Financial results 4Q 2015

Oslo,16 February 2016

AGENDA

FINANCIAL RESULTS 4Q 2015

MARKET

OPERATIONS

SUMMARY

Income Statement – Key Figures

(USD mill) 4Q 2015 3Q 2015 Change

Operating revenues 257,9 235,1 22,8 Recharged income 7,3 6,3 1,0 Total revenues 265,2 241,4 23,8

Operating costs (116,3) (105,7) (10,6)Recharged expenses (7,4) (6,1) (1,3)Total operating expenses (123,7) (111,8) (11,9)

Oper. result before depr. (EBITDA) 141,5 129,6 11,9

Depreciation (86,2) (82,6) (3,6)Impairment (158,0) (31,0) (127,0)Operating result (EBIT) (102,7) 16,0 (118,7)

Net financial items (19,8) 6,3 (26,1)Result before tax (122,5) 22,3 (144,8)

Estimated tax 8,3 (0,9) 9,2 Net result (114,2) 21,4 (135,6)

EBITDA Comparison 4Q 2015 vs. 3Q 2015

Financial Items Breakdown

(USD mill) 4Q 2015 3Q 2015 Change

Interest income 0,4 0,4 - Other financial income 0,5 - 0,5 Gains on financial instruments 0,9 - 0,9 Financial income 1,8 0,4 1,4

Interest expenses (10,9) (11,7) 0,8 Capitalized borrowing cost (projects) - 1,8 (1,8)Losses on financial instruments (8,2) (7,7) (0,5)Other financial expenses (11,9) (3,5) (8,4)Financial expenses (31,0) (21,1) (9,9)

Net foreign currency gain 9,4 27,0 (17,6)

Net financial items (19,8) 6,3 (26,1)

Offshore Drilling Segment

(USD mill) 4Q 2015 3Q 2015 Change

Operating revenues 252,7 234,0 18,7 Recharged income 7,3 6,3 1,0 Total revenues 260,0 240,3 19,7

Operating costs (114,0) (103,4) (10,6)Recharged expenses (7,4) (6,1) (1,3)Total operating expenses (121,4) (109,5) (11,9)

Oper. result before depr. (EBITDA) 138,6 130,8 7,8

Depreciation (84,7) (82,0) (2,7)Impairment (158,0) (31,0) (127,0)

Operating result (EBIT) (104,1) 17,8 (121,9)

Engineering & Fabrication Segment

(USD mill) 4Q 2015 3Q 2015 Change

Operating revenues (external) 5,2 1,1 4,1 Inter-segment revenues 0,3 (1,1) 1,4 Total operating revenues 5,5 - 5,5

Operating costs (2,6) (1,2) (1,4)Oper. result before depr. (EBITDA) 2,9 (1,2) 4,1

Depreciation (1,5) (0,6) (0,9)

Operating result (EBIT) 1,4 (1,8) 3,2

Consolidated Balance Sheet

(USD mill) 4Q 2015 3Q 2015 Change

Intangible assets 11,2 11,6 (0,4)Property, plant & equipment 1 862,4 2 702,2 (839,8)Other non-current assets 22,9 30,3 (7,4)Total non-current assets 1 896,5 2 744,1 (847,6)

Other current assets 462,8 284,4 178,4 Cash and cash equivalents 214,1 209,5 4,6 Total current assets 676,9 493,9 183,0 Total assets 2 573,4 3 238,0 (664,6)

Equity 965,5 1 068,6 (103,1)

Non-current interest bearing debt 1 002,1 1 056,0 (53,9)Other non-current liabilities 100,3 123,7 (23,4)Total non-current liabilities 1 102,4 1 179,7 (77,3)

Current interest bearing debt 325,7 355,6 (29,9)Current liabilities newbuilds - 417,0 (417,0)Other current liabilities 179,8 217,1 (37,3)Total current liabilities 505,5 989,7 (484,2)Total equity and liabilities 2 573,4 3 238,0 (664,6)

Consolidated Cash Flow

(USD mill) 4Q 2015 3Q 2015 Change

Profit before income taxes (122,5) 22,3 (144,8)Depreciation and impairment 244,2 113,6 130,6 Interest expense 11,0 9,8 1,2 Changes in working capital 51,7 11,9 39,8 Unrealized loss/(gain) financial instruments (4,1) (17,8) 13,7 Cash generated from operations 180,3 139,8 40,5

Interest paid (11,7) (11,7) - Taxes paid (2,2) (3,8) 1,6 Net cash flow from operating activities 166,4 124,3 42,1

Net investment in fixed assets (74,2) (94,3) 20,1 Cash flow used in investment activities (74,2) (94,3) 20,1

Borrowing of loans - 130,0 (130,0)Repayments of loans (84,4) (135,5) 51,1 Cash flow from financing activities (84,4) (5,5) (78,9)

Foreign currency (3,2) (1,0) (2,2)Net change in cash and cash equivalents 7,8 24,5 (16,7)Cash at beginning of period 209,5 186,0 23,5 Cash at end of period 214,1 209,5 4,6

