to m

aint

ain

high

sta

ndar

ds o

f cor

pora

te g

over

nanc

e an

d is

com

mitt

ed to

ens

urin

g th

at a

ll sh

areh

olde

rs o

f the

Com

pany

are

trea

ted

equa

lly a

nd th

e sa

me

info

rmat

ion

is

com

mun

icat

ed to

all

shar

ehol

ders

at t

he

sam

e tim

e.

Cor

pora

te G

over

nanc

e is

sub

ject

to a

n-nu

al a

sses

smen

t and

revi

ew b

y th

e Bo

ard

of D

irect

ors.

The

Boar

d of

Dire

ctor

s ha

s re

view

ed th

is

stat

emen

t. It

is th

e op

inio

n of

the

Boar

d of

Dire

ctor

s th

at th

e C

ompa

ny c

ompl

ies

with

the

Nor

weg

ian

Cod

e of

Pra

ctic

e fo

r C

orpo

rate

Gov

erna

nce.

This

sta

tem

ent i

s st

ruct

ured

in a

ccor

d-an

ce w

ith T

he N

orw

egia

n C

ode

of P

ract

ice

for C

orpo

rate

Gov

erna

nce.

Bus

ines

s

Cay

man

Isla

nds

law

s an

d re

gula

tion

do

not r

equi

re th

e ob

ject

s cl

ause

of t

he C

om-

pani

es M

emor

andu

m a

nd A

rtic

les

of A

sso-

ciat

ion

to b

e cl

earl

y de

fined

. The

Com

pany

ha

s ho

wev

er a

dopt

ed c

lear

obj

ectiv

es a

nd

stra

tegi

es fo

r its

bus

ines

s.

Siem

Off

shor

e ai

ms

to g

row

the

com

pany

w

ithin

off

shor

e su

ppor

t ves

sels

, bot

h or

gani

cally

and

thro

ugh

com

bina

tion

with

oth

er o

pera

tors

, in

orde

r to

achi

eve

econ

omie

s of

sca

le a

nd s

tron

ger p

rese

nce

in th

e m

arke

t.

Siem

Off

shor

e ai

ms

to b

ecom

e a

pref

erre

d su

pplie

r of m

arin

e se

rvic

es to

the

ener

gy

indu

stry

bas

ed o

n qu

ality

and

relia

bilit

y an

d to

pro

vide

cos

t-ef

ficie

nt s

olut

ions

to

its

cust

omer

s by

und

erst

andi

ng th

eir

oper

atio

n an

d ap

plyi

ng te

chno

logy

and

ex

perie

nce.

The

Com

pany

bui

lds

its b

usin

ess

arou

nd a

m

otiv

ated

wor

kfor

ce w

ith th

e ap

prop

riate

te

chni

cal s

olut

ions

. Thi

s cr

eate

s su

stai

n-ab

le v

alue

for a

ll sh

areh

olde

rs.

Refe

renc

e is

mad

e to

the

Boar

d of

Dire

c-to

rs re

port

for d

etai

led

info

rmat

ion.

Equi

ty a

nd D

ivid

ends

The

prio

ritie

s fo

r the

use

of C

ompa

ny

fund

s ar

e de

term

ined

by

the

Boar

d of

D

irect

ors

and

reco

mm

enda

tions

of M

an-

agem

ent i

nflue

nced

by

exis

ting

cond

ition

s.

At p

rese

nt, p

riorit

ies

for u

se o

f fun

ds

in o

rder

of i

mpo

rtan

ce a

re in

vest

men

t op

port

uniti

es in

the

busi

ness

, rep

aym

ent

of d

ebt a

nd t

he re

turn

of c

apita

l to

the

shar

ehol

ders

in fo

rm o

f sh

are

buy-

back

or

divi

dend

s.

The

Boar

d’s

man

date

to in

crea

se th

e C

ompa

ny’s

sha

re c

apita

l is

limite

d on

ly to

th

e ex

tent

of t

he a

utho

rized

sha

re c

apita

l of

the

Com

pany

with

cer

tain

pre

-em

ptio

n rig

hts

for s

hare

hold

ers

and

in a

ccor

danc

e w

ith th

e C

ompa

ny’s

Mem

oran

dum

and

A

rtic

les

of A

ssoc

iatio

n w

hich

com

ply

with

C

aym

an Is

land

law

.

Und

er th

e A

rtic

les

of A

ssoc

iatio

n, th

e Bo

ard

can

issu

e ne

w s

hare

s, c

onve

rtib

le

bond

s or

war

rant

s at

any

tim

e w

ithin

the

limits

of t

he a

utho

rized

cap

ital w

ithou

t th

e co

nsen

t of t

he g

ener

al m

eetin

g bu

t w

ith p

re-e

mpt

ion

right

s fo

r sha

reho

lder

s.

A G

ener

al M

eetin

g ha

s fu

rthe

r aut

horiz

ed

the

Boar

d to

issu

e ne

w s

hare

s w

ithou

t pr

e-em

ptio

n rig

hts

to a

ll sh

areh

olde

rs u

p to

a li

mit

of 5

0% o

f Sie

m O

ffsh

ore’

sha

res

at th

e tim

e th

e au

thor

izat

ion

was

giv

en.

The

Boar

d ho

lds

auth

oriz

atio

n fr

om th

e A

nnua

l Gen

eral

Mee

ting

held

on

10 M

ay

2010

to is

sue

154,

248,

360

new

sha

res.

Th

e au

thor

ity g

ives

the

Boar

d fle

xibi

lity

to fi

nanc

e in

vest

men

ts, a

cqui

sitio

ns a

nd

othe

r bus

ines

s co

mbi

natio

ns o

n sh

ort n

o-tic

e th

roug

h th

e is

sue

of s

hare

s or

cer

tain

CO

RP

OR

ATE

GO

VER

NA

NC

E

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

423

othe

r equ

ity in

stru

men

ts in

the

Com

pany

. Fu

rthe

rmor

e, th

e Bo

ard

cons

ider

s th

e gr

antin

g of

a n

ew s

tand

ing

auth

ority

at t

he

time

of h

oldi

ng a

n A

nnua

l Gen

eral

Mee

t-in

g ra

ther

than

con

veni

ng a

n Ex

trao

rdi-

nary

Gen

eral

Mee

ting

at s

ome

futu

re ti

me

to b

e in

the

best

inte

rest

s of

the

Com

pany

, as

this

will

resu

lt in

cos

t sav

ings

and

mor

e ef

fect

ive

time

man

agem

ent f

or b

oth

the

Com

pany

’s s

enio

r man

agem

ent a

nd it

s Sh

areh

olde

rs.

Equa

l Tre

atm

ent o

f Sha

reho

lder

s,

Free

ly T

rada

ble

Shar

es a

nd

Tran

sact

ions

wit

h R

elat

ed P

arti

es

The

Com

pany

is c

omm

itted

to e

nsur

ing

that

all

shar

ehol

ders

of t

he C

ompa

ny a

re

trea

ted

equa

lly a

nd a

ll th

e is

sued

sha

res

in S

iem

Off

shor

e, a

t nom

inal

val

ue U

S$

0.01

eac

h, a

re fr

eely

trad

able

and

car

ry

equa

l rig

hts

with

no

rest

rictio

ns o

n vo

ting.

Siem

Indu

strie

s In

c, w

hich

ow

ns 3

4,1%

of

the

Com

pany

, is

repr

esen

ted

by it

s C

hair-

man

, Kris

tian

Siem

, Dep

uty

CEO

, Eys

tein

Er

iksr

ud a

nd P

resi

dent

, Mic

hael

Del

ouch

e,

on th

e B

oard

of D

irect

ors.

The

Com

pany

pa

ys a

n an

nual

fee

to S

iem

Indu

strie

s as

co

mpe

nsat

ion

for d

irect

orsh

ips,

pro

visi

on

of a

n of

fice

and

pres

ence

in th

e C

aym

an

Isla

nds,

and

oth

er s

ervi

ces.

The

fee

is

adop

ted

by th

e an

nual

gen

eral

mee

ting

base

d on

a re

com

men

datio

n fr

om th

e in

-de

pend

ent B

oard

Mem

bers

. Rel

ated

par

ty

tran

sact

ions

are

dis

clos

ed in

the

note

s to

th

e ac

coun

ts.

Free

ly N

egot

iabl

e Sh

ares

All

of th

e sh

ares

in th

e C

ompa

ny c

arry

eq

ual r

ight

s an

d ar

e fr

eely

neg

otia

ble.

The

sh

ares

are

trad

ed a

ccor

ding

to n

orm

al

mar

ket p

ract

ice

and

no s

peci

al li

mita

tions

on

tran

sact

ions

hav

e be

en la

id d

own

in th

e A

rtic

les

of A

ssoc

iatio

n.

Gen

eral

Mee

ting

s

The

Ann

ual G

ener

al M

eetin

g of

the

Com

-pa

ny w

ill b

e he

ld a

t the

regi

ster

ed o

ffice

of

the

Com

pany

on

the

Cay

man

Isla

nds,

1

May

201

5, a

t 9:3

0am

Cay

man

Isla

nds

loca

l tim

e an

d Sh

areh

olde

rs c

an b

e re

pres

ente

d by

pro

xy. N

otic

es o

f gen

eral

m

eetin

gs a

nd re

late

d do

cum

ents

are

m

ade

avai

labl

e to

sha

reho

lder

s at

the

lat-

est 1

7 da

ys p

rior t

o m

eetin

g da

te. N

otic

e of

att

enda

nce

by p

roxy

is to

be

prov

ided

to

eith

er (1

) the

offi

ces

of S

iem

Off

shor

e A

S at

Nod

evig

a 14

, P.O

. Box

425

, Kris

tians

and

4664

, Nor

way

, tel

efax

no.

+47

.37.

40.6

2.86

or

(2) t

he C

ompa

ny’s

offi

ce a

t P.O

. Box

10

597,

Geo

rge

Tow

n, G

rand

Cay

man

K

Y1-1

005,

CAY

MA

N IS

LAN

DS,

tele

fax

no.

+1.3

45.9

46.3

342,

not

less

than

24

hour

s pr

ior t

o th

e st

ated

tim

e of

the

annu

al

gene

ral m

eetin

g. S

hare

hold

ers

are

give

n th

e op

port

unity

to v

ote

on th

e el

ectio

n of

bo

ard

mem

bers

.

Nom

inat

ion

Com

mit

tee

The

appo

intm

ent o

f a n

omin

atio

n co

mm

it-te

e is

not

a re

quire

men

t und

er C

aym

an

Isla

nds

Law

.

Cor

pora

te A

ssem

bly

and

Boa

rd o

f D

irec

tors

; Com

posi

tion

and

Inde

pend

-en

ce

In th

e no

min

atio

ns to

the

Boa

rd o

f Dire

c-to

rs, t

he B

oard

con

sults

with

the

Com

-pa

ny’s

maj

or s

hare

hold

ers

and

ensu

res

that

the

Boar

d is

con

stitu

ted

by D

irect

ors

with

the

nece

ssar

y ex

pert

ise

and

capa

city

. Th

ere

is n

o re

quire

men

t und

er C

aym

an

Isla

nds

Law

for t

he C

ompa

ny to

est

ablis

h a

corp

orat

e as

sem

bly.

Each

Boa

rd m

embe

r is

elec

ted

for a

term

of

2 y

ears

or s

uch

shor

ter t

erm

as

shal

l be

spec

ified

in th

e or

dina

ry re

solu

tion

purs

u-an

t to

whi

ch th

e D

irect

or s

hall

be a

p-po

inte

d. R

epre

sent

ativ

es o

f the

Exe

cutiv

e M

anag

emen

t are

not

pre

sent

ly m

embe

rs

of th

e C

ompa

ny’s

Boa

rd o

f Dire

ctor

s.Th

e Bo

ard

of D

irect

ors

as a

gro

up h

as

exte

nsiv

e ex

perie

nce

in a

reas

whi

ch a

re

impo

rtan

t to

Siem

Off

shor

e, in

clud

ing

off-

shor

e se

rvic

es, i

nter

natio

nal s

hipp

ing,

shi

p br

okin

g, fi

nanc

e an

d co

rpor

ate

gove

rnan

ce

and

rest

ruct

urin

g.

Wor

k of

the

Boa

rd o

f Dir

ecto

rs

The

Boar

d m

onito

rs th

e pe

rfor

man

ce

of m

anag

emen

t thr

ough

regu

lar m

eet-

ings

and

repo

rtin

g. T

he C

ompa

ny h

as a

C

ompe

nsat

ion

Com

mitt

ee a

nd a

n A

udit

Com

mitt

ee.

The

Com

pens

atio

n C

omm

ittee

con

sist

s of

two

Dire

ctor

s. T

he m

anda

te o

f the

co

mm

ittee

is to

revi

ew a

nd a

ppro

ve th

e co

mpe

nsat

ion

of th

e C

EO a

nd a

ny b

onus

es

to a

ll ex

ecut

ive

pers

onne

l. Re

fere

nce

is

also

mad

e to

sec

tion

12, R

emun

erat

ion

of

the

Exec

utiv

e M

anag

emen

t.

The

Aud

it C

omm

ittee

con

sist

s of

two

Dire

ctor

s. T

he c

ompo

sitio

n of

the

com

-m

ittee

mee

ts th

e re

quire

men

ts o

f the

N

orw

egia

n C

ode

of P

ract

ice

for C

orpo

rate

G

over

nanc

e as

rega

rds

inde

pend

ence

. The

co

mm

ittee

’s m

anda

te c

an b

e su

mm

ariz

ed

as fo

llow

s:

• A

scer

tain

that

the

inte

rnal

and

ext

erna

l ac

coun

ting

repo

rtin

g pr

oces

s ar

e or

gani

zed

appr

opria

tely

and

car

ried

out

effic

ient

ly, a

nd a

re o

f hig

h pr

ofes

sion

al

qual

ity.

• M

onito

r and

ass

ess

the

qual

ity o

f the

st

atut

ory

audi

t of t

he C

ompa

ny’s

fina

n-ci

al s

tate

men

ts.

• En

sure

the

inde

pend

ence

of t

he e

xter

-na

l aud

itor,

incl

udin

g an

y ad

ditio

nal s

er-

vice

s pr

ovid

ed b

y th

e ex

tern

al a

udito

r.

Ris

k M

anag

emen

t and

Inte

rnal

Con

trol

Inte

rnal

con

trol

A p

rere

quis

ite fo

r the

Com

pany

’s s

yste

m

of d

ecen

tral

ized

resp

onsi

bilit

y is

that

the

activ

ities

in e

very

par

t of t

he C

ompa

ny

mee

t gen

eral

fina

ncia

l and

non

-fina

ncia

l re

quire

men

ts, a

nd a

re c

arrie

d ou

t in

ac-

cord

ance

with

the

Com

pany

’s c

omm

on

norm

s an

d va

lues

. The

exe

cutiv

e m

anag

e-m

ent o

f eac

h su

bsid

iary

is re

spon

sibl

e fo

r ris

k m

anag

emen

t and

inte

rnal

con

trol

in

the

subs

idia

ry w

ith a

vie

w to

ens

urin

g 1)

op

timal

isat

ion

of b

usin

ess

oppo

rtun

ities

,

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

424

2) ta

rget

ed, s

afe,

hig

h-qu

ality

and

cos

t-ef

fect

ive

oper

atio

ns, 3

) rel

iabl

e fin

anci

al

repo

rtin

g, 4

) com

plia

nce

with

cur

rent

le

gisl

atio

n an

d re

gula

tions

and

5) o

pera

-tio

ns in

acc

orda

nce

with

the

Com

pany

’s

gove

rnin

g do

cum

ents

, inc

ludi

ng e

thic

al

and

soci

al re

spon

sibi

lity

stan

dard

s. T

he

Com

pany

’s ri

sk m

anag

emen

t sys

tem

is

fund

amen

tal t

o th

e ac

hiev

emen

t of t

hese

go

als.

Fina

ncia

l rep

ortin

g pr

oces

s Th

e C

ompa

ny p

repa

res

and

pres

ents

its

finan

cial

sta

tem

ents

in a

ccor

danc

e w

ith

curr

ent I

AS/

IFRS

rule

s. F

inan

cial

info

rma-

tion

from

sub

sidi

arie

s is

rece

ived

eac

h m

onth

in a

repo

rtin

g pa

ckag

e in

sta

nd-

ard

form

at a

ccom

mod

ated

nec

essa

ry

info

rmat

ion

for p

repa

ring

the

cons

olid

ated

fin

anci

al s

tate

men

t for

the

Com

pany

. Th

e re

port

ing

from

the

subs

idia

ries

is e

xten

ded

in th

e ye

ar-e

nd re

port

ing

proc

ess

to m

eet v

ario

us re

quire

men

ts fo

r su

pple

men

tary

info

rmat

ion.

The

re a

re

esta

blis

hed

rout

ines

to c

heck

the

finan

cial

da

ta in

the

rece

ived

repo

rtin

g pa

ckag

es

to e

nsur

e th

e be

st q

ualit

y fo

r the

con

soli-

date

d fig

ures

for t

he C

ompa

ny.

Trai

ning

and

furt

her d

evel

opm

ent o

f ac-

coun

ting

expe

rienc

e w

ithin

the

Com

pany

is

pro

vide

d lo

cally

by

part

icip

atin

g on

var

i-ou

s ex

tern

al c

ours

es o

n a

regu

lar b

asis

.

Rem

uner

atio

n of

the

Boa

rd o

f D

irec

tors

The

rem

uner

atio

n of

the

Boar

d m

embe

rs

refle

ct th

eir e

xper

ienc

e an

d re

spon

sibi

li-tie

s, a

nd is

ado

pted

by

the

annu

al g

ener

al

mee

ting

base

d on

the

reco

mm

enda

tion

from

the

Boar

d. T

he B

oard

mem

bers

do

not h

ave

shar

e op

tions

or p

rofit

-bas

ed

rem

uner

atio

n.

The

resp

onsi

bilit

y st

atem

ent o

f the

Boa

rd

of D

irect

ors

in th

is re

port

and

the

note

s to

the

acco

unts

incl

ude

info

rmat

ion

abou

t th

e re

mun

erat

ion

of th

e Bo

ard

of D

irec-

tors

.

Rem

uner

atio

n of

the

Exec

utiv

e M

an-

agem

ent

The

Com

pany

has

a C

ompe

nsat

ion

Com

-m

ittee

whi

ch re

view

s an

d ap

prov

es th

e co

mpe

nsat

ion

of th

e C

EO a

nd th

e bo

nuse

s to

all

exec

utiv

e pe

rson

nel.

The

Art

icle

s of

Ass

ocia

tion

of th

e C

ompa

ny p

erm

it th

e Bo

ard

to a

ppro

ve th

e gr

antin

g of

sha

re

optio

ns to

em

ploy

ees.

A lo

ng-t

erm

sha

re

optio

n pr

ogra

m fo

r 8 k

ey e

mpl

oyee

s of

the

com

pany

was

intr

oduc

ed in

Q1

2013

. An

addi

tiona

l sha

re o

ptio

n pr

ogra

m w

as im

-pl

emen

ted

in Q

2 20

14 fo

r 10

key

empl

oy-

ees

of th

e co

mpa

ny. T

he re

mun

erat

ion

of

the

CEO

and

the

shar

e op

tion

sche

me

are

disc

lose

d in

the

note

s to

the

acco

unts

.

The

boar

d of

dire

ctor

’s s

tate

men

t on

the

rem

uner

atio

n of

exe

cutiv

e pe

rson

nel

is p

rese

nted

as

a se

para

te a

ppen

dix

to

the

agen

da fo

r the

gen

eral

mee

ting.

The

re

mun

erat

ion

stat

emen

t cle

arly

sta

tes

whi

ch a

spec

ts o

f the

gui

delin

es a

re

advi

sory

and

whi

ch, i

f any

, are

bin

ding

. The

ge

nera

l mee

ting

will

vot

e se

para

tely

on

each

of t

hese

asp

ects

of t

he g

uide

lines

.

Info

rmat

ion

and

Com

mun

icat

ions

The

Com

pany

has

a p

olic

y of

trea

ting

all

its s

hare

hold

ers

and

othe

r mar

ket p

artic

i-pa

nts

equa

lly, a

nd c

omm

unic

ates

rele

vant

an

d ob

ject

ive

info

rmat

ion

on s

igni

fican

t de

velo

pmen

ts w

hich

impa

ct th

e C

ompa

ny

in a

tim

ely

man

ner.

The

Com

pany

als

o se

eks

to e

nsur

e th

at

its a

ccou

ntin

g an

d fin

anci

al re

port

ing

are

to th

e st

anda

rds

of o

ur in

vest

ors,

and

the

Com

pany

pre

sent

s its

fina

ncia

l sta

te-

men

ts in

acc

orda

nce

with

the

Inte

rnat

ion-

al F

inan

cial

Rep

ortin

g St

anda

rds

(IFRS

). Th

e A

udit

Com

mitt

ee o

f the

Boa

rd o

f D

irect

ors

mon

itors

the

com

pany

’s re

port

-in

g on

beh

alf o

f the

Boa

rd.

Not

ices

to th

e O

slo

Stoc

k Ex

chan

ge a

nd

plac

emen

ts o

f not

ices

and

oth

er in

for-

mat

ion,

incl

udin

g qu

arte

rly

and

annu

al

repo

rts,

may

be

foun

d on

the

Com

pany

’s

web

site

(ww

w.s

iem

offs

hore

.com

). Th

e fin

anci

al c

alen

dar f

or 2

015

may

be

foun

d on

the

Com

pany

’s w

ebsi

te u

nder

“Inv

esto

r Re

latio

ns”.

Take

-ove

rs

The

shar

es in

the

Com

pany

are

free

ly tr

ad-

able

and

the

Art

icle

s of

Ass

ocia

tion

of th

e C

ompa

ny d

oes

not h

old

spec

ific

defe

nce

mec

hani

sms

agai

nst t

ake-

over

situ

atio

ns.

In a

take

-ove

r situ

atio

n, th

e Bo

ard

of D

irec-

tors

will

com

ply

with

rele

vant

legi

slat

ion.

Aud

itor

The

Aud

itor o

f the

Com

pany

is e

lect

ed a

t th

e A

nnua

l Gen

eral

Mee

ting

whi

ch a

lso

appr

oves

its

rem

uner

atio

n. D

etai

ls o

f the

C

ompa

ny’s

rem

uner

atio

n of

the

exte

rnal

au

dito

r are

giv

en in

the

note

s to

the

ac-

coun

ts.

The

audi

tor r

epor

ts to

the

Aud

it C

omm

it-te

e tw

ice

a ye

ar a

t a m

inim

um, b

ut m

ore

ofte

n if

nece

ssar

y. D

urin

g th

e la

tter

hal

f of

the

year

, the

ext

erna

l aud

itor p

rese

nts

to th

e A

udit

Com

mitt

ee h

is a

sses

smen

t of

risk

s, in

tern

al c

ontr

ols,

risk

are

as a

nd

impr

ovem

ent p

oten

tial i

n co

ntro

l sys

tem

s an

d hi

s au

dit p

lan

for t

he fo

llow

ing

y ear

. Th

e se

cond

repo

rt to

the

Aud

it C

omm

ittee

is

the

pres

enta

tion

of Y

ear-

End

Aud

it. T

he

exte

rnal

aud

itor p

rese

nts

a su

mm

ary

of

the

audi

t pro

cess

, inc

ludi

ng c

omm

ents

on

audi

ted

inte

rnal

con

trol

pro

cedu

res

and

key

issu

e in

the

finan

cial

repo

rtin

g.

The

Aud

it C

omm

ittee

als

o re

ceiv

es a

n an

nual

inde

pend

ence

repo

rtin

g fr

om th

e ex

tern

al a

udito

r, co

nfirm

ing

the

exte

rnal

au

dito

r’s in

depe

nden

ce w

ith re

spec

t to

the

Com

pany

, with

in th

e m

eani

ng o

f the

N

orw

egia

n A

ct o

n A

uditi

ng a

nd A

udito

rs.

The

confi

rmat

ion

also

incl

udes

ser

vice

s de

liver

ed to

the

Com

pany

oth

er th

an

man

dato

ry a

udit.

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fin

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Crit

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acc

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1.3

Cha

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r beg

inni

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n or

aft

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lidat

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asse

ts, l

iabi

litie

s, re

venu

e an

d ex

pens

es.

Join

t ven

ture

s ar

ise

whe

re th

e in

vest

ors

have

righ

ts to

the

net a

sset

s of

the

ar-

rang

emen

t; jo

int v

entu

res

are

acco

unte

d fo

r und

er th

e eq

uity

met

hod.

Pro

port

iona

l co

nsol

idat

ion

of jo

int a

rran

gem

ents

is n

o lo

nger

per

mitt

ed. T

he C

ompa

ny w

as n

ot

invo

lved

in a

ny jo

int a

rran

gem

ents

dur

ing

2014

or 2

013.

IFRS

12,

Dis

clos

ures

of i

nter

ests

in o

ther

en

titie

s in

clud

es th

e di

sclo

sure

requ

ire-

men

ts fo

r all

form

s of

inte

rest

s in

oth

er

entit

ies,

incl

udin

g jo

int a

rran

gem

ents

, as

soci

ates

, str

uctu

red

entit

ies

and

othe

r of

f-ba

lanc

e sh

eet v

ehic

les.

IFRI

C 2

1, L

evie

s se

ts o

ut th

e ac

coun

ting

for a

n ob

ligat

ion

to p

ay a

levy

that

is n

ot

inco

me

tax.

The

inte

rpre

tatio

n ad

dres

ses

wha

t the

obl

igat

ing

even

t is

that

giv

es

rise

to p

ay a

levy

and

whe

n a

liabi

lity

shou

ld b

e re

cogn

ized

. The

Com

pany

is

not c

urre

ntly

sub

ject

to s

igni

fican

t lev

ies

so th

e ad

optio

n im

pact

of I

FRIC

21

on th

e C

ompa

ny is

not

mat

eria

l.

Am

endm

ent t

o IA

S 32

, Fin

anci

al in

-st

rum

ents

: Pre

sent

atio

n on

off

sett

ing

finan

cial

ass

ets

and

finan

cial

liab

ilitie

s.

This

am

endm

ent c

larifi

es th

at th

e rig

ht o

f se

t-of

f mus

t not

be

cont

inge

nt o

n a

futu

re

even

t. It

mus

t als

o be

lega

lly e

nfor

ce-

able

for a

ll co

unte

rpar

ties

in th

e no

rmal

co

urse

of b

usin

ess,

as

wel

l as

in th

e ev

ent

of d

efau

lt, in

solv

ency

or b

ankr

uptc

y. T

he

amen

dmen

t als

o co

nsid

ers

sett

lem

ent

mec

hani

sms.

The

am

endm

ent i

s re

leva

nt

for t

he C

ompa

ny, s

peci

fical

ly re

late

d to

po

sitio

ns h

eld

in d

eriv

ativ

e co

ntra

cts,

but

ad

optio

n of

the

amen

dmen

t did

not

hav

e a

mat

eria

l eff

ect o

n th

e fin

anci

al s

tate

-m

ents

.

Am

endm

ents

to IA

S 36

, Im

pairm

ent

of a

sset

s on

the

reco

vera

ble

amou

nt

disc

losu

res

for n

on-fi

nanc

ial a

sset

s. T

his

amen

dmen

t rem

oved

cer

tain

dis

clos

ures

of

the

reco

vera

ble

amou

nt o

f CG

Us

whi

ch

had

been

incl

uded

in IA

S 36

by

the

issu

e of

IFRS

13.

Am

endm

ent t

o IA

S 39

, Fin

anci

al in

stru

-m

ents

: Rec

ogni

tion

and

mea

sure

men

t on

the

nova

tion

of d

eriv

ativ

es a

nd th

e co

ntin

uatio

n of

hed

ge a

ccou

ntin

g. T

his

amen

dmen

t con

side

rs le

gisl

ativ

e ch

ange

s to

‘ove

r-th

e-co

unte

r’ de

rivat

ives

and

the

esta

blis

hmen

t of c

entr

al c

ount

erpa

rtie

s.

Und

er IA

S 39

nov

atio

n of

der

ivat

ives

to

cent

ral c

ount

erpa

rtie

s w

ould

resu

lt in

di

scon

tinua

nce

of h

edge

acc

ount

ing.

The

am

endm

ent p

rovi

des

relie

f fro

m d

isco

n-tin

uing

hed

ge a

ccou

ntin

g w

hen

nova

tion

of a

hed

ging

inst

rum

ent m

eets

spe

cifie

d cr

iteria

. The

Com

pany

has

app

lied

the

amen

dmen

t and

ther

e ha

s be

en n

o si

g-ni

fican

t im

pact

on

the

Com

pany

fina

ncia

l st

atem

ents

as

a re

sult.

(b) N

ew s

tand

ards

, am

endm

ents

and

in

terp

reta

tions

not

yet

ado

pted

by

the

Com

pany

A n

umbe

r of n

ew s

tand

ards

and

am

end-

men

ts to

sta

ndar

ds a

nd in

terp

reta

tions

ar

e ef

fect

ive

for a

nnua

l per

iods

beg

inni

ng

afte

r 1 J

anua

ry 2

015,

and

hav

e no

t bee

n ap

plie

d in

pre

parin

g th

e co

nsol

idat

ed a

nd

pare

nt fi

nanc

ial s

tate

men

ts.

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

434

NO

TES

TO

TH

E A

CC

OU

NTS

Non

e of

thes

e is

exp

ecte

d to

hav

e a

sign

ifi-

cant

eff

ect o

n th

e co

nsol

idat

ed fi

nanc

ial

stat

emen

ts o

f the

Com

pany

, exc

ept t

he

follo

win

g se

t out

bel

ow:

IFRS

9, F

inan

cial

inst

rum

ents

add

ress

es

the

clas

sific

atio

n, m

easu

rem

ent a

nd re

c-og

nitio

n of

fina

ncia

l ass

ets

and

finan

cial

lia

bilit

ies.

The

com

plet

e ve

rsio

n of

IFRS

9

was

issu

ed in

Jul

y 20

14. I

t rep

lace

s th

e gu

idan

ce in

IAS

39 th

at re

late

s to

the

clas

-si

ficat

ion

and

mea

sure

men

t of fi

nanc

ial

inst

rum

ents

. IFR

S 9

reta

ins

but s

impl

i-fie

s th

e m

ixed

mea

sure

men

t mod

el a

nd

esta

blis

hes

thre

e pr

imar

y m

easu

rem

ent

cate

gorie

s: fo

r fina

ncia

l ass

ets:

am

ortiz

ed

cost

, fai

r val

ue th

roug

h O

CI a

nd fa

ir va

lue

thro

ugh

P&L.

The

basi

s of

cla

ssifi

catio

n de

pend

s on

th

e en

tity’

s bu

sine

ss m

odel

and

the

cont

ract

ual c

ash

flow

cha

ract

eris

tics

of

the

finan

cial

ass

et. I

nves

tmen

ts in

equ

ity

inst

rum

ents

are

requ

ired

to b

e m

easu

red

at fa

ir va

lue

thro

ugh

profi

t or l

oss

with

the

irrev

ocab

le o

ptio

n at

ince

ptio

n to

pre

sent

ch

ange

s in

fair

valu

e in

OC

I not

recy

clin

g.

Ther

e is

now

a n

ew e

xpec

ted

cred

it lo

sses

m

odel

that

repl

aces

the

incu

rred

loss

im

pairm

ent m

odel

use

d in

IAS

39. F

or

finan

cial

liab

ilitie

s th

ere

wer

e no

cha

nges

to

cla

ssifi

catio

n an

d m

easu

rem

ent e

xcep

t fo

r the

reco

gniti

on o

f cha

nges

in o

wn

cred

it ris

k in

oth

er c

ompr

ehen

sive

inco

me,

fo

r lia

bilit

ies

desi

gnat

ed a

t fai

r val

ue

thro

ugh

profi

t or l

oss.

IFRS

9 re

laxe

s th

e re

quire

men

ts fo

r hed

ge

effe

ctiv

enes

s by

repl

acin

g th

e br

ight

line

he

dge

effe

ctiv

enes

s te

sts.

It re

quire

s an

eco

nom

ic re

latio

nshi

p be

twee

n th

e he

dged

item

and

hed

ging

inst

rum

ent a

nd

for t

he ‘h

edge

d ra

tio’ t

o be

the

sam

e as

th

e on

e m

anag

emen

t act

ually

use

for r

isk

man

agem

ent p

urpo

ses.

Con

tem

pora

ne-

ous

docu

men

tatio

n is

stil

l req

uire

d bu

t is

diff

eren

t to

that

cur

rent

ly p

repa

red

unde

r IA

S 39

. The

sta

ndar

d is

eff

ectiv

e fo

r ac-

coun

ting

perio

ds b

egin

ning

on

or a

fter

1

Janu

ary

2018

. Ear

ly a

dopt

ion

is p

erm

itted

, de

pend

ent o

n EU

app

rova

l. Th

e C

ompa

ny

is y

et to

ass

ess

IFRS

9’s

full

impa

ct.

IFRS

15,

Rev

enue

from

con

trac

ts w

ith

cust

omer

s de

als

with

reve

nue

reco

gniti

on

and

esta

blis

hes

prin

cipl

es fo

r rep

ortin

g us

eful

info

rmat

ion

to u

sers

of fi

nanc

ial

stat

emen

ts a

bout

the

natu

re, a

mou

nt, t

im-

ing

and

unce

rtai

nty

of re

venu

e an

d ca

sh

flow

s ar

isin

g fr

om a

n en

tity’

s co

ntra

cts

with

cus

tom

ers.

Reve

nue

is re

cogn

ized

whe

n a

cust

omer

ob

tain

s co

ntro

l of a

goo

d or

ser

vice

and

th

us h

as th

e ab

ility

to d

irect

the

use

and

obta

in th

e be

nefit

s fr

om th

e go

od o

r ser

-vi

ce. T

he s

tand

ard

repl

aces

IAS

18 R

ev-

enue

and

IAS

11 C

onst

ruct

ion

cont

ract

s an

d re

late

d in

terp

reta

tions

. The

sta

ndar

d is

eff

ectiv

e fo

r ann

ual p

erio

ds b

egin

ning

on

or a

fter

1 J

anua

ry 2

017

and

earl

ier

appl

icat

ion

is p

erm

itted

, dep

ende

nt o

n EU

ap

prov

al. T

he C

ompa

ny is

ass

essi

ng th

e im

pact

of I

FRS

15.

Ther

e ar

e no

oth

er IF

RSs

or IF

RIC

inte

r-pr

etat

ions

that

are

not

yet

eff

ectiv

e th

at

wou

ld b

e ex

pect

ed to

hav

e a

mat

eria

l im

pact

on

the

Com

pany

.

1.4

Con

solid

atio

n

a) S

ubsi

diar

ies

Subs

idia

ries

are

entit

ies

over

whi

ch th

e Pa

rent

has

con

trol

. The

Par

ent c

ontr

ols

an e

ntity

whe

n th

e Pa

rent

is e

xpos

ed to

, or

has

righ

ts to

, var

iabl

e re

turn

s fr

om it

s in

volv

emen

t with

the

entit

y an

d ha

s th

e ab

ility

to a

ffec

t tho

se re

turn

s th

roug

h its

po

wer

ove

r the

ent

ity. S

ubsi

diar

ies

are

fully

con

solid

ated

from

the

date

on

whi

ch

cont

rol i

s tr

ansf

erre

d to

the

Com

pany

. Th

ey a

re d

econ

solid

ated

from

the

date

th

at c

ontr

ol c

ease

s.

The

Com

pany

app

lies

the

acqu

isiti

on

met

hod

to a

ccou

nt fo

r bus

ines

s co

mbi

na-

tions

. The

con

side

ratio

n tr

ansf

erre

d fo

r th

e ac

quis

ition

of a

sub

sidi

ary

is th

e fa

ir va

lues

of t

he a

sset

s tr

ansf

erre

d an

d th

e lia

bilit

ies

assu

med

from

to th

e fo

rmer

ow

ners

of t

he a

cqui

rer a

nd th

e eq

uity

in

tere

sts

issu

ed b

y th

e C

ompa

ny. T

he

cons

ider

atio

n tr

ansf

erre

d in

clud

es th

e fa

ir va

lue

of a

ny a

sset

or l

iabi

lity

resu

lting

from

a c

ontin

gent

con

side

ratio

n ar

rang

e-m

ent.

Iden

tifiab

le a

sset

s ac

quire

d an

d li-

abili

ties

and

cont

inge

nt li

abili

ties

assu

med

in

a b

usin

ess

com

bina

tion

are

mea

sure

d in

itial

ly a

t the

ir fa

ir va

lues

at t

he a

cqui

si-

tion

date

. The

Com

pany

reco

gniz

es a

ny

non-

cont

rolli

ng in

tere

st in

the

acqu

iree

on

an a

cqui

sitio

n-by

-acq

uisi

tion

basi

s, e

ither

at

fair

valu

e or

at t

he n

on-c

ontr

ollin

g in

tere

st’s

pro

port

iona

te s

hare

of t

he re

c-og

nize

d am

ount

s of

acq

uire

e’s

iden

tifiab

le

net a

sset

s. A

cqui

sitio

n-re

late

d co

sts

are

expe

nsed

as

incu

rred

.

If th

e bu

sine

ss c

ombi

natio

n is

ach

ieve

d in

st

ages

, fai

r val

ue o

f the

acq

uire

r’s p

revi

-ou

sly

held

equ

ity in

tere

st in

the

acqu

iree

is re

mea

sure

d to

fair

valu

e at

the

acqu

isi-

tion

date

thro

ugh

profi

t or l

oss.

