Investor Presentation. April 2018

Transcription

1 Investor Presentation April 2018

2 Important information This presentation and any appendices hereto (the Presentation ) has been produced by Odfjell Drilling Ltd ( Odfjell Drilling or the Company and, together with its subsidiaries, the "Group") solely for use at presentations to investors held in connection with the contemplated offering of new common shares in the Company (the "Private Placement"), as further discussed herein and as described in a term sheet (the "Term Sheet") and an agreement governing applications to participate in the Private Placement (the "Application Agreement" and collectively with this Presentation and the Term Sheet, the "Private Placement Materials"). ABG Sundal Collier ASA, ABN Amro, Danske Bank Markets, Norwegian branch of Danske Bank A/S, DNB Markets, a part of DNB Bank ASA, Nordea Bank AB (publ), filial i Norge, Pareto Securities AS and SpareBank 1 Markets AS have been appointed as joint managers and bookrunners for the Private Placement (the Managers ). This Presentation is strictly confidential and may not be reproduced or redistributed, in whole or in part, to any other person. No representation or warranty (express or implied) is made as to, and no reliance should be placed on, any information, including projections, estimates, targets and opinions, contained herein, and no liability whatsoever is accepted as to any errors, omissions or misstatements contained herein, and, accordingly, neither the Company nor the Managers nor any of their parent or subsidiary undertakings nor advisors nor any such person s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this Presentation. This Presentation includes certain forward-looking statements relating to the business, financial performance and results of the Group and/or the industry in which it operates. Forward-looking statements relate to future circumstances and results and other statements that are not historical facts, sometimes identified by the words believes, expects, predicts, intends, projects, plans, estimates, aims, foresees, anticipates, targets, and similar expressions. The forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts which are subject to material risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. Neither the Company nor the Managers nor any of their parent or subsidiary undertakings nor advisors nor any such person s officers or employees provide any assurance that the assumptions underlying such forward-looking statements are free from errors, nor do any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. The Company assumes no obligation, except as required by law, to update any forward-looking statements or to conform these forward-looking statements to its actual results. This Presentation contains information obtained from third parties. Such information has been accurately reproduced and, as far as the Company is aware and able to ascertain from the information published by that third party, no facts have been omitted that would render the reproduced information inaccurate or misleading. By receiving this Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Group and that you will conduct your own analysis and are solely responsible for forming your own opinion of the potential future performance of the Group s business. In making an investment decision, investors must rely on their own examination of the Company and the Group, including the merits and risks involved. AN INVESTMENT IN THE COMPANY INVOLVES SIGNIFICANT RISK AND SEVERAL FACTORS COULD CAUSE THE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS THAT MAY BE EXPRESSED OR IMPLIED BY STATEMENTS AND INFORMATION IN THIS PRESENTATION. A NON-EXHAUSTIVE OVERVIEW OF RELEVANT RISK FACTORS THAT SHOULD BE TAKEN INTO ACCOUNT WHEN CONSIDERING AN INVESTMENT IN THE SHARES ISSUED BY THE COMPANY IS INCLUDED IN THIS PRESENTATION. SHOULD ONE OR MORE OF THESE RISKS OR UNCERTAINTIES MATERIALISE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED IN THIS PRESENTATION. THE COMPANY DOES NOT INTEND, AND DOES NOT ASSUME ANY OBLIGATION, TO UPDATE OR CORRECT THE INFORMATION INCLUDED IN THIS PRESENTATION. The contents of this Presentation are not to be construed as legal, business, investment or tax advice. Each recipient should consult its own legal, business, investment or tax adviser as to legal, business, investment or tax advice. By attending or receiving this Presentation you acknowledge that (i) you will be solely responsible for your own assessment of the market and the market position of the Group and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Group s business, (ii) if you are a U.S. person, you are a QIB (as defined below), and (iii) if you are a non-u.s. person, you are a Qualified Investor or a Relevant Person (as defined below). This Presentation has not been approved, reviewed or registered by or with any public authority or stock exchange. This Presentation is not a prospectus within the meaning of the EU Prospective Directive (Directive 2003/71/EC), as amended (the "Prospectus Directive") and does not contain the same level of information as a prospectus. The new shares contemplated to be offered in the Private Placement will be offered on the basis of the Private Placement Materials and publicly available information only, and no prospectus will have been approved or published in connection with the Private Placement at the time of any application for or purchase of shares. The prospectus contemplated to be prepared in relation to the listing of the new shares on the Oslo Stock Exchange and a contemplated subsequent offering of new common hares in the Company will contain more extensive information about the Group and its operations than the Private Placement Materials, and the recipient will not have the benefit of the information contained in any such prospectus in making any application for new shares in the Private Placement. 2

