Financial results 1Q 2015

Oslo,6 May 2015

AGENDA

FINANCIAL RESULTS 1Q 2015

MARKET

OPERATIONS

SUMMARY

Income Statement – Key Figures

(USD mill) 1Q 2015 4Q 2014 Change

Operating revenues 272,0 286,4 (14,4)Recharged income 11,9 11,2 0,7 Total revenues 283,9 297,6 (13,7)

Operating costs (114,9) (129,6) 14,7 Recharged expenses (11,7) (10,9) (0,8)Total operating expenses (126,6) (140,5) 13,9

Oper. result before depr. (EBITDA) 157,3 157,1 0,2

Depreciation (91,1) (86,6) (4,5)Operating result (EBIT) 66,2 70,5 (4,3)

Net financial items 8,7 33,7 (25,0)Result before tax 74,9 104,2 (29,3)

Estimated tax (5,2) (8,6) 3,4 Net result 69,7 95,6 (25,9)

EBITDA Comparison 1Q 2015 vs. 4Q 2014

Financial Items Breakdown

(USD mill) 1Q 2015 4Q 2014 Change

Interest income 0,4 0,4 - Gains on financial instruments - - - Financial income 0,4 0,4 -

Interest expenses (11,5) (12,3) 0,8 Capitalized borrowing cost (projects) 1,7 1,7 - Losses on financial instruments (7,6) (9,4) 1,8 Other financial expenses (3,7) (4,2) 0,5 Financial expenses (21,1) (24,2) 3,1

Net foreign currency gain 29,4 57,5 (28,1)

Net financial items 8,7 33,7 (25,0)

Offshore Drilling Segment

(USD mill) 1Q 2015 4Q 2014 Change

Operating revenues 268,0 283,3 (15,3)Recharged income 11,9 11,2 0,7 Total revenues 279,9 294,5 (14,6)

Operating costs (111,8) (128,1) 16,3 Recharged expenses (11,7) (10,9) (0,8)Total operating expenses (123,5) (139,0) 15,5

Oper. result before depr. (EBITDA) 156,4 155,5 0,9

Depreciation (90,5) (86,0) (4,5)

Operating result (EBIT) 65,9 69,5 (3,6)

Engineering & Fabrication Segment

(USD mill) 1Q 2015 4Q 2014 Change

Operating revenues (external) 4,0 3,1 0,9 Inter-segment revenues 33,7 3,0 30,7 Total operating revenues 37,7 6,1 31,6

Operating costs (35,4) (4,4) (31,0)Oper. result before depr. (EBITDA) 2,3 1,7 0,6

Depreciation (0,6) (0,6) -

Operating result (EBIT) 1,7 1,1 0,6

Consolidated Balance Sheet

(USD mill) 1Q 2015 4Q 2014 Change

Intangible assets 12,2 13,3 (1,1)Property, plant & equipment 2 989,7 2 901,6 88,1 Other non-current assets 30,8 31,4 (0,6)Total non-current assets 3 032,7 2 946,3 86,4

Other current assets 331,1 318,9 12,2 Cash and cash equivalents 152,4 203,4 (51,0)Total current assets 483,5 522,3 (38,8)Total assets 3 516,2 3 468,6 47,6

Equity 1 376,5 1 307,9 68,6

Non-current interest bearing debt 1 238,6 1 359,9 (121,3)Other non-current liabilities 135,1 139,0 (3,9)Total non-current liabilities 1 373,7 1 498,9 (125,2)

Current interest bearing debt 190,9 95,5 95,4 Current liabilities newbuilds 337,2 292,7 44,5 Other current liabilities 237,9 273,6 (35,7)Total current liabilities 766,0 661,8 104,2 Total equity and liabilities 3 516,2 3 468,6 47,6