Any

con

tinge

nt c

onsi

dera

tion

to b

e tr

ans-

ferr

ed b

y th

e C

ompa

ny is

reco

gniz

ed a

t fa

ir va

lue

at th

e ac

quis

ition

dat

e. S

ub-

sequ

ent c

hang

es to

the

fair

valu

e of

the

cont

inge

nt c

onsi

dera

tion

that

is d

eem

ed

to b

e an

ass

et o

r lia

bilit

y is

reco

gniz

ed in

ac

cord

ance

with

IAS

39 e

ither

in p

rofit

or

loss

or a

s a

chan

ge to

oth

er c

ompr

ehen

-si

ve in

com

e. C

ontin

gent

con

side

ratio

n th

at

is c

lass

ified

as

equi

ty is

not

rem

easu

red

and

its s

ubse

quen

t set

tlem

ent i

s ac

coun

t-ed

for w

ithin

equ

ity.

Inte

rcom

pany

tran

sact

ions

, bal

ance

s, a

nd

unre

aliz

ed g

ains

on

tran

sact

ions

bet

wee

n C

ompa

ny c

ompa

nies

are

elim

inat

ed.

Unr

ealiz

ed lo

sses

are

als

o el

imin

ated

. W

hen

nece

ssar

y, a

mou

nts

repo

rted

by

subs

idia

ries

have

bee

n ad

just

ed to

ens

ure

cons

iste

ncy

with

the

polic

ies

adop

ted

by

the

Com

pany

. (b

) Ass

ocia

ted

com

pani

es

Ass

ocia

tes

are

entit

ies

over

whi

ch th

e C

ompa

ny h

as s

igni

fican

t infl

uenc

e bu

t not

co

ntro

l, ge

nera

lly a

ccom

pany

ing

a sh

are-

hold

ing

of b

etw

een

20%

and

50%

of t

he

votin

g rig

hts.

Inve

stm

ents

in a

ssoc

iate

s ar

e ac

coun

ted

for u

sing

the

equi

ty m

etho

d of

acc

ount

ing

and

are

initi

ally

reco

gniz

ed

at c

ost.

The

Com

pany

’s in

vest

men

t in

asso

ciat

es in

clud

es g

oodw

ill id

entifi

ed

on a

cqui

sitio

n. T

he s

hare

of p

rofit

or l

oss

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

435

  The

rele

vant

exc

hang

e ra

tes

vs. U

SD a

re:

Ave

rage

20

1431

.12.

14A

vera

ge

2013

31.1

2.20

13

NO

K (N

orw

egia

n kr

oner

) 0

.157

50.

1345

0.17

000.

1643

EUR

(Eur

os)

1.32

561.

2157

1.33

001.

3778

GB

P (P

ound

Ste

rlin

g)1.

6448

1.55

671.

5699

1.65

24

REA

S (B

razi

lian

Real

s)0.

4240

0.37

650.

4620

0.42

68

reco

rded

in th

e co

nsol

idat

ed fi

nanc

ial

stat

emen

ts is

bas

ed o

n th

e af

ter-

tax

earn

-in

gs o

f the

ass

ocia

te.

The

Com

pany

’s s

hare

of p

ost-

acqu

isiti

on

profi

t or l

oss

is re

cogn

ized

in th

e in

com

e st

atem

ent,

and

its s

hare

of p

ost-

acqu

isi-

tion

mov

emen

ts in

oth

er c

ompr

ehen

sive

in

com

e is

reco

gniz

ed in

oth

er c

ompr

e-he

nsiv

e in

com

e w

ith a

cor

resp

ondi

ng

adju

stm

ent t

o th

e ca

rryi

ng a

mou

nt o

f the

in

vest

men

t. W

hen

the

Com

pany

’s s

hare

of

loss

es in

an

asso

ciat

e eq

uals

or e

xcee

ds

its in

tere

st in

the

asso

ciat

e, in

clud

ing

any

othe

r uns

ecur

ed re

ceiv

able

s, th

e C

om-

pany

doe

s no

t rec

ogni

ze fu

rthe

r los

ses

unle

ss it

has

incu

rred

lega

l or c

onst

ruct

ive

oblig

atio

ns o

r mad

e pa

ymen

ts o

n be

half

of

the

asso

ciat

e.

Unr

ealiz

ed g

ains

on

tran

sact

ions

bet

wee

n th

e C

ompa

ny a

nd it

s as

soci

ates

are

el

imin

ated

to th

e ex

tent

of t

he C

ompa

ny’s

in

tere

st in

the

asso

ciat

es. U

nrea

lized

lo

sses

are

elim

inat

ed u

nles

s th

e tr

ansa

c-tio

n pr

ovid

es e

vide

nce

of a

n im

pairm

ent o

f th

e as

set t

rans

ferr

ed. A

ccou

ntin

g po

licie

s of

ass

ocia

tes

have

bee

n ch

ange

d w

here

ne

cess

ary

to e

nsur

e co

nsis

tenc

y w

ith th

e po

licie

s ad

opte

d by

the

Com

pany

.

1.5

Cla

ssifi

cati

on o

f ite

ms

in th

e fin

an-

cial

sta

tem

ents

Ass

ets

desi

gnat

ed fo

r lon

g-te

rm o

wne

r-sh

ip o

r use

and

rece

ivab

les

due

late

r tha

n on

e ye

ar a

fter

dra

wdo

wn

are

clas

sifie

d as

non

-cur

rent

ass

ets.

Oth

er a

sset

s ar

e cl

assi

fied

as c

urre

nt a

sset

s.

Liab

ilitie

s du

e la

ter t

han

one

year

aft

er th

e en

d of

the

repo

rtin

g pe

riod

are

clas

sifie

d as

no

n-cu

rren

t lia

bilit

ies.

Oth

er li

abili

ties

are

clas

sifie

d as

cur

rent

liab

ilitie

s. A

ll de

riva-

tive

finan

cial

inst

rum

ents

are

cla

ssifi

ed a

s cu

rren

t ass

ets

or c

urre

nt li

abili

ties.

1.6

Segm

ent r

epor

ting

Ope

ratin

g se

gmen

ts a

re re

port

ed in

a

man

ner c

onsi

sten

t with

the

inte

rnal

re

port

ing

prov

ided

to th

e ch

ief o

pera

t-in

g de

cisi

on-m

aker

. The

chi

ef o

pera

ting

deci

sion

-mak

er, w

ho is

resp

onsi

ble

for

allo

catin

g re

sour

ces

and

asse

ssin

g pe

r-fo

rman

ce o

f the

ope

ratin

g se

gmen

ts, h

as

been

iden

tified

as

the

exec

utiv

e m

anag

e-m

ent t

eam

con

sist

ing

of th

e C

EO, C

FO,

CC

O a

nd C

OO

.

The

Com

pany

is o

rgan

ized

into

eig

ht d

if-fe

rent

seg

men

ts, p

latf

orm

sup

ply

vess

els

(“PS

Vs”)

, off

shor

e su

bsea

con

stru

ctio

n ve

ssel

s (“

OSC

Vs),

anch

or-h

andl

ing

tug

supp

ly v

esse

ls (“

AH

TS V

esse

ls”)

, Oth

er

Vess

els

in B

razi

l (co

nsis

ting

of fa

st c

rew

ve

ssel

s (“

FCVs

”), f

ast s

uppl

y ve

ssel

s (“

FSVs

”) a

nd o

il sp

ill re

cove

ry v

esse

ls

(“O

SRVs

”)),

Com

bat M

anag

emen

t Sys

tem

s (“

CM

S”),

Subm

arin

e Po

wer

Cab

le In

stal

la-

tion,

Sci

entifi

c C

ore-

Dril

ling

and

Oth

er.

1.7

For

eign

cur

renc

y tr

ansl

atio

n

(a) F

unct

iona

l and

pre

sent

atio

n cu

rren

cy

Item

s in

clud

ed in

the

finan

cial

sta

tem

ents

of

eac

h of

the

Com

pany

’s e

ntiti

es a

re

mea

sure

d us

ing

the

curr

ency

of t

he p

ri-m

ary

econ

omic

env

ironm

ent i

n w

hich

the

entit

y op

erat

es (t

he “f

unct

iona

l cur

renc

y”).

The

cons

olid

ated

fina

ncia

l sta

tem

ents

are

pr

esen

ted

in U

SD, w

hich

is th

e C

ompa

ny’s

pr

esen

tatio

n cu

rren

cy.

(b) T

rans

actio

ns a

nd b

alan

ces

Fore

ign

curr

ency

tran

sact

ions

are

tran

s-la

ted

into

the

func

tiona

l cur

renc

y us

ing

the

exch

ange

rate

s pr

evai

ling

at th

e da

tes

of th

e tr

ansa

ctio

ns. F

orei

gn e

xcha

nge

gain

s an

d lo

sses

resu

lting

from

the

sett

lem

ent o

f suc

h tr

ansa

ctio

ns a

nd fr

om

the

tran

slat

ion

at y

ear-

end

exch

ange

rate

s of

mon

etar

y as

sets

and

liab

ilitie

s de

nom

i-na

ted

in fo

reig

n cu

rren

cies

are

reco

gniz

ed

in th

e in

com

e st

atem

ent l

ine

item

Net

cu

rren

cy g

ain

/ los

s.

(c) G

roup

com

pani

es

The

resu

lts a

nd fi

nanc

ial p

ositi

on o

f all

the

Gro

up c

ompa

nies

(non

e of

whi

ch h

ave

the

curr

ency

of a

hyp

erin

flatio

nary

eco

nom

y)

that

hav

e a

func

tiona

l cur

renc

y di

ffer

-en

t fro

m th

e pr

esen

tatio

n cu

rren

cy a

re

tran

slat

ed in

to th

e pr

esen

tatio

n cu

rren

cy

as fo

llow

s:

(i) a

sset

s an

d lia

bilit

ies

for e

ach

stat

e-m

ent o

f fina

ncia

l pos

ition

pre

sent

ed a

re

tran

slat

ed a

t the

clo

sing

rate

at t

he d

ate

of th

at s

tate

men

t of fi

nanc

ial p

ositi

on;

(ii)

inco

me

and

expe

nses

for e

ach

inco

me

stat

emen

t are

tran

slat

ed a

t ave

rage

ex-

chan

ge ra

tes

(unl

ess

this

ave

rage

is n

ot a

re

ason

able

app

roxi

mat

ion

of th

e cu

mul

a-tiv

e ef

fect

of t

he ra

tes

prev

ailin

g on

the

tran

sact

ion

date

s, in

whi

ch c

ase

inco

me

and

expe

nses

are

tran

slat

ed a

t the

dat

es

of th

e tr

ansa

ctio

ns);

and

(iii)

all

resu

lting

exc

hang

e di

ffer

ence

s ar

e re

cogn

ized

in o

ther

com

preh

ensi

ve

inco

me.

As

part

of t

he c

onso

lidat

ion

proc

ess,

ex

chan

ge d

iffer

ence

s ar

isin

g fr

om th

e tr

ansl

atio

n of

the

net i

nves

tmen

t in

fore

ign

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

436

NO

TES

TO

TH

E A

CC

OU

NTS

oper

atio

ns is

reco

gniz

ed d

irect

ly in

Oth

er

com

preh

ensi

ve In

com

e (O

CI).

Whe

n a

fore

ign

oper

atio

n is

sol

d, e

xcha

nge

dif-

fere

nces

pre

viou

sly

reco

gniz

ed in

OC

I are

re

clas

sifie

d to

pro

fit o

r los

s an

d in

clud

ed

in th

e ga

in o

r los

s on

sal

e.

Goo

dwill

and

fair

valu

e ad

just

men

ts a

ris-

ing

on th

e ac

quis

ition

of a

fore

ign

entit

y ar

e tr

eate

d as

ass

ets

and

liabi

litie

s of

the

fore

ign

entit

y an

d tr

ansl

ated

at t

he c

losi

ng

rate

. Exc

hang

e di

ffer

ence

s ar

isin

g ar

e re

cogn

ized

in O

CI.

1.8

Non

-cur

rent

tang

ible

ass

ets

and

mai

nten

ance

cos

ts

Land

and

Bui

ldin

gs a

nd V

esse

ls a

re s

tate

d at

thei

r his

toric

al c

ost l

ess

accu

mul

ated

de

prec

iatio

n an

d ne

t of a

ny im

pairm

ent

loss

es.

All

non-

curr

ent t

angi

ble

asse

ts

(exc

ludi

ng L

and

and

Vess

els

unde

r con

-st

ruct

ion)

are

dep

reci

ated

on

a st

raig

ht-

line

basi

s ov

er th

e es

timat

ed re

mai

ning

us

eful

eco

nom

ic li

fe o

f the

ass

et.

The

ves-

sel r

esid

ual v

alue

is th

e es

timat

ed fu

ture

sa

les

pric

e fo

r ste

el le

ss th

e es

timat

ed

cost

s as

soci

ated

with

scr

appi

ng a

ves

sel.

The

resi

dual

val

ue a

nd e

xpec

ted

usef

ul

life

for a

ll no

n-cu

rren

t tan

gibl

e as

sets

is

revi

ewed

ann

ually

and

, whe

re th

ey d

iffer

si

gnifi

cant

ly fr

om p

revi

ous

estim

ates

, the

ra

te o

f dep

reci

atio

n ch

arge

s is

cha

nged

ac

cord

ingl

y.

The

vess

els

pres

ently

ow

ned

by th

e C

ompa

ny h

ave

an e

stim

ated

eco

nom

ic

life

of 3

0 ye

ars.

Som

e co

mpo

nent

s of

the

vess

els

have

a s

hort

er e

cono

mic

life

than

30

yea

rs. T

he v

esse

ls a

re d

ecom

pose

d in

to d

iffer

ent c

ompo

nent

s an

d ea

ch c

om-

pone

nt is

dep

reci

ated

ove

r its

est

imat

ed

econ

omic

life

. Eac

h pa

rt o

f a v

esse

l tha

t is

sign

ifica

nt to

the

tota

l cos

t of t

he v

esse

l is

sep

arat

ely

iden

tified

and

dep

reci

ated

ov

er th

at c

ompo

nent

’s u

sefu

l life

time.

C

ompo

nent

s w

ith s

imila

r use

ful l

ives

are

in

clud

ed in

one

com

pone

nt.

The

Com

pany

ha

s id

entifi

ed n

ine

sign

ifica

nt c

ompo

nent

s re

latin

g to

its

diff

eren

t typ

es o

f ves

sels

. Se

e no

te 5

for a

dditi

onal

info

rmat

ion.

D

ry-d

ocki

ng -

In a

ccor

danc

e w

ith IA

S 16

and

the

cost

mod

el, d

ry-d

ocki

ng c

osts

are

a

sepa

rate

com

pone

nt o

f the

shi

p’s

cost

at

purc

hase

with

a d

iffer

ent p

atte

rn o

f ben

-efi

ts a

nd a

re th

eref

ore

initi

ally

reco

gniz

ed

as a

sep

arat

e de

prec

iabl

e as

set.

Subs

e-qu

ently

, the

cos

t of m

ajor

reno

vatio

ns a

nd

perio

dic

mai

nten

ance

cos

ts a

re c

apita

lized

as

a d

ry-d

ocki

ng a

sset

and

dep

reci

ated

ov

er th

e us

eful

life

of t

he p

arts

repl

aced

. Th

e us

eful

life

of t

he d

ry-d

ocki

ng c

osts

w

ill b

e th

e pe

riod

until

the

next

doc

king

, no

rmal

ly b

etw

een

two

to th

ree

year

s. D

ay-

to-d

ay m

aint

enan

ce c

osts

are

imm

edia

tely

ex

pens

ed d

urin

g th

e re

port

ing

perio

d in

w

hich

they

are

incu

rred

.

Cap

italiz

ed p

roje

ct c

ost -

Cer

tain

ves

sel

cont

ract

s re

quire

an

inve

stm

ent p

rior t

o co

mm

enci

ng th

e co

ntra

ct to

fulfi

l req

uire

-m

ents

set

by

the

char

tere

r. Th

ese

inve

st-

men

ts a

re c

apita

lized

and

am

ortiz

ed o

ver

the

term

of t

he s

peci

fic c

hart

er c

ontr

act.

Gai

ns a

nd lo

sses

on

the

sale

of a

sset

s an

d di

spos

als

are

dete

rmin

ed b

y co

mpa

ring

the

sale

s or

dis

posa

l pro

ceed

s w

ith th

e ne

t car

ryin

g am

ount

and

are

incl

uded

in

oper

atin

g pr

ofit.

1.9

New

build

con

trac

ts a

nd b

orro

win

g co

sts

Inst

allm

ents

on

new

build

con

trac

ts a

re

clas

sifie

d as

non

-cur

rent

tang

ible

ass

ets.

D

irect

cos

ts re

late

d to

the

on-s

ite s

uper

vi-

sion

and

oth

er p

re-d

eliv

ery

cons

truc

tion

cost

s ar

e ca

pita

lized

per

ves

sel.

Gen

eral

and

spe

cific

bor

row

ing

cost

s di

-re

ctly

rela

ted

to th

e ac

quis

ition

, con

stru

c-tio

n or

pro

duct

ion

of q

ualif

ying

ves

sels

are

ad

ded

to th

e co

st o

f tho

se v

esse

ls, u

ntil

such

tim

e as

the

vess

els

are

subs

tant

ially

re

ady

for t

heir

inte

nded

use

or s

ale.

All

othe

r bor

row

ing

cost

s ar

e re

cogn

ized

in

the

profi

t or l

oss

in th

e pe

riod

in w

hich

th

ey a

re in

curr

ed.

Inte

rest

exp

ense

elig

ible

for c

apita

lizat

ion

is o

nly

adju

sted

for t

he e

ffec

t of i

nter

est

rate

or c

ross

-cur

renc

y in

tere

st ra

te s

wap

s th

at a

re d

esig

nate

d an

d qu

alify

as

an a

c-co

untin

g he

dge

unde

r IA

S 39

. C

urre

ntly

the

Com

pany

doe

s no

t hav

e an

y in

tere

st

rate

or c

ross

-cur

renc

y sw

ap c

ontr

acts

de

sign

ated

as

hedg

es.

1.10

Impa

irm

ent o

f non

-fina

ncia

l as-

sets

In

tang

ible

ass

ets

that

hav

e an

inde

finite

us

eful

life

or i

ntan

gibl

e as

sets

not

read

y to

use

are

not

sub

ject

to a

mor

tizat

ion

and

are

test

ed a

nnua

lly fo

r im

pairm

ent.

Ass

ets

that

are

sub

ject

to a

mor

tizat

ion

are

revi

ewed

for i

mpa

irmen

t whe

neve

r ev

ents

or c

hang

es in

circ

umst

ance

s in

dica

te th

at th

e ca

rryi

ng a

mou

nt m

ay

not b

e re

cove

rabl

e. A

n im

pairm

ent l

oss

is

reco

gniz

ed fo

r the

am

ount

by

whi

ch th

e as

set’s

car

ryin

g am

ount

exc

eeds

its

reco

v-er

able

am

ount

. The

reco

vera

ble

amou

nt

is th

e hi

gher

of a

n as

set’s

fair

valu

e le

ss

cost

s of

dis

posa

l and

val

ue in

use

. The

re

cove

rabl

e am

ount

is e

stab

lishe

d in

di-

vidu

ally

for a

ll as

sets

. In

ass

essi

ng v

alue

in

use

, the

est

imat

ed fu

ture

cas

h flo

ws

are

disc

ount

ed to

thei

r pre

sent

val

ue u

sing

a

pre-

tax

disc

ount

rate

that

refle

cts

curr

ent

mar

k et a

sses

smen

ts o

f the

tim

e an

d th

e ris

k sp

ecifi

c to

the

asse

t tha

t is

cons

ider

ed

impa

ired.

Prio

r im

pairm

ents

of n

on-fi

nanc

ial a

sset

s (o

ther

than

goo

dwill

) are

revi

ewed

for

poss

ible

reve

rsal

at e

ach

repo

rtin

g da

te.

A p

revi

ousl

y re

cogn

ized

impa

irmen

t los

s is

reve

rsed

if th

ere

has

been

a c

hang

e in

the

estim

ates

use

d to

det

erm

ine

the

reco

vera

ble

amou

nt.

Reve

rsal

of a

pre

vi-

ousl

y re

cogn

ized

impa

irmen

t is

limite

d to

an

am

ount

that

wou

ld m

ake

the

carr

ying

va

lue

of th

e as

set e

qual

to w

hat i

t w

ould

ha

ve b

een

had

the

initi

al im

pairm

ent

char

ge n

ot o

ccur

red.

1.11

Inta

ngib

le a

sset

s

Inta

ngib

le a

sset

s th

at a

re a

cqui

red

sepa

-ra

tely

are

mea

sure

d on

initi

al re

cogn

ition

at

cos

t. T

he c

ost o

f int

angi

ble

asse

ts

acqu

ired

in a

bus

ines

s co

mbi

natio

n is

re

cogn

ized

at f

air v

alue

at t

he d

ate

of

acqu

isiti

on.

Follo

win

g in

itial

reco

gniti

on,

inta

ngib

le a

sset

s ar

e ca

rrie

d at

cos

t les

s

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

437

any

accu

mul

ated

am

ortiz

atio

n an

d an

y ac

-cu

mul

ated

impa

irmen

t los

ses.

Int

erna

lly-

gene

rate

d in

tang

ible

ass

ets,

exc

ludi

ng

capi

taliz

ed d

evel

opm

ent c

osts

, are

not

ca

pita

lized

and

exp

endi

ture

is c

harg

ed

agai

nst p

rofit

s in

the

year

in w

hich

the

expe

nditu

re is

incu

rred

. Th

e us

eful

live

s of

inta

ngib

le a

sset

s ar

e as

sess

ed to

be

eith

er fi

nite

or i

ndefi

nite

. In

tang

ible

as-

sets

with

fini

te li

ves

are

amor

tized

ove

r th

e us

eful

eco

nom

ic li

fe a

nd a

sses

sed

for i

mpa

irmen

t whe

neve

r the

re is

an

indi

catio

n th

at th

e in

tang

ible

ass

et m

ay

be im

paire

d. T

he a

mor

tizat

ion

perio

d an

d th

e am

ortiz

atio

n m

etho

d ar

e re

view

ed

annu

ally

. Cha

nges

in th

e ex

pect

ed u

sefu

l lif

e or

the

expe

cted

pat

tern

of c

onsu

mp-

tion

of fu

ture

eco

nom

ic b

enefi

ts e

mbo

died

in

the

asse

t is

acco

unte

d fo

r by

chan

ging

th

e am

ortiz

atio

n pe

riod

or m

etho

d, a

s ap

prop

riate

, and

trea

ted

as a

cha

nge

in

acco

untin

g es

timat

e. T

he a

mor

tizat

ion

ex-

pens

e on

inta

ngib

le a

sset

s w

ith fi

nite

live

s is

reco

gniz

ed in

the

inco

me

stat

emen

t in

the

expe

nse

cate

gory

con

sist

ent w

ith th

e fu

nctio

n of

the

inta

ngib

le a

sset

.

Inta

ngib

le a

sset

s w

ith in

defin

ite u

sefu

l liv

es a

re te

sted

for i

mpa

irmen

t ann

ually

ei

ther

indi

vidu

ally

or a

t the

cas

h-ge

ner-

atin

g un

it le

vel.

Such

inta

ngib

les

are

not

amor

tized

. The

use

ful l

ife o

f an

inta

ngib

le

asse

t with

an

inde

finite

life

is re

view

ed a

n-nu

ally

to d

eter

min

e w

heth

er th

e in

defin

ite

life

asse

ssm

ent c

ontin

ues

to b

e su

ppor

t-ab

le. I

f not

, the

cha

nge

in th

e us

eful

life

as

sess

men

t fro

m in

defin

ite to

fini

te is

m

ade

on a

pro

spec

tive

basi

s.

Goo

dwill

- G

oodw

ill a

rises

on

the

acqu

isi-

tion

of s

ubsi

diar

ies

and

repr

esen

ts th

e ex

cess

of t

he c

onsi

dera

tion

tran

sfer

red,

th

e am

ount

of a

ny n

on-c

ontr

ollin

g in

tere

st

in th

e ac

quire

e an

d th

e ac

quis

ition

-dat

e fa

ir va

lue

of a

ny p

revi

ous

equi

ty in

tere

st

in th

e ac

quire

e ov

er th

e fa

ir va

lue

of th

e id

entifi

able

net

ass

ets

acqu

ired.

If th

e to

tal

of c

onsi

dera

tion

tran

sfer

red,

non

-con

trol

-lin

g in

tere

st re

cogn

ized

and

pre

viou

sly

held

inte

rest

mea

sure

d at

fair

valu

e is

less

th

an th

e fa

ir va

lue

of th

e ne

t ass

ets

of th

e su

bsid

iary

acq

uire

d, in

the

case

of a

bar

-

gain

pur

chas

e, th

e di

ffer

ence

is re

cogn

ized

di

rect

ly in

the

inco

me

stat

emen

t.

For t

he p

urpo

se o

f im

pairm

ent t

estin

g,

good

will

acq

uire

d in

a b

usin

ess

com

bi-

natio

n is

allo

cate

d to

eac

h of

the

CG

Us,

or

gro

ups

of C

GU

s, th

at is

exp

ecte

d to

be

nefit

from

the

syne

rgie

s of

the

com

bina

-tio

n. E

ach

unit

or g

roup

of u

nits

to w

hich

th

e go

odw

ill is

allo

cate

d re

pres

ents

the

low

est l

evel

with

in th

e en

tity

at w

hich

the

good

will

is m

onito

red

for i

nter

nal m

an-

agem

ent p

urpo

ses.

Goo

dwill

is m

onito

red

at th

e op

erat

ing

segm

ent l

evel

.

Goo

dwill

impa

irmen

t rev

iew

s ar

e un

-de

rtak

en a

nnua

lly o

r mor

e fr

eque

ntly

if

even

ts o

r cha

nges

in c

ircum

stan

ces

indi

cate

a p

oten

tial i

mpa

irmen

t. Th

e ca

r-ry

ing

valu

e of

goo

dwill

is c

ompa

red

to th

e re

cove

rabl

e am

ount

, whi

ch is

the

high

er o

f va

lue

in u

se a

nd th

e fa

ir va

lue

less

cos

ts

to s

ell.

Any

impa

irmen

t is

reco

gniz

ed

imm

edia

tely

as

an e

xpen

se a

nd is

not

su

bseq

uent

ly re

vers

ed.

Trad

emar

ks a

nd li

cens

es -

Sepa

rate

ly a

c-qu

ired

trad

emar

ks a

nd li

cens

es a

re s

how

n at

his

toric

al c

ost.

Trad

emar

ks a

nd li

-ce

nses

acq

uire

d in

a b

usin

ess

com

bina

tion

are

reco

gniz

ed a

t fai

r val

ue a

t the

acq

uisi

-tio

n da

te. T

rade

mar

ks a

nd li

cens

es h

ave

a fin

ite u

sefu

l life

and

are

mea

sure

d at

cos

t le

ss a

ccum

ulat

ed a

mor

tizat

ion.

Am

ortiz

a-tio

n is

cal

cula

ted

usin

g th

e st

raig

ht-l

ine

met

hod

to a

lloca

te th

e co

st o

f tra

dem

arks

an

d lic

ense

s ov

er th

eir e

stim

ated

use

ful

lives

of

thre

e to

sev

en y

ears

.

Rese

arch

and

dev

elop

men

t - R

esea

rch

and

Dev

elop

men

t (R&

D) r

elat

es to

the

deve

lopm

ent o

f a p

rodu

ctio

n m

etho

d fo

r dr

illin

g pr

oces

s; th

is R

&D

is p

art o

f the

O

ther

Seg

men

t.

1.12

Fin

anci

al a

sset

s

1.12

.1 C

lass

ifica

tion

The

Com

pany

cla

ssifi

es it

s fin

anci

al

asse

ts in

the

follo

win

g tw

o ca

tego

ries:

Fi-

nanc

ial a

sset

s at

fair

valu

e th

roug

h pr

ofit

or lo

ss a

nd L

oans

and

rece

ivab

les.

The

cl

assi

ficat

ion

depe

nds

on th

e pu

rpos

e fo

r

whi

ch th

e fin

anci

al a

sset

s w

ere

acqu

ired.

M

anag

emen

t det

erm

ines

the

clas

sific

atio

n of

its

finan

cial

ass

ets

at in

itial

reco

gniti

on

and

re-e

valu

ates

this

des

igna

tion

at e

very

re

port

ing

date

.

(a) F

inan

cial

ass

ets

at fa

ir va

lue

thro

ugh

profi

t or l

oss

Fina

ncia

l ass

ets

at fa

ir va

lue

thro

ugh

profi

t or l

oss

are

finan

cial

ass

ets

held

for

trad

ing.

The

onl

y fin

anci

al a

sset

s in

this

ca

tego

ry a

re d

eriv

ativ

e co

ntra

cts,

whi

ch

are

cate

goriz

ed a

s he

ld fo

r tra

ding

unl

ess

desi

gnat

ed a

s he

dges

. Der

ivat

ives

in th

is

cate

gory

are

cla

ssifi

ed a

s cu

rren

t ass

ets.

(b) L

oans

and

rece

ivab

les

Loan

s an

d re

ceiv

able

s ar

e no

n-de

rivat

ive

finan

cial

ass

ets

with

fixe

d or

det

erm

inab

le

paym

ents

that

are

not

quo

ted

in a

n ac

-tiv

e m

arke

t. Th

ey a

re in

clud

ed in

cur

rent

as

sets

, exc

ept f

or a

sset

s w

ith m

atur

ities

gr

eate

r tha

n 12

mon

ths

afte

r the

repo

rtin

g da

te. T

hese

are

cla

ssifi

ed a

s no

n-cu

rren

t fin

anci

al a

sset

s. T

he C

ompa

ny’s

loan

s an

d re

ceiv

able

s in

clud

e ac

coun

ts re

ceiv

-ab

le, c

ash,

sho

rt a

nd lo

ng-t

erm

fina

ncia

l re

ceiv

able

s an

d th

e C

IRR

loan

dep

osit.

1.12

.2 R

ecog

nitio

n an

d m

easu

rem

ent

Regu

lar p

urch

ases

and

sal

es o

f fina

ncia

l as

sets

are

reco

gniz

ed o

n th

e tr

ade-

date

–

the

date

on

whi

ch th

e C

ompa

ny c

omm

its

to p

urch

ase

or s

ell t

he a

sset

. Inv

estm

ents

ar

e in

itial

ly re

cogn

ized

at f

air v

alue

plu

s tr

ansa

ctio

n co

sts

for a

ll fin

anci

al a

sset

s no

t car

ried

at fa

ir va

lue

thro

ugh

profi

t or

loss

. Fin

anci

al a

sset

s ca

rrie

d at

fair

valu

e th

roug

h pr

ofit o

r los

s ar

e in

itial

ly re

cog-

nize

d at

fair

valu

e, a

nd tr

ansa

ctio

n co

sts

are

expe

nsed

in th

e in

com

e st

atem

ent.

Fina

ncia

l ass

ets

are

dere

cogn

ized

whe

n th

e rig

hts

to re

ceiv

e ca

sh fl

ows

from

the

inve

stm

ents

hav

e ex

pire

d or

hav

e be

en

tran

sfer

red

and

the

Com

pany

has

tran

s-fe

rred

sub

stan

tially

all

risks

and

rew

ards

of

ow

ners

hip.

Loa

ns a

nd re

ceiv

able

s ar

e su

bseq

uent

ly c

arrie

d at

am

ortiz

ed c

ost

usin

g th

e ef

fect

ive

inte

rest

met

hod.

Gai

ns o

r los

ses

aris

ing

from

cha

nges

in

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

438

NO

TES

TO

TH

E A

CC

OU

NTS

the

fair

valu

e of

the

‘fina

ncia

l ass

ets

at fa

ir va

lue

thro

ugh

profi

t or l

oss’

cat

egor

y ar

e pr

esen

ted

in th

e in

com

e st

atem

ent w

ithin

O

pera

ting

profi

t as

Gai

n/(L

oss)

on

cur-

renc

y cu

rren

cy d

eriv

ativ

e co

ntra

cts

and

with

in n

et fi

nanc

ial i

tem

s fo

r the

inte

rest

ra

te a

nd c

ross

cur

renc

y sw

ap d

eriv

ativ

e co

ntra

cts.

See

for n

ote

21 fo

r add

ition

al

info

rmat

ion.

1.13

Off

sett

ing

finan

cial

inst

rum

ents

Fina

ncia

l ass

ets

and

liabi

litie

s ar

e of

fset

an

d th

e ne

t am

ount

repo

rted

in th

e ba

lanc

e sh

eet w

hen

ther

e is

a le

gally

en

forc

eabl

e rig

ht to

off

set t

he re

cogn

ized

am

ount

s an

d th

ere

is a

n in

tent

ion

to s

ettl

e on

a n

et b

asis

or r

ealiz

e th

e as

set a

nd s

et-

tle

the

liabi

lity

sim

ulta

neou

sly.

The

lega

lly

enfo

rcea

ble

right

mus

t not

be

cont

inge

nt

on fu

ture

eve

nts

and

mus

t be

enfo

rce-

able

in th

e no

rmal

cou

rse

of b

usin

ess

and

in th

e ev

ent o

f def

ault,

inso

lven

cy

or b

ankr

uptc

y of

the

com

pany

or t

he c

oun-

terp

arty

. The

Com

pany

has

eva

luat

ed a

ll of

thei

r der

ivat

ive

cont

ract

pos

ition

s an

d do

es n

ot c

urre

ntly

hav

e th

e rig

ht to

off

set

the

cont

ract

s, a

nd th

eref

ore

repo

rts

all

deriv

ativ

e po

sitio

ns a

t gro

ss a

mou

nts.

1.14

Inve

ntor

ies

Lubr

icat

ing

oil a

nd b

unke

rs in

vent

orie

s ar

e va

lued

at t

he lo

wer

of c

ost a

nd n

et re

aliz

-ab

le v

alue

. Cos

t is

dete

rmin

ed u

sing

the

wei

ghte

d av

erag

e co

st m

etho

d. B

unke

rs

and

lubr

icat

ing

oil i

nven

torie

s ar

e an

inte

-gr

al p

art o

f the

ves

sel,

and

not s

old

sepa

-ra

tely

. Net

real

izab

le v

alue

is e

stim

ated

ba

sed

on c

omm

odity

mar

ket p

rices

.

1.15

Cas

h an

d ca

sh e

quiv

alen

ts

In th

e st

atem

ent o

f cas

h flo

ws,

cas

h an

d ca

sh e

quiv

alen

ts in

clud

es c

ash

in h

and

and

othe

r sho

rt-t

erm

hig

hly-

liqui

d in

vest

-m

ents

with

orig

inal

mat

uriti

es o

f thr

ee

mon

ths

or le

ss.

Cas

h an

d ca

sh e

quiv

alen

ts in

the

Stat

e-m

ent o

f cas

h flo

ws

excl

udes

rest

ricte

d ca

sh b

alan

ces.

1.16

Acc

ount

s re

ceiv

able

Acc

ount

s re

ceiv

able

are

reco

gniz

ed

initi

ally

at f

air v

alue

and

sub

sequ

ently

m

easu

red

at a

mor

tized

cos

t, le

ss p

rovi

-si

on fo

r im

pairm

ent.

The

inte

rest

fact

or

for a

ccou

nts

rece

ivab

le is

con

side

red

to

be in

sign

ifica

nt a

nd th

eref

ore

not i

nclu

ded

in th

e m

easu

rem

ent o

f am

ortiz

ed c

ost.

In

the

case

of a

n ob

ject

ive

evid

ence

of a

fall

in v

alue

, the

diff

eren

ce b

etw

een

repo

rted

va

lue

and

the

pres

ent v

alue

of t

he e

x-pe

cted

net

futu

re c

ash

flow

s is

repo

rted

as

a lo

ss.

Prov

isio

ns fo

r los

ses

are

reco

gniz

ed

whe

n th

ere

are

obje

ctiv

e in

dica

tors

that

th

e C

ompa

ny w

ill n

ot re

ceiv

e se

ttle

men

t in

acc

orda

nce

with

the

orig

inal

con

trac

t te

rms.

Sig

nific

ant fi

nanc

ial p

robl

ems

faci

ng th

e cu

stom

er, p

roba

bilit

y th

at th

e cu

stom

er w

ill g

o ba

nkru

pt o

r und

ergo

fi-

nanc

ial r

estr

uctu

ring,

pos

tpon

emen

ts a

nd

non-

paym

ent a

re re

gard

ed a

s in

dica

tors

th

at th

e cu

stom

er re

ceiv

able

is im

paire

d.

1.17

Sha

re c

apit

al

Ord

inar

y sh

ares

are

cla

ssifi

ed a

s eq

uity

. In

crem

enta

l cos

ts d

irect

ly a

ttrib

utab

le

to th

e is

sue

of n

ew s

hare

s or

opt

ions

are

sh

own

in e

quity

as

a de

duct

ion,

net

of t

ax,

from

the

proc

eeds

. Whe

n an

y C

ompa

ny

entit

y pu

rcha

ses

its o

wn

shar

es, t

he

cons

ider

atio

n pa

id, i

nclu

ding

any

dire

ctly

at

trib

utab

le in

crem

enta

l cos

ts (n

et o

f in

com

e ta

xes)

, is

dedu

cted

as

appr

opria

te

from

sha

re c

apita

l and

sha

re p

rem

ium

re

serv

e an

d th

e sh

ares

are

can

celle

d.

1.18

Bor

row

ings

Borr

owin

gs a

re re

cogn

ized

initi

ally

at f

air

valu

e, n

et o

f tra

nsac

tion

cost

s in

curr

ed

and

are

subs

eque

ntly

sta

ted

at a

mor

tized

co

st. A

ny d

iffer

ence

bet

wee

n th

e pr

ocee

ds

(net

of t

rans

actio

n co

sts)

and

the

rede

mp-

tion

valu

e is

reco

gniz

ed in

the

inco

me

stat

emen

t ove

r the

per

iod

of th

e bo

rrow

-in

gs u

sing

the

effe

ctiv

e in

tere

st m

etho

d.

Borr

owin

gs a

re c

lass

ified

as

curr

ent

liabi

litie

s un

less

the

Com

pany

has

an

unco

nditi

onal

righ

t to

defe

r set

tlem

ent o

f

the

liabi

lity

for a

t lea

st 1

2 m

onth

s af

ter

the

repo

rtin

g da

te.

