Shelf Drilling : Q2 2021 Results Highlights

Shelf Drilling Q2 2021 Results Highlights

August 12, 2021

Disclaimer

This presentation (the "Presentation") has been prepared by Shelf Drilling, Ltd. ("Shelf Drilling" or the "Company") exclusively for information purposes and may not be reproduced or redistributed, in whole or in part, to any other person. The Presentation is being made only to, and is only directed at, persons to whom such presentation may lawfully be communicated ('relevant persons'). Any person who is not a relevant person should not act or rely on the Presentation or any of its contents.

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The Presentation contains certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates. Forward-looking statements concern 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 the Presentation, including assumptions, opinions and views of the Company or cited from third party sources are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. None of the Company or any of its shareholders or subsidiary undertakings or any such person's officers or employees provides any assurance that the assumptions underlying such forward- looking statements are free from errors nor does any of them accept any responsibility for the future accuracy of the opinions expressed in the 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.

The Company uses certain financial information calculated on a basis other than in accordance with accounting principles generally accepted in the United States ("GAAP"), including EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin, Capital expenditures and deferred costs and Net Debt, as supplemental financial measures in this presentation. These non-GAAP financial measures are provided as additional insight into the Company's ongoing financial performance and to enhance the user's overall understanding of the Company's financial results and the potential impact of any corporate development activities.

''EBITDA'' as used herein represents revenues less: operating expenses, selling, general and administrative expenses, (reversal of) / provision for doubtful accounts, share-based compensation expense, net of forfeitures, and other, net, and excludes interest expense and financing charges, interest income, income taxes, depreciation, amortization, loss on impairment and loss / (gain) on disposal of assets. ''Adjusted EBITDA'' as used herein represents EBITDA as adjusted for the exclusion of acquired rig reactivation costs and restructuring costs. These terms, as we define them, may not be comparable to similarly titled measures employed by other companies and are not a measure of performance calculated in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for operating income, net income or other income or cash flow statement data prepared in accordance with U.S. GAAP. We believe that EBITDA and Adjusted EBITDA are useful because they are widely used by investors in our industry to measure a company's operating performance without regard to items such as interest, income tax expense, depreciation and amortization and other non-recurring expenses (benefits), which can vary substantially from company to company. EBITDA and Adjusted EBITDA have significant limitations, such as not reflecting our cash requirements for capital expenditures and deferred costs, contractual commitments, working capital, taxes or debt service. Our management uses EBITDA and Adjusted EBITDA for the reasons stated above. In addition, our management uses Adjusted EBITDA in presentations to our Board of Directors to provide a consistent basis to measure operating performance of management; as a measure for planning and forecasting overall expectations; for evaluation of actual results against such expectations; and in communications with equity holders, lenders, note holders, rating agencies and others concerning our financial performance.

"Capital expenditures and deferred costs" as used herein include fixed asset purchases, investments associated with the construction of newbuild rigs and certain expenditures associated with regulatory inspections, major equipment overhauls, contract preparation, rig upgrades, mobilization and stacked rig reactivations. Capital expenditures are included in property and equipment. Deferred costs are included in other current assets and other long-term assets. This term, as we define it, may not be comparable to similarly titled measures employed by other companies and is not calculated in accordance with U.S. GAAP. Capital expenditures and deferred costs should not be considered in isolation or as a substitute for capital expenditures prepared in accordance with U.S. GAAP. We believe that Capital expenditures and deferred costs is a useful measure as it better represents the overall level of the Company's capital investments. Capital expenditures and deferred costs as used herein is a non-U.S. GAAP measure defined and periodically reported in the Company's financial statements on a consistent basis.

"Net Debt" as used herein represents Total Debt less Cash and Cash Equivalents. This term, as we define it, may not be comparable to similarly titled measures employed by other companies and is not a measure of performance calculated in accordance with U.S. GAAP. Net Debt should not be considered in isolation or as a substitute for total debt prepared in accordance with U.S. GAAP. We believe that Net Debt is useful because it is widely used by investors in our industry to measure a company's financial position.

The quarterly financial information included in this Presentation has not been audited and may be subject to modifications.

The Presentation contains information obtained from third parties. You are advised that such third party information has not been prepared specifically for inclusion in the Presentation and the Company has not undertaken any independent investigation to confirm the accuracy or completeness of such information.

An investment in the Company involves 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 the Presentation, including, among others, the risk factors described in the Company's Form 10-K equivalent for the period ended December 31, 2020 and the Company's prospectus dated 7 May 2019. Should any risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the Presentation.

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, none of the Company or any of its shareholders or subsidiary undertakings or any such person's officers or employees accepts any liability whatsoever arising directly or indirectly from the use of the Presentation.

By attending or receiving the Presentation you acknowledge that you will be solely responsible for your own assessment of the market and the market position of the Company and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Company's business.

The Presentation speaks as of August 12, 2021. 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.

Aug 2021 | 2

Oil Price Development

• Brent crude oil prices reached a high of $77 in the run-up to the July OPEC meeting which was the highest oil price since October 2018
• Barring a brief dip, Brent prices have held steady above $70 level since the end of May
• Brent prices averaged higher in Q2 2021 at $69 as compared to Q1 2021 at $67
• Resumption in economic activity in US and Europe, increase in oil and gas demand and global vaccine rollouts have led to this resilience in oil price

Brent Oil Price ($/bbl)

$90																												Current: $71
$80
$70		2017-2019 Average: $64
$60
$50
$40			2017 Average		$55
		2018 Average			$72
$30			2019 Average		$64
			2020 Average		$43
$20			Q1 2021 Average			$67
$10			Q2 2021 Average		$69
			Q3 2021 Average1	$74
$0

Source: Bloomberg, as of 11 August 2021.

Note (1): Q3 2021 Average Brent oil price based on 1 July to 11 August 2021.

Aug 2021 | 3

Global Jack-up Fleet

• The improvement in the Brent price is also reflected in the global jack-up tendering and marketing activity
• Global number of contracted jack-ups has increased from 343 rigs as of end of 2020 to 349 rigs in August 2021
• • Marketed utilization has improved from 79% to 82% during the same period
• Expect further uplift in shallow water activity in 2022 with current commodity price outlook

# of Contracted Jack-ups

Marketed Contracted

	Previous Cycle Peak (April 2014)	457 JUs
400	Previous Cycle Trough (Jan 2017)	303 JUs	95%
380	January 2020	384 JUs	90%
	August 2021	349 JUs
360			85%
340
			80%
320
			75%
300
			70%
280
			65%
260
240			60%
220			55%
200			50%

Jan 2017 Jul 2017 Jan 2018 Jul 2018 Jan 2019 Jul 2019 Jan 2020 Jul 2020 Jan 2021 Jul 2021

Source: IHS Petrodata, as of 11 August 2021.

Aug 2021 | 4

SHLF Near-Term Objectives Remain Unchanged

1

2

3

Keeping our rigs/operations safe and free from COVID-19

Maintaining business continuity

Preserving cash / liquidity

MITIGATING MEASURES

• Effective and safe crew changes / people movement
• Working closely with customers to implement COVID-19 protocols
• Frequent employee communication
• Comprehensive cost reduction
• Completed $310 million notes offering
• Several new contracts/extensions in 2021

Aug 2021 | 5