Consolidated Cash Flow

(USD mill) 1Q 2015 4Q 2014 Change

Profit before income taxes 74,9 104,2 (29,3)Depreciation and impairment 91,1 86,6 4,5 Interest expense 9,9 10,6 (0,7)Gain on sale of assets 0,1 - 0,1 Changes in working capital (28,5) 33,4 (61,9)Unrealized loss/(gain) financial instruments (20,3) (43,0) 22,7 Cash generated from operations 127,2 191,8 (64,6)

Interest paid (11,9) (12,8) 0,9 Taxes paid (7,0) (19,7) 12,7 Net cash flow from operating activities 108,3 159,3 (51,0)

Net investment in fixed assets (157,0) (130,7) (26,3)Cash flow used in investment activities (157,0) (130,7) (26,3)

Cash flow from financing activities - - -

Foreign currency (2,3) 0,3 (2,6)Net change in cash and cash equivalents (48,7) 28,6 (77,3)Cash at beginning of period 203,4 174,5 28,9 Cash at end of period 152,4 203,4 (51,0)

Offshore drilling EBITDA and margin

Fleet statusRig Type / design W depth ft Location Client Contract status Day rate (in USD) Next CR survey

Bollsta Dolphin SS / Moss 10 000 UK Chevron 4Q 2015- 4Q 2020 560 000 3Q 2020

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

Belford Dolphin Drillship 10 000 Mozambique Anadarko January '12 - September '15 495 000 2Q 2015September '15 - March'16 Termination for convenience

Blackford Dolphin SS / Aker H-3 7 000 UK Nexen October '14 - May '15 428 000 4Q 2018UK Chevron June '15 - January '17 428 000

Option January '17 - October '17

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

Borgland Dolphin SS / Aker H-3 1 500 Norway Consortium* April '14 - December '17 NOK 1046' + USD 349' 4Q 2019

Bredford Dolphin SS / Aker H-3 1 500 Norway Consortium** October '13 - September '15 NOK 1025' + USD 274' 2Q 2017

Byford Dolphin SS / Aker H-3 1 500 UK BP April '13 - September '16 345 500 OngoingOption September '16 - August '19

Borgsten Dolphin Tender support / AH-3 UK Total February '13 -May '16 202 000/ 240 500 incl. capital contributionOption June '16 - June '17 1Q 2018

Borgholm Dolphin Accomodation / AH-3 UK BG October '14 - May '15 240 000 4Q 2017

Borgny Dolphin SS / Aker H-3 2 300 Idle

Participants in the consortiums: * Wintershall, Tullow Oil, E.ON Ruhrgas, Suncor Energy ** RWE DEA, Lundin, Noreco, Repsol

Midwater floaters Norway

Midwater floaters UK

Ultra-deepwater and deepwater units

FINANCIAL RESULTS

MARKET

OPERATIONS

SUMMARY

Global market – floating units

The market continues to be challenging in all segments

The contracting and tender activity is low, while further newbuilds are entering the market

The imbalance between demand and supply is expected to prevail through 2015 and into 2016

Increased stacking and scrapping is materializing

Norwegian floater market

The low contracting activity over the last two years will continue through 2015

Several rigs will come off contract during 2015, including Bredford Dolphin

Contract renewal will be challenging and increased idle time is expected

As per April 2015

Source: DNB

NameWest NavigatorTransocean SpitsbergenWest VentureTransocean SearcherDeepsea AtlanticBredford DolphinTransocean BarentsTransocean ArcticTransocean WinnerCOSLPioneerBideford DolphinSonga DeltaSonga DeeIsland InnovatorBorgland DolphinStena DonSonga TrymScarabeo 5Deepsea BergenScarabeo 8Leiv EirikssonCOSLInnovatorCOSLPromoterSonga EquinoxSonga EnduranceSonga EncourageSonga Enabler

Contract Option Yard/under construction

Q3 Q4 Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4 Q1 Q22015 2016 2017

Average dayrates Norway

NameOcean VanguardOcean NomadOcean PrincessTransocean ProspectOcean GuardianWest PhoenixParagon MSS1Sedco 711Transocean John ShawWilHunterSedco 704Ocean ValiantSedco 714Stena SpeySedco 712Blackford DolphinPaul B. Loyd, Jr.Byford DolphinWilPhoenixOcean PatriotTransocean LeaderBollsta DolphinDeepsea Aberdeen