1.19

Com

mer

cial

Inte

rest

Ref

eren

ce

Rat

e (C

IRR

) loa

n

The

Com

pany

has

app

lied

for t

hree

C

omm

erci

al In

tere

st R

efer

ence

Rat

e (C

IRR)

loan

s fr

om th

e N

orw

egia

n Ex

port

C

redi

t Age

ncy.

The

dur

atio

n of

the

loan

s is

12

year

s an

d th

e ca

sh p

roce

eds

from

th

e lo

ans

have

bee

n de

posi

ted

in a

fixe

d de

posi

t acc

ount

with

a N

orw

egia

n ba

nk a

t th

e sa

me

inte

rest

rate

as

the

loan

s. T

he

agre

ed p

erio

ds o

f the

dep

osits

are

iden

ti-ca

l with

the

perio

ds o

f the

loan

s.

1.20

Tax

atio

n

The

tax

expe

nse

for t

he p

erio

d co

mpr

ises

cu

rren

t and

def

erre

d ta

x. T

ax is

reco

gniz

ed

in th

e in

com

e st

atem

ent,

exce

pt to

the

exte

nt th

at it

rela

tes

to it

ems

reco

gniz

ed

in o

ther

com

preh

ensi

ve in

com

e or

dire

ctly

in

equ

ity. I

n th

is c

ase,

the

tax

is a

lso

rec-

ogni

zed

in o

ther

com

preh

ensi

ve in

com

e or

di

rect

ly in

equ

ity, r

espe

ctiv

ely.

Tax

expe

nse/

bene

fit in

clud

es c

urre

nt

taxe

s an

d th

e ch

ange

in d

efer

red

taxe

s.

Def

erre

d in

com

e ta

x is

pro

vide

d fo

r all

tem

pora

ry d

iffer

ence

s be

twee

n th

e bo

ok v

alue

and

the

tax

basi

s of

ass

ets

and

liabi

litie

s an

d fo

r tax

loss

es c

arrie

d fo

rwar

d. D

efer

red

tax

asse

ts m

ade

prob

-ab

le th

roug

h pr

ospe

ctiv

e ea

rnin

gs th

at

can

be u

tiliz

ed a

gain

st th

e ta

x re

duci

ng

tem

pora

r y d

iffer

ence

s ar

e re

cogn

ized

as

inta

ngib

le a

sset

s. D

efer

red

tax

asse

ts a

nd

defe

rred

tax

liabi

litie

s ar

e re

cogn

ized

inde

-pe

nden

tly o

f whe

n th

e di

ffer

ence

s w

ill b

e re

vers

ed a

nd, a

s a

rule

, at n

omin

al v

alue

. D

efer

red

tax

asse

ts a

nd ta

x lia

bilit

ies

are

mea

sure

d on

the

basi

s of

est

imat

ed fu

ture

ta

x ra

te.

Part

of t

he C

ompa

ny’s

act

iviti

es u

nder

the

Nor

weg

ian

subs

idia

ries

are

stru

ctur

ed to

be

in c

ompl

ianc

e w

ith th

e re

gula

tions

for

the

Nor

weg

ian

Tonn

age

Tax

Regi

me.

The

C

ompa

ny h

as e

stim

ated

a ta

x ra

te o

f 0%

fo

r the

com

pani

es s

ubje

ct to

Nor

weg

ian

Tonn

age

Tax

Regi

me.

Fin

anci

al in

com

e

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

439

with

in th

e re

gim

e is

taxa

ble

at a

rate

of

27%

. For

com

pani

es n

ot in

clud

ed in

the

tonn

age

tax

regi

me,

the

Com

pany

ap-

plie

s a

tax

rate

of 2

7%. T

he ta

x ex

pens

e co

nsis

ts o

f tax

es p

ayab

le a

nd c

hang

es in

de

ferr

ed ta

x as

sets

/lia

bilit

ies.

Def

erre

d in

com

e ta

x is

reco

gniz

ed o

n te

mpo

rary

diff

eren

ces

aris

ing

betw

een

the

tax

base

s of

ass

ets

and

liabi

litie

s an

d th

eir c

arry

ing

amou

nts

in th

e co

nsol

idat

ed

finan

cial

sta

tem

ents

. Def

erre

d in

com

e ta

x is

det

erm

ined

usi

ng ta

x ra

tes

(and

law

s)

that

hav

e be

en e

nact

ed o

r sub

stan

tivel

y en

acte

d by

the

bala

nce

shee

t dat

e an

d ar

e ex

pect

ed to

app

ly w

hen

the

rela

ted

defe

rred

inco

me

tax

asse

t is

real

ized

or

the

defe

rred

inco

me

tax

liabi

lity

is s

ettl

ed.

Def

erre

d in

com

e ta

x as

sets

are

reco

g-ni

zed

only

to th

e ex

tent

that

it is

pro

babl

e th

at fu

ture

taxa

ble

profi

t will

be

avai

labl

e ag

ains

t whi

ch th

e te

mpo

rary

diff

eren

ces

can

be u

tiliz

ed.

Def

erre

d in

com

e ta

x lia

bilit

ies

are

prov

id-

ed o

n ta

xabl

e te

mpo

rary

diff

eren

ces

aris

-in

g fr

om in

vest

men

ts in

sub

sidi

arie

s an

d as

soci

ates

, exc

ept f

or d

efer

red

inco

me

tax

liabi

lity

whe

re th

e tim

ing

of th

e re

vers

al

of th

e te

mpo

rary

diff

eren

ce is

con

trol

led

by th

e C

ompa

ny a

nd it

is p

roba

ble

that

th

e te

mpo

rary

diff

eren

ce w

ill n

ot re

vers

e in

the

fore

seea

ble

futu

re. G

ener

ally

the

Com

pany

is u

nabl

e to

con

trol

the

reve

rsal

of

the

tem

pora

ry d

iffer

ence

for a

ssoc

iate

s.

Def

erre

d in

com

e ta

x as

sets

are

reco

g-ni

zed

on d

educ

tible

tem

pora

ry d

iffer

ence

s ar

isin

g fr

om in

vest

men

ts in

sub

sidi

arie

s an

d as

soci

ates

onl

y to

the

exte

nt th

at it

is

pro

babl

e th

e te

mpo

rary

diff

eren

ce w

ill

reve

rse

in th

e fu

ture

and

ther

e is

suf

ficie

nt

taxa

ble

profi

t ava

ilabl

e ag

ains

t whi

ch th

e te

mpo

rary

diff

eren

ce c

an b

e ut

ilize

d.

Def

erre

d in

com

e ta

x as

sets

and

liab

ilitie

s ar

e of

fset

whe

n th

ere

is a

lega

lly e

nfor

ce-

able

righ

t to

offs

et c

urre

nt ta

x as

sets

ag

ains

t cur

rent

tax

liabi

litie

s an

d w

hen

the

defe

rred

inco

me

taxe

s as

sets

and

lia

bilit

ies

rela

te to

inco

me

taxe

s le

vied

by

the

sam

e ta

xatio

n au

thor

ity o

n ei

ther

the

sam

e ta

xabl

e en

tity

or d

iffer

ent t

axab

le

entit

ies

whe

re th

ere

is a

n in

tent

ion

to s

et-

tle

the

bala

nces

on

a ne

t bas

is.

1.21

Pen

sion

cos

ts a

nd o

blig

atio

ns

The

Com

pany

has

a d

efine

d be

nefit

pla

n fo

r its

em

ploy

ees

in N

orw

ay.

The

pens

ion

sche

me

is fi

nanc

ed th

roug

h co

ntrib

utio

ns

to in

sura

nce

com

pani

es o

r pen

sion

fund

s.

A d

efine

d be

nefit

pla

n de

fines

the

amou

nt

of p

ensi

on b

enefi

t tha

t an

empl

oyee

will

re

ceiv

e on

retir

emen

t, us

ually

dep

ende

nt

on o

ne o

r mor

e fa

ctor

s su

ch a

s ag

e, y

ears

of

ser

vice

and

com

pens

atio

n.

The

liabi

lity

reco

gniz

ed in

the

stat

emen

t of

fina

ncia

l pos

ition

rela

ting

to d

efine

d be

nefit

pla

ns is

the

pres

ent v

alue

of t

he

defin

ed b

enefi

t obl

igat

ion

at th

e en

d of

th

e re

port

ing

perio

d le

ss th

e fa

ir va

lue

of th

e pe

nsio

n fu

nd a

sset

s. T

he d

efine

d be

nefit

obl

igat

ion

is c

alcu

late

d an

nual

ly

by a

n in

depe

nden

t act

uary

on

the

basi

s of

a

linea

r mod

el. T

he p

rese

nt v

alue

of t

he

defin

ed b

enefi

t obl

igat

ion

is d

eter

min

ed

by d

isco

untin

g th

e es

timat

ed fu

ture

cas

h ou

tflow

s ba

sed

on th

e in

tere

st ra

te fo

r N

orw

egia

n go

vern

men

t bon

ds. S

ince

N

orw

egia

n go

vern

men

t bon

ds a

re n

ot

issu

ed fo

r ter

ms

exce

edin

g 10

yea

rs, a

su

pple

men

t to

this

bon

d ra

te is

cal

cula

ted

by m

eans

of e

stim

atio

n te

chni

ques

to

esta

blis

h a

disc

ount

rate

that

is a

ppro

xi-

mat

ely

the

sam

e as

the

term

of t

he p

en-

sion

obl

igat

ion.

Past

ser

vice

cos

ts a

re re

cogn

ized

im

med

iate

ly in

inco

me.

Act

uaria

l gai

ns a

nd lo

sses

aris

ing

from

ex

perie

nce

adju

stm

ents

and

cha

nges

in

actu

aria

l ass

umpt

ions

are

cha

rged

or

cred

ited

to e

quity

in o

ther

com

preh

ensi

ve

inco

me

in th

e pe

riod

in w

hich

they

aris

e.

1.22

Der

ivat

ive

finan

cial

inst

rum

ents

an

d he

dgin

g ac

tivi

ties

The

Com

pany

ent

ers

into

der

ivat

ive

inst

ru-

men

ts, p

rimar

ily fo

reig

n cu

rren

cy c

on-

trac

ts a

nd in

tere

st ra

te s

wap

s, to

hed

ge

fore

ign

curr

ency

exp

osur

es, f

or e

xam

ple

rela

ted

to o

pera

ting

expe

nses

and

ves

sel

purc

hase

com

mitm

ents

, and

inte

rest

rate

ex

posu

res

prim

arily

rela

ted

to lo

ng-t

erm

bo

rrow

ings

. The

se d

eriv

ativ

es a

re n

ot

desi

gnat

ed a

s ac

coun

ting

hedg

es.

Der

ivat

ives

are

initi

ally

reco

gniz

ed a

t fai

r va

lue

on th

e da

te a

der

ivat

ive

cont

ract

is

ent

ered

into

and

are

sub

sequ

ently

re-

mea

sure

d at

thei

r fai

r val

ue. T

he m

etho

d of

reco

gniz

ing

the

resu

lting

gai

n or

loss

de

pend

s on

whe

ther

the

deriv

ativ

e is

des

-ig

nate

d as

a h

edgi

ng in

stru

men

t, an

d if

so,

the

natu

re o

f the

item

bei

ng h

edge

d.

Man

agem

ent d

esig

nate

s ce

rtai

n de

-riv

ativ

es a

s he

dges

of a

par

ticul

ar ri

sk

asso

ciat

ed w

ith a

hig

hly

prob

able

fore

cast

tr

ansa

ctio

n (c

ash

flow

hed

ge),

spec

ifi-

cally

the

cont

ract

ual f

utur

e sa

les

rela

ted

to v

esse

ls c

hart

ered

by

the

Braz

ilian

su

bsid

iary

. The

Bra

zilia

n en

tity

docu

men

ts

at th

e in

cept

ion

of th

e tr

ansa

ctio

n th

e re

latio

nshi

p be

twee

n th

e fo

reig

n cu

rren

cy

deriv

ativ

es (h

edgi

ng in

stru

men

t) a

nd th

e he

dged

item

s (h

ighl

y pr

obab

le fu

ture

sa

les)

, as

wel

l as

its ri

sk m

anag

emen

t ob-

ject

ives

and

str

ateg

y fo

r und

erta

king

the

vario

us h

edgi

ng tr

ansa

ctio

ns. T

he e

ntity

al

so d

ocum

ents

its

asse

ssm

ent,

both

at

hedg

e in

cept

ion

and

on a

n on

goin

g ba

sis,

of

whe

ther

the

deriv

ativ

es th

at a

re u

sed

in

the

hedg

ing

tran

sact

ions

are

hig

hly

effe

c-tiv

e in

off

sett

ing

chan

ges

in fa

ir va

lues

or

cash

flow

s of

hed

ged

item

s.

The

fair

valu

es o

f the

fore

ign

curr

ency

de

rivat

ive

inst

rum

ents

use

d fo

r hed

ging

pu

rpos

es a

re d

iscl

osed

in n

ote

15. M

ove-

men

ts o

n th

e he

dgin

g re

serv

e in

oth

er

com

preh

ensi

ve in

com

e ar

e sh

own

in n

ote

15. T

he fu

ll fa

ir va

lue

of a

hed

ging

der

iva-

tive

is c

lass

ified

as

a no

n-cu

rren

t ass

et o

r lia

bilit

y w

hen

the

rem

aini

ng h

edge

d ite

m

is m

ore

than

12

mon

ths,

and

as

a cu

rren

t as

set o

r lia

bilit

y w

hen

the

rem

aini

ng

mat

urity

of t

he h

edge

d ite

m is

less

than

12

mon

ths.

The

effe

ctiv

e po

rtio

n of

cha

nges

in th

e fa

ir va

lue

of d

eriv

ativ

es th

at a

re d

esig

nate

d

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

440

NO

TES

TO

TH

E A

CC

OU

NTS

and

qual

ify a

s ca

sh fl

ow h

edge

s is

rec-

ogni

zed

in o

ther

com

preh

ensi

ve in

com

e.

The

gain

or l

oss

rela

ting

to th

e in

effe

ctiv

e po

rtio

n is

reco

gniz

ed im

med

iate

ly in

the

inco

me

stat

emen

t.

Am

ount

s ac

cum

ulat

ed in

equ

ity a

re

recl

assi

fied

to p

rofit

or l

oss

in th

e pe

riods

w

hen

the

fore

cast

sal

e th

at is

hed

ged

take

s pl

ace.

Whe

n a

hedg

ing

inst

ru-

men

t exp

ires

or is

sol

d, o

r whe

n a

hedg

e no

long

er m

eets

the

crite

ria fo

r hed

ge

acco

untin

g, a

ny c

umul

ativ

e ga

in o

r los

s ex

istin

g in

equ

ity a

t tha

t tim

e re

mai

ns in

eq

uity

and

is re

cogn

ized

whe

n th

e fo

reca

st

tran

sact

ion

is u

ltim

atel

y re

cogn

ized

in th

e

profi

t or l

oss.

Whe

n a

fore

cast

tran

sac-

tion

is n

o lo

nger

exp

ecte

d to

occ

ur, t

he

cum

ulat

ive

gain

or l

oss

that

was

repo

rted

in

equ

ity is

imm

edia

tely

tran

sfer

red

to

the

inco

me

stat

emen

t with

in O

pera

ting

Mar

gin.

1.23

Rev

enue

rec

ogni

tion

The

Com

pany

’s a

ctiv

ity is

to e

mpl

oy d

if-fe

rent

type

s of

off

shor

e su

ppor

t ves

sels

, in

clud

ing

PSVs

, OSC

Vs, A

HTS

ves

sels

, O

SRVs

, sta

ndby

ves

sels

and

cre

w-b

oats

an

d on

e sc

ient

ific

core

-dril

ling

vess

el.

In a

dditi

on, t

he C

ompa

ny h

olds

inte

r-es

t in

one

limite

d lia

bilit

y pa

rtne

rshi

p w

ith o

wne

rshi

p in

one

wel

l-st

imul

atio

n ve

ssel

. In

one

of th

e su

bsid

iarie

s of

the

Com

pany

, rev

enue

s ar

e pa

rtly

gen

erat

ed

from

inco

me

from

con

stru

ctio

n co

ntra

cts.

Re

venu

e co

mpr

ises

the

fair

valu

e of

the

cons

ider

atio

n re

ceiv

ed o

r rec

eiva

ble

for

the

sale

of g

oods

and

ser

vice

s in

the

ordi

nary

cou

rse

of th

e C

ompa

ny’s

act

ivi-

ties.

Rev

enue

is s

how

n ne

t of v

alue

-add

ed

tax,

with

hold

ing

tax,

retu

rns,

reba

tes

and

disc

ount

s an

d af

ter e

limin

atio

n of

sal

es

with

in th

e C

ompa

ny. R

even

ue is

reco

g-ni

zed

as fo

llow

s:

Cha

rter

rate

con

trac

ts

Cha

rter

con

trac

ts a

re c

lass

ified

as

oper

at-

ing

leas

es u

nder

IAS

17. R

even

ue d

eriv

ed

from

cha

rter

con

trac

ts is

reco

gniz

ed in

the

perio

d ov

er th

e le

ase

term

on

a st

raig

ht-

line

basi

s. R

elat

ed s

ervi

ces

are

reco

g-

nize

d as

reve

nue

in a

ccor

danc

e w

ith th

e se

rvic

es b

eing

rend

ered

.

Reve

nues

from

tim

e ch

arte

rs a

nd b

are-

boat

cha

rter

s ac

coun

ted

for a

s op

erat

ing

leas

es a

re re

cogn

ized

ove

r the

rent

al

perio

ds o

f suc

h ch

arte

rs, a

s se

rvic

e is

pe

rfor

med

on

a st

raig

ht-l

ine

basi

s. C

erta

in

cont

ract

s in

clud

e m

obili

zatio

n fe

es p

ay-

able

at t

he s

tart

of t

he c

ontr

act,

and

are

reco

gniz

ed a

s re

venu

e in

the

mob

iliza

-tio

n pe

riod

until

con

trac

t com

men

ce-

men

t. In

cas

es w

here

the

fee

cove

rs

spec

ific

upgr

ades

or e

quip

men

t spe

cific

to

the

cont

ract

, the

mob

iliza

tion

fees

are

re

cogn

ized

as

reve

nue

over

the

estim

ated

co

ntra

ct p

erio

d. T

he re

late

d in

vest

men

t is

depr

ecia

ted

over

the

estim

ated

con

trac

t pe

riod.

In c

ases

whe

re th

e fe

e co

vers

sp

ecifi

c op

erat

ing

expe

nses

at t

he s

tart

of

the

cont

ract

, the

fees

are

reco

gniz

ed in

th

e sa

me

perio

d as

the

expe

nses

.

Vess

els

with

out s

igne

d co

ntra

cts

in p

lace

at

dis

char

ge h

ave

no re

venu

e un

til th

e si

gnin

g of

a n

ew c

ontr

act.

Cha

rter

-rel

ated

ex

pens

es fo

r ves

sels

dur

ing

idle

tim

e ar

e ex

pens

ed a

s in

curr

ed.

Con

stru

ctio

n co

ntra

cts

The

Com

pany

acc

ount

s fo

r lon

g-te

rm c

on-

stru

ctio

n, e

ngin

eerin

g an

d pr

ojec

t man

-ag

emen

t con

trac

ts o

n th

e pe

rcen

tage

-of-

com

plet

ion

basi

s as

cos

ts a

re in

curr

ed.

Und

er th

is m

etho

d, w

hen

the

outc

ome

of

a co

nstr

uctio

n co

ntra

ct c

an b

e es

timat

ed

relia

bly

and

it is

pro

babl

y th

at th

e co

ntra

ct

will

be

profi

tabl

e, c

ontr

act r

even

ue is

rec-

ogni

zed

over

the

perio

d of

the

cont

ract

by

refe

renc

e to

the

stag

e of

com

plet

ion.

In th

e be

ginn

ing

phas

e of

a p

roje

ct, t

he

profi

t on

a co

ntra

ct is

not

abl

e to

be

esti-

mat

ed re

liabl

y un

til p

rogr

ess

has

reac

hed

at le

ast 2

5% c

ompl

etio

n. T

here

fore

, unt

il an

est

imat

e of

25%

com

plet

e is

pos

sibl

e,

only

con

trac

t exp

ense

s ar

e re

cogn

ized

, bu

t no

profi

t mar

gin.

Con

trac

t cos

ts a

re

reco

gniz

ed a

s ex

pens

es b

y re

fere

nce

to

the

stag

e of

com

plet

ion

of th

e co

ntra

ct

activ

ity a

t the

end

of t

he re

port

ing

perio

d.

Whe

n it

is p

roba

ble

that

a p

roje

ct w

ill g

en-

erat

e a

loss

(tot

al c

ontr

act c

osts

are

ex-

pect

ed to

exc

eed

tota

l con

trac

t rev

enue

), th

e to

tal e

stim

ated

loss

is re

cogn

ized

as

an e

xpen

se im

med

iate

ly.

Inte

rest

inco

me

Inte

rest

inco

me

is re

cogn

ized

usi

ng th

e ef

-fe

ctiv

e in

tere

st m

etho

d. W

hen

a re

ceiv

able

is

impa

ired,

the

Com

pany

redu

ces

the

car-

ryin

g am

ount

to it

s re

cove

rabl

e am

ount

, w

hich

is d

eter

min

ed a

s th

e es

timat

ed

futu

re c

ash

flow

dis

coun

ted

at o

rigin

al e

f-fe

ctiv

e in

tere

st ra

te o

f the

inst

rum

ent a

nd

cont

inue

s un

win

ding

the

disc

ount

as

inte

r-es

t inc

ome.

Inte

rest

inco

me

on im

paire

d lo

ans

and

rece

ivab

les

is re

cogn

ized

usi

ng

the

orig

inal

eff

ectiv

e in

tere

st ra

te.

Div

iden

d in

com

e D

ivid

end

inco

me

is re

cogn

ized

whe

n th

e rig

ht to

rece

ive

paym

ent i

s es

tabl

ishe

d.

Rend

erin

g of

ser

vice

s Se

rvic

e re

venu

e is

gen

eral

ly re

cogn

ized

w

hen

a si

gned

con

trac

t or o

ther

per

sua-

sive

evi

denc

e of

an

arra

ngem

ent e

xist

s,

the

serv

ice

has

been

pro

vide

d, th

e fe

e is

fix

ed o

r det

erm

inab

le a

nd c

olle

ctio

n of

re

sulti

ng re

ceiv

able

s is

reas

onab

ly a

s-su

red.

Oth

er s

ervi

ces

are

reco

gniz

ed o

n a

perc

enta

ge-o

f-co

mpl

etio

n ba

sis.

1.24

Acc

ount

s pa

yabl

e

Acc

ount

s pa

yabl

es a

re o

blig

atio

ns to

pa

y fo

r goo

ds o

r ser

vice

s th

at h

ave

been

ac

quire

d in

the

ordi

nary

cou

rse

of b

usi-

ness

from

sup

plie

rs. A

ccou

nts

paya

ble

are

clas

sifie

d as

cur

rent

liab

ilitie

s if

paym

ent

is d

ue w

ithin

one

yea

r or l

ess

(or i

n th

e no

rmal

ope

ratin

g cy

cle

of th

e bu

sine

ss

if lo

nger

). If

not,

they

are

pre

sent

ed a

s no

n-cu

rren

t lia

bilit

ies.

Acc

ount

s pa

yabl

e ar

e re

cogn

ized

initi

ally

at f

air v

alue

and

su

bseq

uent

ly m

easu

red

at a

mor

tized

cos

t us

ing

the

effe

ctiv

e in

tere

st m

etho

d.

1.25

Ear

ning

s pe

r sh

are

Earn

ings

per

sha

re a

re c

alcu

late

d by

div

id-

ing

the

net p

rofit

/los

s fo

r sha

reho

lder

s of

the

Com

pany

by

the

wei

ghte

d av

erag

e

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

441

num

ber o

f out

stan

ding

sha

res

over

the

repo

rtin

g pe

riod.

Dilu

ted

earn

ings

per

sh

are

incl

ude

the

effe

ct o

f the

ass

umed

co

nver

sion

of p

oten

tially

dilu

tive

inst

ru-

men

ts s

uch

as e

mpl

oyee

sto

ck o

ptio

ns.

The

impa

ct o

f sha

re e

quiv

alen

ts is

com

-pu

ted

usin

g th

e tr

easu

ry s

tock

met

hod

for

stoc

k op

tions

.

1.26

Sta

tem

ent o

f Cas

h Fl

ows

The

Stat

emen

ts o

f cas

h flo

ws

are

prep

ared

in a

ccor

danc

e w

ith th

e in

dire

ct

met

hod.

1.27

Rel

ated

par

ty tr

ansa

ctio

ns

All

tran

sact

ions

, agr

eem

ents

and

bus

i-ne

ss a

ctiv

ities

with

rela

ted

part

ies

are

dete

rmin

ed o

n an

arm

’s le

ngth

bas

is in

a

man

ner s

imila

r to

tran

sact

ions

with

third

pa

rtie

s.

1. 2

8 G

over

nmen

t gra

nts

Gra

nts

rela

ting

to n

et w

ages

arr

ange

men

t in

Nor

way

are

reco

gniz

ed a

s a

redu

ctio

n of

w

age

cost

.

1.29

Ope

rati

ng le

ases

Leas

es in

whi

ch a

sig

nific

ant p

ortio

n of

th

e ris

ks a

nd re

war

ds o

f ow

ners

hip

have

no

t bee

n tr

ansf

erre

d to

the

Com

pany

are

cl

assi

fied

as o

pera

ting

leas

es. P

aym

ents

m

ade

unde

r ope

ratin

g le

ase

agre

emen

ts

are

clas

sifie

d in

the

inco

me

stat

emen

t as

ope

ratin

g ex

pens

es a

nd re

cogn

ized

st

raig

ht-l

ine

over

the

perio

d of

the

leas

e.

1.30

Sha

re-b

ased

pay

men

ts

The

Com

pany

ope

rate

s an

exe

cutiv

e m

anag

emen

t equ

ity-s

ettl

ed, s

hare

-ba

sed

com

pens

atio

n pl

an, u

nder

whi

ch

the

entit

y re

ceiv

es s

ervi

ces

from

ten

top

man

agem

ent e

mpl

oyee

s (e

ight

in 2

013)

as

con

side

ratio

n fo

r equ

ity in

stru

men

ts

(sha

re-o

ptio

ns) o

f the

Com

pany

. The

fair

valu

e of

the

empl

oyee

ser

vice

s re

ceiv

ed

in e

xcha

nge

for t

he g

rant

of t

he o

ptio

ns is

re

cogn

ized

as

an O

pera

ting

Expe

nse.

For

ad

ditio

nal i

nfor

mat

ion

see

note

31

Shar

e-ba

sed

paym

ents

.

The

tota

l am

ount

to b

e ex

pens

ed is

de

term

ined

by

refe

renc

e to

the

fair

valu

e of

the

optio

ns g

rant

ed a

t gra

nt d

ate,

as

dete

rmin

ed u

sing

a B

lack

-Sch

oles

mod

el.

Exer

cise

pric

e is

the

stoc

k pr

ice

at d

ate

of

The

tota

l exp

ense

is re

cogn

ized

ove

r the

ve

stin

g pe

riod,

whi

ch is

the

perio

d ov

er

whi

ch a

ll of

the

spec

ified

ves

ting

cond

i-tio

ns a

re to

be

satis

fied.

The

onl

y co

nditi

on

for v

estin

g is

em

ploy

men

t with

the

Com

-pa

ny; o

ptio

ns v

est o

ver a

five

-yea

r per

iod

afte

r gra

nt d

ate.

At t

he e

nd o

f eac

h re

port

ing

perio

d, th

e C

ompa

ny re

vise

s its

est

imat

es o

f the

nu

mbe

r of o

ptio

ns th

at a

re e

xpec

ted

to

vest

bas

ed o

n th

e no

n-m

arke

t ves

ting

cond

ition

s. It

reco

gniz

es th

e im

pact

of t

he

revi

sion

to o

rigin

al e

stim

ates

, if a

ny, i

n th

e in

com

e st

atem

ent,

with

a c

orre

spon

ding

ad

just

men

t to

equi

ty. E

ach

optio

n gi

ves

the

hold

er th

e rig

ht, b

ut n

ot th

e ob

ligat

ion,

to

acq

uire

one

sha

re a

t the

exe

rcis

e pr

ice

on th

e te

rms

and

subj

ect t

o th

e co

nditi

ons

set o

ut in

the

Stoc

k O

ptio

n Pl

an.

Whe

n th

e op

tions

are

exe

rcis

ed, t

he P

ar-

ent i

ssue

s ne

w s

hare

s or

re-is

sues

trea

s-ur

y sh

ares

. The

pro

ceed

s re

ceiv

ed n

et o

f an

y di

rect

ly a

ttrib

utab

le tr

ansa

ctio

n co

sts

are

cred

ited

to s

hare

cap

ital (

nom

inal

va

lue)

and

sha

re p

rem

ium

.

The

gran

t by

the

Com

pany

of o

ptio

ns o

ver

its e

quity

inst

rum

ents

to th

e em

ploy

ees

of

subs

idia

ry u

nder

taki

ngs

in th

e C

ompa

ny

is tr

eate

d as

a c

apita

l con

trib

utio

n. T

he

fair

valu

e of

em

ploy

ee s

ervi

ces

rece

ived

, m

easu

red

by re

fere

nce

to th

e gr

ant d

ate

fair

valu

e, is

reco

gniz

ed o

ver t

he v

estin

g pe

riod

as a

n in

crea

se to

inve

stm

ent i

n su

bsid

iary

und

erta

king

s, w

ith a

cor

re-

spon

ding

cre

dit t

o eq

uity

in th

e pa

rent

en

tity

acco

unts

.

The

soci

al s

ecur

ity c

ontr

ibut

ions

pay

able

in

con

nect

ion

with

the

gran

t of t

he s

hare

op

tions

is c

onsi

dere

d an

inte

gral

par

t of

the

gran

t its

elf,

and

the

char

ge w

ill b

e tr

eate

d as

a c

ash-

sett

led

tran

sact

ion.

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

442

2.1

Fina

ncia

l ris

k fa

ctor

s

The

Com

pany

is e

xpos

ed to

a v

arie

ty

of fi

nanc

ial r

isks

thro

ugh

its o

rdin

ary

oper

atio

ns a

nd d

ebt fi

nanc

ing.

Suc

h ris

ks

incl

ude

fore

ign

exch

ange

risk

, int

eres

t rat

e ris

k, c

redi

t ris

k an

d liq

uidi

ty ri

sk.

To m

an-

age

thes

e ris

ks, m

anag

emen

t rev

iew

s an

d

asse

sses

its

prim

ary

finan

cial

and

mar

ket

risks

. Onc

e ris

ks a

re id

entifi

ed, a

ppro

pria

te

actio

n is

take

n to

miti

gate

the

iden

tified

ris

k. T

he C

ompa

ny’s

risk

man

agem

ent i

s ex

erci

sed

in li

ne w

ith g

uide

lines

app

rove

d by

the

Boar

d. 

2.2

Fore

ign

exch

ange

ris

ks

USD

is th

e re

port

ing

curr

ency

for t

he

Com

pany

. Fun

ctio

nal c

urre

ncy

for t

he

pare

nt c

ompa

ny a

nd v

esse

l-op

erat

ing

subs

idia

ries

is U

SD, e

xcep

t for

one

of t

he

Nor

weg

ian

subs

idia

ry w

here

NO

K is

the

func

tiona

l cur

renc

y, a

nd th

e Br

azili

an

Fina

ncia

l ass

ets

in 2

014

incl

ude

deriv

ativ

es re

late

d to

hed

ging

of f

orei

gn e

xcha

nge

risks

. The

der

ivat

ives

in th

e se

nsiti

vity

tabl

e in

clud

e

path

depe

nden

t opt

ions

in w

hich

the

valu

e of

the

deriv

ativ

es is

influ

ence

d w

hen

the

unde

rlyin

g re

ache

s or

fluc

tuat

es w

ithin

, be

low

or a

bove

spe

cific

bar

rier l

evel

s. T

he c

hang

e in

val

ue o

f the

se d

eriv

ativ

es w

ill im

pact

the

profi

t of t

he C

ompa

ny.

Fina

ncia

l lia

bilit

ies

in 2

014

and

2013

con

sist

of i

nter

est r

ate

deriv

ativ

es a

nd a

re n

ot in

fluen

ced

by m

ovem

ents

in fo

reig

n ex

chan

ge ra

tes,

and

ther

efor

e no

t inc

lude

d in

the

tabl

e.

NO

TES

TO

TH

E A

CC

OU

NTS

No

te 2

- F

ina

nc

ial

Ris

k M

an

ag

em

en

t

CO

NSO

LID

ATED

Fore

ign

exch

ange

risk

rate

10%

(Am

ount

s in

USD

1,0

00)

+10%

mov

emen

ts-1

0% m

ovem

ents

Dec

embe

r 31

, 201

4C

arry

ing

amou

ntP

rofit

/(lo

ss)

Equi

tyP

rofit

/(lo

ss)

Equi

ty

Fina

ncia

l ass

ets

Cas

h an

d ca

sh e

quiv

alen

t 1

17,6

23

3,6

143,

614

-3,6

14-3

,614

Der

ivat

ives

1,0

41

- -

- -

Acc

ount

s re

ceiv

able

74,

753

1,2

92

1,29

2-1

,292

-1,2

92

Impa

ct o

n fin

anci

al a

sset

s be

fore

tax

193

,417

4

,907

4,9

07 -4

,907

-4

,907

Fina

ncia

l lia

bilit

ies

Acc

ount

s pa

yabl

e 1

0,78

1 -1

,583

-1

,583

1

,583

1

,583

Der

ivat

ives

16,

732

18,

402

18,4

02-2

1,01

6-2

1,01

6

Borr

owin

gs 1

,214

,360

-5

1,39

9 -5

1,39

9 5

1,39

9 5

1,39

9

Impa

ct o

n fin

anci

al li

abili

ties

bef

ore

tax

1,2

41,8

73

-34,

580

-34,

580

31,9

6631

,966

Inco

me

stat

emen

t

Ope

ratin

g re

venu

e 4

91,3

12

20,

149

20,

149

-20,

149

-20,

149

Ope

ratin

g ex

pens

es 2

97,1

87

-18,

284

-18,

284

18,

284

18,

284

Impa

ct o

n op

erat

ing

resu

lt b

efor

e ta

x 1

94,1

25

1,8

66

1,8

66

-1,8

66

-1,8

66

Tota

l inc

reas

e/de

crea

se b

efor

e ta

x -2

7,80

7 -2

7,80

725

,193

25,1

93

All

ocat

ion

per

curr

ency

NO

K

-21,

985

-21,

985

19,

371

19,

371

EUR

1

0,27

4 1

0,27

4 -1

0,27

4 -1

0,27

4

GBP

440

4

40

-440

-4

40

BRL

-16,

537

-16,

537

16,

537

16,

537

Tota

l inc

reas

e/ d

ecre

ase

befo

re ta

x -2

7,80

7 -2

7,80

7 2

5,19

3 2

5,19

3

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

443

subs

idia

ry w

here

BRL

is th

e fu

nctio

nal

curr

ency

. Rem

aini

ng s

ubsi

diar

ies

use

NO

K a

nd E

UR

as fu

nctio

nal c

urre

ncy.

The

C

ompa

ny o

pera

tes

inte

rnat

iona

lly a

nd is

ex

pose

d to

fore

ign

exch

ange

risk

s ar

isin

g fr

om v

ario

us c

urre

ncy

expo

sure

s pr

imar

y w

ith re

spec

t to

NO

K, G

BP, E

UR

and

BRL

. Fo

reig

n ex

chan

ge ri

sks

can

be d

ivid

ed in

to

tran

sact

ion

risk

from

pay

ing

and

rece

ivin

g fo

reig

n cu

rren

cy a

nd tr

ansl

atio

n ris

k du

e to

reco

gniz

ing

asse

ts a

nd li

abili

ties

in

USD

. The

Com

pany

had

in 2

014

and

2013

mai

nly

USD

, NO

K, E

UR

and

BRL

reve

nue

and

expe

nses

. A

t yea

r end

, the

Com

pany

had

one

shi

p-bu

ildin

g co

ntra

ct w

ith a

Bra

zilia

n ya

rd fo

r th

e co

nstr

uctio

n of

one

OSR

V, s

hipb

uild

-in

g co

ntra

cts

with

a P

olis

h ya

rd fo

r the

co

nstr

uctio

n of

four

PSV

s an

d on

e C

LV

and

ship

build

ing

cont

ract

s w

ith a

Ger

man

ya

rd fo

r con

stru

ctio

n of

two

WIV

s. T

he

cont

ract

with

the

Bra

zilia

n ya

rd is

in U

SD,

the

cont

ract

s w

ith th

e Po

lish-

and

Ger

-m

an y

ards

are

in E

UR.

Fur

ther

info

rma-

tion

rega

rdin

g th

ese

cont

ract

s is

set

out

in

Not

e 2.

5 an

d N

ote

17.

The

Com

pany

is e

xpos

ed to

fore

ign

exch

ange

risk

of i

ts s

ubsi

diar

ies,

incl

udin

g th

e de

velo

pmen

t of t

he B

razi

lian

Real

. Th

e fo

llow

ing

sens

itivi

ty ta

ble

dem

on-

stra

tes

the

impa

ct o

n th

e C

ompa

ny’s

pr

ofit a

nd e

quity

bef

ore

tax

from

pot

entia

l ch

ange

s to

the

exch

ange

rate

s, a

ll ot

her

varia

bles

hel

d co

nsta

nt.