Offshore drilling EBITDA and margin

Fleet status

RIG DESIGN W DEPTH LOCATION CLIENT CONTRACT STATUS DAY RATE (USD) NEXT CRS

Bolette Dolphin DS/ Gusto P10' 12 000 Ivory Coast Anadarko 2Q 2014 - 2Q 2018 488 000 1Q 2019

Belford Dolphin Drillship 10 000 Labuan Terminated for convenience

Blackford Dolphin SS / Aker H-3 7 000 UK Chevron July '15 - January '17 428 000 2Q 2019

Bideford Dolphin SS / Aker H-3 1 500 Norway Statoil January '14 - January '17 NOK 1048' + USD 301' 2Q 2019

Borgland Dolphin SS / Aker H-3 1 500 Norway Consortium* April '14 - March '17 NOK 1057' + USD 349' 1Q 2020

Bredford Dolphin SS / Aker H-3 1 500 Norway Idle, cold stacked 2Q 2017

Byford Dolphin SS / Aker H-3 1 500 UK BP April '13 - September '16 345 500 2Q 2020

Borgsten Dolphin Tender support / AH-3 UK Total October '15 - January '18 166 000 1Q 2018(204 500 incl. cap.contribution)

Borgholm Dolphin Accomodation / AH-3 UK Idle, cold stacked 4Q 2017

Borgny Dolphin SS / Aker H-3 2 300 Cold stacked

Participants in the consortium: * Wintershall, Tullow Oil, E.ON Ruhrgas, Suncor Energy

MID WATER FLOATERS NORWAY

MID WATER FLOATERS UK

ULTRA DEEPWATER UNITS

FINANCIAL RESULTS

MARKET

OPERATIONS

SUMMARY

Global market – floating units

Limited new demand is creating an increasing overcapacity resulting in declining day rates to a current low level

Cold stacking of units is expected to increase

Scrapping is expected to continue to some extent

The market imbalance is expected to prevail through 2016 and into 2017

NameWest NavigatorCOSLPioneerTransocean SearcherTransocean BarentsWest VentureSonga TrymBredford DolphinPolar PioneerTransocean SpitsbergenLeiv EirikssonTransocean WinnerWest AlphaBideford DolphinBorgland DolphinTransocean ArcticSonga DeltaSonga DeeWest HerculesStena DonIsland InnovatorScarabeo 5Deepsea BergenDeepsea StavangerScarabeo 8COSLInnovatorCOSLPromoterDeepsea AtlanticSonga EnduranceSonga EquinoxSonga EncourageSonga Enabler

Contract Option Yard/under construction

2016 2017 2018Q1 Q2 Q3 Q4 Q1 Q3 Q4 Q1 Q2 Q3 Q4Q2

Norwegian floater market

There has been a considerable reduction in the utilisation of the rig fleet in Norway during the last year

Few new visible contract opportunities in the near to mid term

Expect increased number of cold stacked units

As per January 2016

Source: DNB

Average dayrates Norway

NameOcean VanguardBorgny DolphinOcean NomadOcean PrincessTransocean ProspectSertaoSedco 711Transocean John ShawSedco 714Paragon MSS1Sedco 704WilHunterOcean ValiantByford DolphinWest PhoenixStena SpeySedco 712Ocean GuardianBlackford DolphinPaul B. Loyd, Jr.Ocean PatriotWilPhoenixTransocean LeaderDeepsea Aberdeen

Contract Option Yard/under construction

Q42016 2017 2018

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

UK floater market

The UK market is in a similar situation as the Norwegian market with a sharp decline in utilization of the fleet

Some of the tender activity in 2016 has been postponed to 2017

The visibility for 2016 and into 2017 is low

The low project activity in general is affecting the accommodation segment, with few contracting opportunities also in this market