3 Important information (cont'd) This Presentation does not constitute an offer to sell, or a solicitation of an offer to buy, any securities in any jurisdiction or to any person in which or to whom it is unlawful to make such an offer or solicitation. The distribution of this Presentation and the offering, subscription, purchase or sale of securities issued by the Company are in certain jurisdictions restricted by law. Persons into whose possession this Presentation may come are required by the Company and the Managers to inform themselves about, and to comply with, all applicable laws and regulations in force in any jurisdiction in or from which it invests in the securities issued by the Company or receives or possesses this Presentation and must obtain any consent, approval or permission required under the laws and regulations in force in such jurisdiction. The Company shall not have any responsibility or liability whatsoever for these obligations. In particular, neither this Presentation nor any copy of it may be taken or transmitted or distributed, directly or indirectly, into the United States, Canada, Australia or Japan. This Presentation is strictly confidential and is being distributed in the United Kingdom solely to, and directed solely at, Qualified Investors who (i) have professional experience, knowledge and expertise in matters relating to investments falling within Article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 of the United Kingdom, as amended, (ii) are high net-worth entities and other persons falling within Article 49(1) of the Financial Promotion Order or (iii) are persons to whom an invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 of the United Kingdom, as amended (the FSMA )) in connection with the issue or sale of any securities may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as Relevant Persons ). This Presentation is directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this Presentation relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. This Presentation does not constitute a prospectus for the purposes of Section 85(1) of the FSMA. Accordingly, this Presentation has not been approved as a prospectus by the UK Financial Conduct Authority (the FCA ) under Section 87A of the FSMA and has not been filed with the FCA pursuant to the UK Prospectus Rules nor has it been approved by a person authorized pursuant to Section 31 of the FSMA. Neither this Presentation nor any part of it may be reproduced, distributed, passed on, or the contents otherwise divulged, directly or indirectly, to any person who is not a Relevant Person without the prior written consent of the Managers or the Company. IN RELATION TO THE UNITED STATES AND U.S. PERSONS, THIS PRESENTATION IS STRICTLY CONFIDENTIAL AND IS BEING FURNISHED SOLELY IN RELIANCE ON APPLICABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE U.S. SECURITIES ACT ). ACCORDINGLY, NEITHER THIS PRESENTATION NOR ANY PART OR COPY OF IT MAY BE TAKEN OR TRANSMITTED INTO THE UNITED STATES, OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR TO ANY U.S. PERSON (AS THAT TERM IS DEFINED IN THE U.S. SECURITIES ACT) EXCEPT IN RELIANCE ON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. ANY FAILURE TO COMPLY WITH THIS RESTRICTION MAY CONSTITUTE A VIOLATION OF UNITED STATES SECURITIES LAWS. THE SHARES ISSUED BY THE COMPANY 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 OR SOLD WITHIN THE UNITED STATES, ABSENT REGISTRATION OR UNDER AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT. ACCORDINGLY, ANY OFFER OR SALE OF SHARES WILL ONLY BE MADE (I) WITHIN THE UNITED STATES, OR TO OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS, TO QUALIFIED INSTITUTIONAL BUYERS ( QIBs ) WITHIN THE MEANING OF, AND AS DEFINED IN, RULE 144A UNDER THE U.S. SECURITIES ACT AND (II) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE U.S. SECURITIES ACT. ANY PURCHASER OF SHARES IN THE UNITED STATES, OR TO OR FOR THE ACCOUNT OF U.S. PERSONS, WILL BE DEEMED TO HAVE MADE CERTAIN REPRESENTATIONS AND ACKNOWLEDGEMENTS, INCLUDING WITHOUT LIMITATION THAT SUCH PURCHASER IS A QIB. This Presentation is made on 19 April There may have been changes in matters that affect the Company subsequent to the date of this Presentation. Neither the delivery of this Presentation nor any further discussions of the Company with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. The Company does not intend, and does not assume any obligation, to update or correct any information included in this Presentation. Each of the Managers is acting only for the Company and will not be responsible to anyone other than the Company for providing the protections afforded to clients of such Manager. The Managers and/or their employees may hold shares, options or other securities of the Company and may, as principal or agent, buy or sell such securities. The Managers may have other financial interests in transactions involving these securities. This Presentation is subject to Norwegian law and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts with Bergen district court (Nw: Bergen tingrett) as legal venue. 3

4 Summary of risk factors This is a brief summary only. For further discussion about the risks facing the Group, please see pages 36 to 38. An investment in the Company's shares should be considered as a high-risk investment. An investment in the shares is only suitable for you if you have sufficient knowledge, sophistication and experience in financial and business matters to be capable of evaluating the merits and risks of an investment decision relating to the shares, and if you are able to bear the economic risk, and to withstand a complete loss of your investment. All references to the "Group" shall in the following be understood as a reference to Odfjell Drilling, together with its consolidated subsidiaries. Industry risks - The Group's business is affected by a number of market conditions - Changes in laws and regulations may affect the Group and its operations - The Group may be exposed to environmental liability - The Group may fail to comply with applicable laws and regulations - The Group's business is exposed to numerous operating hazards - The Group's insurance coverage may prove insufficient - The Group's operations in various jurisdictions is exposed to inherent risks - The Group is exposed to poor conditions on physical infrastructure and logistics systems in some areas - Certain jurisdictions in which the Group operates have inherent risks related to fraud, bribery and corruption - The Group may operate in jurisdictions that are subject to sanction regimes Group risks - Backlog may not be ultimately realized - Contracts may be subject to early termination - Future business performance depends on ability to renew and extend existing contracts and win new contracts - The Group is exposed to unforeseen or unanticipated risks when bidding on or managing contracts Operational risks - Client concentration risk - Operating and maintenance costs fluctuate in proportion to changes in operating revenues - Newbuild projects are subject to risks - Maintaining and repairing drilling units may lead to increased costs and loss of income - The Group is exposed to disruptions of deliveries from suppliers - The Group is exposed to the risk of sub-standard performance by third party subcontractors - The quality of drilling units, spare parts and equipment purchased by the Group may be inadequate - The Group's strategies may be unsuccessfully implemented and there can be no assurance that the Group will be able to secure favourable growth opportunities (or such opportunities at all) for the proceeds from the Private Placement - The Group is exposed to the risk of loss of key personnel - The Group is exposed to the risk of labour interruptions - Labour costs and related operating costs could increase - Damage to the Group's reputation and business relationships may occur - The Group is reliant on certain IT systems - The Group may be unable to keep pace with changes in technological developments - HSSE policies may not be sufficiently implemented or adhered to Risks related to laws, regulation and litigation - Litigation may have a material adverse effect on the Group - Technology disputes could impact operations - Changes in tax laws could result in a higher tax expense or effective tax rate Financing and market risks - Additional capital may be required to execute the Group's growth strategy (including the financing of Ex. Stena MidMax, if applicable) and there can be no assurance that such financing is secured - Debt arrangements and the Company's other contractual commitments could limit the Group's liquidity and flexibility to inter alia pay dividends - Non-compliance with financial covenants could result in acceleration of repayment - The Group is exposed to interest rate fluctuations - The Group is exposed to exchange rate fluctuations Risks related to Group structure - The Company is a holding company and depends on cash flow from subsidiaries - The Group may fail to integrate acquired businesses or assets - Divestments may subject the Company to risks and liabilities - The Group is exposed to the risk of decrease of market value of acquired assets Risks related to the shares in the Company - The market value may fluctuate significantly - Odfjell Partners Ltd. has significant voting power - Future sales of shares may affect the market price - Future issuance of shares may affect the market price - Exchange rate fluctuations may affect the value of the shares and dividends paid - Investors may not be able to vote for shares held in nominee accounts - Transfer of shares is restricted under securities laws of the US and other jurisdictions - The Company may be unwilling or unable to pay dividends in the future - Limited free float may have a negative impact on liquidity and market price - Shareholders may be diluted if not participating in subsequent offerings - Any future issuance of preference shares and/or warrants may dilute the common shares of the Company significantly and limit the Company s liquidity and flexibility to inter alia pay dividends Risks related to the Group's incorporation in Bermuda - It may be difficult to enforce judgments obtained in the US - The Company has anti-takeover provisions in its bye-laws - Various conditions may cause an adverse tax effect if the Company pays dividends 4