CO

NSO

LID

ATED

Fore

ign

exch

ange

risk

rate

10%

(Am

ount

s in

USD

1,0

00)

+10%

mov

emen

ts-1

0% m

ovem

ents

Dec

embe

r 31

, 201

3C

arry

ing

amou

ntP

rofit

/(lo

ss)

Equi

tyP

rofit

/(lo

ss)

Equi

ty

Fina

ncia

l ass

ets

Cas

h an

d ca

sh e

quiv

alen

t 1

01,2

06

2,4

73

2,4

73

-2,4

73

-2,4

73

Der

ivat

ives

- -

- -

-

Acc

ount

s re

ceiv

able

53,

198

2,6

53

2,6

53

-2,6

53

-2,6

53

Impa

ct o

n fin

anci

al a

sset

s be

fore

tax

154

,404

5

,126

5

,126

-5

,126

-5

,126

Fina

ncia

l lia

bilit

ies

Acc

ount

s pa

yabl

e 1

6,25

3 -1

,966

-1

,966

1

,966

1

,966

Der

ivat

ives

11,

085

-33,

797

-33,

797

29,

343

29,

343

Borr

owin

gs 9

61,5

00

-36,

253

-36,

253

36,

253

36,

253

Impa

ct o

n fin

anci

al li

abili

ties

bef

ore

tax

988

,838

-7

2,01

6 -7

2,01

6 6

7,56

2 6

7,56

2

Inco

me

stat

emen

t

Ope

ratin

g re

venu

e 3

63,9

55

16,

834

16,

834

-16,

834

-16,

834

Ope

ratin

g ex

pens

es 2

41,2

91

-19,

235

-19,

235

19,

235

19,

235

Impa

ct o

n op

erat

ing

resu

lt b

efor

e ta

x 1

22,6

63

-2,4

01

-2,4

01

2,4

01

2,4

01

Tota

l inc

reas

e/de

crea

se b

efor

e ta

x -6

9,29

0 -6

9,29

0 6

4,83

6 6

4,83

6

All

ocat

ion

per

curr

ency

NO

K

-60,

250

-60,

250

55,

797

55,

797

EUR

2

,079

2

,079

-2

,079

-2

,079

GB

P 4

50

450

-4

50

-450

BRL

-11,

569

-11,

569

11,

570

11,

570

Tota

l inc

reas

e/ d

ecre

ase

befo

re ta

x -6

9,29

0 -6

9,29

0 6

4,83

6 6

4,83

6

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

444

NO

TES

TO

TH

E A

CC

OU

NTS

PAR

ENT

CO

MPA

NY

Fore

ign

exch

ange

risk

rate

10%

(Am

ount

s in

USD

1,0

00)

+10%

mov

emen

ts-1

0% m

ovem

ents

Dec

embe

r 31

, 201

4C

arry

ing

amou

ntP

rofit

/(l

oss)

Equi

tyP

rofit

/(lo

ss)

Equi

ty

Fina

ncia

l ass

ets

Cas

h an

d ca

sh e

quiv

alen

t 2

22,5

79

15,

217

15,

217

-15,

217

-15,

217

Acc

ount

s re

ceiv

able

- -

- -

-

Impa

ct o

n fin

anci

al a

sset

s be

fore

tax

222

,579

1

5,21

7 1

5,21

7 -1

5,21

7 -1

5,21

7

Fina

ncia

l lia

bilit

ies

Acc

ount

s pa

yabl

e 5

3 -1

-1

1

1

Der

ivat

ives

- -

- -

-

Borr

owin

gs 1

74,8

81

-20,

334

-20,

334

20,

334

20,

334

Impa

ct o

n fin

anci

al li

abili

ties

bef

ore

tax

174

,934

-2

0,33

4 -2

0,33

4 2

0,33

4 2

0,33

4

Inco

me

stat

emen

t

Ope

ratin

g re

venu

e 4

05

- -

- -

Ope

ratin

g ex

pens

es 1

2,52

1 -1

,156

-1

,156

1

,156

1

,156

Impa

ct o

n op

erat

ing

resu

lt b

efor

e ta

x -1

2,11

6 -1

,156

-1

,156

1

,156

1

,156

Tota

l inc

reas

e/de

crea

se b

efor

e ta

x -6

,273

-6

,273

6

,273

6

,273

All

ocat

ion

per

curr

ency

NO

K

-8,2

12

-8,2

12

8,2

12

8,2

12

EUR

1

,916

1

,916

-1

,916

-1

,916

GBP

23

23

-23

-23

Tota

l inc

reas

e/ d

ecre

ase

befo

re ta

x -6

,273

-6

,273

6

,273

6

,273

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

445

PAR

ENT

CO

MPA

NY

Fore

ign

exch

ange

risk

rate

10%

(Am

ount

s in

USD

1,0

00)

+10%

mov

emen

ts-1

0% m

ovem

ents

Dec

embe

r 31

, 201

3C

arry

ing

amou

ntP

rofit

/(l

oss)

Equi

tyP

rofit

/(lo

ss)

Equi

ty

Fina

ncia

l ass

ets

Cas

h an

d ca

sh e

quiv

alen

t 1

32,0

68

7,9

46

7,9

46

-7,9

46

-7,9

46

Acc

ount

s re

ceiv

able

3,4

47

- -

- -

Impa

ct o

n fin

anci

al a

sset

s be

fore

tax

135

,514

7

,946

7

,946

-7

,946

-7

,946

Fina

ncia

l lia

bilit

ies

Acc

ount

s pa

yabl

e 3

97

-19

-19

19

19

Der

ivat

ives

- -

- -

-

Borr

owin

gs 9

8,62

4 -1

4,03

4 -1

4,03

4 1

4,03

4 1

4,03

4

Impa

ct o

n fin

anci

al li

abili

ties

bef

ore

tax

99,

021

-14,

053

-14,

053

14,

053

14,

053

Inco

me

stat

emen

t

Ope

ratin

g re

venu

e 1

0,95

3 -2

-2

2

2

Ope

ratin

g ex

pens

es 1

8,77

4 -1

,189

-1

,189

1

,189

1

,189

Impa

ct o

n op

erat

ing

resu

lt b

efor

e ta

x -7

,821

-1

,191

-1

,191

1

,191

1

,191

Tota

l inc

reas

e/de

crea

se b

efor

e ta

x -7

,298

-7

,298

7

,298

7

,298

All

ocat

ion

per

curr

ency

NO

K

-7,3

24

-7,3

24

7,3

24

7,3

24

EUR

-1

0 -1

0 1

0 1

0

GBP

36

36

-36

-36

Tota

l inc

reas

e/ d

ecre

ase

befo

re ta

x -7

,298

-7

,298

7

,298

7

,298

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

446

NO

TES

TO

TH

E A

CC

OU

NTS

2.3

Cre

dit r

isks

Con

cent

ratio

n ris

ksTh

e C

ompa

ny’s

cre

dit r

isk

is p

rimar

ily

attr

ibut

able

to it

s tr

ade

and

othe

r sho

rt-

term

rece

ivab

les

and

asse

t der

ivat

ive

posi

tions

. The

der

ivat

ive

coun

terp

artie

s ar

e la

rge

esta

blis

hed

finan

cial

inst

itutio

ns,

and

the

coun

terp

arty

risk

for t

he a

sset

de-

rivat

ive

posi

tions

are

rega

rded

as

limite

d.Th

e ex

posu

re to

cre

dit r

isk

for t

rade

and

ot

her s

hort

term

rece

ivab

les

is m

easu

red

on a

n on

goin

g ba

sis

and

cred

it ev

alua

tions

ar

e pe

rfor

med

for c

usto

mer

s id

entifi

ed

to b

e ris

ky. T

he C

ompa

ny’s

deb

tors

are

m

ainl

y m

ajor

oil

com

pani

es a

nd o

ffsh

ore

serv

ice

com

pani

es, w

hich

are

con

side

red

to b

e cr

editw

orth

y th

ird p

artie

s. H

isto

ri-

cally

, the

loss

per

cent

age

has

been

low

. O

ngoi

ng p

rovi

sion

s ar

e m

ade

and,

on

Dec

embe

r 31,

201

4, th

e pr

ovis

ion

for c

er-

tain

acc

ount

s re

ceiv

able

s w

hich

may

not

be

pai

d in

full

was

USD

9.5

mill

ion

for t

he

Com

pany

(201

3: U

SD 7

.0 m

illio

n) a

nd U

SD

751K

for t

he P

aren

t (20

13: U

SD 0

K).

The

tabl

e be

low

pre

sent

s th

e co

ncen

trat

ion

risks

for 2

014

and

2013

.

PAR

ENT

CO

MPA

NY

CO

NSO

LID

ATED

(Am

ount

s in

USD

1,0

00)

USD

% o

f tot

alU

SD%

of t

otal

Rec

eiva

bles

on

Dec

embe

r 31

, 201

4

1 to

5 la

rges

t -

- 5

0,45

4 67

.5 %

6 to

10

larg

est

- -

16,

279

21.8

%

Oth

ers

- -

8,0

20

10.7

%

Tota

l acc

ount

s re

ceiv

able

s -

- 7

4,75

3 10

0%

(Am

ount

s in

USD

1,0

00)

USD

% o

f tot

alU

SD%

of t

otal

Rec

eiva

bles

on

Dec

embe

r 31

, 201

3

1 to

5 la

rges

t3,

447

100.

0 %

32,

311

60.7

%

6 to

10

larg

est

- -

17,

978

33.8

%

Oth

ers

- -

2,9

09

5.5

%

Tota

l acc

ount

s re

ceiv

able

s 3

,447

10

0% 5

3,19

8 10

0%

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

447

Trad

e an

d re

ceiv

able

sTh

e ta

ble

belo

w p

rese

nts

an a

ging

ana

lysi

s of

the

outs

tand

ing

rece

ivab

les

at y

ear

end

2014

and

201

3.

Ove

rdue

rec

eiva

bles

are

follo

wed

up

cont

inua

lly b

y M

anag

emen

t. Th

e M

anag

emen

t con

side

rs th

e ou

tsta

ndin

g am

ount

s to

be

reco

vera

ble.

At y

ear

end

2014

the

rece

ivab

les

wer

e si

gnifi

cant

ly h

ighe

r th

an a

s fo

r 20

13. T

his

was

cau

sed

by s

anct

ions

aff

ectin

g,re

ceiv

able

s fr

om th

e K

ara-

Sea

proj

ect.

Paym

ents

from

Pet

robr

as in

Bra

zil w

as d

elay

ed d

ue to

form

al a

ppro

val r

equi

rem

ents

. The

maj

ority

of t

hese

rece

ivab

les

have

bee

n pa

id in

Q1

2015

. The

max

imum

exp

osur

e to

cre

dit r

isk

at th

e re

port

ing

date

is th

e ca

rryi

ng v

alue

of e

ach

clas

s of

acc

ount

s re

ceiv

able

s m

entio

ned

abov

e.

The

carr

ying

am

ount

of t

he C

ompa

ny’s

and

Pare

nt’s

acco

unts

rece

ivab

les

are

deno

min

ated

in th

e fo

llow

ing

curr

enci

es:

PAR

ENT

CO

MPA

NY

CO

NSO

LID

ATED

(Am

ount

s in

USD

1,0

00)

USD

% o

f tot

alU

SD%

of t

otal

Agi

ng o

n D

ecem

ber

31, 2

014

Not

due

- -

28,

392

38.0

%

Due

up

to 1

mon

th -

- 1

4,82

3 19

.8 %

Due

1-4

mon

ths

- -

12,

409

16.6

%

Due

mor

e th

an 4

mon

ths

- -

19,

128

25.6

%

Tota

l acc

ount

s re

ceiv

able

s -

- 7

4,75

3 10

0%

(Am

ount

s in

USD

1,0

00)

USD

% o

f tot

alU

SD%

of t

otal

Agi

ng o

n D

ecem

ber

31, 2

013

Not

due

- -

27,

365

51.4

%

Due

up

to 1

mon

th -

- 1

6,51

1 31

.0 %

Due

1-4

mon

ths

- -

3,0

45

5.7

%

Due

mor

e th

an 4

mon

ths

3,4

47

100.

0 %

6,2

76

11.8

%

Tota

l acc

ount

s re

ceiv

able

s 3

,447

10

0% 5

3,19

8 10

0%

PAR

ENT

CO

MPA

NY

CO

NSO

LID

ATED

(Am

ount

s in

USD

1,0

00)

2014

2013

2014

2013

Cur

renc

y

USD

- 3

,447

6

1,83

0 2

6,67

0

NO

K -

- 1

,947

1

0,12

3

EUR

- -

5,6

06

10,

999

GB

P -

- 2

,386

2

,015

BRL

- -

2,9

84

3,3

91

Tota

l acc

ount

s re

ceiv

able

s -

3,4

47

74,

753

53,

198

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

448

2.4

Cas

h fl

ow, i

nter

est r

isk

and

fair

val

ue

The

Com

pany

is fi

nanc

ed b

y de

bt a

nd

equi

ty. I

f the

Com

pany

fails

to re

pay

or

refin

ance

its

loan

faci

litie

s, a

dditi

onal

eq-

uity

fina

ncin

g m

ay b

e re

quire

d. T

here

can

be

no

assu

ranc

e th

at th

e C

ompa

ny w

ill

be a

ble

to re

pay

its d

ebts

or e

xten

d re

-pa

ymen

t sch

edul

es th

roug

h re

-fina

ncin

g

of it

s lo

an a

gree

men

ts o

r avo

id n

et c

ash

flow

sho

rtfa

lls e

xcee

ding

the

Com

pany

’s

avai

labl

e fu

ndin

g so

urce

s or

com

ply

with

m

inim

um c

ash

requ

irem

ents

. Fur

ther

, th

ere

can

be n

o as

sura

nce

that

the

Com

pany

will

be

able

to ra

ise

new

equ

ity,

or a

rran

ge n

ew b

orro

win

g fa

cilit

ies,

on

favo

urab

le te

rms

and

in a

mou

nts

nece

s-sa

ry to

con

duct

its

ongo

ing

and

futu

re

oper

atio

ns, s

houl

d th

is b

e re

quire

d.

In th

e ev

ent o

f ins

olve

ncy,

liqu

idat

ion

or s

imila

r eve

nt re

latin

g to

a s

ubsi

diar

y of

the

Com

pany

, all

cred

itors

of s

uch

subs

idia

ry w

ould

be

entit

led

to p

aym

ent

in fu

ll ou

t of t

he a

sset

s of

suc

h su

bsid

iary

be

fore

the

Com

pany

, as

a sh

areh

olde

r, w

ould

be

entit

led

to a

ny p

aym

ents

. De-

faul

ts b

y, o

r the

inso

lven

cy o

f, a

subs

idia

ry

of th

e C

ompa

ny c

ould

resu

lt in

the

oblig

a-tio

n of

the

Com

pany

to m

ake

paym

ents

NO

TES

TO

TH

E A

CC

OU

NTS

CO

NSO

LID

ATED

Inte

rest

rate

risk

(IR)

(Am

ount

s in

USD

1,0

00)

-1%

mov

emen

ts+1

% m

ovem

ents

Dec

embe

r 31

, 201

4C

arry

ing

amou

ntP

rofit

/(lo

ss)

Equi

tyP

rofit

/(lo

ss)

Equi

ty

Fina

ncia

l ass

ets

Cas

h an

d ca

sh e

quiv

alen

t 1

17,6

23

-1,1

76

-1,1

76

1,1

76

1,1

76

Impa

ct o

n fin

anci

al a

sset

s be

fore

tax

117

,623

-1

,176

-1

,176

1

,176

1

,176

Fina

ncia

l lia

bilit

ies

Borr

owin

gs 6

68,7

72

2,6

89

2,6

89

-2,3

20

-2,3

20

Impa

ct o

n fin

anci

al li

abili

ties

bef

ore

tax

668

,772

2,

689

2,68

9 -2

,320

-2,3

20

Tota

l inc

reas

e/de

crea

se b

efor

e ta

x 1

,513

1,5

13

-1,1

44 -1

,144

CO

NSO

LID

ATED

Inte

rest

rate

risk

(IR)

(Am

ount

s in

USD

1,0

00)

-1%

mov

emen

ts+1

% m

ovem

ents

Dec

embe

r 31

, 20

13C

arry

ing

amou

ntP

rofit

/(lo

ss)

Equi

tyP

rofit

/(lo

ss)

Equi

ty

Fina

ncia

l ass

ets

Cas

h an

d ca

sh e

quiv

alen

t 1

01,2

06

-1,0

12

-1,0

12

1,0

12

1,0

12

Impa

ct o

n fin

anci

al a

sset

s be

fore

tax

101

,206

-1

,012

-1

,012

1

,012

1

,012

Fina

ncia

l lia

bilit

ies

Borr

owin

gs 6

29,2

21

-3,8

86

-3,8

86

3,3

50

3,3

50

Impa

ct o

n fin

anci

al li

abili

ties

bef

ore

tax

629

,221

-3

,886

-3

,886

3

,350

3

,350

Tota

l inc

reas

e/de

crea

se b

efor

e ta

x -4

,898

-4

,898

4

,362

4

,362

Borr

owin

gs in

the

tabl

es a

bove

(bot

h fo

r 201

4 an

d 20

13) i

nclu

de o

nly

borr

owin

gs w

ith fl

oatin

g in

tere

st.

Abo

ve m

ovem

ents

als

o in

clud

e th

e ef

fect

of i

nter

est r

ate

swap

s en

tere

d in

to in

ord

er to

hed

ge th

e flo

atin

g in

tere

st ri

sk. M

arke

t-to

-mar

-ke

t eff

ects

in re

latio

n to

the

inte

rest

rate

sw

aps

impa

cts

the

profi

t and

loss

follo

win

g a

chan

ge o

f +/-

1%

in th

e in

tere

st ra

te.

For m

ore

deta

ils, s

ee N

ote

12

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

449

PAR

ENT

CO

MPA

NY

Inte

rest

rate

risk

(IR)

(Am

ount

s in

USD

1,0

00)

-1%

mov

emen

ts+1

% m

ovem

ents

Dec

embe

r 31

, 201

4C

arry

ing

amou

ntP

rofit

/(lo

ss)

Equi

tyP

rofit

/(lo

ss)

Equi

ty

Fina

ncia

l ass

ets

Cas

h an

d ca

sh e

quiv

alen

t 2

22,5

79

-2,2

26

-2,2

26

2,2

26

2,2

26

Impa

ct o

n fin

anci

al a

sset

s be

fore

tax

222

,579

-2

,226

-2

,226

2

,226

2

,226

Fina

ncia

l lia

bilit

ies

Bor

row

ings

174

,881

1

,749

1

,749

-1

,749

-1

,749

Impa

ct o

n fin

anci

al li

abili

ties

bef

ore

tax

174

,881

1

,749

1

,749

-1

,749

-1

,749

Tota

l inc

reas

e/de

crea

se b

efor

e ta

x -4

77

-477

4

77

477

PAR

ENT

CO

MPA

NY

Inte

rest

rate

risk

(IR)

(Am

ount

s in

USD

1,0

00)

-1%

mov

emen

ts+1

% m

ovem

ents

Dec

embe

r 31

, 201

3C

arry

ing

amou

ntP

rofit

/(lo

ss)

Equi

tyP

rofit

/(lo

ss)

Equi

ty

Fina

ncia

l ass

ets

Cas

h an

d ca

sh e

quiv

alen

t 1

32,0

68

-1,3

21

-1,3

21

1,3

21

1,3

21

Impa

ct o

n fin

anci

al a

sset

s be

fore

tax

132

,068

-1

,321

-1

,321

1

,321

1

,321

Fina

ncia

l lia

bilit

ies

Bor

row

ings

98,

624

986

9

86

-986

-9

86

Impa

ct o

n fin

anci

al li

abili

ties

bef

ore

tax

98,

624

986

9

86

-986

-9

86

Tota

l inc

reas

e/de

crea

se b

efor

e ta

x -3

35

-335

3

35

335

unde

r par

ent c

ompa

ny g

uara

ntee

s is

sued

in

favo

ur o

f suc

h su

bsid

iary

.

 The

Com

pany

is m

oreo

ver e

xpos

ed to

ch

ange

s in

inte

rest

rate

s, w

hich

may

aff

ect

the

Com

pany

’s fi

nanc

ial r

esul

ts. T

hese

ris

ks a

re m

ainl

y re

late

d to

the

Com

pany

’s

long

term

bor

row

ings

with

floa

ting

inte

rest

ra

tes.

Fur

ther

det

ails

of t

he C

ompa

ny’s

bo

rrow

ings

are

set

out

in N

ote

12.

 

Cas

h an

d ca

sh e

quiv

alen

ts a

re in

vest

ed

for s

hort

mat

urity

per

iods

, gen

eral

ly

from

1 d

ay to

3 m

onth

s, w

hich

miti

gate

s th

e po

tent

ial i

nter

est r

ate

risk.

The

follo

win

g se

nsiti

vity

tabl

es d

em-

onst

rate

the

impa

ct o

n th

e C

ompa

ny’s

pr

ofit b

efor

e ta

x an

d eq

uity

from

a

pote

ntia

l shi

ft in

inte

rest

rate

s, a

ll ot

her

varia

bles

hel

d co

nsta

nt.

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

450

NO

TES

TO

TH

E A

CC

OU

NTS

CO

NSO

LID

ATED

(Am

ount

s in

USD

1,0

00)

12/3

1/20

1412

/31/

2013

B

ook

valu

eFa

ir v

alue

Boo

k va

lue

Fair

val

ue

Fina

ncia

l ass

ets

CIR

R lo

an d

epos

it 2

8,45

3 3

0,11

4 4

1,71

8 4

2,58

0

Long

-ter

m re

ceiv

able

s 2

3,43

2 2

3,43

2 6

,639

6

,639

Acc

ount

s re

ceiv

able

s 7

4,75

3 7

4,75

3 5

3,19

8 5

3,19

8

Oth

er s

hort

-ter

m re

ceiv

able

s 6

3,87

7 6

3,87

7 3

2,73

7 3

2,73

7

Der

ivat

ive

finan

cial

inst

rum

ents

1,0

41

1,0

41

- -

Cas

h an

d ca

sh e

quiv

alen

ts 1

17,6

23

117

,623

1

01,2

06

101

,206

Tota

l 3

09,1

79

310

,840

2

35,4

98

236

,360

Fina

ncia

l lia

bilit

ies

Borr

owin

gs 1

,214

,360

1

,250

,847

9

61,5

00

970

,585

CIR

R lo

an 2

8,45

3 3

0,11

4 4

1,71

8 4

2,58

0

Oth

er n

on-c

urre

nt li

abili

ties

26,

565

26,

565

18,

826

18,

826

Acc

ount

s pa

yabl

e 1

0,78

1 1

0,78

1 1

6,25

3 1

6,25

3

Der

ivat

ive

finan

cial

inst

rum

ents

16,

732

16,

732

11,

085

11,

085

Oth

er c

urre

nt li

abili

ties

123

,072

1

23,0

72

44,

061

44,

061

Tota

l 1

,419

,963

1

,458

,111

1

,093

,443

1

,103

,390

The

Com

pany

’s fi

nanc

ial a

sset

s ar

e cl

assi

fied

into

the

cate

gorie

s: a

sset

s at

fa

ir va

lue

thro

ugh

the

profi

t and

loss

, lo

ans

and

rece

ivab

les.

Fin

anci

al li

abili

ties

are

clas

sifie

d as

liab

ilitie

s at

fair

valu

e th

roug

h th

e pr

ofit a

nd lo

ss, a

nd o

ther

fin

anci

al li

abili

ties.

For

furt

her i

nfor

ma-

tion

abou

t com

paris

on b

y ca

tego

ry, s

ee

Not

e 29

.

The

valu

e of

forw

ard

exch

ange

con

trac

ts

is s

et b

y co

mpa

ring

forw

ard

exch

ange

ra

te a

nd th

e ra

te o

n th

e re

port

ing

date

. The

Com

pany

’s fo

llow

ing

finan

cial

in

stru

men

ts a

re n

ot e

valu

ated

at f

air

valu

e: a

ccou

nts

rece

ivab

le, c

ash

and

cash

eq

uiva

lent

s, o

ther

sho

rt -t

erm

rece

ivab

les,

ac

coun

ts p

ayab

le a

nd lo

ng-t

erm

liab

ilitie

s w

ith fl

oatin

g in

tere

st.

Beca

use

of th

e sh

ort t

erm

to m

atur

ity, t

he

valu

e of

cas

h an

d ca

sh e

quiv

alen

ts e

nter

ed

into

the

Stat

emen

ts o

f Fin

anci

al P

ositi

on is

al

mos

t the

sam

e as

the

fair

valu

e of

thes

e.

Acc

ordi

ngly

, the

val

ues

of a

ccou

nts

rece

iva-

bles

and

acc

ount

s pa

yabl

es a

re a

lmos

t the

sam

e as

thei

r fai

r val

ues

sinc

e th

ey a

re

ente

red

on “n

orm

al” c

ondi

tions

.

The

fair

valu

e of

the

Com

pany

’s n

on-

curr

ent l

iabi

litie

s su

bjec

ted

to fi

xed

inte

rest

rate

s is

cal

cula

ted

by c

ompa

ring

the

Com

pany

’s te

rms

and

mar

ket t

erm

s fo

r lia

bilit

ies

with

the

sam

e te

rms

to

mat

urity

and

cre

dit r

isk.

The

follo

win

g ta

bles

dis

play

the

book

ed

valu

e an

d th

e fa

ir va

lue

of fi

nanc

ial a

s-se

ts a

nd fi

nanc

ial l

iabi

litie

s.

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

451

PAR

ENT

CO

MPA

NY

(Am

ount

s in

USD

1,0

00)

12/3

1/20

1412

/31/

2013

B

ook

valu

eFa

ir v

alue

Boo

k va

lue

Fair

val

ue

Fina

ncia

l ass

ets

CIR

R lo

an d

epos

it 2

8,45

3 3

0,11

4 4

1,71

8 4

2,58

0

Long

-ter

m lo

an 3

0,05

3 3

0,05

3 4

7,09

4 4

7,09

4

Acc

ount

s re

ceiv

able

- -

3,4

47

3,4

47

Oth

er s

hort

-ter

m re

ceiv

able

s 1

7,34

3 1

7,34

3 7

,340

7

,340

Cas

h an

d ca

sh e

quiv

alen

ts 2

22,5

79

222

,579

1

32,0

68

132

,068

Tota

l 2

98,4

29

300

,089

2

31,6

67

232

,529

Fina

ncia

l lia

bilit

ies

CIR

R lo

an 2

8,45

3 3

0,11

4 4

1,71

8 4

2,58

0

Acc

ount

s pa

yabl

e 5

3 5

3 3

97

397

Oth

er c

urre

nt li

abili

ties

67,

255

67,

255

8,1

70

8,1

70

Tota

l 9

5,76

1 9

7,42

2 5

0,28

5 5

1,14

7

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

452

2.5

Liqu

idit

y ri

sk

The

Com

pany

mon

itors

its

cash

flow

fr

om o

pera

tions

clo

sely

and

opt

imiz

es

the

wor

king

cap

ital l

evel

of t

he in

divi

dual

co

mpa

nies

and

the

Com

pany

as

a w

hole

. Th

e C

ompa

ny fu

nds

are

used

for i

nves

t-m

ent o

ppor

tuni

ties

in th

e bu

sine

ss, y

ard

inst

alm

ents

, sch

edul

ed re

paym

ents

and

re

paym

ents

of d

ebt a

nd to

gen

eral

wor

k-

ing

capi

tal p

urpo

ses.

The

Com

pany

see

ks

to fi

x th

e m

ajor

ity o

f its

flee

t on

long

-ter

m

cont

ract

s. V

esse

ls n

ot fi

xed

on lo

ng-t

erm

co

ntra

cts

are

expo

sed

to th

e vo

latil

ity in

th

e sp

ot m

arke

t.   Th

e C

ompa

ny w

ill fr

om ti

me

to ti

me

re-

quire

add

ition

al c

apita

l to

take

adv

anta

ge

of b

usin

ess

oppo

rtun

ities

. His

toric

ally

th

e C

ompa

ny h

as m

anag

ed to

obt

ain

nece

ssar

y fin

anci

ng in

a ti

mel

y m

anne

r on

acce

ptab

le te

rms

whe

n ne

eded

.   Th

e ta

bles

bel

ow s

umm

ariz

e th

e m

atur

ity

profi

le o

f the

Com

pany

’s fi

nanc

ial l

i-ab

ilitie

s, a

nd fu

ture

com

mitm

ents

to th

e ne

wbu

ildin

g pr

ogra

m.

The

tabl

es d

o no

t inc

lude

futu

re in

tere

st

paym

ents

.

NO

TES

TO

TH

E A

CC

OU

NTS

PAR

ENT

CO

MPA

NY

Dec

embe

r 31

, 201

4Le

ss th

an 3

m

onth

s3

to 1

2 m

onth

s1

to 5

ye

ars

Ther

eaft

erTo

tal

Inte

rest

-bea

ring

loan

s an

d bo

rrow

ings

- 5

,691

1

97,6

43

- 2

03,3

34

Trad

e an

d ot

her p

ayab

les

53

- -

- 5

3

Tota

l 5

3 5

,691

1

97,6

43

- 2

03,3

87

Dec

embe

r 31

, 201

3

Inte

rest

-bea

ring

loan

s an

d bo

rrow

ings

- 6

,953

1

26,4

36

6,9

53

140

,342

Trad

e an

d ot

her p

ayab

les

397

-

- -

397

Tota

l 3

97

6,9

53

126

,436

6

,953

1

40,7

39

CO

NSO

LID

ATED

Dec

embe

r 31

, 201

4Le

ss th

an 3

m

onth

s3

to 1

2 m

onth

s1

to 5

yea

rsTh

erea

fter

Tota

l

Inte

rest

-bea

ring

loan

s an

d bo

rrow

ings

23,

085

291

,508

7

75,0

86

166

,379

1

,256

,058

Trad

e an

d ot

her p

ayab

les

10,

781

- -

- 1

0,78

1

Tota

l 3

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91,5

08

775

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1

66,3

79

1,2

66,8

39

Dec

embe

r 31

, 201

3

Inte

rest

-bea

ring

loan

s an

d bo

rrow

ings

31,

414

76,

294

726

,630

1

76,2

47

1,0

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86

Trad

e an

d ot

her p

ayab

les

16,

253

- -

- 1

6,25

3

Tota

l 4

7,66

7 7

6,29

4 7

26,6

30

176

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1

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CO

NSO

LID

ATED

Dec

embe

r 31

, 201

4Le

ss th

an 3

m

onth

s3

to 1

2 m

onth

s1

to 5

ye

ars

Ther

eaft

erTo

tal

Yard

inst

alm

ents

fall

ing

due

39,

262

202

,800

3

08,4

08

- 5

50,4

70

Dec

embe

r 31

, 201

3

Yard

inst

alm

ents

fall

ing

due

71,

271

323

,225

3

06,4

73

- 7

00,9

69

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

453

2.6

Cap

ital

ris

k m

anag

emen

t

The

Com

pany

see

ks to

obt

ain

long

-ter

m

finan

cing

sup

port

ed b

y lo

ng-t

erm

con

-tr

acts

, in

orde

r to

redu

ce th

e fr

eque

ncy

and

risk

asso

ciat

ed w

ith th

e re

finan

cing

of

loan

s. L

ong-

term

cha

rter

par

ties

will

als

o en

able

a h

ighe

r deg

ree

of d

ebt-

finan

cing

.   Th

e w

holly

-ow

ned

Nor

weg

ian

com

pany

, Si

em O

ffsh

ore

Rede

ri A

S, h

as 7

ves

-se

ls u

nder

con

stru

ctio

n in

Pol

and

and

Ger

man

y at

yea

r end

, whi

ch in

clud

es fo

ur

dual

-fue

l PSV

s, o

ne C

LV a

nd tw

o W

IVs.

Fi

rst 1

0% to

20%

of t

he c

ontr

act p

rice

is

or w

ill b

e pa

id in

acc

orda

nce

with

agr

eed

paym

ent s

ched

ules

and

the

rem

ain-

ing

80%

to 9

0% w

ill b

e pa

id a

t del

iver

y.

The

Com

pany

has

sec

ured

long

-ter

m

empl

oym

ent f

or o

ne P

SV a

nd fo

r the

two

WIV

s un

der c

onst

ruct

ion.

The

CLV

will

be

utili

sed

by th

e C

ompa

ny’s

who

lly-o

wne

d su

bsid

iary

, Sie

m O

ffsh

ore

Con

trac

tors

, for

pr

ojec

t wor

k w

ithin

the

subm

arin

e po

wer

ca

ble

inst

alla

tion,

repa

ir an

d m

aint

enan

ce

segm

ent.

The

Com

pany

is in

dis

cuss

ions

fo

r lon

g-te

rm c

ontr

acts

for t

he th

ree

dual

fu

elle

d PS

Vs.

The

who

lly-o

wne

d B

razi

lian

subs

idia

ry,

Siem

Off

shor

e do

Bra

sil S

A, h

as o

ne

OSR

V un

der c

onst

ruct

ion

in B

razi

l at y

ear-

end.

The

OSR

V is

sch

edul

ed fo

r del

iver

y in

201

5. T

he v

esse

l sha

ll co

mm

ence

an

eigh

t-ye

ar fi

rm c

ontr

act f

or P

etro

bras

w

ith o

ptio

ns fo

r add

ition

al e

ight

-yea

r pe

riods

.

The

com

pany

has

sec

ured

deb

t-fin

anci

ng

for a

ll of

the

eigh

t who

lly o

wne

d ve

ssel

s un

der c

onst

ruct

ion

at y

ear-

end.

2.7

Ris

ks r

elat

ed to

loan

agr

eem

ents

, re

stri

ctio

ns o

n di

vide

nds

and

dist

ribu

-ti

on

The

Com

pany

’s lo

an a

gree

men

ts in

clud

e te

rms,

con

ditio

ns a

nd c

oven

ants

whi

ch

impo

se re

stric

tions

on

the

oper

atio

ns o

f th

e C

ompa

ny.

Thes

e re

stric

tions

may

neg

ativ

ely

affe

ct

the

Com

pany

’s o

pera

tions

incl

udin

g, b

ut

not l

imite

d to

, the

Com

pany

’s a

bilit

y to

m

eet t

he fi

erce

com

petit

ion

in th

e m

arke

t in

whi

ch it

ope

rate

s.

   2.8

Ris

ks r

elat

ed to

pos

sibl

e ta

x li-

abili

ties

The

Com

pany

see

ks to

opt

imiz

e its

tax

stru

ctur

e to

min

imiz

e w

ithho

ldin

g ta

xes

whe

n op

erat

ing

vess

els

abro

ad, a

void

ing

doub

le ta

xatio

n, a

nd m

inim

izin

g co

rpor

ate

tax

paid

by

mak

ing

optim

al u

se o

f the

ship

ping

taxa

tion

rule

s th

at a

pply

. It i

s,

how

ever

, a c

halle

ngin

g ta

sk to

opt

imiz

e ta

xatio

n, a

nd th

ere

is a

lway

s a

risk

that

th

e C

ompa

ny m

ay e

nd u

p pa

ying

mor

e ta

xes

than

the

theo

retic

al m

inim

um,

whi

ch m

ay in

turn

aff

ect t

he fi

nanc

ial

resu

lts n

egat

ivel

y.

2.9

Long

term

con

trac

ts

The

Com

pany

use

s th

e pe

rcen

tage

-of-

com

plet

ion

met

hod

in a

ccou

ntin

g fo

r its

fix

ed p

rice

cons

truc

tion

cont

ract

s re

late

d to

the

segm

ent S

ubm

arin

e Po

wer

Cab

le

Inst

alla

tion.

Sig

nific

ant e

stim

ates

are

es

timat

e of

the

perc

ent c

ompl

ete

and

the

over

all m

argi

n.

The

follo

win

g se

nsiti

vity

tabl

e de

mon

-st

rate

s th

e im

pact

on

the

Com

pany

’s

profi

t and

equ

ity b

efor

e ta

x fr

om p

oten

tial

chan

ges

to th

e pe

rcen

tage

of c

ompl

e-tio

n an

d m

argi

n, a

ll ot

her v

aria

bles

hel

d co

nsta

nt.

Con

solid

ated

(Am

ount

s in

USD

1,0

00)

Long

term

con

trac

ts

+1%

mov

emen

ts-1

% m

ovem

ents

Dec

embe

r 31

, 201

4Es

tim

ated

to

tal

reve

nue

Pro

fit/(

loss

)Eq

uity

Pro

fit/(

loss

)Eq

uity

Prog

ress

repo

rtin

g, e

ffec

t fro

m m

ovem

ent

150

,166

1,5

02

1,5

02

-1,5

02

-1,5

02

Mar

gin

estim

ate,

eff

ect f

rom

mov

emen

t -

1,5

02

1,5

02

-1,5

02

-1,5

02

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

454

No

te 3

- C

riti

ca

l A

cc

ou

nti

ng

Es

tim

ate

s a

nd

Ju

dg

em

en

ts

NO

TES

TO

TH

E A

CC

OU

NTS

IFRS

requ

ires

man

agem

ent t

o m

ake

estim

ates

and

judg

men

ts th

at a

ffec

t the

re

port

ed a

mou

nts

of a

sset

s an

d lia

bilit

ies,

as

wel

l as

inco

me

and

expe

nses

in th

e fin

anci

al s

tate

men

ts. T

he fi

nal r

epor

ted

outc

omes

may

dev

iate

from

the

orig

inal

es

timat

es.

Cer

tain

am

ount

s in

clud

ed in

, or t

hat h

ave

an e

ffec

t on,

the

acco

unts

and

the

as-

soci

ated

not

es re

quire

est

imat

ion,

whi

ch

in tu

rn e

ntai

ls th

at th

e C

ompa

ny m

ust

mak

e as

sess

men

ts re

late

d to

val

ues

and

circ

umst

ance

s th

at a

re n

ot k

now

n at

the

poin

t in

time

whe

n th

e ac

coun

ts a

re p

re-

pare

d. A

sig

nific

ant a

ccou

ntin

g es

timat

e is

an

est

imat

e th

at is

impo

rtan

t to

prov

ide

a co

mpl

ete

pict

ure

of th

e C

ompa

ny’s

fina

n-ci

al p

ositi

on, w

hich

at t

he s

ame

time

is th

e re

sult

of d

ifficu

lt, s

ubje

ctiv

e an

d co

mpl

ex

asse

ssm

ents

per

form

ed b

y th

e m

anag

e-m

ent.