As per January 2016

Source: DNB

Average dayrates UK

Deepwater dayrates - worldwide

FINANCIAL RESULTS

MARKET

OPERATIONS

SUMMARY

Russia

New Zealand

Papua -New Guinea

Australia

Philippines

Japan

Brunei

Taiwan

South Korea

North Korea

Indonesia

Malaysia

Vietnam

Cambodia

LaosMyanmar

Sri Lanka

Madagascar

India

Mongolia

China

Mozambique

South Africa

Malawi

Pakistan

Zimbabwe

Botswana

Kirgistan

Tadschikistan

Somalia

Afghanistan

Tanzania

Namibia

Sambia

Kenya

Dschibuti

Qatar

Yemen

Uganda

Ethiopia

Usbekistan

Angola

Turkmenistan

Eritrea

Iran

Zaire

Saudi-Arabia

Sudan

Iraq

Kazakhstan

Azerbaijan

Congo

Argentina

Jordan

Central Africa

Chile

Gabun

Israel

Syria

Lebanon

Georgia

Cameroon

Chad

Egypt

Cyprus

Nigeria

Turkey

Benin

Togo

Ghana

Libya

Greece

Niger

Bulgaria

Ivory Coast

Burkina Faso

Liberia

Ukraine

Serbia

Romania

Tunesia

Sierra Leone

Belarus

Mali

Guinea

Brazil

Hungaria

Algeria

Lithuania

Italy

Guinea- Bissau

Estonia

Latvia

Senegal

Gambia

Poland

Mauretania

Finnland

Bolivia

West Sahara

Germany

Marocco

Sweden

Denmark

Spain

France

Belgium

Netherlands

Portugal

Peru

Norway

French- Guayana

United Kingdom

Guyana

Ireland

Columbia

Ecuador

Venezuela

Trinidad

Panama

Puerto Rico

Costa Rica

Dominican RepublicHaiti

Nicaragua

Jamaica

Honduras

El Salvador

Iceland

Belize

Cuba

Mexico

USA

Greenland

Canada

NepalBhutan

Bangladesh

Thailand

Uruguay

Guatemala

Kuwait

Oman

United Arab Emirates

Lesotho

Swaziland

Burundi

Rwanda

Croatia Bosnia- Herzegovina

Austria

Switzerland

Luxemburg

Moldawia

Albania

Macedonia

Montenegro

Slovenia

Czech Republic

Slovakia

Armenia

Paraguay

Surinam

ByfordDolphin

BorgstenDolphin

BorgholmDolphin

BlackfordDolphin

BidefordDolphin

BorglandDolphin

BredfordDolphin

BorgnyDolphin (cold stacked)

BoletteDolphin Belford

Dolphin

Fred. Olsen Energy – Operating worldwide

Contract overview

Average contract length approximately 11 months

Contract backlog

Total backlog approximately USD 1.1 billion

Ultra deepwater

Belford Dolphin

Completed the five-year Class Renewal Survey at the Keppel yard in October 2015

Has undergone a preservation program and is located outside Labuan, Malaysia. The unit is marketed for contract possibilities worldwide

Bolette Dolphin

Operates under a four-year contract with Anadarko, estimated to expire 2Q 2018

Completed the first drilling campaign offshore Colombia and has recently arrived in the Ivory Coast

Midwater - Norway

Bideford DolphinOperates under a three-year contract with Statoil, estimated to be completed end of January 2017

Completed its five-year class renewal survey July 2014

One of the winterstorms have caused damages to the helideck of the rig. The unit is therefore inshore for repairs which is expected to be completed early March

Borgland Dolphin

Continued its operations under the 18-well contract with an RMN consortium, estimated to be completed 1Q 2017

The unit is currently inshore due to lack of drilling program for the client

The unit completed its Class Renewal Survey February 2015

Midwater - Norway / United Kingdom

Bredford DolphinCompleted the 12-well contract with an AGR consortium beginning of 2016

The unit is cold stacked at Kvinesdal, Norway, due to lack of new contract opportunities

The class renewal survey was completed August 2012

Borgholm DolphinThe unit is cold stacked and located at the quay side of Harland & Wolff

Class renewal survey was completed March 2013

Midwater - United Kingdom (cont.)

Byford Dolphin

Continued under the contract with BP Exploration in the UK. The contract is estimated to expire 3Q 2016

The unit completed its CRS July 2015

Borgsten Dolphin

Continued under the tender support services contract with Total E&P UK

The contract rate was amended from October 2015 with estimated expiry of the contact in January 2018, subject to certain early termination rights

Completed class renewal survey and conversion to tender support vessel in February 2013

Deepwater – United Kingdom

Blackford Dolphin

Continued the 572 days contract with Chevron offshore UK. The contract is estimated to expire around January 2017

The unit experienced 56 days of downtime related to subsea equipment during the 4th quarter and 18 days in January 2016

Completed its class renewal survey in June 2014

Bollsta Dolphin

HHI’s quantification of their claim that Bollstawas not entitled to cancel the contract was received in January 2016

In addition to claiming entitlement to the first instalment HHI claims an additional payment of about MUSD 178

An alternative claim of MUSD 38 has been submitted by HHI should their primary claim fail

Bollsta, together with FOE, remain firm that the cancellation was rightful, that Bollsta is entitled to a full repayment of the first instalment (of about MUSD 186) and that none of HHI’s claims holds any merit; they will all be vigorously refuted

An impairment of USD 91.4 million is booked for the Bollsta Dolphin due to the cancellation

Ta inn nytt bilde

Harland & Wolff

Focus on ship repair, ship building, steel fabrication and engineering services

The main activities during the quarter has been several dockings and a repair of the LNG tanker Al Oraig in the main dock

Borgny Dolphin and Borgholm Dolphin remains cold-stacked at the yard

Summary

Financial

Revenues were USD 265 million

EBITDA was USD 141.5 million

Profit before tax was negative USD 122.5 million

Impairment of totally USD 158 million is booked

Contract backlog amounting to approximately USD 1.1 billion

HHI’s quantification of their claim that Bollsta was not entitled to cancel the contract was received in January 2016

Operational

Bredford Dolphin completed its contract early January 2016

Market

Average contract duration approximately 11 months

Q&A