5 Transaction summary Offering details Private Placement of new common shares in the Company (the Offer Shares ) raising gross proceeds of up to approximately USD 200 million Equivalent to gross proceeds of up to approximately NOK 1.56 billion 1 The Private Placement is directed towards: Non-U.S. investors in reliance with Regulation S under the U.S. Securities Act of 1933, as amended; and U.S. 144A (QIB s as defined by Rule 144A) Offer price: To be determined through an accelerated bookbuilding process Target markets: Non-professional, professional and eligible counterparties Negative target market: An investment in the Offer Shares is not compatible with investors looking for full capital protection or full repayment of the amount invested or having no risk tolerance, or investors requiring a fully guaranteed income or fully predictable return profile Allocation criteria: (i) ownership in the Company, (ii) timeliness of the application, (iii) price leadership, (iv) relative order size, (v) sector knowledge, (vi) perceived investor quality and (vii) investment horizon Joint Lead Managers: ABG Sundal Collier, ABN Amro, Danske Bank, DNB Markets, Nordea, Pareto, Sparebank1 Markets Timetable and key considerations Application period: 19 April 2018 at 16:30 CET / 12:30pm EST 20 April 2018 at 08:00 CET / 2:00am EST Application period may be closed or extended at any time Notification of allocation: 20 April 2018, before opening of the OSE Delivery versus payment (DVP): 24 April 2018, subject to satisfaction of the condition (see the term sheet) First day of trading: 20 April 2018 Minimum application: NOK equivalent of EUR 100,000 Documentation: Investor presentation, term sheet, application agreement and the stock exchange announcement Use of proceeds: Net proceeds will be used to (i) finance the Company's growth ambitions and (ii) for general corporate purposes. One growth opportunity is the possible purchase of the Ex. Stena MidMax Rig", a Moss CS60E semi-submersible drilling rig construction (the "Unit") to be constructed at Samsung Heavy Industries Co., Ltd. (the "Yard"); no decision has been made to purchase the Unit, the Company may select other alternatives to realise its growth ambitions and completion of the Private Placement is not conditional upon the purchase of the Unit 2 The completion of the private placement is conditional upon: all necessary corporate resolutions payment being received for the allocated Offer Shares The Odfjell Drilling shares are listed on the Oslo Stock Exchange under the ticker code ODL 1) USD/NOK exchange rate of ) There can be no assurance that the Company decides to use its option to acquire the Unit; the decision will inter alia depend on whether sufficient comfort for the ability to secure employment of the Unit can be obtained before the deadline to declare the option. Such comfort is currently not secured and the option lapses on 30 April 2018 (unless it is extended) 5

6 Investment highlights The harsh environment specialist Preferred by the oil companies Excellent drilling efficiency Sold out on near-term rig capacity Solid balance sheet Growing high spec & harsh environment fleet Net debt/ebitda below 4x Strong contract backlog will enable continued deleveraging Attractive bank financing of the fleet Target to acquire high spec & harsh environment rigs significantly below construction cost Strategy to grow drilling fleet from 4 to 6-10 rigs over the next few years Perfectly positioned to secure employment prior to potentially acquiring new rigs Attractive opportunities within reach Multiple single assets available in the second-hand market Secured an option to acquire Ex. Stena MidMax at an attractive price Market recovery is happening Increased activity in the harsh environment market More wells sanctioned in Norway than in the prior upcycle Modern rigs are being preferred by the oil companies 6

7 Introduction to Odfjell Drilling Mobile Offshore Drilling Units Well Services Drilling & Technology Modern fleet of UDW 1 and HE 2 drilling units Extensive drilling experience Provision of integrated management services for drilling units USD million Casing and tubular running services Drill tool and tubular rental Well intervention services Services in approximately 20 countries from 10+ bases in Europe and Middle East EBITDA (LHS) NIBD (RHS) One of the leading contractors in the North Sea platform drilling market Drilling engineering services Established competence for the latest generation technology USD million ) Ultra Deep-Water 2) Harsh Environment 3) Shaded area represent share of loss from JV (DSM Ltd) of USD 269 million 7

8 The harsh environment specialist Preferred by the oil companies....due to excellent drilling efficiency Odfjell Drilling Backlog days added last three years 1 2,617 Deepsea Atlantic 2 1,500 1,000 Days 1,095 days -55% Transocean 1, days North Atlantic Drilling 401 Field: Johan Sverdrup 0 Est days per progam Act days per progam Island Offshore Saipem Deepsea Stavanger Days 584 days -49% days COSL ,000 2,000 3,000 Rig days Field: Maria 0 Est days per progam Act days per progam Won 54% of all 6G work in Norway last 3 years Drilled around 50% faster than expected on ongoing field developments Source: DNB Markets, IHS Petrodata 1) Contracts awarded for 6G semis on the NCS 2) Initially 6 production wells and 7 injection wells in 36 months; delivered 8 production wells, 9 injection wells and 6 appraisal wells, total of 23 wells, in 21 months. 8

9 Sold out on near-term rig capacity Drilling unit Location /operator Dayrate (USDk/day) 1 Contract status Deepsea Stavanger Norway Wintershall/ Aker BP/Total/Aker BP 305/250/305/ 279* Alliance agreement with Aker BP, subject to call-off Deepsea Atlantic 2 Norway Statoil 295/296* Contract contains the option to continue operations for Statoil after the firm period Deepsea Aberdeen UK BP Exploration 431 Deepsea Bergen Norway Statoil/Faroe/Wellesley /OMV 328/120/ *Plus potential performance bonus Contract Option Signed LOI 1) Rates may include mix of currencies and fluctuate based on exchange rates 2) Statoil has awarded a conditional Letter of Intent for a drilling contract for Deepsea Atlantic for 6 firm wells with an estimated total duration of 18 months, 9 scheduled to commence in early first quarter 2019; the contract contains the option to continue operations for Statoil after the firm period, and such options shall be based on market pricing