Such

est

imat

es a

re o

ften

unc

erta

in

by n

atur

e. M

anag

emen

t eva

luat

es s

uch

estim

ates

con

tinuo

usly

bas

ed o

n hi

stor

i-ca

l dat

a an

d ex

perie

nce,

con

sulta

tion

with

ex

pert

s, tr

end

anal

ysis

and

oth

er fa

c-to

rs th

at a

re re

leva

nt fo

r the

indi

vidu

al

estim

ate,

incl

udin

g ex

pect

atio

ns o

f fut

ure

even

ts th

at a

re b

elie

ved

to b

e re

ason

able

un

der t

he c

ircum

stan

ces.

Estim

ates

and

ass

umpt

ions

that

hav

e a

sign

ifica

nt ri

sk o

f cau

sing

a m

ater

ial

adju

stm

ent t

o th

e ca

rryi

ng a

mou

nts

of a

s-se

ts a

nd li

abili

ties

with

in th

e ne

xt fi

nanc

ial

year

, as

wel

l as

judg

men

ts m

ade

by m

an-

agem

ent,

in th

e pr

oces

s of

app

lyin

g th

e C

ompa

ny’s

acc

ount

ing

polic

ies,

that

hav

e th

e m

ost s

igni

fican

t eff

ect o

n th

e am

ount

s re

cogn

ized

in th

e fin

anci

al s

tate

men

ts, a

re

disc

usse

d be

low

.

Rev

enue

rec

ogni

tion

– p

erce

ntag

e-of

-co

mpl

etio

n of

f-sh

ore

cabl

e co

ntra

cts

The

Com

pany

use

s th

e pe

rcen

tage

-of-

com

plet

ion

met

hod

in a

ccou

ntin

g fo

r its

fix

ed p

rice

cons

truc

tion

cont

ract

s re

late

d

to th

e se

gmen

t Sub

mar

ine

Pow

er C

able

In

stal

latio

n. O

ne s

igni

fican

t est

imat

e is

an

estim

ate

of th

e pe

rcen

t com

plet

e. M

an-

agem

ent e

stim

ates

com

plet

ion

base

d on

an

ass

essm

ent o

f cer

tain

tech

nica

l crit

eria

in

the

proj

ect e

xecu

tion

plan

that

hav

e to

be

met

in o

rder

to a

chie

ve a

cer

tain

leve

l of

per

cent

age

of c

ompl

etio

n, a

s op

pose

d to

usi

ng c

osts

incu

rred

as

a m

easu

re o

f co

mpl

etio

n.

The

prim

ary

risk

in th

e ex

ecut

ion

of

proj

ects

rela

tes

to th

e of

fsho

re in

stal

la-

tion

phas

e. H

ence

, pro

fit m

argi

n is

not

re

cord

ed u

ntil

the

prog

ress

of t

he p

roje

ct

has

reac

hed

a st

age

of m

inim

um 2

5 pe

r-ce

nt te

chni

cally

com

plet

ion.

The

bel

ow

tabl

e pr

esen

ts a

n ex

ampl

e of

the

vario

us

stag

es d

urin

g a

proj

ect l

ife.

As

pres

ente

d in

the

belo

w ta

ble,

the

proj

ect s

hall

need

to p

rogr

ess

into

the

cabl

e-la

ying

pha

se b

efor

e th

e m

inim

um

25 p

erce

ntag

e of

tech

nica

l com

plet

ion

is

reac

hed.

Prio

r to

reac

hing

a p

rogr

ess

of

min

imum

25

perc

ent t

echn

ical

com

ple-

tion,

and

sub

ject

to a

fore

cast

ed p

ositi

ve

proj

ect m

argi

n, p

roje

ct re

venu

e ar

e ac

-cr

ued

to m

atch

the

actu

al c

osts

incu

rred

.

Perio

dica

l pro

ject

mar

gin

is o

nly

re-

cord

ed w

hen

the

over

all p

roje

ct m

argi

n is

fore

cast

ed to

be

posi

tive,

and

whe

n th

e ex

ecut

ion

of th

e pr

ojec

t has

reac

hed

such

le

vel o

f tec

hnic

al c

ompl

etio

n be

yond

25

perc

ent t

hat t

he m

anag

emen

t is

com

fort

-ab

le to

ass

ess

the

finan

cial

out

com

e of

th

e pr

ojec

t.

The

stag

es o

f com

plet

ion

for a

pro

ject

are

as

follo

ws:

The

sens

itivi

ty o

n th

e re

cord

ed re

venu

e on

lo

ng-t

erm

con

stru

ctio

n co

ntra

cts

wou

ld

be +

/- U

SD 1

4.9

mill

ion

in 2

014,

if m

an-

agem

ent h

ad e

stim

ated

a 1

0%

bett

er/w

orse

pro

gres

s on

the

cont

ract

s pe

r yea

r-en

d 20

14.

Vess

els

Econ

omic

use

ful l

ifeTh

e le

vel o

f dep

reci

atio

n ex

pens

e is

de

pend

ent,

in p

art,

upon

the

estim

ated

us

eful

life

of t

he v

esse

l. Th

e us

eful

life

is

estim

ated

bas

ed o

n hi

stor

ical

dat

a, e

xper

i-en

ce re

late

d to

the

vess

el a

nd s

imila

r ve

ssel

s. T

he e

stim

ate

is re

view

ed a

nd u

p-da

ted

annu

ally

. A c

hang

e in

the

estim

ate

will

aff

ect d

epre

ciat

ion

pros

pect

ivel

y in

cu

rren

t and

futu

re re

port

ing

perio

ds.

Resi

dual

val

ue

The

leve

l of d

epre

ciat

ion

expe

nse

is

depe

nden

t, in

par

t, up

on th

e es

timat

ed

resi

dual

val

ue. M

anag

emen

t est

imat

es

a ve

ssel

’s re

sidu

al v

alue

usi

ng th

eir

know

ledg

e of

the

scra

p va

lue

of v

esse

ls.

The

scra

p va

lue

estim

ates

are

dep

end-

ent o

n th

e pr

ice

of s

teel

. The

scr

ap v

alue

es

timat

e is

bas

ed o

n th

e ex

pect

ed v

alue

at

the

end

of th

e us

eful

life

of t

he v

esse

l. M

anag

emen

t per

form

s an

ann

ual r

evie

w

Pro

ject

Pro

gres

s -

XIte

mP

roje

ct

Pro

gres

s -

wei

ghti

ng

Proj

ect M

anag

emen

t &

XEng

inee

ring

2%

Pre-

Inst

alla

tion

Wor

ks20

%

Cab

le L

ay26

%

Cab

le T

erm

inat

ion

16%

Col

d C

omm

issi

onin

g22

%

Post

Inst

alla

tion

Wor

ks14

%

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

455

Phot

ogra

pher

: Jar

le N

yvol

l, Si

em O

pal

and

asse

ssm

ent o

f the

ves

sel s

crap

val

ue

estim

ates

. Res

idua

l val

ue is

sub

ject

to a

n an

nual

reas

sess

men

t.

Impa

irmen

t of v

esse

ls

On

the

repo

rtin

g da

te, t

he C

ompa

ny h

as

asse

ssed

whe

ther

ther

e ar

e an

y in

dica

-tio

ns th

at it

may

be

nece

ssar

y to

writ

e do

wn

a ve

ssel

. Ind

icat

ors

incl

ude

exte

rnal

br

oker

est

imat

es, s

igni

fican

t cha

nges

in

char

ter h

ire c

ontr

acts

, day

rate

s, o

pera

t-in

g co

sts

or a

dver

se m

arke

t con

ditio

ns.

Whe

n su

ch in

dica

tions

exi

st, a

n im

pair-

men

t tes

t is

perf

orm

ed in

acc

orda

nce

with

C

ompa

ny p

olic

y.

The

reco

vera

ble

valu

e of

the

vess

el is

es

timat

ed, a

nd if

the

reco

vera

ble

amou

nt

is le

ss th

an th

e cu

rren

t car

ryin

g va

lue,

an

impa

irmen

t los

s is

reco

gniz

ed in

the

amou

nt o

f the

diff

eren

ce b

etw

een

carr

y-in

g va

lue

and

net r

ealiz

able

val

ue. T

he re

-co

vera

ble

amou

nt fo

r ves

sels

is e

stim

ated

by

mea

ns o

f bro

ker e

stim

ates

and

val

ue

in u

se c

alcu

latio

ns b

ased

on

proj

ecte

d di

scou

nted

cas

h flo

ws

for t

he re

mai

ning

ch

arte

r hire

per

iod

or o

ver t

he n

ext f

our

year

s if

no c

hart

er c

ontr

act e

xist

s, to

geth

-er

with

an

assu

mpt

ion

of a

term

inal

val

ue

of th

e ve

ssel

. If a

ves

sel i

s fix

ed o

n a

long

co

ntra

ct, t

he C

ompa

ny a

lso

estim

ates

an

exce

ss v

alue

of t

he c

hart

er p

arty

and

this

va

lue

is d

isco

unte

d ba

sed

on a

n es

timat

ed

disc

ount

rate

.

Impa

irm

ent o

f goo

dwill

and

in

tang

ible

ass

ets

The

Com

pany

test

s w

heth

er g

oodw

ill

and

inta

ngib

le a

sset

s ha

ve s

uffe

red

any

impa

irmen

t in

acco

rdan

ce w

ith th

e ac

-co

untin

g po

licy

stat

ed in

not

e 1.

11. T

he

reco

vera

ble

amou

nts

of c

ash-

gene

ratin

g un

it ha

ve b

een

dete

rmin

ed b

ased

on

valu

e-in

-use

cal

cula

tion.

Thi

s ca

lcul

atio

n re

quire

the

use

of e

stim

ates

(Not

e 5)

.

Hed

ge a

ccou

ntin

g

The

Com

pany

use

s he

dge

acco

untin

g fo

r th

e Br

azili

an s

ubsi

diar

y, w

hich

has

a fu

nc-

tiona

l cur

renc

y of

BRL

. The

des

igna

ted

cash

-flow

hed

ge is

a fo

reig

n cu

rren

cy e

x-po

sure

of f

utur

e U

SD c

hart

er h

ire re

venu

e

as th

e he

dged

item

and

USD

long

-ter

m

debt

the

desi

gnat

ed h

edgi

ng in

stru

men

t. D

esig

natio

n of

the

hedg

ed it

em re

quire

s si

gnifi

cant

judg

men

t in

defin

ing

the

futu

re c

hart

er c

ontr

act r

even

ue a

s hi

ghly

pr

obab

le. C

ontr

acts

hav

e be

en w

ritte

n fo

r ves

sels

stil

l und

er c

onst

ruct

ion,

and

so

met

imes

the

deliv

ery

date

of t

he v

esse

l is

del

ayed

. Con

trac

ts h

ave

been

agr

eed

for a

spe

cific

tim

e pe

riod

(e.g

. fou

r to

five

year

s) a

nd h

ave

a re

new

al o

ptio

n.

Hig

hly

prob

able

futu

re c

hart

er re

venu

e ha

s be

en d

eter

min

ed b

y m

anag

emen

t to

incl

ude

the

rene

wal

opt

ion

perio

d, b

ased

on

the

freq

uenc

y of

sim

ilar p

ast t

rans

ac-

tions

and

for t

he c

ontr

acts

to b

e in

clud

ed

in th

e de

sign

ated

hed

ge fr

om th

e da

te o

f si

gnin

g, e

ven

thou

gh th

e ve

ssel

s ar

e un

der

cons

truc

tion.

Sie

m O

ffsh

ore

has

defin

ed

an e

ffec

tive

hedg

e to

be

whe

n th

e ca

sh

flow

s of

the

high

ly p

roba

ble

futu

re tr

ans-

actio

ns a

re h

ighe

r tha

n th

e ca

sh fl

ows

of th

e he

dgin

g in

stru

men

t for

the

sam

e pe

riod.

Eff

ectiv

enes

s te

stin

g is

per

form

ed

usin

g th

e D

olla

r Off

set M

etho

d. S

ee n

ote

12 fo

r add

ition

al in

form

atio

n.

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

456

No

te 4

- S

eg

me

nt

Re

po

rtin

g

For r

epor

ting

purp

oses

, the

Com

NO

TES

TO

TH

E A

CC

OU

NTS

(Am

ount

s in

USD

1,0

00)

CO

NSO

LID

ATED

Ope

rati

ng r

even

ue b

y bu

sine

ss a

rea

2014

2013

PSV

(1)

104,

423

94,

630

OSC

V 10

4,84

4 4

1,40

7

AH

TS V

esse

ls (1

)14

2,48

0 1

31,8

94

Vess

els

in B

razi

l, Sm

alle

r bui

lt19

,351

24,

103

Com

bat M

anag

emen

t Sys

tem

s6,

075

7,9

87

Subm

arin

e Po

wer

Cab

le In

stal

latio

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Scie

ntifi

c C

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ling

25,9

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6,89

8

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er14

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84

Inte

rcom

pany

elim

inat

ion

(1)

-28,

052

-

Tota

l49

1,31

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63,9

55

Dep

reci

atio

n an

d am

orti

sati

on b

y bu

sine

ss a

rea

PSV

23,4

34 2

1,28

8

OSC

V23

,121

7,0

72

AH

TS V

esse

ls38

,230

38,

883

Vess

els

in B

razi

l, Sm

alle

r bui

lt (2

)31

,865

2,9

89

Subm

arin

e Po

wer

Cab

le In

stal

latio

n1,

530

440

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ntifi

c C

ore-

Dril

ling

3,49

0 3

,264

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er4,

212

1,9

04

Tota

l 1

25,8

83

75,

841

The

Com

pany

iden

tifies

its

repo

rtab

le s

eg-

men

ts a

nd d

iscl

oses

seg

men

t inf

orm

atio

n un

der I

FRS

8 O

pera

ting

Segm

ents

whi

ch

requ

ires

Siem

Off

shor

e In

c to

iden

tify

its

segm

ents

acc

ordi

ng to

the

orga

niza

tion

and

repo

rtin

g st

ruct

ure

used

by

man

agem

ent.

Ope

ratin

g se

gmen

ts a

re c

ompo

nent

s of

a

busi

ness

that

are

eva

luat

ed re

gula

rly

by

the

chie

f ope

ratin

g de

cisi

on m

aker

for t

he

purp

ose

of a

sses

sing

per

form

ance

and

al-

loca

ting

reso

urce

s. T

he C

ompa

ny’s

chi

ef o

p-er

atin

g de

cisi

on m

aker

is th

e m

anag

emen

t bo

ard,

com

pris

ed o

f the

CEO

, CFO

, CO

O

an C

CO

. Gen

eral

ly, fi

nanc

ial i

nfor

mat

ion

is

requ

ired

to b

e di

sclo

sed

on th

e sa

me

basi

s th

at is

use

d by

the

chie

f ope

ratin

g de

cisi

on

mak

er. T

he C

ompa

ny’s

ope

ratin

g se

gmen

ts

repr

esen

t sep

arat

ely

man

aged

bus

ines

s ar

eas

with

uni

que

prod

ucts

ser

ving

diff

eren

t m

arke

ts. T

he re

port

able

seg

men

ts a

re th

e se

ven

busi

ness

are

as P

SV, O

SCV,

AH

TS V

es-

sels

, Oth

er V

esse

ls in

Bra

zil,

Com

bat M

an-

agem

ent S

yste

ms,

Sub

mar

ine

Pow

er C

able

In

stal

latio

n, a

nd S

cien

tific

Cor

e-D

rillin

g.

The

PSV

segm

ent i

nclu

des

12 P

latf

orm

Su

pply

Ves

sels

. The

OSC

V se

gmen

t inc

lude

s fo

ur O

ffsh

ore

Subs

ea C

onst

ruct

ion

Vess

els

and

two

Mul

tipur

pose

fiel

d an

d RO

V Su

ppor

t Ve

ssel

s. T

he A

THS

segm

ent i

nclu

des

ten

Anc

hor H

andl

ing

and

Tug

Supp

ly V

esse

ls.

The

Segm

ent o

f Oth

er V

esse

ls in

Bra

zil

cons

ists

of o

ne O

ilspi

ll Re

cove

ry V

esse

l an

d ei

ght s

mal

ler P

latf

orm

Sup

ply

Vess

els.

C

omba

t Man

agem

ent S

yste

ms

is th

e ac

tivity

of

sup

plyi

ng s

oftw

are

for a

man

agem

ent

syst

em to

the

Braz

ilian

Nav

y. S

ubm

arin

e Po

wer

Cab

le In

stal

latio

n co

mpr

ises

the

activ

ities

of i

nsta

llatio

n a

nd m

aint

enan

ce o

f su

bsea

pow

er c

able

s fo

r off

shor

e w

ind-

farm

s. S

cien

tific

Cor

e-D

rillin

g is

com

pris

ed

of th

e ac

tivity

of a

sci

entifi

c dr

illsh

ip w

hich

pe

rfor

ms

core

drill

ing.

The

seg

men

t Oth

er

is c

ompr

ised

of t

he o

wne

rshi

p of

Sie

m W

IS

that

dev

elop

s ap

plic

atio

ns fo

r man

aged

pr

essu

re d

rillin

g (“

MPD

”), a

nd c

erta

in o

ther

ac

tiviti

es.

Siem

Off

shor

e In

c us

es th

ree

mea

sure

s of

se

gmen

t res

ults

, ope

ratin

g re

venu

e, o

pera

t-in

g m

argi

n an

d ne

t pro

fit.

Inte

rseg

men

t sal

es a

nd tr

ansf

ers

refle

ct

arm

’s le

ngth

pric

es a

s if

sold

or t

rans

ferr

ed

to th

ird p

artie

s at

the

time

of in

cept

ion

of th

e in

tern

al c

ontr

act,

whi

ch m

ay c

over

se

vera

l yea

rs. T

rans

fers

of b

usin

esse

s or

fix

ed a

sset

s w

ithin

or b

etw

een

the

segm

ents

ar

e re

port

ed w

ithou

t rec

ogni

zing

gai

ns o

r lo

sses

. Res

ults

of a

ctiv

ities

not

con

side

red

part

of S

iem

Off

shor

e In

c.’s

mai

n op

erat

ions

as

wel

l as

unal

loca

ted

reve

nues

, exp

ense

s,

liabi

litie

s an

d as

sets

are

repo

rted

toge

ther

w

ith O

ther

und

er th

e ca

ptio

n O

ther

and

el

imin

atio

ns.

The

follo

win

g ta

bles

incl

ude

info

rmat

ion

abou

t the

Com

pany

’s o

pera

ting

segm

ents

.

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

457

mpa

ny is

org

anis

ed in

to s

even

seg

men

ts, w

hich

are

repr

esen

tativ

e of

its

prin

cipa

l act

iviti

es.

(1) P

SV a

nd A

HTS

Ves

sels

seg

men

ts in

clud

e I/C

Rev

enue

s fr

om c

ontr

actin

g w

ork

for S

ubm

arin

e Po

wer

Cab

le In

stal

latio

n se

gmen

ts.

(2) I

nclu

ding

impa

irmen

t of v

esse

ls a

t USD

29

mill

ions

.

Cap

ital

exp

endi

ture

s by

bus

ines

s ar

ea20

1420

13

PSV

(1)

85,

269

41,

252

OSC

V (1

)28

2,78

6 2

04,7

86

AH

TS V

esse

ls

11,

856

3,9

21

Vess

els

in B

razi

l, Sm

alle

r bui

lt (1

) 7

9,94

4 6

5,23

7

Com

bat M

anag

emen

t Sys

tem

s -

-

Subm

arin

e Po

wer

Cab

le In

stal

latio

n58

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4,1

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ntifi

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ore

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ling

271

2

,814

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er6,

740

7,2

89

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l 5

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74

329

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(1) I

nclu

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new

build

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prog

ram

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tota

l:33

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1,52

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Boo

k va

lue

by b

usin

ess

area

2014

2013

PSV

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385,

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V (1

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TS V

esse

ls

664,

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664,

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lt (1

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Com

bat M

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ain

of s

ale

of in

tere

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n/(lo

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n cu

rren

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xcha

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forw

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cont

ract

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d ge

nera

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trat

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Ope

rati

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bat M

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ntifi

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l 8

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1

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

458

No

te 5

- V

es

se

ls,

Eq

uip

me

nt,

Pro

jec

t C

os

t a

nd

In

tan

gib

le A

ss

ets

NO

TES

TO

TH

E A

CC

OU

NTS

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Vess

els

unde

r co

nstr

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onVe

ssel

s an

d eq

uipm

ent

Dry

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ckin

g

- -

- -

- -

- -

- -

- -

-

- -

-

- -

- -

- -

- -

- -

-

- -

-

- -

-

- -

-

- -

- -

- -

- -

- -

- -

-

- -

-

- -

- -

- -

- -

- -

-

- -

-

- -

-

Phot

ogra

pher

: Aril

d Li

llebø

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

459

The

bala

nce

of c

apita

lized

pro

ject

cos

ts re

late

to s

peci

fic c

ontr

acts

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cos

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mor

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term

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he s

peci

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er c

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ount

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Land

and

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ssel

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cons

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equi

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17,

340

5,0

98

Inte

rcom

pany

rece

ivab

les

- -

- 2,

133

Oth

er s

hort

-ter

m re

ceiv

able

s (2

) 1

3,03

9 2

,519

17,

343

7,34

0To

tal o

ther

sho

rt-t

erm

rec

eiva

bles

63,

877

32,

737

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OFF

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RE IN

C., A

NN

UA

L RE

PORT

201

471

No

te 1

1 -

Ta

xe

s

CO

NSO

LID

ATED

(Am

ount

s in

USD

1,0

00)

2014

2013

Tem

pora

ry d

iffer

ence

s

Def

erre

d ta

xTi

me

fram

e

Part

icip

atio

n in

lim

ited

liabi

lity

com

pani

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ng -

-

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ratin

g as

sets

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921

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ax a

ccou

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ion

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hort

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m d

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ence

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- -

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er lo

ng-t

erm

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eren

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Long

2,3

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Net

tem

pora

ry d

iffer

ence

s as

of D

ecem

ber

31 -3

9,38

1 -4

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7

Tax

loss

car

ried

forw

ard

-30,

265

-21,

851

Bas

is fo

r de

ferr

ed ta

x (t

ax a

sset

) -6

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erre

d ta

x (t

ax a

sset

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way

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58

Def

erre

d ta

x (t

ax a

sset

) Hol

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85

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94

Def

erre

d ta

x (t

ax a

sset

) Ger

man

y -6

,203

-6

,019

Def

erre

d ta

x (t

ax a

sset

) -1

2,59

1 -1

1,77

0

Def

erre

d ta

x as

set r

ecog

nize

d in

sta

tem

ent

of

--fin

anci

al p

osit

ion

as o

f Dec

embe

r 31

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2,59

1

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770

Ther

e ar

e no

tax

asse

ts in

the

pare

nt c

ompa

ny.

Def

erre

d ta

x as

sets

are

reco

gniz

ed a

s in

tang

ible

ass

ets

as it

is p

roba

ble

thro

ugh

pros

pect

ive

earn

ings

that

it c

an b

e ut

ilize

d.

The

Com

pany

is s

ubje

ct to

taxe

s in

sev

eral

juris

dict

ions

, whe

re s

igni

fican

t jud

gmen

t is

requ

ired

in c

alcu

latin

g th

e ta

x pr

ovis

ion

for t

he C

om-

pany

. The

re a

re s

ever

al tr

ansa

ctio

ns fo

r whi

ch th

e ul

timat

e ta

x co

st is

unc

erta

in a

nd fo

r whi

ch th

e Co

mpa

ny m

akes

pro

visi

ons

base

d on

an

as-

sess

men

t of i

nter

nal e

stim

ates

, tax

trea

ties

and

tax

regu

latio

ns in

cou

ntrie

s of

ope

ratio

n, a

nd a

ppro

pria

te e

xter

nal a

dvic

e. W

here

the

final

tax

outc

ome

of th

ese

mat

ters

is d

iffer

ent f

rom

the

amou

nts

that

wer

e in

itial

ly re

cord

ed, s

uch

diffe

renc

e w

ill im

pact

the

tax

char

ge in

the

perio

d in

w

hich

the

outc

ome

is d

eter

min

ed.

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

472

NO

TES

TO

TH

E A

CC

OU

NTS

Ove

rpro

visi

on in

pre

viou

s ye

ar re

late

s to

act

ivity

on

Gre

enla

nd fo

r the

sub

sidi

ary

Ove

rsea

s D

rillin

g Li

mite

d.A

ctua

l tax

liab

ility

was

dec

reas

ed c

ompa

red

to b

udge

t tak

ing

into

con

side

ratio

n lo

cal t

ax le

gisl

atio

n.

2014

2013

Tonn

age

tax

regi

me

in s

ubsi

diar

ies,

as

of J

anua

ry 1

39

964

Tax

char

ge

2

39

Paid

-15

-949

Effe

ct o

f exc

hang

e ra

te d

iffer

ence

s -4

-1

5

Tota

l ton

nage

tax

in s

ubsi

diar

ies,

as

of D

ecem

ber

31 2

2 3

9

Tota

l tax

con

solid

ated

12

/31/

2014

(Am

ount

s in

USD

1,0

00)

Tonn

age

tax

regi

me

Oth

er ta

x re

gim

eTo

tal t

ax

liabi

litie

s

Long

term

tax

liabi

litie

s fa

lling

due

aft

er 1

yea

r -

6,3

68

6,3

68

Paya

ble

taxe

s fa

lling

due

with

in 1

yea

r 2

2 4

,983

5

,005

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liabi

litie

s 2

2 1

1,35

1 1

1,37

3

Tax

expe

nse

2014

(Am

ount

s in

USD

1,0

00)

Tonn

age

tax

regi

me

Oth

er ta

x re

gim

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tal t

ax

expe

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Taxe

s pa

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3

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Cha

nge

in d

efer

red

tax/

defe

rred

tax

asse

t -

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79

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Ove

r/un

der p

rovi

sion

s in

pre

viou

s ye

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l 2

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Tota

l tax

con

solid

ated

12

/31/

2014

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ount

s in

USD

1,0

00)

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tax

regi

me

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tal t

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Long

term

tax

liabi

litie

s fa

lling

due

aft

er 1

yea

r -

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ble

taxe

s fa

lling

due

with

in 1

yea

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9 3

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3

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liabi

litie

s 3

9 1

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9

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nse

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ount

s in

USD

1,0

00)

Tonn

age

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regi

me

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er ta

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tal t

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Taxe

s pa

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e 3

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,364

3

,403

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in d

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red

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defe

rred

tax

asse

t -

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50

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der p

rovi

sion

s in

pre

viou

s ye

ar -

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37

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37

Tota

l 3

9 -3

,624

-3

,585

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

473

Tota

l tax

par

ent c

ompa

ny

(Am

ount

s in

USD

1,0

00)

12/3

1/20

1412

/31/

2013

Long

term

tax

liabi

litie

s fa

lling

due

aft

er 1

yea

r 4

,885

4

,885

Paya

ble

taxe

s fa

lling

due

with

in 1

yea

r -1

46

-673

Tax

liabi

litie

s 4

,738

4

,212

2014

2013

Taxe

s pa

yabl

e -

261

Tota

l -

261

Phot

ogra

pher

: Ant

onio

Mla

dino

v,

Siem

N-S

ea

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

474

(1) U

nder

the

USD

62.

8 m

illio

n fa

cilit

y, p

art o

f the

loan

(USD

30.

2 m

illio

n) is

fixe

d fo

r a 7

-yea

r ter

m to

ave

rage

inte

rest

rate

of 7

.58%

. (2

) Und

er th

e N

OK

365

.1m

illon

faci

lity,

par

t of t

he lo

an (e

quiv

alen

t to

USD

25.

0 m

illio

n) is

fixe

d fo

r an

appr

oxim

atel

y 9-

year

term

to

ave

rage

inte

rest

rate

of 5

.36%

.(3

) Und

er th

e N

OK

222

mill

ion

faci

lity

a m

ajor

ity o

f the

loan

is fi

xed

for a

5-y

ear t

erm

to a

n av

erag

e in

tere

st o

f 4.1

8%.

(4) T

he U

SD 2

34.1

mill

ion

faci

lity

has

a ba

lloon

repa

ymen

t in

2015

. The

term

for t

his

debt

sha

ll ei

ther

be

auto

mat

ical

ly e

xten

ded

or

rene

gotia

ted

subj

ect t

o ce

rtai

n re

quire

men

ts re

gard

ing

vess

el e

mpl

oym

ent.

NO

TES

TO

TH

E A

CC

OU

NTS

No

te 1

2 -

Bo

rro

win

gs

2014

PAR

ENT

CO

MPA

NY

(Am

ount

s in

USD

1,0

00)

CO

NSO

LID

ATED

(USD

)Lo

anC

urre

ncy

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mit

ted

Faci

lity

amou

nt c

urre

ncy

Dra

wn

amou

nt

curr

ency

Dra

wn

amou

nt

USD

- U

SD 7

9,13

2 7

9,13

2 7

9,13

2

- U

SD (

1) 6

2,79

1 6

2,79

1 6

2,79

1

- N

OK

(4)

1,7

40,2

47

- 2

34,1

18

- N

OK

320

,762

-

43,

153

- U

SD 1

9,60

0 1

9,60

0 1

9,60

0

- U

SD 1

6,48

2 1

6,48

2 1

6,48

2

- U

SD 1

14,0

85

114

,085

1

14,0

85

- U

SD 5

4,59

8 4

9,74

0 4

9,74

0

- N

OK

(2)

365

,137

3

65,1

37

49,

123

- N

OK

4,6

55

4,6

55

626

- N

OK

3,0

60

3,0

60

412

- N

OK

12,

364

12,

364

1,6

63

80,

719

NO

K 6

00,0

00

600

,000

8

0,71

9

- N

OK

2,3

51,7

00

2,1

97,3

33

295

,611

- N

OK

240

,000

2

40,0

00

32,

288

- N

OK

(3)

222

,167

2

07,8

33

27,

960

- N

OK

435

,000

-

-

- N

OK

360

,000

-

-

- EU

R 4

9,77

0 2

1,33

0 2

5,93

1

94,

172

NO

K 7

00,0

00

700

,000

9

4,17

2

174

,891

To

tal s

ecur

ed d

ebt

1,2

27,6

05

- 10

Fees

and

exp

ense

s -1

3,24

5

174

,881

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tal

1,2

14,3

60

28,

453

(CIR

R lo

an) N

OK

211

,500

2

11,5

00

28,

453

203

,334

To

tal l

ong-

term

deb

t inc

ludi

ng fe

es a

nd e

xpen

ses

1,2

42,8

13

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

475

Dec

embe

r 31

, 201

4

Fair

val

ueIn

tere

st r

ate

Dur

atio

nIn

stal

men

ts

79,

132

Floa

ting

2017

Qua

rter

ly

67,

251

Fixe

d an

d flo

atin

g20

21Se

mi a

nnua

lly

234

,118

Fl

oatin

g20

15Se

mi a

nnua

lly

43,

153

Floa

ting

2022

Qua

rter

ly

19,

600

Floa

ting

2019

Sem

i ann

ually

16,

310

Fixe

d20

27M

onth

ly

115

,824

Fi

xed

2028

Mon

thly

52,

980

Fixe

d20

31M

onth

ly

51,

811

Fixe

d an

d flo

atin

g20

23Se

mi a

nnua

lly

626

Fl

oatin

g20

19Q

uart

erly

412

Fl

oatin

g20

19M

onth

ly

1,6

63

Floa

ting

2019

Mon

thly

80,

719

Floa

ting

2018

Bulle

t

305

,205

Fi

xed

2018

Sem

i ann

ually

32,

288

Floa

ting

2019

Sem

i ann

ually

29,

653

Fixe

d or

floa

ting

2019

Sem

i ann

ually

- Fi

xed

or fl

oatin

g20

27Se

mi a

nnua

lly

- Fi

xed

or fl

oatin

g20

27Se

mi a

nnua

lly

25,

931

Floa

ting

2016

Bul

let

94,

172

Floa

ting

2019

Bulle

t

1,2

50,8

47

-13,

245

1,2

37,6

02

30,

114

Fixe

d20

19Se

mi a

nnua

lly

1,2

67,7

16

The

Com

pany

has

a p

ortf

olio

of b

ank

loan

s se

cure

d w

ith m

ortg

age

in v

esse

ls. T

he c

redi

tor a

nd g

uara

ntor

s ar

e in

gen

eral

firs

t cla

ss

com

mer

cial

ban

ks  a

nd s

tate

ow

ned

finan

cial

inst

itutio

ns w

ith ra

tings

on

or a

bove

BB

B- a

nd A

AA

.A

s of

yea

r end

, the

Com

pany

had

issu

ed tw

o hi

gh y

ield

uns

ecur

ed b

onds

of N

OK

600

mill

ion

and

NO

K 7

00 m

illio

n re

spec

tivel

y.

The

high

yie

ld u

nsec

ured

bon

ds a

re li

sted

on

Osl

o St

ock

Exch

ange

, hav

e no

am

ortiz

atio

n an

d m

atur

es in

201

8 an

d 20

19.

As

of D

ecem

ber 3

1 20

14 a

ll co

vena

nts

requ

irem

ents

hav

e be

en m

et.

The

Com

pany

has

reci

eved

wai

ver o

f fina

ncia

l cov

enan

t for

the

perio

d of

Q1

2015

, fro

m le

nder

s an

d gu

aran

tors

, for

cer

tain

mor

tgag

e ba

cked

ves

sel fi

nanc

ings

.

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

476

(1) U

nder

the

USD

72.

1 m

illio

n fa

cilit

y, p

art o

f the

loan

(USD

34.

9 m

illio

n) is

fixe

d fo

r a 8

-yea

r ter

m to

ave

rage

inte

rest

rate

of 7

.58%

. (2

) Und

er th

e N

OK

625

.7m

illon

faci

lity,

par

t of t

he lo

an (e

quiv

alen

t to

USD

34.

2 m

illio

n) is

fixe

d fo

r an

appr

oxim

atel

y 10

-yea

r ter

m to

av

erag

e in

tere

st ra

te o

f 5.3

6%.

The

fair

valu

e of

the

curr

ent b

orro

win

gs w

ith fl

oatin

g in

tere

st e

qual

s th

eir c

arry

ing

amou

nt, a

s th

e im

pact

of d

isco

untin

g is

not

si

gnifi

cant

. Th

e fa

ir va

lues

are

bas

ed o

n ca

sh fl

ows

disc

ount

ed u

sing

a ra

te b

ased

on

the

actu

al b

orro

win

g ra

tes,

and

are

with

in le

vel 2

of

the

fair

valu

e hi

erar

chy.

The

fair

valu

e of

the

curr

ent b

orro

win

gs w

ith fi

xed

inte

rest

hav

e be

en c

alcu

late

d by

usi

ng th

e cu

rren

t mar

ket r

ate

for s

imila

r loa

ns, a

nd

are

with

in le

vel 2

of t

he fa

ir va

lue

hier

arch

y.

NO

TES

TO

TH

E A

CC

OU

NTS

2013

PAR

ENT

CO

MPA

NY

(Am

ount

s in

USD

1,0

00)

CO

NSO

LID

ATED

(USD

)Lo

anC

urre

ncy

Com

mit

ted

Faci

lity

amou

nt c

urre

ncy

Dra

wn

amou

nt

curr

ency

Dra

wn

amou

nt

USD

- U

SD 9

0,43

7 9

0,43

7 9

0,43

7

- U

SD (

1) 7

2,12

4 7

2,12

4 7

2,12

4

- N

OK

1,6

09,2

07

- 2

64,5

11

- N

OK

296

,402

-

48,

721

- U

SD 2

1,00

0 2

1,00

0 2

1,00

0

- U

SD 2

3,16

2 1

8,17

3 1

8,17

3

- U

SD 1

16,1

07

57,

432

57,

432

- U

SD 5

8,87

9 4

7,99

0 4

7,99

0

- N

OK

(2)

625

,746

6

25,7

46

102

,856

- N

OK

5,2

50

5,2

50

863

98,

624

NO

K 6

00,0

00

600

,000

9

8,62

4

- N

OK

1,6

57,7

71

889

,050

1

46,1

36

- N

OK

240

,000

-

-

98,

624

Tota

l sec

ured

deb

t 9

68,8

68

- Fe

es a

nd e

xpen

ses

-7,3

68

98,

624

Tota

l 9

61,5

00

41,

718

(CIR

R lo

an) N

OK

253

,800

2

53,8

00

41,

718

140

,342

To

tal l

ong-

term

deb

t inc

ludi

ng fe

es

and

expe

nses

1,0

03,2

18

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

477

Dec

embe

r 31

, 201

3

Fair

val

ueIn

tere

st r

ate

Dur

atio

nIn

stal

men

ts

90,

437

Floa

ting

2017

Qua

rter

ly

77,

797

Fixe

d an

d flo

atin

g20

21Se

mi a

nnua

lly

264

,511

Fl

oatin

g20

15Se

mi a

nnua

lly

48,

721

Floa

ting

2022

Qua

rter

ly

21,

000

Floa

ting

2019

Sem

i ann

ually

16,

925

Fixe

d20

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onth

ly

54,

890

Fixe

d20

27M

onth

ly

47,

543

Fixe

d20

30M

onth

ly

104

,340

Fi

xed

and

float

ing

2022

Sem

i ann

ually

928

Fi

xed

2017

Qua

rter

ly

98,

624

Floa

ting

2018

Bulle

t

144

,868

Fi

xed

2018

Sem

i ann

ually

- Fi

xed

or fl

oatin

g20

19Se

mi a

nnua

lly

970

,585

-7,3

68

963

,217

42,

580

Fixe

d20

19Se

mi a

nnua

lly

1,0

05,7

97

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

478

Prio

r to

orde

ring

vess

els

from

Nor

weg

ian

yard

s, th

e C

ompa

ny a

pplie

d fo

r fixe

d 12

-ye

ar in

tere

st ra

te o

ptio

ns re

late

d to

the

long

-ter

m fi

nanc

ing

of s

uch

vess

els.

