SHELF DRILLING, LTD. PRESS RELEASE SHELF DRILLING NORTH SEA REPORTS FIRST QUARTER 2024 RESULTSDubai, UAE ,May 15, 2024 -Shelf Drilling (North Sea ), Ltd. ("Shelf Drilling North Sea " and, together with its subsidiaries, the "Company", Euronext Growth Oslo Exchange: SDNS) announces results for the first quarter of 2024 endingMarch 31 . The results highlights will be presented by audio conference call onMay 16, 2024 at6:00 pm Dubai time /4:00 pm Oslo time. Dial-in details for the call are included in the press release posted onMay 7, 2024 and on page 3 of this release.David Mullen , Chief Executive Officer, commented: "Our results during the first quarter of 2024 were impacted by the out-of-service periods of the Shelf Drilling Barsk and Shelf Drilling Perseverance. Both the Shelf Drilling Barsk and Shelf Drilling Perseverance remain on track to commence their new contracts in May inNorway and July inVietnam , respectively. Since the beginning of April, we added$135 million of new contract awards for the Shelf Drilling Barsk inNorway and Shelf Drilling Fortress in theUnited Kingdom providing contract coverage for both rigs into late 2025 at attractive dayrates." Mullen added: "The recently announced debt refinancing transaction will significantly improve our liquidity position and extend our maturities until late 2028, providing greater long-term flexibility. Our near-term priority is the successful start-up of the new contracts inNorway andVietnam . We believe we are well positioned to deliver on our EBITDA guidance for the second half of 2024 and generate significant free cash flow in the years ahead." First Quarter Highlights o Q1 2024 adjusted revenues of$27.7 million . o Q1 2024 adjusted EBITDA of$(11.3) million . o Q1 2024 net loss of$(20.4) million . o Q1 2024 capital expenditures and deferred costs totaled$12.6 million . o The Company's cash and cash equivalents balance atMarch 31, 2024 was$13.6 million . o Contract backlog was$229.4 million atMarch 31, 2024 across five contracted rigs. o InApril 2024 , the Shelf Drilling Barsk was awarded additional backlog withEquinor extending the firm term throughDecember 2025 with additional option wells thereafter. o InApril 2024 , the Shelf Drilling Fortress was awarded a new contract with an estimated term of 400 days, scheduled to commence inAugust 2024 immediately after completion of the rig's existing contract. o OnApril 26, 2024 , SDNS successfully placed$315.0 million senior aggregate principal amount of 9.875% senior secured first lien bonds, dueNovember 2028 (the "9.875% Senior Secured Bonds"). The net proceeds from the 9.875% Senior Secured Bonds will be used to refinance the 10.25% Senior Secured Notes, dueOctober 2025 (the "10.25% Senior Secured Notes"), fund the previously disclosed short-term liquidity requirement and transaction costs (including the call premium on the 10.25% Senior Secured Notes) and for general corporate purposes. First Quarter Results Adjusted revenues of$27.7 million in Q1 2024 remained relatively unchanged as compared to$27.2 million in Q4 2023. Average earned dayrate increased marginally to$96.8 thousand in Q1 2024 from$96.6 thousand in Q4 2023. Effective utilization decreased to 59% in Q1 2024 from 69% in Q4 2023, primarily due to one rig inNorway that completed its bareboat charter contract inDecember 2023 and was out of service preparing for a new contract during Q1 2024. Total operating and maintenance expenses increased to$35.3 million in Q1 2024 compared to$25.6 million in Q4 2023. The increase of$9.7 million was primarily due to higher costs for one rig inNorway that was previously under a bareboat charter agreement. General and administrative expenses increased to$4.2 million in Q1 2024 compared to$3.7 million in Q4 2023. The increase of$0.5 million was primarily due to one-time transition costs incurred following the completion of the bareboat charter agreement for the rig inNorway . Adjusted EBITDA for Q1 2024 decreased to$(11.3) million compared to$(3.0) million for Q4 2023, primarily due to the Shelf Drilling Barsk being out of service preparing for a new contract for all of Q1 2024. Capital expenditures and deferred costs of$12.6 million in Q1 2024 increased from$3.5 million in Q4 2023 primarily due to higher contract preparation expenditures for one rig inSingapore expected to commence a new contract inVietnam inJuly 2024 and higher regulatory and capital maintenance for one rig inNorway preparing for a new contract which is expected to start inMay 2024 . Q1 2024 ending cash and cash equivalents balance of$13.6 million decreased by$14.1 million from$27.7 million at the end of Q4 2023 primarily due to the two rigs out of service preparing for new contracts for the full quarter. For further queries, please contact:Greg O'Brien , Executive Vice President and Chief Financial OfficerShelf Drilling (North Sea ), Ltd. Tel.: +971 4567 3616 Email : greg.obrien@shelfdrilling.com Dial in Details for the Audio Conference call Participants will receive conference access information only when they register for the conference via the link below: Online Registration: https://register.vevent.com/register/BI4541f66dbc134073908c8c416d5e8280 Participants must register for the call using online registration. Upon registering, each participant will be provided with call details. AboutShelf Drilling North Sea Shelf Drilling North Sea is a shallow water offshore drilling contractor primarily operating in theNorth Sea . The company's fit-for-purpose strategy and fleet of modern high-specification harsh environment jack-up rigs enable it to offer a broad range of services in the shallow water drilling markets. The company is incorporated under the laws ofBermuda . SinceOctober 12, 2022 , Company shares are listed on the Euronext Growth Oslo Exchange under the ticker symbol SDNS. Special Note Regarding Forward-Looking Statements Matters discussed in this announcement may constitute forward-looking statements. Forward-looking statements are statements that are not historical facts and may be identified by words such as "believe", "expect", "anticipate", "strategy", "intends", "estimate", "will", "may", "continue", "should" and similar expressions. The forward-looking statements in this release are based upon various assumptions, many of which are based, in turn, upon further assumptions. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and may be beyond its control. Such risks, uncertainties, contingencies and other important factors could cause actual events to differ materially from the expectations expressed or implied in this release by such forward-looking statements. Given these factors, users of this information should not place undue reliance on the forward-looking statements. Additional information aboutShelf Drilling (North Sea ), Ltd. can be found at https://www.shelfdrillingnorthsea.com. This information is subject to the disclosure requirements pursuant to Euronext Growth Rule Book part II.
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