10 Earnings visibility through USD 2.3 billion order backlog Total revenue backlog per year 1,2,3 USD million 1,000 Firm contracts USD 1.5 billion 992 Priced options USD 0.8 billion 800 Total backlog USD 2.3 billion After Firm Options 1) Estimates at 31 December 2017; revenue from frame agreements and call-off contracts in Well Services and revenue from Technology and MODU Management is not included in the backlog 2) Recent LOI award to Deepsea Atlantic from Statoil is included in firm backlog estimate 3) Non-priced options not included in backlog estimate 10

11 Robust capital structure NIBD 1 per UDW equivalent adjusted for backlog NIBD / EBITDA YE 2017 USD million 350 NPV of EBITDA backlog Remaining NIBD & newbuild capex x 6.9x 6.8x x 3.1x 2.8x 2.4x 0 Seadrill Transocean Odfjell Drilling 2 Noble Diamond Ensco Rowan 0.0 Seadrill Ensco Noble Odfjell Drilling 2 Transocean Diamond Rowan Odfjell Drilling s strong contract backlog will enable continued deleveraging as opposed to many of its peers Source: DNB Markets, Bloomberg 1) Fully invested net debt (including newbuild capex) per UDW equivalent rig 2) Not taking into account the possible acquisition of Ex. Stena MidMax 11

12 Strategy 1 Maintaining position as a leading harsh environment offshore driller Excellent long-term client relationships Superior and robust operational performance Continue to build on strategic alliances 2 Grow drilling fleet from 4 to 6-10 units over the next few years High specification and harsh environment floaters Focus on fleet standardization No speculative growth comfort on ability to secure employment must be in place before adding rig capacity 3 Continue to develop a strong service provider within Well Services, Platform Drilling and Technology Expansion into new geographical markets Diversified income stream across geography, service offering and onshore/offshore activities Considering strategic options to visualize underlying values 4 Continued emphasis on efficient operations Strict cost control through standardization, synergies and digitalization Closer collaboration with reputable Oil companies (e.g. Aker BP alliance) 5 Contract portfolio consisting of medium- to long-term contracts Ensuring financial visibility and flexibility 12

13 Potential growth opportunities in harsh environment Several growth opportunities Modern HE fleet (6G and 6G light) Delivered Newbuilds Secured an option to acquire Ex. Stena MidMax Option lapses on 30 April 2018 In dialogue with yards to obtain pricing of potential newbuilds Awilco newbuild Ex. Stena MidMax 1 1 NODL 2 Ex West Rigel 1 RIG/SONG 6 Single assets in the second-hand market North Sea Rigs 3 Other harsh environment capable rigs currently at yards 3 ODL Island Innovator 1 Scarabeo 8 1 COSL 4 SDRL/NADL 3 Confident on securing additional work with a larger fleet Source: Pareto Securities, DNB Markets, IHS Petrodata 13

14 Option to acquire the Ex. Stena MidMax One of the world s most sophisticated semis Built for superior operational efficiency and safety Purpose built for harsh environment including arctic areas State of the art drilling system Efficient equipment & material handling arrangements Key specifications 1 : Design: Moss CS 60E Construction yard: Samsung Heavy Industries Classification: DNV Drill(N) Rig water depth (m): 2,000 (riser for 500 meters) Drilling depth (m): 10,750 DP system: Kongsberg DP3 Mooring system: Rolls-Royce winches, 10x2000m chain Variable deck load (mt) 7,000 Accommodation (p): 150 (single cabin) Derrick: NOV 64m tall with 16x16.9m base 1,250st@elevator Drawworks: NOV AHDD 1400, 2x6900HP Mud pumps: 4xNOV 14P-220, 7,500psi Top Drive: NOV TDX-1250 BOP (psi): 15,000 (1xCameron 18-3/4 5 ram) Winterization: Fully winterized - NCS compliant (incl. Barents) Large unobstructed deck-space Large payload & bulk capacities Advanced compensation system for reduced wait on weather in harsh environments Modified design a result of Odfjell Drilling s unique experience and expertise creating a truly extraordinary drilling machine 1) As per purchase option 14

15 Attractive option price for Ex. Stena MidMax Signed LOI and anticipated financing Purchase price below peers when adjusting for backlog Uses of funds USD million Yard price (purchase option) Est. upgrades, spare parts and project supervision 45 USD million Steel price Additional capex 675 Total project cost Total project costs ex. Yard 550 Other 51 Working capital 17 Total uses 618 Sources of funds USD million Common equity 170 Preferred equity (see separate description) 75 Secured bank debt (estimate) 325 Seller s credit (SHI) 48 Total sources 618 ODL price - HE semi NODL price - West Mira NODL price - Bollsta Dolphin Riegel Historical project cost Mira Historical project cost Bollsta Avg. allin build cost 6G HE semis 2 All-in build cost - Stena Midmax Transocean s acquisition of Songa (YE19) Rig cost at +33% discount to building cost Source: DNB Markets, IHS Petrodata, Companies 1) At signing: USD million, at delivery: USD million + seller credit: USD million 2)15 NCS compliant semis built after 2008 (excl. Rigs built in China and Awilco Drilling newbuild) 15

16 More wells to be sanctioned in Norway than in prior upcycle # of wells sanctioned under PDO 1 s by rig type PDO by delivery year PDO s Semi Jackup Fixed inst # of PDO s p.a. Wells sanctioned p.a. # of PDO s p.a. Wells sanctioned p.a. # of PDO s p.a. Wells sanctioned p.a Source: NPD, Pareto Securities Equity Research 1) Plan for development and operation 16

17 Modern rigs are taking over Preference for modern rigs Utilization for semis on NCS and UKCS # of rigs Working floaters in Norway Pct Modern 6G Standard Modern 6G Standard Source: DNB Markets, IHS Petrodata and Company 17