The

C

ompa

ny w

as g

rant

ed s

uch

optio

ns fo

r ea

ch o

f the

rele

vant

ves

sel b

y th

e N

orw

e-

gian

Exp

ort C

redi

t Age

ncy.

The

Com

pany

m

ade

cert

ain

sale

of t

he ri

ght t

o ex

erci

se

such

opt

ions

to a

firs

t cla

ss in

tern

atio

nal

bank

(the

“Ban

k”).

Lon

g-te

rm lo

ans

draw

n fr

om th

e N

orw

egia

n Ex

port

Cre

dit A

genc

y ar

e pl

aced

as

corr

espo

ndin

g de

posi

ts in

the

Bank

as

finan

cial

sec

urity

for t

he lo

ans

draw

n. R

ecog

nitio

n of

the

gain

, rel

ated

to

each

opt

ion,

is re

cord

ed o

ver t

he te

rm o

f an

y dr

awn

loan

s.

NO

TES

TO

TH

E A

CC

OU

NTS

Une

arne

d C

IRR

2014

2013

Begi

nnin

g of

the

year

2,1

55

2,5

23

Reco

gniz

ed in

the

profi

t and

loss

acc

ount

-368

-3

68

Paid

-bac

k C

IRR

- -

Net

une

arne

d C

IRR

as

of D

ecem

ber

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2

,155

The

book

val

ue o

f mor

tgag

ed a

sset

s co

nsis

t of n

on-c

urre

nt ta

ngib

le a

sset

s an

d po

rtio

n of

the

acco

unts

rece

ivab

les

and

amou

nts

to

USD

1,7

64 m

illio

n at

yea

r end

.Th

ere

are

vario

us fi

nanc

ial c

oven

ants

rela

ted

to th

e C

ompa

ny’s

deb

t agr

eem

ents

. The

mai

n pr

evai

ling

cove

nant

s ar

e:- e

quity

ratio

to to

tal a

sset

s in

exc

ess

of 3

0%- p

ositi

ve w

orki

ng c

apita

l- c

erta

in a

mou

nt o

f fre

ely

avai

labl

e ca

sh a

nd b

ank

depo

sit b

alan

ce- d

ebt s

ervi

ce ra

tios

and

inte

rest

rate

cov

erag

e

The

Com

pany

and

par

ent c

ompa

ny a

re in

com

plia

nce

with

the

finan

cial

cov

enan

ts a

s pe

r Dec

embe

r 31,

201

4.

PAR

ENT

CO

MPA

NY

CO

NSO

LID

ATED

(USD

)In

stal

men

ts p

er D

ecem

ber

31, 2

014

fall

ing

due

over

the

next

5 y

ears

Mor

tgag

e d

ebt

Oth

er in

tere

st

bear

ing

debt

Tota

l

- 20

15 3

08,9

02

- 3

08,9

02

- 20

16 9

9,62

3 -

99,

623

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17 1

18,9

26

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80,

719

2018

282

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8

0,71

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63,6

28

94,

172

2019

75,

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94,

172

170

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- Th

erea

fter

166

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166

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174

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tal

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174

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an (B

oth

cons

olid

ated

and

par

ent c

ompa

ny)

Tota

l CIR

R lo

an c

omm

itmen

t 2

8,45

3 4

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CIR

R lo

an d

raw

n on

31.

12 2

8,45

3 4

1,71

8

Com

mit

men

t as

of D

ecem

ber

31 -

-

Cas

h-fl

ow h

edge

s

Siem

Con

sub

SA (s

ubsi

diar

y co

mpa

ny in

Br

azil

with

Bra

zilia

n re

al a

s th

eir f

unc-

tiona

l cur

renc

y) in

itiat

ed h

edge

acc

ount

ing

1 Ja

nuar

y 20

14. T

he h

edgi

ng in

stru

men

t is

100

% o

f the

USD

den

omin

ated

long

-te

rm d

ebt h

eld

by th

e Br

azili

an e

ntity

in

the

amou

nt o

f USD

187

.7 m

illio

n (in

clud

ed

in th

e bo

rrow

ings

tabl

e ab

ove)

and

the

hedg

ed it

em is

the

USD

fore

ign

curr

ency

ex

posu

re re

late

d to

futu

re c

ash

flow

s of

hi

ghly

pro

babl

e co

ntra

cted

cha

rter

ves

sel

reve

nue.

The

hed

ged

item

is th

e va

lue

of

the

first

sal

es o

f the

mon

th fr

om a

por

tfo-

lio o

f sev

en v

esse

ls s

uffic

ient

to c

over

the

mon

thly

deb

t pay

men

t. Th

e pr

ospe

ctiv

e an

d re

tros

pect

ive

effe

c-tiv

enes

s te

stin

g fo

r the

hed

ge fa

lls w

ithin

th

e ac

cept

ed 8

0-12

0% ra

nge,

as

ther

e is

su

ffici

ent h

ead-

room

in th

e ef

fect

iven

ess

test

eve

n th

ough

two

of th

e se

ven

vess

els

wer

e no

t yet

ope

ratio

nal i

n 20

14 (d

ue to

de

laye

d de

liver

y da

tes)

. Th

e ef

fect

ive

por-

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

479

Siem

Indu

strie

s In

c. is

the

pare

nt c

ompa

ny o

f Sie

m E

urop

e S.

a.r.l

. the

Com

pany

’s la

rges

t sha

reho

lder

with

a h

oldi

ng o

f 34.

39%

, and

is

defi

ned

as a

rel

ated

par

ty. T

he C

ompa

ny is

obl

igat

ed to

Sie

m In

dust

ries

Inc.

, for

a fe

e of

USD

250

K (2

013:

USD

300

K).

This

fee

is

the

rem

uner

atio

n fo

r th

e se

rvic

es o

f tw

o of

the

Boa

rd m

embe

rs. T

his

fee

also

cov

ers

offic

e in

the

Cay

man

Isla

nds

and

adm

inis

trat

ive

expe

nces

.D

etai

ls r

elat

ed to

tran

sact

ions

, loa

ns a

nd r

emun

erat

ion

to th

e ex

ecut

ive

Man

agem

ent a

nd th

e bo

ard

of d

irect

ors

are

set o

ut in

Not

e 19

. For

Par

ent,

all s

ubsi

diar

ies

in N

ote

6 ar

e al

so d

efine

d as

rel

ated

par

ties.

For

othe

r re

late

d pa

rtie

s, th

e fo

llow

ing

tran

sact

ions

wer

e ca

rrie

d ou

t:

Abo

ve s

ervi

ce is

pro

vide

d to

com

pani

es in

whi

ch a

Boa

rd m

embe

r ha

s an

inte

rest

. Kris

tian

Siem

is th

e C

hairm

an o

f Sie

m In

dust

ries

Inc.

, whi

ch is

con

trol

led

by a

trus

t who

se p

oten

tial b

enefi

ciar

ies

incl

ude

mem

bers

of K

ristia

n Si

em’s

imm

edia

te fa

mily

. Si

em In

dust

ries

hold

s an

inte

rest

in S

ubse

a 7.

Sie

m O

ffsh

ore

LLC

, 100

% o

wne

d by

the

Com

pany

, has

cha

rter

ed o

ne v

esse

l to

Subs

ea 7

dur

ing

2014

.

Oth

er a

ccru

ed c

ost i

nclu

de a

ccru

ed c

omm

issi

on, p

urch

ase

orde

rs a

nd o

ther

acc

rued

cos

t. O

ther

cur

rent

liab

ilitie

s in

clud

e ac

crue

d sa

larie

s an

d in

cent

ive

prog

ram

, pro

visi

on fo

r ope

ratin

g ex

pens

es a

nd o

ther

sho

rt te

rm li

abili

ties.

No

te 1

3 -

Oth

er

Cu

rre

nt

Lia

bil

itie

s

No

te 1

4 -

Re

late

d P

art

y T

ran

sa

cti

on

s

PAR

ENT

CO

MPA

NY

CO

NSO

LID

ATED

12/3

1/20

1412

/31/

2013

(Am

ount

s in

USD

1,0

00)

12/3

1/20

1412

/31/

2013

- -

Non

-inte

rest

-bea

ring

shor

t-te

rm li

abili

ties

- -

- -

Soci

al s

ecur

ity e

tc.

3,9

60

5,4

28

60,

000

- Lo

an fr

om s

hare

hold

er60

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-

- -

Une

arne

d in

com

e 7

,264

3

,517

926

1

,111

A

ccru

ed in

tere

st 1

3,86

9 1

1,78

0

80

201

O

ther

acc

rued

cos

t, m

ainl

y re

gard

ing

oper

atin

g ex

pens

es v

esse

ls

6,1

03

5,1

33

6,2

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6,8

58

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er c

urre

nt li

abili

ties

31,

876

18,

203

67,

255

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70

Tota

l oth

er c

urre

nt li

abili

ties

123

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4

4,06

1

CO

NSO

LID

ATED

Sale

s of

ser

vice

s20

1420

13

(Am

ount

s in

USD

1,0

00)

Serv

ice

to e

ntity

whe

re d

irect

or h

as o

wne

rshi

p 8

,556

2

,796

Tota

l 8

,556

2

,796

tion

of th

e ca

sh fl

ow h

edge

, USD

14.

6 m

il-lio

n sh

own

in O

CI,

is th

e ef

fect

ive

port

ion

of th

e lo

ss o

n th

e he

dgin

g in

stru

men

t. Th

e he

dge

was

not

100

% e

ffec

tive,

and

a U

SD

6 m

illio

n lo

ss re

late

d to

the

inef

fect

ive-

ness

of t

he c

ash

flow

hed

ge is

reco

gniz

ed

over

the

profi

t or l

oss.

USD

5.6

mill

ion

was

re

cycl

ed fr

om O

CI t

o th

e pr

ofit o

r los

s du

r-in

g 20

14 in

con

nect

ion

with

this

hed

ge.

Net

inve

stm

ent h

edge

wit

h in

tern

al lo

ans

Cur

renc

y tr

ansl

atio

n di

ffer

ence

s of

USD

11

mill

ion

reco

gniz

ed a

s O

CI i

nclu

de

appr

oxim

atel

y U

SD 7

63 th

ousa

nd o

f cu

rren

cy d

iffer

ence

s re

late

d to

loan

s in

U

SD fr

om o

ther

Com

pany

ent

ities

to th

e Br

azili

an e

ntity

. The

se in

tern

al lo

ans

are

desi

gnat

ed a

s a

net i

nves

tmen

t hed

ge in

ac

cord

ance

with

IAS

21 a

nd th

e cu

rren

cy

gain

s an

d lo

sses

reco

gniz

ed in

the

Bra

zilia

n en

tity

are

appr

opria

tely

sho

wn

as p

art o

f OC

I, an

d w

ill b

e re

cycl

ed o

ver

profi

t or l

oss

in th

e ev

ent t

hat t

he B

razi

lian

entit

y ce

ases

to b

e a

cons

olid

ated

C

ompa

ny e

ntity

.

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

480

Serv

ice

deliv

ered

from

rel

ated

par

ties

is m

ainl

y co

st fo

r te

chni

cal m

anag

emen

t, co

rpor

ate

man

agem

ent a

nd d

eliv

ered

cre

w.

The

serv

ice

is s

uppo

rted

to S

iem

Mel

ing

Off

shor

e D

A, 5

1% o

wne

d by

the

Com

pany

, and

is d

eliv

ered

by

its p

artn

er in

Sie

m M

elin

g O

ffsh

ore

DA

.

The

Com

pany

hol

ds a

long

-ter

m lo

an to

Rov

de In

dust

ripar

k A

S. S

iem

Off

shor

e In

vest

AS

owns

50%

of R

ovde

Indu

strip

ark

AS.

NO

TES

TO

TH

E A

CC

OU

NTS

In Q

3 20

14, t

he v

esse

l “Si

em S

ailo

r” w

as s

old

to a

com

pany

con

trol

led

by O

.H. M

elin

g &

Co

AS

at a

pric

e of

NO

K 2

95 m

illio

n. T

he

purc

hase

r of

the

vess

el is

the

49%

ow

ner

of S

iem

Mel

ing

Off

shor

e D

A, a

nd is

con

trol

led

by O

.H M

elin

g &

Co

AS.

CO

NSO

LID

ATED

Pur

chas

e of

ser

vice

2014

2013

(Am

ount

s in

USD

1,0

00)

Serv

ice

from

rela

ted

part

ies

11,

351

14,

098

Tota

l 1

1,35

1 1

4,09

8

CO

NSO

LID

ATED

Sale

of V

esse

l20

1420

13

(Am

ount

s in

USD

1,0

00)

Sale

of v

esse

l 4

7,44

7 8

4,20

0

Tota

l 4

7,44

7 8

4,20

0

Bal

ance

item

s fo

llow

ing

purc

hase

and

sal

e of

ser

vice

:C

ON

SOLI

DAT

ED

(Am

ount

s in

USD

1,0

00)

2014

2013

Acc

ount

s re

ceiv

able

s 2

,102

4

9

Acc

ount

s pa

yabl

e 2

50

2

Loan

s to

rel

ated

par

ties

:C

ON

SOLI

DAT

ED

(Am

ount

s in

USD

1,0

00)

2014

2013

Loan

to a

ssoc

iate

s

At J

anua

ry 1

308

4

36

Dra

win

gs -

-

Inst

alm

ents

-22

-94

Inte

rest

cha

rged

8

11

Inte

rest

rece

ived

-8

-11

Exch

ange

rate

var

iatio

ns -5

3 -3

4

At D

ecem

ber

31 2

33

308

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

481

Siem

Mel

ing

Off

shor

e D

A h

ad a

long

term

-lia

bilit

y fr

om it

s pa

rtne

r in

Siem

Mel

ing

Off

shor

e D

A.

The

who

le lo

an h

as b

een

repa

id d

urin

g th

e ye

ar.

The

borr

owin

g fa

cilit

y w

as o

n m

arke

t ter

ms

of in

tere

st.

Shor

t-te

rm lo

anA

t the

end

of 2

014

a sh

ort-

term

loan

of U

SD 6

0 m

illio

n w

as d

raw

n by

Sie

m O

ffsh

ore

Inc.

und

er a

cre

dit f

acili

ty p

rovi

ded

by S

iem

Indu

s-tr

ies

Inc.

The

sho

rt-t

erm

loan

is o

n m

arke

t ter

ms

of in

tere

st, a

nd a

n in

tere

st o

f USD

158

K h

as b

een

book

ed a

s co

st fo

r 201

4.

Follo

win

g tr

ansa

ctio

ns w

ith re

late

d pa

rtie

s w

ere

carr

ied

out f

or th

e pa

rent

com

pany

:

Serv

ice

from

sub

sidi

arie

s co

nsis

ts o

f adm

inis

trat

ive

and

corp

orat

e se

rvic

es p

rovi

ded

by S

iem

Off

shor

e M

anag

emen

t AS.

A

ll te

rms

used

for a

bove

tran

sact

ions

are

at a

rms’

leng

th.

Liab

ility

to r

elat

ed p

arti

es:

CO

NSO

LID

ATED

(Am

ount

s in

USD

1,0

00)

2014

2013

Liab

ility

to r

elat

ed p

arti

es

At J

anua

ry 1

7,0

57

7,5

06

Dra

win

gs -

-

Inst

alm

ents

-6,9

82

-

Inte

rest

exp

ense

s 5

3 3

15

Inte

rest

pai

d -5

3 -1

19

Exch

ange

rate

var

iatio

ns -7

5 -6

45

At D

ecem

ber

31 0

7

,057

PAR

ENT

CO

MPA

NY

(Am

ount

s in

USD

1,0

00)

2014

2013

Serv

ice

from

sub

sidi

arie

s 1

0,08

6 1

0,07

5

Serv

ice

from

ass

ocia

tes

- 1

,650

Tota

l 1

0,08

6 1

1,72

5

Year

-end

bal

ance

s ar

isin

g fr

om s

ales

and

pur

chas

es:

PAR

ENT

CO

MPA

NY

(Am

ount

s in

USD

1,0

00)

2014

2013

Rece

ivab

les

from

rela

ted

part

ies

Subs

idia

ries

18,

598

1,7

14

Ass

ocia

tes

1,9

75

708

Tota

l 2

0,57

3 2

,422

Paya

bles

from

rela

ted

part

ies

Subs

idia

ries

5,7

37

8,9

48

Ass

ocia

tes

- -

Tota

l 5

,737

8

,948

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

482

The

loan

to s

ubsi

diar

ies

is h

eld

agai

nst S

iem

Off

shor

e do

Bra

sil S

A o

n 31

Dec

embe

r 201

4.

Loan

pro

vide

d to

ass

ocia

tes

is h

eld

agai

nst S

iem

Off

shor

e C

ontr

acto

rs G

mbH

, a c

ompa

ny o

wne

d 10

0% b

y th

e su

bsid

iary

Sie

m O

ffsh

ore

Inve

st A

S.

All

loan

s ar

e on

mar

ket t

erm

s of

inte

rest

.

NO

TES

TO

TH

E A

CC

OU

NTS

Loan

s to

rel

ated

par

ties

:PA

REN

T C

OM

PAN

Y

(Am

ount

s in

USD

1,0

00)

201

4 2

013

Loan

to s

ubsi

diar

ies

At J

anua

ry 1

23,

637

67,

177

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win

gs 2

,500

-

Con

vert

ed to

sha

res

-4,4

12

-45,

353

Inst

alm

ents

- -

Inte

rest

cha

rged

555

2

,076

Inte

rest

rece

ived

- -

Exch

ange

rate

var

iatio

ns -5

32

-263

At D

ecem

ber

31 2

1,74

8 2

3,63

7

Loan

to s

ub-s

ubsi

diar

ies

At J

anua

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18,

104

17,

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Dra

win

gs 4

,619

-

Con

vert

ed to

sha

res

- -

Inst

alm

ents

-18,

176

-

Inte

rest

cha

rged

299

2

72

Inte

rest

rece

ived

- -

Exch

ange

rate

var

iatio

ns -3

47

780

At D

ecem

ber

31 4

,498

1

8,10

4

Tota

l loa

ns to

rel

ated

par

ties

At J

anua

ry 1

41,

740

84,

229

Dra

win

gs 7

,119

-

Con

vert

ed to

sha

res

-4,4

12

-45,

353

Inst

alm

ents

-18,

176

-

Inte

rest

cha

rged

854

2

,348

Inte

rest

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ived

- -

Exch

ange

rate

var

iatio

ns -8

79

517

At D

ecem

ber

31 2

6,24

6 4

1,74

0

SIEM

OFF

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C., A

NN

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L RE

PORT

201

483

Forw

ard

curr

ency

con

trac

ts:

The

nom

inal

prin

cipa

l am

ount

of t

he

outs

tand

ing

forw

ard

curr

ency

con

trac

ts

on 3

1 D

ecem

ber 2

014

wer

e U

SD 1

22.5

m

illio

n (2

013:

153

.5 m

illio

n) o

f whi

ch U

SD

58.4

mill

ion

refe

rs to

EU

R/U

SD c

ontr

acts

, U

SD 5

4.0

mill

ion

refe

rs to

USD

/NO

K c

on-

trac

ts, U

SD 7

.0 m

illio

n re

fers

to G

BP/U

SD

cont

ract

s, U

SD 2

.2 m

illio

n re

fers

to E

UR/

NO

K c

ontr

acts

and

USD

0.9

mill

ion

refe

rs

to G

BP/

NO

K c

ontr

acts

. Of t

he U

SD 5

4.0

mill

ion

unde

r the

USD

/NO

K c

ontr

acts

, tw

o U

SD 2

0.0

mill

ion

posi

tions

are

off

sett

ing,

su

ch th

at th

e ne

t pos

ition

is U

SD 1

4.0

mill

ion.

The

forw

ard

curr

ency

con

trac

ts

have

bee

n en

tere

d in

to in

ord

er to

hed

ge

prim

arily

ope

ratin

g ex

pens

es in

fore

ign

curr

enci

es a

nd c

omm

ittm

ents

rela

ted

to

vess

els

unde

r con

stru

ctio

n.

No

te 1

5 -

De

riva

tive

Fin

an

cia

l In

str

um

en

ts –

As

se

ts (

Lia

bil

itie

s)

Cur

renc

y op

tion

s:

Cur

renc

y op

tions

hav

e be

en e

nter

ed in

to

in o

rder

to h

edge

ope

ratio

nal c

urre

ncy

expo

sure

.Th

ese

optio

ns a

re ty

pica

lly p

ath-

depe

nd-

ent o

ptio

ns w

hich

incl

ude

feat

ures

rela

ted

to s

ituat

ions

whe

re th

e un

derl

ying

reac

hes

or fl

uctu

ates

with

in s

peci

fic b

arrie

r lev

els.

Th

is e

nabl

es th

e C

ompa

ny to

hed

ge a

ra

nge

in th

e un

derl

ying

cur

renc

y ra

ther

th

an s

impl

y a

leve

l. G

ains

and

loss

es a

re

reco

gnis

ed in

the

profi

t and

loss

.

For f

urth

er in

form

atio

n re

gard

ing

profi

t an

d lo

ss e

ffec

t on

forw

ard

curr

ency

con

-tr

acts

and

cur

renc

y op

tions

, ple

ase

see

Not

e 28

.

Inte

rest

rat

e sw

aps:

The

nom

inal

am

ount

s of

the

outs

tand

-in

g in

tere

st ra

te s

wap

s co

ntra

cts

on 3

1 D

ecem

ber 2

014

wer

e U

SD 2

70.0

mill

ion

(201

3: U

SD 2

88.4

mill

ion)

.

At 3

1 D

ecem

ber 2

014,

the

fixed

rate

s va

ry

from

1.1

3% to

2.2

9%.

The

float

ing

rate

le

g of

the

inte

rest

rate

sw

aps

are

LIBO

R.

Gai

ns a

nd lo

sses

are

reco

gnis

ed in

the

profi

t and

loss

und

er fi

nanc

ial e

xpen

ses.

Cro

ss c

urre

ncy

swap

s:

Cro

ss c

urre

ncy

swap

s ha

ve b

een

ente

red

into

in o

rder

to h

edge

bot

h in

tere

st a

nd

prin

cipa

l pay

men

ts o

n lo

ng te

rm d

ebt

finan

cing

s de

nom

inat

ed in

oth

er c

urre

n-ci

es th

an U

SD.

PAR

ENT

CO

MPA

NY

CO

NSO

LID

ATED

12/3

1/20

1412

/31/

2013

(Am

ount

s in

USD

1,0

00)

12/3

1/20

1412

/31/

2013

Ass

ets

Liab

iliti

esA

sset

sLi

abili

ties

Forw

ard

curr

ency

con

trac

ts-

2,32

5-

-

- -

Cur

renc

y op

tions

-

10,

292

- 6

,810

- -

Inte

rest

rate

sw

aps

- 4

,683

-

4,2

75

- -

Cro

ss C

urre

ncy

Swap

1,04

1-

- -

- -

Tota

l der

ivat

ive

finan

cial

inst

rum

ents

1,04

116

,732

- 1

1,08

5

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

484

Cap

ital e

xpen

ditu

res

cont

ract

ed fo

r at t

he re

port

ing

date

but

not

yet

pai

d is

as

follo

ws:

(1) C

ontr

actu

al g

uara

ntee

s to

the

Braz

ilian

Nav

y ar

e is

sued

by

Siem

Off

shor

e do

Bra

sil S

A.

(2) C

ontr

actu

al g

uara

ntee

s pr

ovid

ed b

y Pa

rent

are

sec

urity

for o

ne o

f the

con

trac

ting

part

ies

of S

iem

Off

shor

e C

ontr

acto

rs G

mbH

.Su

ch g

uara

ntee

s ar

e fo

r adv

ance

pay

men

ts re

ciev

ed a

t USD

27.

3 m

illio

n an

d pe

rfor

man

ce g

uata

ntee

s at

USD

109

.3 m

illio

n an

d gu

aran

tees

rela

ted

to ta

x ca

ses

in B

razi

l USD

4.7

mill

ion.

NO

TES

TO

TH

E A

CC

OU

NTS

No

te 1

6 -

Gu

ara

nte

es

No

te 1

7 -

Co

mm

itm

en

ts

PAR

ENT

CO

MPA

NY

CO

NSO

LID

ATED

12/3

1/20

1412

/31/

2013

(Am

ount

s in

USD

1,0

00)

12/3

1/20

1412

/31/

2013

- -

Con

trac

tual

gua

rant

ees

to B

razi

lian

Nav

y (1

) 5

93

4,3

04

106

,131

1

20,2

91

Con

trac

tual

gua

rant

ees

othe

r (2

) 1

41,3

15

150

,014

106

,131

1

20,2

91

Tota

l gua

rant

ees

141

,908

1

54,3

17

PAR

ENT

CO

MPA

NY

CO

NSO

LID

ATED

12/3

1/20

1412

/31/

2013

(Am

ount

s in

USD

1,0

00)

12/3

1/20

1412

/31/

2013

- -

Ship

build

ing

cont

ract

s w

ith v

aria

tion

orde

rs 6

78,0

76

847

,961

- -

Inst

alm

ents

pai

d 1

27,6

06

146

,992

- -

Unp

aid

inst

alm

ents

550

,470

7

00,9

69

Pare

nt c

ompa

nyIn

stal

men

ts fa

llin

g du

e ov

er th

e ne

xt 3

yea

rsC

ON

SOLI

DAT

ED

12/3

1/20

1412

/31/

2013

(Am

ount

s in

USD

1,0

00)

12/3

1/20

1412

/31/

2013

2014

- 3

94,4

96

- -

2015

242

,062

2

20,1

17

2016

308

,408

8

6,35

6

- -

Tota

l 5

50,4

70

700

,969

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

485

No

te 1

8 -

Op

era

tin

g E

xp

en

se

s

No

te 1

9 -

Sa

lari

es

an

d W

ag

es

, N

um

be

r o

f E

mp

loye

es

(1) P

erso

nnel

exp

ense

s in

clud

es v

esse

l cre

w e

xpen

ses

and

part

of g

ener

al a

nd a

dmin

istr

ativ

e ex

pens

es, s

ee N

ote

18.

Gov

ernm

ent g

rant

s is

a s

peci

al N

orw

egia

n se

aman

pay

roll

and

tax

refu

nd g

iven

to N

orw

egia

n G

over

nmen

t gra

nts

is a

spe

cial

Nor

we-

gian

sea

man

pay

roll

and

tax

refu

nd g

iven

to N

orw

egia

n

The

aver

age

num

ber o

f em

ploy

ees

in th

e C

ompa

ny w

as 1

,073

for 2

014,

incl

udin

g on

shor

e an

d of

fsho

re e

mpl

oyee

s.

No

empl

oyee

s ar

e em

ploy

ed in

the

pare

nt c

ompa

ny.

PAR

ENT

CO

MPA

NY

CO

NSO

LID

ATED

2014

2013

(Am

ount

s in

USD

1,0

00)

2014

2013

- 1

,675

Ve

ssel

cre

w e

xpen

ses

124

,451

1

13,9

45

769

7

,007

O

ther

ves

sel o

pera

ting

expe

nses

35

,523

45

,568

--

Pow

er C

able

pro

ject

cos

t90

,179

31,0

78

11,

752

10,

091

Gen

eral

and

adm

inis

trat

ion

47,

033

50,

701

12,

521

18,

774

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l ope

rati

ng e

xpen

ses

297

,187

2

41,2

91

CO

NSO

LID

ATED

(Am

ount

s in

USD

1,0

00)

2014

2013

Pers

onne

l exp

ense

s (1

)

Sala

ries

and

wag

es 9

5,42

1 9

1,36

2

Gov

ernm

ent g

rant

s - n

et w

ages

arr

ange

men

t in

Nor

way

-5,4

57

-5,7

62

Payr

oll t

ax 1

4,30

9 1

3,61

4

Pens

ion

cost

s, s

ee N

ote

8 2

,151

1

,887

Oth

er b

enefi

t 4

,147

2,9

29

Tota

l per

sonn

el e

xpen

ses

110

,571

1

04,0

30

SIEM

OFF

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C., A

NN

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L RE

PORT

201

486

NO

TES

TO

TH

E A

CC

OU

NTS

Payr

oll r

egis

tere

d to

the

exec

utiv

e m

anag

emen

t: (A

mou

nts

in U

SD 1

,000

)20

1420

13

Sala

ry a

nd o

ther

sho

rt te

rm c

ompe

nsat

ion

2,4

21

2,1

93

Tota

l 2

,421

2

,193

Empl

oyee

s in

clud

ed in

the

abov

e pa

yrol

l in

2014

wer

e fiv

e (2

013:

five

).

Shar

es in

the

Com

pany

hel

d by

mem

bers

of c

orpo

rate

man

agem

ent i

n 20

14 w

ere

2,61

8,16

1 (2

013:

2,6

08,1

61).

The

Boar

d of

Dire

ctor

s of

Sie

m O

ffsh

ore

Inc.

has

aut

horiz

ed th

e aw

ard

of S

tock

Opt

ions

to e

ight

key

em

ploy

ees

of th

e C

ompa

ny.

See

Not

e 31

for m

ore

info

rmat

ion.

Loan

to e

xecu

tive

man

agem

ent:

(Am

ount

s in

USD

1,0

00)

2014

2013

Bala

nce

Janu

ary

1 4

,356

4

,723

Cha

nges

in e

xecu

tive

man

agem

ent

- -

New

loan

rais

ed 4

0 3

5

Inst

alm

ents

-310

-

Effe

ct o

f cur

renc

y di

ffer

ence

s -7

55

-402

Bal

ance

Dec

embe

r 31

3,3

31

4,3

56

Am

ount

s in

USD

1,0

00

Nam

e S

alar

y pa

id

Pen

sion

pre

miu

m

Oth

er b

enefi

ts

Sha

re o

ptio

ns

2014

CEO

Ter

je S

øren

sen

610.

633

.855

.960

0,00

0

CFO

Dag

finn

B. L

ie

310.

531

.112

.540

0,00

0

CO

O S

vein

Erik

Myk

land

45

2.4

40.6

9.0

400,

000

CC

O B

ernt

Om

dal

391.

337

.23.

140

0,00

0

HR

Tor

e B.

Joh

anne

ssen

388.

641

.03.

740

0,00

0

2013

CEO

Ter

je S

øren

sen

559.

330

.254

.53.

000,

000

CFO

Dag

finn

B. L

ie

307.

627

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000

CO

O S

vein

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land

41

1.1

36.9

8.5

2.00

0,00

0

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Om

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367.

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e B.

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298.

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000

Cor

pora

te m

anag

emen

t sal

arie

s an

d ot

her b

enefi

ts a

re p

rese

nted

in th

e ta

ble

belo

w:

Loan

on

Dec

embe

r 31

, 201

4: (A

mou

nts

in U

SD 1

,000

)A

mou

ntIn

tere

stTe

rms

Loan

to e

xecu

tive

man

agem

ent

3,3

31

- Sh

are

loan

(1).

Tota

l 3

,331

SIEM

OFF

SHO

RE IN

C., A

NN

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L RE

PORT

201

487

The

Com

pany

has

ent

ered

into

diff

eren

t ope

ratin

g le

ases

for o

ffice

pre

mis

es, o

ffice

mac

hine

s, a

nd c

omm

unic

atio

n sa

telli

te e

quip

men

t fo

r the

ves

sels

. The

leas

es a

lso

incl

ude

a su

bstit

ute

vess

el o

n a

time

char

ter p

arty

. Th

e le

ase

perio

d fo

r the

leas

e ag

reem

ents

var

ies

and

mos

t of t

he le

ases

con

tain

an

optio

n fo

r ext

ensi

on.

The

oper

atin

g le

ases

in th

e Pa

rent

for

201

3 ar

e re

late

d to

cha

rter

of v

esse

ls a

nd s

atel

lite

equi

pmen

t. O

ne o

f the

cha

rter

ed v

esse

ls,

“Sie

m S

asha

” has

bee

n ch

arte

red

on b

areb

oat a

gree

men

ts fr

om th

e su

bsid

iary

Sie

m O

ffsh

ore

Rede

ri A

S. T

he c

ontr

act w

as fi

nish

ed

Sept

embe

r 201

3. T

he le

ase

cost

s w

ere

as fo

llow

s:

No

te 2

0 -

Op

era

tin

g L

ea

se

s a

s L

es

se

e

Aud

itor

’s r

emun

erat

ion

PAR

ENT

CO

MPA

NY

CO

NSO

LID

ATED

2014

2013

(Am

ount

s in

USD

1,0

00)

2014

2013

99

103

A

udit

Fee

528

579

60

51

Aud

it Fe

e O

ther

202

139

21

- Ta

x/Le

gal A

ssis

tanc

e11

612

7

- -

Oth

er c

onsu

ltant

s, F

ees

5628

180

155

To

tal a

udit

or’s

rem

uner

atio

n90

287

3

PAR

ENT

CO

MPA

NY

Fall

due

CO

NSO

LID

ATED

- 20

15 1

,787

- 20

16 1

,193

- 20

17 a

nd th

erea

fter

1,8

59

- To

tal

4,8

39

As

of 3

1 D

ecem

ber 2

014,

the

Com

pany

had

som

e co

mm

itmen

ts re

latin

g to

leas

e ag

reem

ents

whi

ch fa

ll du

e as

follo

ws.

Net

pre

sent

val

ue o

f fut

ure

com

mitm

ents

rela

ting

to le

ase

agre

emen

ts a

re c

alcu

late

d to

be

USD

4,8

39 f

or th

e C

ompa

ny.

Ther

e ar

e no

leas

e ag

reem

ent f

or th

e Pa

rent

. The

inte

rest

rat

e in

the

calc

ulat

ion

of n

et p

rese

nt v

alue

is 5

%.

Loa

n on

Dec

embe

r 31

, 201

3 (A

mou

nts

in U

SD 1

,000

)A

mou

ntIn

tere

stTe

rms

Loan

to e

xecu

tive

man

agem

ent

4,3

56

- Sh

are

loan

(1).

Tota

l 4

,356

(1) S

hare

loan

: Th

e lo

ans

are

repa

yabl

e by

the

empl

oyee

whe

n th

e em

ploy

ee’s

sha

res

in th

e co

mpa

ny a

re re

aliz

ed o

r if t

he e

mpl

oyee

le

aves

the

Com

pany

. Lo

ans

equi

vale

nt to

USD

4 m

illio

n ar

e se

cure

d by

ple

dges

in re

leva

nt s

hare

s.Th

e Re

mun

erat

ion

paid

to th

e Bo

ard

of D

irect

ors

in 2

014

was

USD

440

K (2

013:

USD

437

K).

PAR

ENT

CO

MPA

NY

CO

NSO

LID

ATED

2014

2013

(Am

ount

s in

USD

1,0

00)

2014

2013

05,

883

Ann

ual l

ease

pay

men

t on

oper

atio

nal l

ease

s 4

,020

8

,763

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

488

NO

TES

TO

TH

E A

CC

OU

NTS

No

te 2

1 -

Fin

an

cia

l It

em

s

No

te 2

2 -

Ea

rnin

gs

pe

r S

ha

re

PAR

ENT

CO

MPA

NY

CO

NSO

LID

ATED

2014

2013

(Am

ount

s in

USD

1,0

00)

2014

2013

Fina

ncia

l inc

ome

4,1

62

9,5

47

Inte

rest

inco

me

4,1

88

5,3

60

- -

Gai

n in

terc

ompa

ny c

losu

re -

-

- 3

9 O

ther

fina

ncia

l inc

ome

4,9

03

74

4,1

62

9,5

86

Tota

l fina

ncia

l inc

ome

9,0

91

5,4

34

Fina

ncia

l exp

ense

s

-11,

801

-6,9

76

Inte

rest

exp

ense

s

-48,

451

-36,

607

- -

Inte

rest

rate

SW

AP

-5,0

63

3,7

84

-903

-8

28

Oth

er fi

nanc

ial e

xpen

ses

-2,3

54

-3,3

09

-12,

704

-7,8

04

Tota

l fina

ncia

l exp

ense

s -5

5,86

8 -3

6,13

2

Oth

er fi

nanc

ial i

tem

s

--

Loss

on

FX c

ontr

acts

-3,0

22-7

,756

4,8

42

1,2

19

Net

cur

renc

y ga

in/(

loss

) 3

7,11

4 -1

4,89

5

(Am

ount

s in

USD

1,0

00)

Earn

ings

per

sha

re20

1420

13

Wei

ghte

d av

erag

e nu

mbe

r of s

hare

s ou

tsta

ndin

g 3

87,5

91

389

,078

Wei

ghte

d av

erag

e nu

mbe

r of s

hare

s di

lute

d 3

89,1

44

389

,144

Resu

lt at

trib

utab

le to

sha

reho

lder

s 5

8,14

7 2

2,00

0

Earn

ings

per

sha

re a

ttri

buta

ble

to e

quit

y sh

areh

olde

rs 0

.15

0.0

6

Earn

ings

per

sha

re d

ilute

d at

trib

utab

le to

equ

ity

shar

ehol

ders

0.1

5 0

.06

Opt

ion

prog

ram

to e

xecu

tive

man

agem

ent,

see

note

19

and

31.

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

489

Con

trac

ts in

pro

gres

s re

fer t

o ac

tivity

with

in th

e C

omba

t Man

agem

ent S

yste

ms

(CM

S) a

nd C

able

Inst

alla

tion

Segm

ent,

see

Not

e 4.