Q3 Q4 Q1 Q2 Q3 Q42015 2016 2017

Q1 Q2 Q3 Q4 Q1 Q2

UK floater market

The activity is weak also in the UK market

Despite some tendering activity there is still limited visibility for contract renewal during the next year

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

As per April 2015

Source: DNB and the Company

Average dayrates UK

Wordwide deepwater dayrates

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 (idle – UK)

BoletteDolphin

BelfordDolphin

BollstaDolphin

Fred. Olsen Energy – Operating worldwide

Contract overview

Average contract length ca. 19 months

Bolette Anadarko

Bollsta Chevron

Belford Anadarko1)

Blackford Chevron

Bideford Statoil

Borgland RMN consortium

Bredford AGR cons

Byford BP

Borgsten Total

Borgholm BG

Borgny Cold stacked1) Terminated for convenience (termination fee of USD 52 million)

Option Mobilization Yard

202020192015 2016 2017 2018

Contract backlog

Total backlog ca. USD 2.9 billion

22

Bollsta Dolphin

Harsh environment ultra deepwater semi-submersible under construction

Moss Maritime CS 60 E (Enhanced) design from Hyundai Heavy Industries

Delivery is scheduled to 3Q 2015

Mechanical completion continues

Has secured a five-year contract with Chevron for operations West of Shetland in the UK sector

Ta inn nytt bilde

2424

Ultra deepwater

Belford Dolphin

Continued operations for Anadarko offshore Mozambique

A notice for termination has been received effective from early September 2015. The termination fee is approximately USD 52 million

The unit will undertake its five-year Class Renewal Survey in 2/3Q 2015, estimated to approximately 100 days and at a cost of USD 130 million

Bolette Dolphin

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

Continued drilling operations under a two well drilling campaign offshore Colombia

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

Borgland Dolphin

Continued its operations under the contract with an RMN consortium after the class renewal survey. The contract is estimated to be completed end of 2017

The five year class renewal survey was completed end of February. The total cost was USD 160 million, including a life extension program of USD 50 million

A new 15K BOP was installed during the yard stay

Midwater - Norway / United Kingdom

Bredford DolphinContinued under the 12-well contract with an AGR consortium. The contract is expected to expire end of 3Q 2015

The class renewal survey was completed August 2012

Borgholm DolphinContinued operations under the BG contract, estimated to expire end of May 2015

Class renewal survey was completed March 2013

Midwater - United Kingdom (cont.)

Byford Dolphin

The rig is under a drilling contract with BP Exploration, estimated to expire 3Q 2016

The class renewal survey was commenced early January 2015. An increase in scope includes some structural upgrade, subsea investment and general repair of equipment

The unit is now expected to complete the CRS in June and will cost approx. USD 190 million

Borgsten Dolphin

Continued under the tender support services contract of 40 months duration with Total E&P UK. Two six month options exist under the contract

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

Deepwater – United Kingdom

Blackford Dolphin

Continued under the contract with Nexen, estimated to be completed end of May 2015. A contact with Chevron of approximately 19 months will follow. Chevron has an option for extending the contract between 300 and 700 days

The unit completed its class renewal survey in June 2014

Harland & Wolff

Focus on ship repair, ship building, steel fabricationand engineering services

Byford Dolphin is undertaking its class renewal surveyat the yard, estimated to be completed first half of June 2015

A number of ship dockings have been carried out in the quarter

Summary

Financial

Revenues were USD 284 million

EBITDA was USD 157 million

Profit before tax was USD 75 million

Contract backlog amounting to approximately USD 2.9 billion

Annual General Meeting to be held 27th of May 2015

Operational

Borgland Dolphin class renewal survey completed end of February

Byford Dolphin class renewal survey commenced early January

Market

Average contract duration approximately 19 months

Q&A