18 Supply balance looks healthy for modern rigs Increased preference for modern equipment will lead to scrapping of older floaters # of rigs 70 Modern floaters Older floaters Peak demand Average demand Current demand G 6G light 10-20yr 20-30yr +30yr Total fleet Newbuilds Cold stacked Contracted / warm If history repeats itself, more newbuilds will be needed in the HS/HE market Source: DNB Markets, Pareto Securities and IHS Petrodata 18

19 Stacked floaters have been inactive on average 24 months Stacked floaters NCS and UK (Months) Months stacked 54 # months stacked 1 year 2 years Scarabeo 5 Songa Delta Stena Don Byford Dolphin Songa Dee Borgland Dolphin West Alpha Sedco 714 Sedco 711 Bredford Dolphin Polar Pioneer Songa Trym West WilHunter West Venture Navigator 12 of 15 stacked floaters are older than 28 years Source: Company data, Nordea Markets 19

20 Investment highligts 5 1 Market recovery is happening The harsh environment specialist 4 2 Attractive opportunities within reach Solid balance sheet 3 Growing high spec & harsh environment fleet 20

21 Group summary financials Condensed consolidated income statement 1 1 P&L - (USD million) Q4 17 Q4 16 FY 17 FY 16 Operating revenue Other gains/losses Personnel expenses Other operating expenses EBITDA Depreciation Operating profit (EBIT) Share of profit (loss) from other joint ventures Net financial items Profit/(loss) before tax Income taxes Profit/(loss) for the period ) Audited numbers 21

22 Summary statement of financial position Group statement of financial position Assets (USDm) million) Deferred tax asset 4 2 Intangible assets Property, plant and equipment Financial fixed assets 1 9 Total non-current assets Trade receivables Other current assets Cash and cash equivalents Total current assets Total assets Group s gross interest bearing debt was USD 1,234 million (net of capitalized financing fees) at 31 December USD 166 million in cash and cash equivalents at 31 December Equity and liabilities (USDm) million) Total paid-in capital Other equity Total equity Borrowings Post-employment benefits Deferred tax liability - - Other non-current liabilities 5 2 Total non-current liabilities Borrowings Trade payables Other current liabilities Total current liabilities Total liabilities Total equity and liabilities Equity-ratio of 36% at 31 December ) Audited numbers 22

23 Appendix 23

24 A truly extraordinary drilling machine Ex. Stena MidMax Moss CS-60 West Mira Bollsta Dolphin West Rigel Ex. Stena MidMax option 20+ improvements to existing yard contract Owner Samsung Awilco Drilling Northern Drilling Northern Drilling Unknown Built Yards Design Drilling equipment Samsung Heavy Industries Moss Maritime CS-60 E Single + enhanced offline Keppel FELS Moss Maritime CS-60 ECO MW Hyundai Heavy Industries Moss Maritime CS-60Mk Hyundai Heavy Industries Moss Maritime CS-60Mk Jurong Shipyard Pte Moss Maritime CS-60Mk Single + offline Single + offline Single + offline Single + offline Static hook load 2.5 MM lbs 2.0 MM lbs 2.3 MM lbs 2.5 MM lbs 2.0 MM lbs Heave compensation system Water depth capacity Active digital positioning with redundancy Active/Passive Active/Passive Active/Passive Active/Passive 6,562 feet 4,920 feet 10,000 feet 10,000 feet 10,000 feet Accommodation 150 single 140 single 150 single 140 single 150 single Variable deck load Thruster capacity 7,000t 5,000t 7,100t 7,500t 7,500t 6 x 5.5 MW 4 x 3.6MW 8 x 4.2 MW / 80 tonn 8 x 4.8 MW 8 x 4.2 MW / 80 tonn Enhanced offline handling capabilities will enable considerable efficiency gains Unique compensation method reducing waiting on weather and downhole well problems Ample deck space and deck load capacity enabling efficient production drilling campaigns Increased flexibility and redundancy with DP in addition to mooring 2 Dynamic positioning Yes No Yes Yes Yes Winterized Fully Basic Fully Fully Fully Source: Company 1) Expected 2) Often required in sensitive and/or crowded areas with multiple installations 24

25 A potential acquisition of Ex. Stena Midmax has the following intended financing structure Bank debt 1 Received indications, in the form of term sheets subject to final agreements, from leading Nordic banks for a term loan facility Key terms: Facility: Senior secured term loan Borrower: SPV [TBD] Guarantor: Odfjell Drilling Ltd. Amount: USD 325 million Profile: 9.5 years Tenor: 5 years Interest: LIBOR + 375/350 bps Security: Standard for this type of facility, including a 1st lien pledge over the rig Financial covenants: In line with other facilities Draw-down: Subject to 4 years firm drilling contracts for the rig Preferred equity Main terms for preferred equity with warrants discussed with Akastor AS or affiliate 2 Key terms: Instrument: Perpetual preferred equity Issuer: Odfjell Drilling Ltd. Amount: USD 75 million Tenor: Perpetual Amortization: None Commitment fee: USD 5.75 million Dividend: 5% cash + 5% PIK per annum Call price: 125% year 2, 120% year 3, 115% year 4, 110% year 5, 105% year 6, 100% thereafter Cash dividend step-up: 8.0% p.a. from year 7 and an additional 1.0% step-up per year until a maximum cash dividend of 10.0% p.a. Warrants: Number of warrants to give 20% IRR from preferred dividend and warrant structure only when ODL shareholders have achieved 20% IRR from issue price 3 Other: Certain rights and covenants 4 in favour of Akastor AS or affiliate Sellers credit LOI with Samsung Heavy Industries Key terms: Facility: Sellers credit Borrower: Odfjell Rig V Ltd Guarantor: Odfjell Drilling Limited or other acceptable collateral Amount: USD million Repayment: Bullet Tenor: 5 years Interest: LIBOR bps 1) Current status: USD 265 million of USD 325 million credit committee approved. 2 additional banks are in the credit process, taking the total amount to USD 325 million 2) The preferred equity and warrants are part of the agreement with Akastor AS or affiliate to acquire the option from Akastor AS or affiliate to purchase Ex. Stena MidMax 3) 6 equal tranches. 1 warrant tranche exercisable p.a. during year 1-6 subject to share price appreciation of 20.0% p.a. above issue price (with catch-up effect). After year 6 warrants that has not been exercised in previous years gives rights to subscription of shares in ODL depending on the share price in year 6. 4) The draft agreements (subject to final negotiations) contain several covenants, including but not limited to an obligation not to pay dividends or other distributions exceeding 50% of the net profit from the preceding year (unless a similar portion of the preference capital is repaid prior to the distribution), and in any case not pay dividends or make distributions after year 6. Also the draft agreement includes a change of control covenant pertaining to restructurings with the effect that Odfjell Partner's shareholding falls below 25%. In the event of a breach of the covenants, the Company will in some instances be required to repay the entire preference capital with a premium not exceeding 15% and the warrants will become immediately exercisable. The draft agreements also contain certain other events of default and an 25 obligation to repay USD 10 million of the preference capital per rig sold, if the Company sells any of its rigs (except Deepsea Bergen).