At y

ear-

end

2014

, the

act

ivity

with

in C

MS

had

five

pro

ject

s in

pro

gres

s. T

he d

egre

e of

com

plet

ion

varie

s fr

om 0

.1%

to 1

00%

. Mar

gin

is

calc

ulat

ed a

nd in

clud

ed fo

r all

five

proj

ects

.  Th

e ac

tivity

with

in th

e C

able

Inst

alla

tion

Segm

ent i

nclu

ded

six

proj

ects

in p

rogr

ess

at y

ear-

end

2014

. The

se p

roje

cts

are

in a

n va

rious

ph

ases

, and

mar

gin

for 2

014

is re

cogn

ized

onl

y on

pro

ject

s w

ith p

rogr

ess

exce

edin

g 45

%.

All

proj

ects

in p

rogr

ess

at y

ear-

end

2014

are

est

imat

ed to

gen

erat

e a

posi

tive

cont

ribut

ion

over

the

tota

l pro

ject

per

iod.

  Ther

e ar

e no

con

trac

ts in

pro

gres

s in

the

Pare

nt.

See

note

2.9

for a

naly

sis

of s

ensi

tivity

.

No

te 2

3 -

Co

ntr

ac

ts i

n P

rog

res

s

CO

NSO

LID

ATED

Rec

ogni

zed

Acc

umul

ated

per

(Am

ount

s in

USD

1,0

00)

2014

12/3

1/20

14

Reve

nue

105

,789

1

48,7

55

Cos

t 9

4,26

1 1

32,6

12

Tota

l 1

1,52

8 1

6,14

3

Ass

ets

/ lia

bilit

ies

Dec

embe

r 31

, 201

4

Une

arne

d re

v-en

ueA

ccru

ed p

roje

ct c

ost

Unb

illed

rev

enue

Reve

nue

21,

549

- 1

4,91

8

Cos

t 2

2,52

1 -

Tota

l 2

1,54

9 2

2,52

1 1

4,91

8

Rec

ogni

zed

Acc

umul

ated

per

(Am

ount

s in

USD

1,0

00)

2013

12/

31/2

013

Reve

nue

33,

923

43,

417

Cos

t 3

2,56

4 3

9,45

2

Tota

l 1

,360

3

,966

Ass

ets

/ lia

bilit

ies

Dec

embe

r 31

, 201

3

Une

arne

d re

venu

eA

ccru

ed p

roje

ct c

ost

Unb

illed

rev

enue

Reve

nue

8,6

08

- 2

,473

Cos

t 2

93

-

Tota

l 8,

608

293

2

,473

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

490

Book

ed v

alue

for

the

vess

el “S

iddi

s Sk

ippe

r” w

as tr

ansf

erre

d fr

om fi

xed

asse

ts to

ass

et h

eld

for s

ale

in D

ecem

ber 2

013.

The

ves

sel w

as

sold

on

Janu

ary

8, 2

014.

Ther

e is

no

asse

t hel

d fo

r sal

e in

the

pare

nt c

ompa

ny o

r gro

up a

s of

Dec

embe

r 31,

201

4.

2014

:Th

e ne

t gai

n fo

r the

Com

pany

on

sale

of a

sset

s of

18.

7mill

ion

cons

ist o

f gai

n fr

om s

ale

of th

e PS

V “S

iddi

s Sk

ippe

r”, “

Siem

Sai

lor”

by

USD

17.

9 m

illio

n an

d ot

her U

SD 0

.7 m

illio

n.

2013

:Th

e ne

t gai

n fo

r the

Com

pany

on

sale

of a

sset

s co

nsis

ted

of g

ain

from

sal

e of

the

MRS

V “S

even

Sis

ters

“ of U

SD 2

8.2

mill

ion

and

gain

of

sale

of o

ne s

mal

ler v

esse

l in

Braz

il of

USD

1.6

mill

ion.

NO

TES

TO

TH

E A

CC

OU

NTS

No

te 2

5 -

Oth

er

Ga

in/(

Lo

ss

) o

n S

ale

of

As

se

ts

No

te 2

4 -

As

se

t H

eld

fo

r S

ale

CO

NSO

LID

ATED

(Am

ount

s in

USD

1,0

00)

20

1420

13

Purc

hase

cos

t per

Jan

uary

1 1

8,12

1 -

Mov

ed fr

om F

ixed

ass

et -

18,

121

Cap

ital e

xpen

ditu

re

- -

The

year

’s d

ispo

sal a

t cos

t -

18,1

21 -

Effe

ct o

f exc

hang

e ra

te d

iffer

ence

s -

-

Pur

chas

e co

st p

er D

ecem

ber

31 -

18,

121

PAR

ENT

CO

MPA

NY

C

ON

SOLI

DAT

ED

2014

2013

(Am

ount

s in

USD

1,0

00)

2014

2013

- -

Gai

n/(lo

ss) o

n sa

le o

f ass

ets,

net

18,

728

29,

827

- -

Gai

n/(lo

ss) o

n sa

le o

f ass

ets

inte

rcom

pany

- -

- -

Tota

l 1

8,72

8 2

9,82

7

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

491

Siem

Indu

strie

s In

c. s

old

it’s

hold

ings

in th

e C

ompa

ny to

Sie

m E

urop

e S.

a.r.l

. on

30 D

ecem

ber 2

014,

a w

holly

ow

ned

subs

idia

ry.

Siem

Eur

ope

S.a.

r.l. i

s th

e m

ain

shar

ehol

der o

f Sie

m O

ffsh

ore

Inc.

and

is c

ontr

olle

d by

a tr

ust w

hose

pot

entia

l be

nefic

iarie

s in

clud

e m

embe

rs o

f Kris

tian

Siem

’s im

med

iate

fam

ily. K

ristia

n Si

em, w

ho is

a D

irect

or o

f the

Com

pany

, is

als

o th

e C

hairm

an o

f Sie

m In

dust

ries

Inc.

Terje

Sør

ense

n is

the

CEO

of t

he C

ompa

ny a

nd h

eld

1,95

0,00

0 sh

ares

on

Dec

embe

r 31,

201

4.

No

te 2

6 -

Lis

tin

g o

f th

e 2

0 L

arg

es

t S

ha

reh

old

ers

as

of

De

ce

mb

er

31

, 2

01

4

SHA

REH

OLD

ERN

UM

BER

OF

SHA

RES

OW

NER

INTE

RES

T

SIEM

EU

ROPE

S.a

.r.l.

133,

279,

421

34,3

9%

AC

E C

ROW

N IN

TERN

ATIO

NA

L LI

MIT

ED

76,7

80,8

0819

,81%

FON

DSF

INA

NS

SPA

R 12

,350

,000

3,19

%

SKA

GEN

KO

N-T

IKI

10,9

77,6

292,

83%

MP

PEN

SJO

N P

K

9,84

1,31

32,

54%

WAT

ERM

AN

HO

LDIN

G L

TD

8,51

0,76

72,

20%

SKA

GEN

VEK

ST

8,03

6,31

72,

07%

DA

NSK

E IN

VEST

NO

RSK

E IN

STIT

. II.

5,51

2,17

11,

42%

OJA

DA

AS

5,31

3,00

01,

37%

VARM

A M

UTU

AL

PEN

SIO

N IN

SURA

NC

E 4,

973,

285

1,28

%

JP M

ORG

AN

CLE

ARI

NG

CO

RP.

3,73

3,08

50,

96%

MER

RILL

LYN

CH

,PIE

RCE,

FEN

NER

&S.

INC

3,

717,

644

0,96

%

FON

DSA

VAN

SE A

S 3,

366,

602

0,87

%

NO

RDEA

BA

NK

FIN

LAN

D P

LC, M

ARK

ETS

3,32

4,60

00,

86%

DA

NSK

E IN

VEST

NO

RSK

E A

KSJE

R IN

ST

3,25

7,30

00,

84%

ALT

A IN

VEST

SA

3,

123,

151

0,81

%

PUM

PØS

AS

3,01

7,57

40,

78%

VERD

IPA

PIRF

ON

DET

DN

B SM

B

2,97

0,00

00,

77%

FON

DSF

INA

NS

AS

2,93

9,93

20,

76%

BERG

EN K

OM

MU

NA

LE P

ENSJ

ON

SKA

SSE

2,85

0,00

00,

74%

Tota

l 20

larg

est s

hare

hold

ers

307

,874

,599

79

,43%

Oth

er s

hare

hold

ers

79,

716,

781

20,5

7%

Tota

l num

ber

of o

utst

andi

ng s

hare

s 3

87,5

91,3

80

100,

00%

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

492

Expi

ring

cha

rter

con

trac

ts w

ith

Petr

o-br

as in

Bra

zil

Petr

obra

s in

form

ed in

Jan

uary

201

5 th

at th

e cu

rren

t con

trac

ts fo

r fou

r AH

TS

vess

els

empl

oyed

in B

razi

l will

not

be

exte

nded

follo

win

g co

ntra

ct e

xpiry

dur

ing

Febr

uary

201

5. P

etro

bras

took

sim

ilar

actio

ns a

gain

st a

ll ow

ners

who

se v

esse

l co

ntra

cts

wer

e ex

pirin

g. A

ltern

ativ

e em

ploy

men

t sha

ll be

pur

sued

glo

bally

for

thes

e fo

ur v

esse

ls.

Sign

ed U

SD 3

50 m

illio

n lo

an a

nd g

uar-

ante

e fa

cilit

y ag

reem

ent

A U

SD 3

50 m

illio

n lo

an a

nd g

uara

ntee

fa

cilit

y ha

s be

en s

igne

d fo

r tw

o ne

w

wel

l-in

terv

entio

n ve

ssel

s (“

WIV

s”) u

nder

co

nstr

uctio

n in

Ger

man

y. T

he W

IVs

are

sche

dule

d fo

r del

iver

y du

ring

first

hal

f of

201

6, a

nd b

oth

WIV

s sh

all c

omm

ence

7-

year

cha

rter

s up

on d

eliv

ery

from

the

yard

.

Furt

her d

etai

ls re

late

d to

the

curr

ency

der

ivat

ive

cont

ract

s ar

e se

t out

in N

ote

15.

NO

TES

TO

TH

E A

CC

OU

NTS

No

te 2

7 –

Su

bs

eq

ue

nt

Eve

nts

No

te 2

8 -

G

ain

/(L

os

s)

on

Cu

rre

nc

y D

eri

va

tive

Co

ntr

ac

ts

Cha

rter

con

trac

t for

“Si

em G

iant

” in

B

razi

l

A o

ne y

ear c

ontr

act w

ith P

etro

bras

has

be

en a

gree

d fo

r the

PSV

“Sie

m G

iant

”. Th

e co

ntra

ct w

ill c

omm

ence

no

late

r tha

n Se

ptem

ber 2

015.

Sale

of t

wo

Off

shor

e Su

bsea

Con

stru

c-ti

on V

esse

ls

Day

a M

ater

ials

Bhd

. (“D

aya”

) has

bee

n gi

ven

until

mid

-Apr

il to

arr

ange

for fi

nanc

-in

g an

d to

pay

the

full

10%

dep

osit

on th

e tw

o 20

13-b

uilt

OSC

Vs “S

iem

Day

a 1”

and

“S

iem

Day

a 2”

, whi

ch a

re n

egot

iate

d to

be

sold

to D

aya.

The

sub

sequ

ent d

eliv

ery

of

the

vess

els

shal

l the

reaf

ter t

ake

plac

e la

t-es

t by

mid

Jul

y. T

he re

cent

vol

atili

ty in

the

mar

ket f

or o

ffsh

ore

vess

els

has

incr

ease

d th

e un

cert

aint

y of

this

tran

sact

ion

to b

e co

nclu

ded.

Bot

h ve

ssel

s ar

e on

long

-ter

m

char

ters

to D

aya.

Deb

t fina

ncin

g fo

r th

ree

PSV

s un

der

cons

truc

tion

in P

olan

d

Deb

t fina

ncin

g ob

tain

ed fo

r the

thre

e du

al-

fuel

led

PSVs

und

er c

onst

ruct

ion

in P

olan

d.

Wai

ver

of fi

nanc

ial c

oven

ant

Reci

eved

wai

ver o

f fina

ncia

l cov

enan

t fo

r the

per

iod

1Q 2

015,

from

lend

ers

and

guar

anto

rs, f

or c

erta

in m

ortg

age

back

ed

vess

el fi

nanc

ings

.N

ords

ee o

ne o

ffsh

ore

win

d fa

rm

reac

hed

finan

cial

clo

se

The

finan

cial

clo

se fo

r the

Nor

dsee

one

of

fsho

re w

ind

farm

was

reac

hed.

The

pr

ojec

t inc

lude

s co

ntra

ctin

g w

ork

for t

he

who

lly o

wne

d su

bsid

iary

of S

iem

Off

shor

e In

c, S

iem

Off

shor

e C

ontr

acto

rs G

mbH

re

late

d to

turn

key

supp

ly a

nd in

stal

latio

n pa

ckag

e of

the

inne

r grid

cab

le s

yste

m.

Aw

ard

of c

ontr

act f

or th

e Ve

ja M

ate

offs

hore

win

d fa

rm

Siem

Off

shor

e C

ontr

acto

rs G

mbH

aw

ard-

ed th

e co

ntra

ct fo

r the

turn

key

supp

ly a

nd

inst

alla

tion

pack

age

of th

e in

ner a

rray

gr

id c

able

sys

tem

for t

he 4

00 M

W V

eja

Mat

e O

ffsh

ore

Win

d Fa

rm. T

he c

ontr

act,

estim

ated

at a

val

ue in

exc

ess

of E

uro

100

Mill

ion,

hig

hlig

hts

the

cont

inue

d gr

owth

in

the

Off

shor

e Re

new

able

Ene

rgy

Mar

ket

for t

he S

iem

Off

shor

e gr

oup.

PAR

ENT

CO

MPA

NY

CO

NSO

LID

ATED

2014

2013

(Am

ount

s in

USD

1,0

00)

2014

2013

- -

Unr

ealiz

ed g

ain/

(loss

) -5

,612

-1

2,20

0

- -

Real

ized

gai

n/(lo

ss)

2,5

90

4,4

44

- -

Tota

l -3

,023

-7

,756

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

493

Belo

w is

a c

ompa

rison

by

cate

gory

for c

arry

ing

amou

nts

and

fair

valu

es o

f all

of th

e C

ompa

ny’s

fina

ncia

l ins

trum

ents

.

(1) P

repa

ymen

ts d

o no

t qua

lify

as a

fina

ncia

l ins

trum

ent a

nd a

re n

ot in

clud

ed in

abo

ve a

mou

nt.

Excl

uded

pre

paym

ents

am

ount

to U

SD 3

2,90

5, s

ee N

ote

9.

(1) N

on-fi

nanc

ial l

iabi

litie

s do

not

qua

lify

as a

fina

ncia

l ins

trum

ent a

nd a

re n

ot in

clud

ed in

abo

ve a

mou

nt. E

xclu

ded

liabi

litie

s am

ount

to

USD

22,

161

cons

istin

g of

USD

10,

438

in T

axes

Pay

able

, USD

2,7

78 in

Pen

sion

Lia

bilit

y, U

SD 5

,428

in S

ocia

l Sec

urity

Pay

able

and

U

SD 3

,517

in U

near

ned

Inco

me.

 See

Not

e 13

for i

nfor

mat

ion

abou

t Soc

ial S

ecur

ity P

ayab

le a

nd U

near

ned

Inco

me.

(1) P

repa

ymen

ts d

o no

t qua

lify

as a

fina

ncia

l ins

trum

ent a

nd a

re n

ot in

clud

ed in

abo

ve a

mou

nt. E

xclu

ded

prep

aym

ents

am

ount

to

USD

13,

517,

see

Not

e 9.

No

te 2

9 -

Fin

an

cia

l In

str

um

en

t b

y C

ate

go

ry

CO

NSO

LID

ATED

(Am

ount

s in

USD

1,0

00)

Dec

embe

r 31

, 201

4

Lo

ans

and

rece

ivab

les

Ass

ets

at fa

ir v

alue

thro

ugh

the

profi

t and

loss

Ava

ilabl

e fo

r sa

leTo

tal

Ass

ets

as p

er s

tate

men

t of fi

nanc

ial p

osit

ion

Fina

ncia

l ass

ets

held

for s

ale

- -

- -

Der

ivat

ive

finan

cial

inst

rum

ents

1,0

41

1,0

41

- 1

,041

Trad

e an

d ot

her r

ecei

vabl

es (1

) 3

3,14

6 -

- 3

3,14

6

Cas

h an

d ca

sh e

quiv

alen

ts 1

17,6

23

- -

117

,623

Tota

l15

1,81

0 1

,041

-

151

,810

CO

NSO

LID

ATED

(Am

ount

s in

USD

1,0

00)

Dec

embe

r 31

, 201

4Li

abili

ties

at f

air

valu

e th

roug

h th

e pr

ofit a

nd lo

ssO

ther

fina

ncia

l lia

bilit

ies

Tota

l

Liab

iliti

es a

s pe

r st

atem

ent o

f fina

ncia

l pos

itio

n

Bank

deb

ts, b

onds

, loa

ns a

nd o

ther

pay

able

s (1

) -

172

,662

1

72,6

62

Der

ivat

ive

finan

cial

inst

rum

ents

16,

732

- 1

6,73

2

Tota

l 1

6,73

2 1

72,6

62

189,

394

CO

NSO

LID

ATED

(Am

ount

s in

USD

1,0

00)

Dec

embe

r 31

, 201

3Lo

ans

and

rece

ivab

les

Ass

ets

at fa

ir v

alue

thro

ugh

the

profi

t and

loss

Ava

ilabl

e fo

r sa

leTo

tal

Ass

ets

as p

er s

tate

men

t of fi

nanc

ial p

ositi

on

Fina

ncia

l ass

ets

held

for s

ale

- -

- -

Der

ivat

ive

finan

cial

inst

rum

ents

- -

- -

Trad

e an

d ot

her r

ecei

vabl

es (1

) 1

20,7

75 -

- 1

20,7

75

Cas

h an

d ca

sh e

quiv

alen

ts 1

01,2

06 -

- 1

01,2

06

Tota

l 2

21,9

81 -

- 2

21,9

81

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

494

(1) P

repa

ymen

ts d

o no

t qua

lify

as a

fina

ncia

l ins

trum

ent a

nd a

re n

ot in

clud

ed in

abo

ve a

mou

nt. E

xclu

ded

prep

aym

ents

am

ount

to U

SD

3,48

0, s

ee N

ote

9.

(1) N

on-fi

nanc

ial l

iabi

litie

s do

not

qua

lify

as a

fina

ncia

l ins

trum

ent a

nd a

re n

ot in

clud

ed in

abo

ve a

mou

nt. E

xclu

ded

liabi

litie

s am

ount

to

USD

22,

161

cons

istin

g of

USD

10,

438

in T

axes

Pay

able

, USD

2,7

78 in

Pen

sion

Lia

bilit

y, U

SD 5

,428

in S

ocia

l Sec

urity

Pay

able

and

USD

3,

517

in U

near

ned

Inco

me.

 See

Not

e 13

for i

nfor

mat

ion

abou

t Soc

ial S

ecur

ity P

ayab

le a

nd U

near

ned

Inco

me.

NO

TES

TO

TH

E A

CC

OU

NTS

CO

NSO

LID

ATED

(Am

ount

s in

USD

1,0

00)

Dec

embe

r 31

, 201

3Li

abili

ties

at f

air

valu

e th

roug

h th

e pr

ofit a

nd lo

ssO

ther

fina

ncia

l lia

bilit

ies

Tota

l

Liab

iliti

es a

s pe

r st

atem

ent o

f fina

ncia

l pos

itio

n

Bank

deb

ts, b

onds

, loa

ns a

nd o

ther

pay

able

s (1

) -

1,0

76,9

30

1,0

76,9

30

Der

ivat

ive

finan

cial

inst

rum

ents

11,

085

- 1

1,08

5

Tota

l 1

1,08

5 1

,076

,930

1

,088

,015

PAR

ENT

CO

MPA

NY

(Am

ount

s in

USD

1,0

00)

Dec

embe

r 31

, 201

4Lo

ans

and

rece

ivab

les

Ass

ets

at fa

ir v

alue

thro

ugh

the

profi

t and

loss

Ava

ilabl

e fo

r sa

leTo

tal

Ass

ets

as p

er s

tate

men

t of fi

nanc

ial p

osit

ion

Der

ivat

ive

finan

cial

inst

rum

ents

- -

-

Trad

e an

d ot

her i

nstr

umen

ts (1

)76

,636

76,6

36

Cas

h an

d ca

sh e

quiv

alen

ts22

2, 5

7922

2,57

9

Tota

l29

9,21

5-

-29

9,21

5

PAR

ENT

CO

MPA

NY

(Am

ount

s in

USD

1,0

00)

Dec

embe

r 31

, 201

4

Li

abili

ties

at f

air

valu

e th

roug

h th

e pr

ofit a

nd lo

ssO

ther

fina

ncia

l lia

bilit

ies

Tota

l

Liab

iliti

es a

s pe

r st

atem

ent o

f fina

ncia

l pos

itio

n

Bank

deb

ts, b

onds

, loa

ns a

nd o

ther

pay

able

s -

203

,387

2

03,3

87

Der

ivat

ive

finan

cial

inst

rum

ents

- -

-

Tota

l -

203

,387

2

03,3

87

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

495

Reco

ncili

atio

n of

net

pro

fit fo

r the

fina

ncia

l yea

r to

profi

t/(lo

ss) b

efor

e ta

xes,

exc

ludi

ng in

tere

st.

No

te 3

0 –

Pro

fit

Be

fore

Ta

xe

s,

Ex

clu

din

g I

nte

res

ts

(1) P

repa

ymen

ts d

o no

t qua

lify

as a

fina

ncia

l ins

trum

ent a

nd a

re n

ot in

clud

ed in

abo

ve a

mou

nt. E

xclu

ded

prep

aym

ents

am

ount

to

USD

1,8

72, s

ee N

ote

9.

PAR

ENT

CO

MPA

NY

CO

NSO

LID

ATED

2014

2013

(Am

ount

s in

USD

1,0

00)

2014

2013

-64,

448

-4,8

45

Net

pro

fit/(

loss

) 7

0,71

0 2

1,54

4

11,

801

6,9

76

Inte

rest

exp

ense

s 4

8,45

1 3

6,60

7

-921

-2

,640

In

terc

ompa

ny in

tere

st -

-

-3,2

41

-3,1

19

Inte

rest

inco

me

-4,1

88

-5,3

60

- 2

61

Tax

expe

nse

2,7

29

-3,5

85

-56,

809

-3,3

67

Pro

fit b

efor

e ta

xes,

exc

ludi

ng in

tere

st 1

17,7

02

49,

205

PAR

ENT

CO

MPA

NY

(Am

ount

s in

USD

1,0

00)

Dec

embe

r 31

, 201

3Lo

ans

and

rece

ivab

les

Ass

ets

at fa

ir v

alue

thro

ugh

the

profi

t and

loss

Ava

ilabl

e fo

r sa

leTo

tal

Ass

ets

as p

er s

tate

men

t of fi

nanc

ial p

ositi

on

Der

ivat

ive

finan

cial

inst

rum

ents

- -

-

Trad

e an

d ot

her r

ecei

vabl

es (1

)97

,464

- -

97,

464

Cas

h an

d ca

sh e

quiv

alen

ts13

2,06

8 -

- 1

32,0

68

Tota

l22

9,53

1 -

- 2

29,5

31

Pare

nt c

ompa

ny

(Am

ount

s in

USD

1,0

00)

Dec

embe

r 31

, 201

3Li

abili

ties

at f

air

valu

e th

roug

h th

e pr

ofit a

nd lo

ssO

ther

fina

ncia

l lia

bilit

ies

Tota

l

Liab

iliti

es a

s pe

r st

atem

ent o

f fina

ncia

l pos

itio

n

Bank

deb

ts, b

onds

, loa

ns a

nd o

ther

pay

able

s -

140

,739

1

40,7

39

Der

ivat

ive

finan

cial

inst

rum

ents

- -

-

Tota

l -

140

,739

1

40,7

39

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

496

No

te 3

1 –

Sh

are

-ba

se

d p

ay

me

nts

2014

Sha

re o

ptio

n pr

ogra

m:

On

the

02. A

pril

2014

, the

Com

pany

en

tere

d in

to a

Sha

re o

ptio

n ag

reem

ent

with

sel

ecte

d em

ploy

ees.

The

Boa

rd o

f D

irect

ors

of S

iem

Off

shor

e In

c. h

as

auth

oriz

ed th

e aw

ard

of 3

,000

,000

sha

re

optio

ns to

ten

key

empl

oyee

s of

the

Com

pany

. The

exe

rcis

e pr

ice

is N

OK

9.0

7 pe

r sha

re. T

he e

xerc

ise

pric

e of

the

gran

ted

optio

ns is

equ

al to

the

mar

ket

pric

e of

the

shar

es o

n th

e da

te o

f the

gr

ant.

 The

Opt

ions

can

be

exer

cise

d as

follo

ws:

2017

: 60

% o

f the

tota

l num

ber b

egin

ning

on

Apr

il 2n

d 20

17, l

ess

any

optio

ns p

revi

ousl

y is

sued

.

2018

: 80

% o

f the

tota

l num

ber b

egin

ning

on

Apr

il 2n

d 20

18, l

ess

any

optio

ns

prev

ious

ly is

sued

. 20

19:

100%

of t

he to

tal n

umbe

r beg

inni

ng o

n A

pril

2nd

2019

, les

s an

y op

tions

pre

vi-

ousl

y is

sued

.

The

exer

cise

per

iod

shal

l in

no e

vent

be

late

r tha

n th

e da

te fa

lling

10

year

s af

ter

the

awar

d da

te.

The

grou

p ha

s no

lega

l or c

onst

ruct

ive

oblig

atio

n to

repu

rcha

se o

r set

tle

the

op-

tions

in c

ash.

The

wei

ghte

d av

erag

e fa

ir va

lue

of o

ptio

ns

gran

ted

durin

g th

e pe

riod

dete

rmin

ed

usin

g th

e Bl

ack-

Scho

les

valu

atio

n m

odel

w

as N

OK

3.6

5 pe

r opt

ion.

The

sign

ifica

nt in

puts

into

the

mod

el w

ere

wei

ghte

d av

erag

e sh

are

pric

e of

NO

K 9

.07

at th

e gr

ant d

ate,

exe

rcis

e pr

ice

of N

OK

9.

07, v

olat

ility

of 2

3%, d

ivid

end

yiel

d of

0%

, an

expe

cted

opt

ion

life

of 1

0 ye

ars

and

an a

nnua

l ris

k-fr

ee in

tere

st ra

te o

f 2.9

0%.

The

vola

tility

mea

sure

d at

the

stan

dard

de

viat

ion

of c

ontin

uous

ly c

ompo

unde

d sh

are

retu

rns

is b

ased

on

stat

istic

al

anal

ysis

of d

aily

sha

re p

rices

ove

r the

last

th

ree

year

s.

Tota

l exp

ense

reco

gnis

ed in

the

inco

me

stat

emen

t for

sha

re o

ptio

ns g

rant

ed to

ce

rtai

n em

ploy

ees

is U

SD 0

.1 m

illio

n.

Valu

e of

em

ploy

ee s

ervi

ces

as p

er

Dec

embe

r 31,

201

4 ar

e re

cogn

ized

und

er

Reta

ined

ear

ning

s at

USD

0,3

91 a

nd y

ield

of

0%

, an

expe

cted

opt

ion

life

of 1

0 ye

ars

and

an a

nnua

l ris

k-fr

ee in

tere

st ra

te o

f 2.

90%

firs

t thr

ee y

ears

NO

TES

TO

TH

E A

CC

OU

NTS

201

3 Sh

are

opti

on p

rogr

am:

On

the

13 ja

nuar

y 20

13, t

he C

ompa

ny e

n-te

red

into

a S

hare

opt

ion

agre

emen

t with

se

lect

ed e

mpl

oyee

s. T

he B

oard

of D

irec-

tors

of S

iem

Off

shor

e In

c. h

as a

utho

rized

th

e aw

ard

of 1

4,00

0,00

0 sh

are

optio

ns to

ei

ght k

ey e

mpl

oyee

s of

the

Com

pany

. The

ex

erci

se p

rice

is N

OK

8.45

per

sha

re.

The

exer

cise

pric

e of

the

gran

ted

optio

ns

is e

qual

to th

e m

arke

t pric

e of

the

shar

es

on th

e da

te o

f the

gra

nt.

2014

: 20

% o

f the

tota

l num

ber b

egin

ning

on

Janu

ary

18th

201

4

2015

: 40

% o

f the

tota

l num

ber b

egin

ning

on

Janu

ary

18th

201

5, le

ss a

ny o

ptio

ns

prev

ious

ly is

sued

.

2016

: 60

% o

f the

tota

l num

ber b

egin

ning

on

Janu

ary

18th

201

6, le

ss a

ny o

ptio

ns p

revi

-ou

sly

issu

ed.

2017

80

% o

f the

tota

l num

ber b

egin

ning

on

Janu

ary

18th

201

7, le

ss a

ny o

ptio

ns p

revi

-ou

sly

issu

ed.

2018

: 10

0% o

f the

tota

l num

ber b

egin

ning

on

Janu

ary

18th

201

8, le

ss a

ny o

ptio

ns p

revi

-ou

sly

issu

ed.

The

exer

cise

per

iod

shal

l in

no e

vent

be

late

r tha

n th

e da

te fa

lling

10

year

s af

ter

the

awar

d da

te.

The

grou

p ha

s no

lega

l or c

onst

ruct

ive

oblig

atio

n to

repu

rcha

se o

r set

tle

the

optio

ns in

cas

h.N

o op

tions

wer

e ex

erci

sed

durin

g 20

13.

The

wei

ghte

d av

erag

e fa

ir va

lue

of o

ptio

ns

gran

ted

durin

g th

e pe

riod

dete

rmin

ed

usin

g th

e Bl

ack-

Scho

les

valu

atio

n m

odel

w

as N

OK

3.7

2 pe

r opt

ion.

The

sign

ifica

nt in

puts

into

the

mod

el

wer

e w

eigh

ted

aver

age

shar

e pr

ice

of

NO

K 8

.45

at th

e gr

ant d

ate,

exe

rcis

e pr

ice

of N

OK

8.4

5, v

olat

ility

of 2

3%,

divi

dend

yie

ld o

f 0%

, an

expe

cted

opt

ion

life

of 1

0 ye

ars

and

an a

nnua

l ris

k-fr

ee

inte

rest

rate

of 4

.13%

.

The

vola

tility

mea

sure

d at

the

stan

dard

de

viat

ion

of c

ontin

uous

ly c

ompo

unde

d sh

are

retu

rns

is b

ased

on

stat

istic

al

anal

ysis

of d

aily

sha

re p

rices

ove

r the

la

st th

ree

year

s.

Tota

l exp

ense

reco

gnis

ed in

the

inco

me

stat

emen

t for

sha

re o

ptio

ns g

rant

ed to

ce

rtai

n em

ploy

ees

is U

SD 0

.2 m

illio

n.Va

lue

of e

mpl

oyee

ser

vice

s as

per

D

ecem

ber 3

1, 2

013

are

reco

gniz

ed u

nder

Re

tain

ed e

arni

ngs

at U

SD 3

,125

.

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

497

Mov

emen

ts in

the

num

ber o

f sha

re o

ptio

ns o

utst

andi

ng a

nd th

eir e

xerc

ise

pric

es a

re a

s fo

llow

s:

Exer

cise

pri

ce p

er

shar

e op

tion

, NO

K

(*w

eigh

ted

aver

age)

Opt

ions

O

utst

andi

ng

At 1

Jan

uary

201

3-

-

Gra

nted

8.45

14,0

00,0

00

Forf

eite

d-

-

Exer

cise

d-

-

Expi

red

--

At 3

1 D

ecem

ber

2013

8.45

14,0

00,0

00

At 1

Jan

uary

201

48.

4514

,000

,000

Gra

nted

9.07

3,00

0,00

0

Forf

eite

d-

-

Exer

cise

d-

-

Expi

red

--

At 3

1 D

ecem

ber

2014

*8.

56*

17,0

00,0

00

Opt

ions

out

stan

ding

at y

ear-

end

and

exer

cisa

ble

tota

l 2 8

00 0

00 o

ptio

ns a

nd n

il op

tions

for

2014

and

201

3, re

spec

tivel

y. O

ptio

ns e

xpire

10

year

s af

ter t

he d

ate

of g

rant

.

*Wei

ghte

d av

erag

e pr

ice

at 3

1 D

ecem

ber 2

014.

Opt

ions

out

stan

ding

for

key

man

agm

ent

Opt

ions

out

-st

andi

ng a

s of

31

Dec

embe

r 20

13

Opt

ions

out

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andi

ng a

s of

31

Dec

embe

r 20

14

Terje

Sør

ense

n, C

EO3,

000,

000

3,60

0,00

0

Dag

finn

Lie,

CFO

2,00

0,00

02,

400,

000

Svei

n Er

ik M

ykla

nd, C

OO

2,00

0,00

02,

400,

000

Bern

t Om

dal,

CC

O2,

000,

000

2,40

0,00

0

Tore

B. J

ohan

ness

en, G

loba

l HR

Dire

ctor

2,00

0,00

02,

400,

000

Cel

so C

osta

, Gen

eral

man

ager

1,00

0,00

01,

200,

000

Lars

Muc

k, G

ener

al m

anag

er1,

000,

000

1,20

0,00

0

Tor H

elge

Ege

land

, Gen

eral

man

ager

1,00

0,00

01,

200,

000

Gen

eral

man

ager

s-

200,

000

Tota

l out

stan

ding

14

,000

,000

17,0

00,0

00

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

498

Stat

emen

t on

Soci

al R

espo

nsib

ility

A

s a

com

pany

inco

rpor

ated

in th

e C

aym

an

Isla

nds,

Sie

m O

ffsh

ore

Inc.

(“Th

e C

om-

pany

”) is

an

exem

pted

com

pany

dul

y in

-co

rpor

ated

und

er th

e la

ws

of th

e C

aym

an

Isla

nds

and

subj

ect t

o C

aym

an Is

land

law

s an

d re

gula

tions

with

resp

ect t

o co

rpor

ate

gove

rnan

ce. C

aym

an Is

land

s co

rpor

ate

law

is to

a g

reat

ext

ent b

ased

on

Engl

ish

Law

. In

add

ition

, due

to T

he C

ompa

ny

bein

g a

Nor

weg

ian

Tax

Resi

dent

, the

N

orw

egia

n A

ccou

ntin

g la

w a

pplie

s to

The

C

ompa

ny. A

ccor

ding

to th

e N

orw

egia

n A

c-co

untin

g A

ct $

3-3c

The

Com

pany

sho

uld

prov

ide

a st

atem

ent o

n so

cial

resp

onsi

bil-

ity. T

he s

tate

men

t sho

uld

incl

ude

whi

ch

actio

ns a

re ta

ken

by T

he C

ompa

ny to

in

tegr

ate

hum

an ri

ghts

, em

ploy

ee’s

righ

ts

and

soci

al c

ondi

tions

, ext

erna

l env

iron-

men

t and

the

fight

aga

inst

cor

rupt

ion

in it

s bu

sine

ss s

trat

egie

s, d

aily

ope

ratio

ns a

nd

in re

latio

n to

its

inte

rest

ed p

artie

s.

The

Boar

d of

Dire

ctor

s ha

s re

view

ed th

is

CO

RP

OR

ATE

SO

CIA

L R

ESP

ON

SIB

ILIT

Y

stat

emen

t. It

is th

e op

inio

n of

the

Boar

d of

Dire

ctor

s th

at T

he C

ompa

ny c

om-

plie

s w

ith re

gula

tions

in th

e N

orw

egia

n A

ccou

ntin

g la

w w

ith re

spec

t to

Soci

al

Resp

onsi

bilit

y re

port

ing.

Cod

e of

Con

duct

The

Com

pany

has

est

ablis

hed

a C

ode

of

Con

duct

pol

icy

expr

essi

ng it

s no

n-to

ler-

ance

on

corr

uptio

n as

wel

l as

deal

ing

with

et

hica

l prin

cipl

es o

f the

Com

pany

. The

C

ompa

ny is

fully

com

mitt

ed to

per

form

its

bus

ines

s w

ith in

tegr

ity a

nd tr

ansp

ar-

ency

thro

ugho

ut it

s gl

obal

ope

ratio

ns. A

s st

ated

in th

e C

ode

of C

ondu

ct P

olic

y it

is

the

polic

y of

the

Com

pany

to c

ondu

ct it

s bu

sine

ss in

acc

orda

nce

with

all

appl

icab

le

law

s an

d re

gula

tions

and

in a

n et

hica

lly

resp

onsi

ble

man

ner.

Prot

ectio

n of

hea

lth, s

afet

y an

d th

e pr

even

tion

of p

ollu

tion

to th

e en

viro

nmen

t ar

e pr

imar

y go

als

of T

he C

ompa

ny. A

ll of

ou

r em

ploy

ees

and

repr

esen

tativ

es m

ust

cond

uct t

heir

dutie

s an

d re

spon

sibi

litie

s in

co

mpl

ianc

e w

ith T

he C

ompa

ny’s

pol

icy

on

Hea

lth, S

afet

y an

d En

viro

nmen

t, ap

plic

a-bl

e la

w a

nd in

dust

ry s

tand

ards

rela

ting

to h

ealth

and

saf

ety

in th

e w

orkp

lace

and

pr

even

tion

of p

ollu

tion

to th

e en

viro

nmen

t.

The

Com

pany

has

impl

emen

ted

polic

ies

and

cont

rol p

roce

dure

s to

ens

ure

that

onl

y pr

oper

tran

sact

ions

are

ent

ered

into

by

The

Com

pany

, tha

t suc

h tr

ansa

ctio

ns h

ave

prop

er m

anag

emen

t app

rova

l, th

at s

uch

tran

sact

ions

are

pro

perl

y ac

coun

ted

for i

n th

e bo

oks

and

reco

rds

of T

he C

ompa

ny,

and

the

repo

rts

and

finan

cial

sta

tem

ents

of

The

Com

pany

are

pre

pare

d in

a ti

mel

y m

anne

r, un

ders

tand

able

and

fully

, fai

rly

and

accu

rate

ly re

flect

suc

h tr

ansa

ctio

ns.

