SHELF DRILLING, LTD. PRESS RELEASE SHELF DRILLING NORTH SEA REPORTS FOURTH QUARTER 2023 RESULTSDubai, UAE ,March 4, 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 fourth quarter and full year of 2023 endingDecember 31 . The results highlights will be presented by audio conference call onMarch 4, 2024 at6:00 pm Dubai time /3:00 pm Oslo time. Dial-in details for the call are included in the press release posted onFebruary 27, 2024 and on page 3 of this release.David Mullen , Chief Executive Officer, commented: "Our results during the fourth quarter of 2023 were adversely impacted by the idle time on theShelf Drilling Perseverance and the program completion of the Shelf Drilling Barsk inNovember 2023 . The rig is now preparing for its next contract expected to start inMay 2024 withEquinor inNorway . InDecember 2023 , the Shelf Drilling Perseverance was also awarded a new contract inVietnam , and we are very optimistic about the long-term opportunities for this rig inSoutheast Asia . As ofDecember 31, 2023 , our backlog was$251 million and all 5 rigs in our fleet were contracted. We are actively exploring options to secure additional liquidity to bridge through the period during the first half of 2024 until all 5 rigs are operational. We expect to have this completed by April. We remain committed to safe operations and reliable and efficient service for our customers. We are confident in the Company's ability to deliver significantly higher earnings and cash flows in the second half of 2024." Fourth Quarter Highlights o Q4 2023 adjusted revenues of$27.2 million . o Q4 2023 adjusted EBITDA of$(3.0) million . o Full year 2023 adjusted revenues of$122.8 million , adjusted EBITDA of$10.1 million and adjusted EBITDA margin of 8%. o Q4 2023 net loss of$11.1 million . o Q4 2023 capital expenditures and deferred costs totaled$3.5 million . FY 2023 capital expenditures and deferred costs totaled$11.5 million . o The Company's cash and cash equivalents balance atDecember 31, 2023 was$27.7 million . o Contract backlog was$251.1 million atDecember 31, 2023 across five contracted rigs. o InDecember 2023 , the Shelf Drilling Barsk completed its bareboat charter contract and is currently preparing for a new contract withEquinor expected to commence inMay 2024 . o InDecember 2023 , the Shelf Drilling Perseverance secured a new contract withPetroVietnam Domestic Exploration Production Operating Company Limited (PVEP POC) which is expected to start inVietnam inJuly 2024 . The firm term of the contract is approximately 16 months. Fourth Quarter Results Adjusted revenues were$27.2 million in Q4 2023 compared to$32.1 million in Q3 2023. The$4.9 million (15%) sequential decrease in revenues was primarily due to a decrease in other revenues, partially offset by higher effective utilization. Other revenues decreased to$1.0 million in Q4 2023 compared to$10.8 million in Q3 2023, as one rig inNorway completed its bareboat charter contract inDecember 2023 . Effective utilization increased to 69% in Q4 2023 from 62% in Q3 2023 as one rig in theUnited Kingdom had a full quarter of operations in Q4 2023. Average earned dayrate increased to$96.6 thousand in Q4 2023 from$91.6 thousand in Q3 2023. Total operating and maintenance expenses increased to$25.6 million in Q4 2023 compared to$23.8 million in Q3 2023. The increase of$1.8 million was primarily due to higher demobilization and maintenance costs for one rig inNorway , which completed its bareboat charter contract in Q4 2023, partially offset by lower maintenance costs for one rig in theUnited Kingdom that started a new contract inAugust 2023 . General and administrative expenses decreased to$3.7 million in Q4 2023 compared to$7.3 million in Q3 2023. The decrease of$3.6 million was mainly due to the provision for credit losses recorded in Q3 2023. Adjusted EBITDA for Q4 2023 decreased to$(3.0) million compared to$1.4 million for Q3 2023. Capital expenditures and deferred costs of$3.5 million in Q4 2023 increased from$3.2 million in Q3 2023 primarily related to higher spending on regulatory and capital maintenance costs for one rig inDenmark and one rig inNorway , partially offset by lower spending on fleet spares and transition costs. Q4 2023 ending cash and cash equivalents balance of$27.7 million decreased by$18.9 million from$46.6 million at the end of Q3 2023 primarily due to the bi-annual interest payment of$12.8 million and the principal repayment of$6.3 million related to the 10.25% Senior Secured Notes inOctober 2023 . 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/BI43ae74b1965c44669e3ce1b0d96e3ed9 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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