26 North Sea is the high activity area for offshore drilling Increased tendering and pre-tender activity Increased duration of tenders and pre-tenders 1 Number of tenders and pre-tenders in the North Sea Total duration of tenders and pre-tenders in the North Sea Currently, the number of identified oil companies out with a firm pre-tender or tender for a rig is 16, up from the bottom of five in early 2014, demonstrating diversified activity in the North Sea Source: DNB Markets 1) Duration in rig years 26

27 Increased market activity Floater fixtures in the North Sea increasing With scope for increased exploration drilling 12m rolling # fixtures % 90% Norway and UK: Development drilling as a % of total wells drilled 80% % 60% % % % 20% % 0% Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Q2-17 Q3-17 Q4-17 Q Norway UK Norway UK Source: IHS-Petrodata and Nordea Markets, UK Oil and Gas Authority 27

28 5+5 year alliance agreement with Aker BP Creating a truly unique operation Developing an integrated drilling solution with the use of turnkey services Drilling and well alliance Odfjell Drilling to provide drilling services and drill the well Halliburton to provide well construction activities Total duration of 5 years plus 5 optional years Odfjell Drilling to drill all wells suitable for semis for Aker BP Aker BP has committed to use Odfjell Drilling to drill all production and exploration wells suitable for semi-submersibles Subject to rig availability and that the alliance model is approved in the respective licenses Aker BP is committed to increase productivity, quality, flow- and time efficiency The alliances will plan and execute sanctioned production and exploration drilling activities Use digitalization as a key enabler to further increase efficiency in drilling operations Enhanced value to Aker BP through Improved operational performance Better project execution through integrated planning between Aker BP and Halliburton Lower drilling costs New service model increasingly demanded by most offshore E&P companies 28

29 Well Services - Pricing pressure offset by cost efficiency measures Key service offerings Tubular Running Services Drill Tool Rental Services Well Intervention Services Conventional and remote-operated casing running tools Remote-operated and conventional power tongs Casing / tubing running and recovery Drill tools (drill pipe, drill collars and tubing) Tubular handling equipment Stablisers, subs and valves Downhole tools Wellbore clean-up tools and services Casing exits Fishing services Well abandonment Slot recoveries Odfjell Well Services in numbers Services from 10+ bases 400+ Employees Operation in 20+ countries 29

30 A leading platform drilling operator in the North Sea Platform Drilling Operations on multiple platforms in Norway and UK Provider of integrated drilling and maintenance services for fixed and floating drilling units First platform contract with Mobil on Statfjord B in 1978 Grane Heidrun Johan Sverdrup Mariner Bressay Harding Cormorant Alpha North Cormorant Eider Tern Alpha Clair Ridge Andrew Bruce Clair Magnus Brage Strong platform for sale of add-on services from Technology and Well Services Focus on use of modern equipment and advanced technology Firm contract backlog of ~USD 300 million as of YE17, with value of priced optional periods of ~USD 800 million Customer Platforms Contract status Heidrun & Grane 3 (NO) Johan Sverdrup (NO) Mariner (UK) Bressay (UK) Brage (NO) 4 UK platforms 1 5 UK platforms 2 Magnus (UK) Contract Option Source: Company 1) Clair, Andrew, Bruce, Clair Ridge 2) Harding, Eider, Tern Alpha, Cormorant A, North Cormorant 3) Grane contract ending Oct-18, Heidrun contract continues with 4 year + 3x2 year options 30

31 Segment reporting - MODU financials MODU Key financials Condensed P&L - (USD million) Q4 17 Q4 16 FY 171 FY 161 Operating revenue EBITDA Depreciation and impairments Revenues (USD million) EBIT Book value rigs EBITDA-margin 49,4 % 63,7 % 50,7 % 51,7 % EBIT-margin 21,0 % -45,8 % 23,2 % 2,3 % Share of group revenue 1 66,4 % 70,6 % 70,4 % 64,5 % Share of group EBITDA 1 82,8 % 83,6 % 83,9 % 84,0 % Share of group EBIT 1 82,5 % 112,4 % 86,3 % 59,9 % 1) Before group eliminations and corporate overheads Q4 17 Q4 16 FY 17 FY 16 EBITDA (USD million) Figures above do not include pro-rata 40% of Deep Sea Metro Q4 17 Q4 16 FY 17 FY 16 1) Audited numbers 31

32 Segment reporting - Drilling & Technology financials Drilling & Technology Key financials Condensed P&L - (USD million) Q4 17 Q4 16 FY 171 FY 161 Operating revenue EBITDA Depreciation and impairments EBIT Revenues (USD million) EBITDA-margin 11 % 14,3 % 14,2 % 0,0 % EBIT-margin 10 % 12,5 % 13,4 % -3,1 % Share of group revenue 1 18 % 13,8 % 15,4 % 19,3 % Share of group EBITDA 1 5 % 3,7 % 5,2 % 0,0 % Share of group EBIT 1 11 % -6,0 % 10,9 % -24,2 % 1) Before group eliminations and corporate overheads Q4 17 Q4 16 FY 17 FY 16 EBITDA 15 (USD million) Q4 17 Q4 16 FY 17 FY 16 1) Audited numbers 32