The

Com

pany

obs

erve

s fa

ir em

ploy

men

t pr

actic

es in

eve

ry a

spec

t of i

ts b

usin

ess.

The

Com

pany

con

duct

s its

bus

ines

s w

ith

hone

sty

and

inte

grity

and

com

pete

s fa

irly

MA

NG

LER

BILD

E!

Hap

py J

ayN

ii fo

otba

ll te

am,

Acc

ra, G

hana

Phot

o: E

llen

Ber

chel

man

n

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

499

and

ethi

cally

with

in th

e fr

amew

ork

of th

e la

w. T

he C

ompa

ny h

as e

nter

ed in

to a

gree

-m

ents

with

wel

l-kn

own

subc

ontr

acto

rs fo

r th

e de

liver

y of

tech

nica

l man

agem

ent a

nd

crew

man

agem

ent s

ervi

ces

to s

ome

of

the

Com

pany

’s v

esse

ls. T

he C

ompa

ny h

as

also

ent

ered

into

shi

pbui

ldin

g co

ntra

cts

with

hig

h st

anda

rd s

hipb

uild

ing

yard

s in

Po

land

and

Ger

man

y. T

hese

sub

cont

rac-

tors

are

sub

ject

to re

view

on

an o

ngoi

ng

basi

s. T

he C

ompa

ny e

xpec

ts th

at a

ll of

its

bus

ines

s pa

rtne

rs h

ave

the

sam

e ap

-pr

oach

to b

usin

ess

deal

ing.

Impr

oper

pay

men

tsTh

e C

ode

of C

ondu

ct d

oes

also

incl

ude

polic

ies

on im

prop

er p

aym

ents

. The

Com

-pa

ny d

oes

not t

oler

ate

any

actio

ns /

pay-

men

ts w

hich

cou

ld b

e vi

ewed

as

impr

oper

pa

ymen

ts.

No

gift

, hos

pita

lity

or tr

avel

ben

efit m

ay

be o

ffer

ed to

or r

eque

sted

or a

ccep

ted

from

any

third

par

ty if

that

ben

efit c

ould

be

see

n to

be

disp

ropo

rtio

nate

ly g

ener

ous

or o

ther

wis

e be

see

n as

som

ethi

ng w

hich

m

ay in

duce

or m

ake

the

reci

pien

t fee

l ob

liged

to re

cipr

ocat

e by

way

of i

mpr

op-

erly

per

form

ing

his

or h

er fu

nctio

n.

The

Com

pany

and

its

dire

ctor

s, o

ffice

rs

and

empl

oyee

s w

ill n

ot a

ccep

t any

gift

, ho

spita

lity

or tr

avel

ben

efit e

ither

dire

ctly

or

indi

rect

ly fr

om b

usin

ess

part

ners

, ag

ains

t mak

ing

com

mitm

ent,

reco

m-

men

ding

or p

rom

otin

g a

cert

ain

cond

uct

or p

ositi

on b

y Th

e C

ompa

ny o

r oth

erw

ise

seek

to g

ain

pers

onal

ben

efit i

n re

latio

n to

Th

e C

ompa

ny’s

bus

ines

s de

alin

gs.

Like

wis

e, th

e C

ompa

ny d

oes

not i

tsel

f of

fer i

nduc

emen

ts to

any

one

asso

ciat

ed

with

bus

ines

s pa

rtne

rs to

pro

mot

e a

cer-

tain

con

duct

or p

ositi

on b

y su

ch b

usin

ess

part

ner.

The

Com

pany

and

any

of i

ts p

eopl

e sh

all

not p

ay m

oney

or p

rovi

de g

ifts,

ent

erta

in-

men

t, ho

spita

lity

or a

ny o

ther

thin

g or

ser

-vi

ce o

f val

ue to

any

Gov

ernm

ent O

ffici

al.

This

pro

hibi

tion

exte

nds

to p

aym

ents

to

cons

ulta

nts,

age

nts

or o

ther

inte

rmed

iar-

ies

whe

n th

e pa

yer k

now

s or

has

reas

on to

be

lieve

that

som

e pa

rt o

f the

pay

men

t will

be

use

d to

brib

e or

oth

erw

ise

influ

ence

a

publ

ic o

ffici

al.

Polit

ical

con

trib

utio

ns a

re n

ot a

utho

rized

.

Cor

pora

te S

ocia

l Res

pons

ibili

ty

The

Com

pany

resp

ects

and

pro

mot

es

harm

onio

us w

orki

ng re

latio

nshi

p w

ith th

e lo

cal c

omm

uniti

es w

here

it o

pera

tes,

but

re

frai

ns fr

om p

artic

ipat

ing

in lo

cal p

oliti

cs.

The

Com

pany

see

ks to

fost

er a

sus

tain

-ab

le b

usin

ess

for i

ts m

any

stak

ehol

ders

.

The

Com

pany

is fu

lly c

omm

itted

to

com

ply

with

loca

l law

s an

d re

gula

tions

th

roug

hout

its

glob

al o

pera

tions

.

The

Com

pany

is c

omm

itted

to e

mpl

oy

loca

l sta

ff w

here

app

licab

le a

nd p

ossi

ble

in a

ll co

untr

ies

whe

re it

is o

pera

ting

and

cond

uctin

g bu

sine

ss. T

he C

ompa

ny is

co

mm

itted

to p

rovi

ding

equ

al o

ppor

tuni

ty

and

fair

trea

tmen

t to

all i

ndiv

idua

ls o

n th

e ba

sis

of m

erit,

with

out d

iscr

imin

atio

n on

the

grou

nds

of ra

ce, c

olou

r, re

ligio

n,

natio

nal o

rigin

, sex

, pre

gnan

cy, a

ge, d

is-

abili

ty, m

arita

l sta

tus

or o

ther

cha

ract

eris

-tic

s pr

otec

ted

by a

pplic

able

law

.

The

Com

pany

is d

edic

ated

in c

reat

ing

a hi

gh-q

ualit

y w

orki

ng e

nviro

nmen

t und

er

whi

ch it

s pe

ople

resp

ect a

nd tr

ust e

ach

othe

r suc

h th

at e

very

one

acts

in a

n ho

nest

, frie

ndly

and

pro

activ

e w

ay w

ith

a re

spon

sibl

e at

titud

e an

d hi

gh m

oral

st

anda

rds.

The

Com

pany

pro

hibi

ts b

ully

-in

g an

d ha

rass

men

t in

any

form

incl

udin

g se

xual

, rac

ial,

ethn

ic, a

nd o

ther

form

s of

ha

rass

men

t.

At C

hris

tmas

201

2 Th

e C

ompa

ny d

onat

ed

fund

s to

Jay

nii S

tree

twis

e in

Gha

na. N

o fu

nds

have

bee

n do

nate

d in

201

4. J

ayni

i St

reet

wis

e is

a c

harit

y an

d no

n-go

vern

-m

enta

l org

aniz

atio

n fo

unde

d in

Gha

na b

y Ja

y Bo

rqua

ye a

nd E

mm

anue

l (N

ii) Q

uart

ey

in th

e de

priv

ed a

rea

of J

ames

tow

n (A

c-cr

a) w

ith th

e ai

m o

f im

prov

ing

the

lives

of

child

ren

and

yout

h. J

ayni

i Str

eetw

ise

was

bo

rn o

ut o

f the

ir Ja

ynii

Cul

tura

l Tro

upe,

a

trad

ition

al m

usic

and

dan

ce g

roup

whi

ch

has

perf

orm

ed a

t cou

ntle

ss fu

nctio

ns lo

-ca

lly a

nd in

tern

atio

nally

.

Ove

r tim

e, J

ayni

i has

iden

tified

the

need

to

sup

port

ong

oing

eff

orts

by

gove

rnm

ent

and

civi

l soc

iety

to k

eep

child

ren

off t

he

stre

ets

and

in s

choo

l. A

s a

poor

, mar

gin-

aliz

ed a

nd d

epriv

ed a

rea,

man

y ch

ildre

n ar

e fo

und

wal

king

on

the

beac

h an

d in

the

stre

ets

durin

g sc

hool

hou

rs. M

ost o

f the

se

child

ren

com

e fr

om v

ery

depr

ived

hom

es.

So fa

r Jay

nii h

as id

entifi

ed fi

fty

child

ren

aged

bet

wee

n 4

to 1

6 ye

ars

who

hav

e be

en e

nrol

led

into

the

Stre

etw

ise

Proj

ect,

base

d at

Jay

nii B

each

, a s

mal

l str

etch

of

beac

h ju

st b

elow

the

Jam

esto

wn

light

-ho

use

whi

ch is

now

thei

r cen

tre.

Thes

e 24

girl

s an

d 26

boy

s, w

ho w

ere

spen

ding

thei

r chi

ldho

od w

alki

ng a

im-

less

ly o

n th

e Ja

mes

tow

n Be

ach,

are

now

en

rolle

d at

sch

ools

in th

e co

mm

uniti

es-

Acc

ra S

empe

Prim

ary

Scho

ol in

Cla

sses

1

to 6

and

St.

Thom

as D

a y C

are

Cen

tre.

Ja

ynii,

with

out a

ssis

tanc

e fr

om p

aren

ts,

buys

them

sch

ool u

nifo

rms,

sho

es, b

ags

and

exer

cise

boo

ks a

nd re

gist

ers

them

in

scho

ol.

Aft

er s

choo

l hou

rs, t

he c

hild

ren

go to

Jay

nii B

each

whe

re th

ey g

et fe

d as

w

ell a

s ge

t ext

ra c

lass

es, h

omew

ork

help

an

d af

tern

oon

activ

ities

and

ent

erta

in-

men

t.D

urin

g 20

13 th

e C

ompa

ny h

as a

lso

dona

ted

fund

s fo

r the

fune

ral a

nd fa

mily

su

ppor

t of p

asse

d aw

ay g

arde

ner o

f the

C

ompa

ny’s

offi

ce in

Gha

na.

The

Com

pany

has

furt

herm

ore

prev

ious

ly

dona

ted

fund

s to

Pro

Cria

nça

Car

díac

a in

Rio

de

Jane

iro, B

rasi

l, a

non-

profi

t or

gani

zatio

n he

lpin

g ch

ildre

n w

ith h

eart

di

seas

es. P

ro C

rianç

a C

ardí

aca

is a

hos

pi-

tal f

ound

ed in

199

6 by

Car

diol

ogis

t Doc

tor

Cel

ia R

ose.

The

mis

sion

of t

he o

rgan

iza-

tion

is to

pro

vide

med

ical

car

e to

car

diac

ch

ildre

n fo

cusi

ng in

car

diac

sur

gery

and

an

y ot

her p

roce

dure

that

requ

ires

high

te

chno

logy

trea

tmen

t to

child

ren.

No

fund

s ha

ve b

een

dona

ted

in 2

014.

The

Com

pany

has

als

o m

ade

dona

tions

to

the

Nor

weg

ian

Salv

atio

n A

rmy,

Red

ning

s-se

lska

pet a

nd th

e st

reet

mag

azin

e “K

lar”

.

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

410

0

NO

TE

S T

O T

HE

AC

CO

UN

TS

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

410

1SI

EM O

FFSH

ORE

INC.

, AN

NU

AL

REPO

RT 2

014

102

Eyst

ein

Erik

srud

Kri

stia

n Si

emJo

hn C

. Wal

lace

Ch

air

ma

nD

ire

cto

rD

ire

cto

r

(Sig

n.)

(Sig

n.)

(Sig

n.)

Mic

hael

Del

ouch

eD

avid

Mul

len

Terj

e Sø

rens

en

Dir

ec

tor

Dir

ec

tor

Ch

ief

Exe

cu

tive

Offi

ce

r

(Sig

n.)

(Sig

n.)

(Sig

n.)

We

confi

rm, t

o th

e be

st o

f our

kno

wle

dge

that

the

finan

cial

st

atem

ents

for t

he p

erio

d 1

Janu

ary

to 3

1 D

ecem

ber 2

014

have

bee

n pr

epar

ed in

acc

orda

nce

with

cur

rent

app

licab

le a

c-co

untin

g st

anda

rds,

and

giv

e a

true

and

fair

view

of t

he a

sset

s,

liabi

litie

s, fi

nanc

ial p

ositi

on a

nd p

rofit

or l

oss

of th

e en

tity

and

the

grou

p ta

ken

as a

who

le. W

e al

so c

onfir

m th

at th

e B

oard

of

Dire

ctor

s’ R

epor

t inc

lude

s a

true

and

fair

revi

ew o

f the

dev

elop

-m

ent a

nd p

erfo

rman

ce o

f the

bus

ines

s an

d th

e po

sitio

n of

the

entit

y an

d th

e gr

oup,

toge

ther

with

a d

escr

iptio

n of

the

prin

cipa

l ris

ks a

nd u

ncer

tain

ties

faci

ng th

e en

tity

and

the

grou

p.

13 A

pril

2015

RES

PO

NS

IBIL

ITY

STAT

EM

EN

T

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

410

3

Eyst

ein

Erik

srud

(bor

n 19

70),

Cha

irM

r. Er

iksr

ud is

the

Dep

uty

CEO

of S

iem

In

dust

ries

Inc.

, the

Com

pany

’s m

ain

shar

ehol

der.

He

is fu

rthe

r the

cha

irman

of

Ele

ctro

mag

netic

Geo

serv

ices

ASA

and

a

dire

ctor

of S

ubse

a7 In

c. P

rior t

o jo

inin

g Si

em In

dust

ries

in O

ctob

er 2

011,

he

was

pa

rtne

r of t

he N

orw

egia

n la

w fi

rm W

ier-

shol

m M

ellb

ye &

Bec

h si

nce

2005

wor

k-in

g as

a b

usin

ess

law

yer w

ith a

n in

tern

a-tio

nally

orie

nted

pra

ctic

e in

mer

gers

and

ac

quis

ition

s, c

ompa

ny la

w a

nd s

ecur

ities

la

w, p

artic

ular

ly in

the

ship

ping

, off

shor

e an

d oi

l ser

vice

sec

tors

. He

was

Gro

up

Com

pany

Sec

reta

ry o

f the

Kva

erne

r Gro

up

from

200

0-20

02 a

nd s

erve

d as

Gro

up

Gen

eral

Cou

nsel

of t

he S

iem

Indu

strie

s G

roup

from

200

2-20

05. H

e ha

s se

rved

on

the

boar

ds o

f Priv

atba

nken

ASA

and

Ti

nfos

AS

as w

ell a

s a

num

ber o

f oth

er

boar

ds. E

riksr

ud is

a N

orw

egia

n ci

tizen

.

Kri

stia

n Si

em (b

orn

1949

), B

oard

mem

ber

Mr.

Siem

is c

hairm

an o

f Sie

m In

dust

ries

Inc.

, Sub

sea

7 S.

A. a

nd S

iem

Indu

strik

api-

tal A

B an

d a

dire

ctor

of S

iem

Shi

ppin

g In

c.,

Flen

sbur

ger S

chiff

bau-

Ges

ells

chaf

t mbH

&

Co.

KG

, Nor

th A

tlan

tic S

mal

ler C

ompa

-ni

es In

vest

men

t Tru

st p

lc. a

nd N

KT

Hol

d-in

g A

/S. M

r. Si

em is

a N

orw

egia

n ci

tizen

.

BO

AR

D O

F D

IREC

TOR

S Mic

hael

Del

ouch

e (b

orn

1957

), B

oard

mem

ber

Mr.

Del

ouch

e is

the

pres

iden

t and

the

secr

etar

y of

Sie

m In

dust

ries

Inc.

and

is

in c

harg

e of

the

Com

pany

’s o

pera

tions

at

the

head

offi

ce in

Geo

rge

Tow

n, C

aym

an

Isla

nds.

He

is a

dire

ctor

of S

iem

Shi

ppin

g In

c. a

nd a

form

er d

irect

or o

f Sub

sea

7 In

c. M

r. D

elou

che

rece

ived

deg

rees

in c

ivil

engi

neer

ing

(str

uctu

ral)

and

busi

ness

and

w

as p

revi

ousl

y an

aud

it m

anag

er w

ith

KPM

G P

eat M

arw

ick

LLP.

Mr.

Del

ouch

e is

a

US

citiz

en.

Dav

id M

ulle

n (b

orn

1958

), B

oard

mem

ber

Dav

id M

ulle

n is

the

foun

der a

nd C

EO o

f Sh

elf D

rillin

g, a

n in

tern

atio

nal s

hallo

w

wat

er d

rillin

g co

ntra

ctor

. Sin

ce th

e co

m-

pany

’s in

cept

ion

in N

ovem

ber 2

012,

Dav

id

has

lead

She

lf D

rillin

g th

roug

h a

serie

s of

co

mpl

ex tr

ansa

ctio

ns in

est

ablis

hing

She

lf D

rillin

g w

ith a

flee

t of 3

7 Ja

ck-u

ps a

nd 1

sw

amp

barg

e an

d 2

new

bui

ld ri

gs u

nder

co

nstr

uctio

n. P

rior t

o Sh

elf D

rillin

g, D

avid

w

as C

EO o

f Wel

lste

am H

oldi

ngs

PLC,

a

UK

-lis

ted

com

pany

that

des

igns

, man

u-fa

ctur

es a

nd s

ervi

ces

subs

ea p

ipel

ine

prod

ucts

. Fro

m 2

008

- 201

0, D

avid

ser

ved

as C

EO o

f Oce

an R

ig A

SA, a

Nor

way

-lis

ted

ultr

a-de

ep w

ater

dril

ling

cont

ract

or. P

rior

to 2

008

Dav

id h

eld

exec

utiv

e m

anag

e-m

ent p

ositi

ons

with

Tra

nsoc

ean

and

Schl

umbe

rger

Lim

ited,

incl

udin

g a

23 y

ear

care

er w

ith S

chlu

mbe

rger

Lim

ited.

John

C. W

alla

ce (b

orn

1938

), B

oard

mem

ber

John

C. W

alla

ce is

a C

hart

ered

Acc

ount

-an

t hav

ing

qual

ified

with

Pric

ewat

erho

use-

Coo

pers

in C

anad

a in

196

3, a

fter

whi

ch h

e jo

ined

Bar

ing

Bro

ther

s &

Co.

, Lim

ited

in

Lond

on, E

ngla

nd. P

rior t

o hi

s re

tirem

ent

in 2

010,

he

serv

ed fo

r ove

r tw

enty

-five

ye

ars

as C

hairm

an o

f Fre

d. O

lsen

Ltd

., a

Lond

on-b

ased

cor

pora

tion

that

he

join

ed

in 1

968

and

whi

ch s

peci

aliz

es in

the

busi

-ne

ss o

f shi

ppin

g, re

new

able

ene

rgy

and

prop

erty

dev

elop

men

t. H

e re

ceiv

ed h

is B

. C

omm

deg

ree

maj

orin

g in

Acc

ount

ing

and

Econ

omic

s fr

om M

cGill

Uni

vers

ity in

195

9.

In N

ovem

ber 2

004,

he

succ

essf

ully

com

-pl

eted

the

Inte

rnat

iona

l Uni

form

Cer

tified

Pu

blic

Acc

ount

ant Q

ualifi

catio

n Ex

amin

a-tio

n an

d ha

s re

ceiv

ed a

CPA

Cer

tifica

te

from

the

Stat

e of

Illin

ois.

Mr.

Wal

lace

al

so re

tired

from

the

boar

d of

dire

ctor

s of

G

ange

r Rol

f ASA

and

Bon

heur

ASA

, Osl

o,

both

pub

licly

-tra

ded

ship

ping

com

pani

es

with

inte

rest

s in

off

shor

e en

ergy

ser

vice

s an

d re

new

able

ene

rgy.

He

is a

Dire

ctor

of

Cal

lon

Petr

oleu

m C

o , U

SA w

here

he

is

Cha

irman

of t

he A

udit

Com

mitt

ee. H

e w

as

indu

cted

as

a 20

11 In

dust

ry P

ione

er b

y th

e O

ffsh

ore

Ener

gy C

entr

e in

Hou

ston

. Mr.

Wal

lace

is a

Can

adia

n ci

tizen

.

The

Com

pany

has

a B

oard

of fi

ve D

irect

ors.

Mem

bers

of t

he

Com

pany

’s m

anag

emen

t are

not

mem

bers

of t

he B

oard

, but

th

e co

mpa

ny’s

man

agem

ent d

oes

atte

nd B

oard

mee

tings

.

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

410

4

Siem

Off

shor

e In

c. w

ill re

leas

e fin

anci

al fi

gure

s on

the

follo

win

g da

tes

in 2

015:

Q1

2015

Wed

nesd

ay 2

0 M

ay

Q2

2015

Th

ursd

ay 2

0 A

ugus

t

Q3

2015

Th

ursd

ay 2

9 O

ctob

er

The

Ann

ual G

ener

al M

eetin

g of

the

com

pany

will

be

held

on

Frid

ay 1

May

201

5.

FIN

AN

CIA

L C

ALE

ND

AR

201

5

SIEM

OFF

SHO

RE IN

C., A

NN

UA

L RE

PORT

201

410

5

INNOVENTI

SIE

M O

FF

SH

OR

E I

NC

., A

NN

UA

L R

EP

OR

T 2

01

4

Siem

Off

shor

e In

c

Nod

evig

a 14

4610

Kris

tians

and

Nor

way

Post

al a

ddre

ss:

P.O

. Box

425

N-4

664

Kris

tians

and

S, N

orw

ay

Tele

phon

e:

+47

38

60 0

4 00

Tele

fax:

+

47 3

7 40

62

86

E-m

ail:

siem

offs

hore

@si

emof

fsho

re.c

om

www.siemoffsh

ore.com

Appendix C: Subscription Form  

SIEM OFFSHORE INC. RIGHTS ISSUE

SUBSCRIPTION FORM Securities no. ISIN KYG813131011

General information: The terms and conditions of the Rights Issue by Siem Offshore Inc. (the “Company”) are set out in the prospectus dated 17 August 2015 (the “Prospectus”). Terms defined in the Prospectus shall have the same meaning in this Subscription Form. All announcements referred to in this Subscription Form will be made through Oslo Børs’ information system under the Company’s ticker “SIOFF”.

Subscription procedures: The subscription period is from 19 August 2015 to 16:30 hours (CET) on 2 September 2015 (the “Subscription Period”). Correctly completed Subscription Forms must be received by the Manager or the Receiving Agent before the end of the Subscription Period at one of the following addresses: Swedbank, P.O Box 1441 Vika, N-0115 Oslo, Norway, telefax +47 23 23 80 11 or DNB Markets, Registrar Department, P.O. Box 1600 Sentrum, N-0021 Oslo, Norway, retail@dnb.no (the “Subscription Offices”). The subscriber is responsible for the correctness of the information filled in on the Subscription Form. Subscription Forms that are incomplete or incorrectly completed, or that are received after the end of the Subscription Period, and any subscription that may be unlawful, may be disregarded, at the discretion of the Manager or the Receiving Agent on behalf of the Company. Subscribers who are residents of Norway with a Norwegian personal identification number may also subscribe for Offer Shares through the VPS online subscription system by following the link on any of the following websites: www.swedbank.no or www.dnb.no/emisjoner. Subscriptions made through the VPS online subscription system must be duly registered before the expiry of the Subscription Period. Neither the Company, the Manager nor the Receiving Agent may be held responsible for postal delays, unavailable fax lines, internet lines or servers or other logistical or technical problems that may result in subscriptions not being received in time or at all by the Subscription Offices. Subscriptions are irrevocable and binding upon receipt and cannot be withdrawn, cancelled or modified by the subscriber after having been received by an Subscription Office, or in the case of subscriptions through the VPS online subscription system, upon registration of the subscription.

Subscription Price: The Subscription Price in the Rights Issue is NOK 1.80 per Offer Share. Subscription Rights: Registered holders of the Company’s shares (the “Existing Shareholders”) as appearing in the VPS as of 18 August 2015 (the “Record Date”) will be granted Subscription Rights giving a preferential right to subscribe for, and be allocated, the Offer Shares. Each Existing Shareholder will be granted 1.1724 Subscription Rights per existing share registered with the respective Existing Shareholder on the Record Date. The number of Subscription Rights issued to each Existing Shareholder will be rounded down to the nearest whole Subscription Right. Each Subscription Right will, subject to applicable securities laws, give the right to subscribe for and be allocated one Offer Share in the Rights Issue. Over-subscription and subscription without Subscription Rights is permitted. Subscription Rights not used to subscribe for Offer Shares before 31 August 2015 will lapse without compensation to the holder, and, consequently, will be of no value from that point in time. Allocation of Offer Shares: The Offer Shares will be allocated to the subscribers based on the allocation criteria set out in the Prospectus. The Company reserves the right to reject or reduce any subscription for Offer Shares not covered by Subscription Rights. The Company will not allocate fractional Offer Shares. Allocation of fewer Offer Shares than subscribed for does not impact on the subscriber’s obligation to pay for the Offer Shares allocated. Notification of allocated Offer Shares and the corresponding subscription amount to be paid by each subscriber is expected to be distributed in a letter from the VPS on or about 4 September 2015. Subscribers who have access to investor services through an institution that operates the subscriber’s VPS account should be able to see how many Offer Shares they have been allocated from 12:00 hours (CET) on or about 4 September 2015.

Payment: In completing this Subscription Form, or registering a subscription through the VPS online subscription system, subscribers authorise each of Swedbank and DNB Markets to debit the subscriber’s Norwegian bank account for the total subscription amount payable for the Offer Shares allocated to the subscriber. Accounts will be debited on or about 14 September 2015 (the “Payment Date”), and there must be sufficient funds in the stated bank account from and including the date falling 2 banking day prior to the Payment Date. Subscribers who do not have a Norwegian bank account must ensure that payment for the allocated Offer Shares is made on or before the Payment Date. Details and instructions can be obtained by contacting Swedbank, telephone: +47 23 23 80 00 or DNB Markets, telephone: + 47 22 94 88 80. Swedbank and DNB Markets together are only authorized to debit each account once, but reserves the right (but has no obligation) to make up to three debit attempts through 21 September 2015 if there are insufficient funds on the account on the Payment Date. Should any subscriber have insufficient funds in his or her account, should payment be delayed for any reason, if it is not possible to debit the account or if payments for any other reasons are not made when due, overdue interest will accrue and other terms will apply as set out under the heading “Overdue and missing payments” below. PLEASE SEE PAGE 2 OF THIS SUBSCRIPTION FORM FOR OTHER PROVISIONS THAT ALSO APPLY TO THE SUBSCRIPTION

DETAILS OF THE SUBSCRIPTION Subscriber’s VPS account: Number of Subscription Rights:

Number of Offer Shares subscribed (incl. over-subscription):

(For broker: consecutive no.):

SUBSCRIPTION RIGHT’S SECURITIES NUMBER: ISIN KYG812291097

Subscription Price per Offer Share:

NOK 1.80

Subscription amount to be paid:

NOK

IRREVOCABLE AUTHORIZATION TO DEBIT ACCOUNT (MUST BE COMPLETED BY SUBSCRIBERS WITH A NORWEGIAN BANK ACCOUNT)

Norwegian bank account to be debited for the payment for Offer Shares allocated (number of Offer Shares allocated x NOK 1.80).

(Norwegian bank account no.) I/we hereby irrevocably (i) subscribe for the number of Offer Shares specified above subject to the terms and conditions set out in this Subscription Form and in the Prospectus, (ii) authorize and instruct each of the Manager and the Receiving Agent (or someone appointed by any of them) acting jointly or severally to take all actions required to transfer such Offer Shares allocate to me/us to the VPS Registrar and ensure delivery of the beneficial interests to such Offer Shares to me/us in the VPS, on my/our behalf, (iii) authorize Swedbank and DNB Markets to debit my/our bank account as set out in this Subscription Form for the amount payable for the Offer Shares allotted to me/us, and (iv) confirm and warrant to have read the Prospectus and that I/we are eligible to subscribe for Offer Shares under the terms set forth therein.

Place and date must be dated in the Subscription Period.

Binding signature The subscriber must have legal capacity. When signed on behalf of a company or pursuant to an authorization, documentation in the form of a company certificate

or power of attorney must be enclosed.

INFORMATION ON THE SUBSCRIBER – ALL FIELDS MUST BE COMPLETED First name

Surname/company

Street address

Post code/district/ country

Personal ID number/ organization number

Nationality

E-mail address

Daytime telephone number

ADDITIONAL GUIDELINES FOR THE SUBSCRIBER

Regulatory issues: In accordance with the Markets in Financial Instruments Directive (“MiFID”) of the European Union, Norwegian law imposes requirements in relation to business investments. In this respect, the Manager and the Receiving Agent must categorize all new clients in one of three categories: eligible counterparties, professional clients and non-professional clients. All subscribers in the Rights Issue who are not existing clients of either the Manager or the Receiving Agent will be categorized as non-professional clients. Subscribers can, by written request to either the Manager or the Receiving Agent, ask to be categorized as a professional client if the subscriber fulfils the applicable requirements of the Norwegian Securities Trading Act. For further information about the categorization, the subscriber may contact Swedbank (Sedbank, Filipstad Brygge 1, P.O Box 1441 Vika, N-0115 Oslo, Norway) or DNB Markets (DNB Markets, KSC - Customer Administration, P.O. Box 7100, NO5020 Bergen, Norway or www.dnb.no/en/mifid). The subscriber represents that he/she/it is capable of evaluating the merits and risks of a decision to invest in the Company by subscribing for Offer Shares, and is able to bear the economic risk, and to withstand a complete loss, of an investment in the Offer Shares.

Selling Restrictions: The attention of persons who wish to subscribe for Offer Shares is drawn to Section 14 “Selling and transfer restrictions” of the Prospectus. The Company is not taking any action to permit a public offering of the Subscription Rights or the Offer Shares (pursuant to the exercise of the Subscription Rights or otherwise) in any jurisdiction other than Norway. Receipt of the Prospectus will not constitute an offer in those jurisdictions in which it would be illegal to make an offer and, in those circumstances, the Prospectus is for information only and should not be copied or redistributed. Persons outside Norway should consult their professional advisors as to whether they require any governmental or other consent or need to observe any other formalities to enable them to subscribe for Offer Shares. It is the responsibility of any person wishing to subscribe for Offer Shares under the Rights Issue to satisfy himself as to the full observance of the laws of any relevant jurisdiction in connection therewith, including obtaining any governmental or other consent which may be required, the compliance with other necessary formalities and the payment of any issue, transfer or other taxes due in such territories. The Subscription Rights and Offer Shares have not been registered, and will not be registered, under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) and may not be offered, sold, taken up, exercised, resold, delivered or transferred, directly or indirectly, within the United States, except pursuant to an applicable exemption from the registration requirements of the U.S. Securities Act and in compliance with the securities laws of any state or other jurisdiction of the United States. The Subscription Rights and Offer Shares have not been and will not be registered under the applicable securities laws of Australia, Canada or Japan and may not be offered, sold, taken up, exercised, resold, delivered or transferred, directly or indirectly, in or into Australia, Canada or Japan. This Subscription Form does not constitute an offer to sell or a solicitation of an offer to buy Offer Shares in any jurisdiction in which such offer or solicitation is unlawful. A notification of exercise of Subscription Rights and subscription of Offer Shares in contravention of the above restrictions may be deemed to be invalid. By subscribing for the Offer Shares, persons effecting subscriptions will be deemed to have represented to the Company that they, and the persons on whose behalf they are subscribing for the Offer Shares, have complied with the above selling restrictions.

Execution Only: The Manager or the Receiving Agent will treat the Subscription Form as an execution-only instruction. The Managerand the Receiving Agent are not required to determine whether an investment in the Offer Shares is appropriate or not for the subscriber. Hence, the subscriber will not benefit from the protection of the relevant conduct of business rules in accordance with the Norwegian Securities Trading Act.

Information exchange: The subscriber acknowledges that, under the Norwegian Securities Trading Act and the Norwegian Commercial Banks Act and foreign legislation applicable to the Manager and the Receiving Agent there is a duty of secrecy between the different units of each of the Manager and the Receiving Agent as well as between the Manager and the Receiving Agent and the other entities in their respective groups. This may entail that other employees of the Manager and the Receiving Agent or the their respective groups may have information that may be relevant to the subscriber and to the assessment of the Offer Shares, but which the Manager or the Receiving Agent will not have access to in their capacity as Manager and Receiving Agent for the Offering.

Information barriers: The Manager and the Receiving Agent are securities firms that offer a broad range of investment services. In order to ensure that assignments undertaken in the Manager and the Receiving Agent's corporate finance departments are kept confidential, the Manager and the Receiving Agent's other activities, including analysis and stock broking, are separated from the their respective corporate finance departments by information walls. Consequently the subscriber acknowledges that the Manager and the Receiving Agent's analysis and stock broking activity may conflict with the subscriber’s interests with regard to transactions in the Shares, including the Offer Shares.

VPS account and mandatory anti-money laundering procedures: The Offering is subject to the Norwegian Money Laundering Act of 6 March 2009 No. 11 and the Norwegian Money Laundering Regulations of 13 March 2009 No. 302 (collectively, the “Anti-Money Laundering Legislation”). Subscribers who are not registered as existing customers of either the Manager or the Receiving Agent must verify their identity to one of the Manager and the Receving Agent in accordance with requirements of the Anti-Money Laundering Legislation, unless an exemption is available. Subscribers who have designated an existing Norwegian bank account and an existing VPS account on the Subscription Form are exempted, unless verification of identity is requested by the Manager or Receiving Agent. Subscribers who have not completed the required verification of identity prior to the expiry of the Subscription Period will not be allocated Offer Shares. Participation in the Offering is conditional upon the subscriber holding a VPS account. The VPS account number must be stated in the subscription form. VPS accounts can be established with authorized VPS registrars, who can be Norwegian banks, authorized securities brokers in Norway and Norwegian branches of credit institutions established within the EEA. Establishment of a VPS account requires verification of identity to the VPS registrar in accordance with the Anti-Money Laundering Legislation. However, non-Norwegian investors may use nominee VPS accounts registered in the name of a nominee. The nominee must be authorized by the Financial Supervisory Authority of Norway.

Terms and conditions for payment by direct debiting - securities trading: Payment by direct debiting is a service the banks in Norway provide in cooperation. In the relationship between the payer and the payer’s bank the following standard terms and conditions apply:

a) The service “Payment by direct debiting – securities trading” is supplemented by the account agreement between the payer and the payer’s bank, in particular Section C of the account agreement, General terms and conditions for deposit and payment instructions.

b) Costs related to the use of “Payment by direct debiting – securities trading” appear from the bank’s prevailing price list, account information and/or information given in another appropriate manner. The bank will charge the indicated account for costs incurred.

c) The authorization for direct debiting is signed by the payer and delivered to the beneficiary. The beneficiary will deliver the instructions to its bank that in turn will charge the payer’s bank account.

d) In case of withdrawal of the authorization for direct debiting the payer shall address this issue with the beneficiary. Pursuant to the Norwegian Financial Contracts Act the payer’s bank shall assist if the payer withdraws a payment instruction that has not been completed. Such withdrawal may be regarded as a breach of the agreement between the payer and the beneficiary.

e) The payer cannot authorize payment of a higher amount than the funds available on the payer’s account at the time of payment. The payer’s bank will normally perform a verification of available funds prior to the account being charged. If the account has been charged with an amount higher than the funds available, the difference shall immediately be covered by the payer.

f) The payer’s account will be charged on the indicated date of payment. If the date of payment has not been indicated in the authorization for direct debiting, the account will be charged as soon as possible after the beneficiary has delivered the instructions to its bank. The charge will not, however, take place after the authorization has expired as indicated above. Payment will normally be credited the beneficiary’s account between one and three working days after the indicated date of payment/delivery.

g) If the payer’s account is wrongfully charged after direct debiting, the payer’s right to repayment of the charged amount will be governed by the account agreement and the Norwegian Financial Contracts Act.

Overdue and missing payments: Overdue payments will be charged with interest at the applicable rate under the Norwegian Act on Interest on Overdue Payment of 17 December 1976 No. 100; 9.00% per annum as of the date of the Prospectus. If the subscriber fails to comply with the terms of payment or should payments not be made when due, the subscriber will remain liable for payment of the Offer Shares allocated to it and the Offer Shares allocated to such subscriber will not be delivered to the subscriber. In such case the Company, Swedbank and DNB Markets reserve the right to, at any time and at the risk and cost of the subscriber, re-allot, cancel or reduce the subscription and the allocation of the allocated Offer Shares, or, if payment has not been received by the third day after the Payment Date, without further notice sell, assume ownership to or otherwise dispose of the allocated Offer Shares in accordance with applicable law. If Offer Shares are sold on behalf of the subscriber, such sale will be for the subscriber’s account and risk and the subscriber will be liable for any loss, costs, charges and expenses suffered or incurred by the Company, Swedbank and/or DNB Markets as a result of, or in connection with, such sales. The Company, Swedbank and/or DNB Markets may enforce payment for any amounts outstanding in accordance with applicable law.

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Siem Offshore Inc.

Harbour Place 5th Floor P.O.Box 10718 George Town

Grand Cayman KY1-1006 Cayman Islands

Siem Offshore Management AS Nodeviga 14

4610 Kristiansand Norway

Lead Manager

Swedbank Filipstad Brygge 1 P.O Box 1441 Vika

N-0115 Oslo Norway

Tel: +47 23 23 80 00 Fax: +47 23 23 80 11

www.swedbank.no

Receiving Agent

DNB Markets Registrars Department Dronning Eufemias gate 30

P.O. Box 1600 Sentrum N-0021 Oslo

Norway Tel.: +47 23 26 81 01 Email: retail@dnb.no

www.dnb.no/emisjoner

Legal counsel

Advokatfirmaet Wiersholm AS Dokkveien 1

Postboks 1400 Vika, 0115 Oslo Norway

Tel: +47 21 02 10 00