33 Segment reporting - Well Services financials Well Services Key financials Condensed P&L - (USD million) Q4 17 Q4 16 FY 171 FY 161 Operating revenue EBITDA Depreciation and impairments EBIT Revenues (USD million) Book value of equipment Cost price for equipment in use Q4 17 Q4 16 FY 17 FY 16 EBITDA-margin 31,6 % 43,9 % 32,6 % 39,2 % EBIT-margin 7,4 % 11,8 % 3,8 % 9,8 % Share of group revenue 1 15,3 % 15,6 % 14,2 % 16,2 % Share of group EBITDA 1 12,2 % 12,8 % 10,9 % 16,0 % Share of group EBIT 1 6,7 % -6,4 % 2,8 % 64,3 % EBITDA (USD million) ) Before group eliminations and corporate overheads 9 11 Q4 17 Q4 16 FY 17 FY 16 1) Audited numbers 33

34 Group - Eliminations & Reconciliation Group Eliminations & Reconciliation 1 1 (USD million) Q4 17 Q4 16 FY 17 FY 16 Operating revenue EBITDA EBIT EBIT for reportable segments Corporate / eliminations Share of profit from DSM Ltd Group Accounting differences Group EBIT Share of profit from other joint ventures Net financial items Group profit before tax ) Audited numbers 34

35 Summary statement of cash flow Group statement of cash flow Cash Flow - (USDm) Q4 17 Q FY 17 1 FY 16 Profit before income tax Cash from operations Interest paid Income tax paid Net cash from operations Net cash used in investing activities Net cash from financing activities Net change in cash and cash equivalents Cash and cash equivalents at period end ) Audited numbers 35

36 Risk factors (1/3) An investment in the Company should be considered as a high-risk investment. A number of risk factors may adversely affect the Group. The risks listed below are not the only ones facing the Group. Additional risks not presently known to the Company or which the Company currently deems immaterial may also adversely affect the Group. If any of the risks facing the Group should actually occur, individually or together with other circumstances, the business, financial position, operating results and cash flows of the Group, and the transactions described herein, could be materially and adversely affected, which may cause a decline in the value of the shares that could result in a loss of all or part of any investment in the shares. Prospective investors should carefully consider the risks involved in an investment in the Company, including, but not limited to, those discussed below. Prospective investors should consult their own legal, tax and financial advisors as to all of these risks and an investment in the Company. The order in which the risks are presented below is not intended to provide an indication of the likelihood of their occurrence nor of their severity or significance. These risks should also be considered in connection with the Important Information on pages 2 and 3. Risks relating to the industry in which the Group operates Market conditions The Group's business, results of operations and financial condition depend on the level of exploration, development and production activity in the oil and gas industry, which is significantly affected by, among other things, volatile oil and gas prices An over-supply of drilling units or rental equipment may lead to a reduction in day rates for the MODU segment and prices for the Well Services segment, which may materially impact the Group's results of operations It may have a material adverse effect on the Group's ability to market its services if its competitors introduce new products or services with features, performance, prices or other characteristics similar to, or better than, the Group's products and services or expand into service areas where the Group operates Legal, regulatory and environmental risks Existing laws or a change of laws and regulations relating to the oil and gas industry could hinder or delay the Group's operations, increase the Group's operating costs, reduce demand for its services and/or restrict the Group's ability to provide its services or operate its drilling units The Group may be subject to contractual environmental liability and liability under environmental laws and regulations, which could have a material adverse effect on the Group's business, results of operations and financial condition The laws and regulations concerning import activity, export recordkeeping and reporting, export control and economic sanctions are complex and constantly changing, and a failure to comply with these complex laws and regulations could adversely affect the Group's operations Operational and country risks The Group's business involves numerous operating hazards and if a significant accident or other event occurs it could materially adversely affect the Group's results of operations, cash flows and financial condition No assurance can be made that the Group has, or will be able to maintain in the future, adequate insurance or indemnity against certain risks, and there is no assurance that such insurance or indemnification agreements will adequately protect the Group if a significant accident or other event occurs The Group's business segments operate in various jurisdictions, thereby exposing the Group to risks inherent in international operations and subjecting the Group to compliance with the laws and regulations of the jurisdictions in which it operates Physical infrastructure and logistics systems, such as roads, air transport facilities and lines of communication, in certain areas of the world may be under-developed and may not have been adequately funded and maintained, which may have an effect on the efficiency and safety of the Group's operations in these regions and may increase the costs of doing business Doing business in international developing markets brings with it inherent risks associated with enforcement of obligations, fraud, bribery and corruption and it may not be possible for the Group to detect or prevent every instance of fraud, bribery and corruption in every jurisdiction in which its employees, agents, sub-contractors or joint venture partners are located The Group has conducted and may in the future conduct business in certain jurisdictions that are subject to US trade embargoes and sanctions by the US Office of Foreign Assets Control, including countries which have been designated by the US government as state sponsors of terrorism, and may conduct business in jurisdictions that are subject to analogous Norwegian and European Union sanctions 36

37 Risk factors (2/3) Risks relating to the industry in which the Group operates Backlog does not provide a precise indication of the time period over which the Group is contractually entitled to receive such revenues and there is no assurance that such revenue will be actually realised in the timeframes anticipated or at all The Group's clients may have the right to terminate their contracts without cause in compliance with applicable notice periods and, under certain circumstances, the Group's contracts may permit a client to terminate its contract early without the payment of any termination fee, as a result of non-performance, delay, quality of deliverables or force majeure events The Group's future business performance depends on its ability to renew and extend existing contracts, and to win new contracts Unforeseen or unanticipated risks, costs or timing when bidding on or managing contracts could adversely affect the Group's business, results of operations and financial condition Risks relating to operations The Group's results of operations and cash flows, and in particular the MODU segment and the Platform Drilling business area, could be materially adversely affected if any of its major clients fail to compensate the Group, terminates their contracts, fail to renew existing contracts, fail to exercise options, or refuse to award new contracts to the Group and the Group is unable to enter into contracts with new clients at comparable day rates The Group's operating and maintenance costs will not necessarily fluctuate in proportion to changes in operating revenues All future newbuild construction projects will be subject to risks of delay, quality issues, damage to personnel, equipment and environment, or cost overruns inherent in any large construction project due to numerous factors which could cause delays or cost overruns and have a material adverse effect on the Group's business, results of operation, cash flows and financial condition The Group must maintain and repair its drilling units, including maintaining the classification of the drilling units, which may lead to increased costs and loss of income Disruptions of deliveries by the Group's suppliers could increase operating costs, decrease revenues and adversely impact the Group's operations. In addition, consolidation of suppliers may limit the Group's ability to obtain supplies and services when needed at an acceptable cost or at all The Group relies on third parties, including subcontractors, to complete some parts of its projects and may be adversely affected by the sub-standard performance or non-performance of those third party subcontractors The Group's purchase of existing drilling units, spare parts and equipment carries risks associated with the quality of such assets The Group may not be able to successfully implement its strategies and any failures, material delays or unexpected costs related to the implementation of the Group's strategies could have a material adverse effect on its business, financial condition, cash flow and results of operations. There can be no assurance that the Group will be able to secure favourable growth opportunities (or such opportunities at all) for the proceeds from the Private Placement Loss of key personnel or the failure to obtain or retain highly skilled personnel could materially adversely affect the Group's operations Labour interruptions could have a material adverse effect on the Group's operations The Group's labour costs and related operating costs could increase as a result of a number of factors, such as high growth within the industry which may increase the cost of qualified personnel and equipment Any circumstances that publicly damage the Group's goodwill, injur the Group's reputation or damage the Group's business relationships may lead to a broader adverse effect on its business and prospects than solely the monetary liability arising directly from the damaging events by way of loss of business, goodwill, clients, joint venture partners and employees. The Group relies on information technology systems to communicate with its drilling units and conduct its business, and disruption, failure or security breaches of these systems could adversely affect its business and results of operations The market for the Group's services is affected by significant technological developments and the Group may not be able to keep pace with a significant step change in technological development Policies, procedures and systems to safeguard employee health, safety and security may not be adequate or sufficiently implemented or adhered to Risks relating to laws, regulation and litigation The Group may be subject to litigation that could have a material adverse effect on the Group's business, results of operations, cash flow and financial condition Technology disputes involving the Group, the Group's suppliers or sub-suppliers could impact the Group's operations The Group is exposed to risk due to its use of certain trademarks such as the "Odfjell" name A change in tax laws of any country in which the Group operates from time to time, or complex tax laws associated with international operations which the Group may undertake from time to time, could result in a higher tax expense or a higher effective tax rate on the Group's earnings 37

38 Risk factors (3/3) A loss of a major tax dispute or a successful tax challenge to the Group's operating structure or to the Group's tax payments, among other things, could result in a higher tax rate on the Group's earnings, which could have a material adverse effect on the Group's earnings and cash flows Risks related to financing and market risk In order to execute the Group's growth strategy, the Group may require additional capital in the future, which may not be available (including the financing of Ex. Stena MidMax, if applicable) and there can be no assurance that such financing is secured The Group's existing or future debt arrangements as well as the preference shares and warrants instruments of Akastor AS or affiliate if the Group should decide to proceed with the acquisition of Ex. Stena MidMax, could limit the Group's liquidity and flexibility in obtaining additional financing, in pursuing other business opportunities or the Company's ability to declare dividends to its shareholders If the Group is unable to comply with the restrictions and the financial covenants in the agreements governing its indebtedness, there could be a default under the terms of these agreements, which could result in an acceleration of repayment of funds that have been borrowed The Group is exposed to interest rate risk, primarily in relation to its long-term borrowings issued at floating interest rates, and interest rate fluctuations could affect the Group's cash flow and financial condition The Group has currency exposure to both transaction risk and translation risk and fluctuations in exchange rates and non-convertibility of expenses could result in financial losses for the Group Risks related to Group structure The Group currently conducts its operations through, and most of the Group's assets are owned by, the Group's subsidiaries and the Company is therefore dependent upon cash flow from subsidiaries to meet its obligations and in order to pay dividends to its shareholders The Group's financial condition may be materially adversely affected if the Group fails to successfully integrate acquired assets or businesses, or is unable to obtain financing for acquisitions on acceptable terms The Group has provided certain representations, warranties and indemnities in connection with the businesses it has sold and may, as a result, be subject to the risk of liability for breach of representations and warranties and/or indemnity obligations in favour of the respective buyers The market value of the drilling units and rental equipment and/or those the Group may acquire in the future may decrease, which could cause the Group to incur losses due to impairment of book values or if it decides to sell assets Risks relating to the shares The market value of the shares may fluctuate significantly, which could cause investors to lose a significant part of their investment Odfjell Partners Ltd. has significant voting power and the ability to influence matters requiring shareholder approval Future sales, or the possibility for future sales, of substantial numbers of shares may affect the shares' market price Future issuances of shares or other securities may dilute the holdings of shareholders and could materially affect the price of the shares Exchange rate fluctuations could adversely affect the value of the shares and any dividends paid on the shares for an investor whose principal currency is not NOK Investors may not be able to exercise their voting rights for shares registered in a nominee account The transfer of shares is subject to restrictions under the securities laws of the United States and other jurisdictions Pursuant to the Company's dividend policy, dividends are only expected to be paid if certain conditions are fulfilled and the Company may be unwilling or unable to pay any dividends in the future Prior to the Private Placement, approximately 71.5% of the issued and outstanding share capital is held by Odfjell Partners Ltd., which may have a negative impact on the liquidity of the shares and result in a low trading volume of the shares, which again could have an adverse effect on the then prevailing market price for the shares Eligible shareholders who do not participate in the Private Placement or the subsequent offering may experience significant dilution in their direct or indirect shareholding in the Company and there can be no assurance that shareholders participating will maintain their relative ownership in the Company Any default under the Company's preference shares and warrant agreements if issued may have a material adverse effect on the Group Risks related to the Company's incorporation in Bermuda Investors in the United States may have difficulty enforcing any judgment obtained in the United States against the Company or its directors or executive officers The Company's Bye-Laws contain provisions that could make it more difficult for a third party to acquire the Company without the consent of the Board of Directors Various conditions may cause an adverse tax effect for the shareholder if the Company pays dividends 38

39 For more information see: