Odfjell Drilling - Prospectus (International)

IMPORTANT NOTICE
IMPORTANT: You must read the following disclaimer before continuing. The following
disclaimer applies to the Prospectus attached to this electronic transmission and you are therefore
advised to read this disclaimer carefully before reading, accessing or making any other use of the
attached Prospectus. In accessing the attached Prospectus, you agree to be bound by the following
terms and conditions, including any modifications to them from time to time, each time you receive
any information from us as a result of such access.
Confirmation of your representation: By accessing this Prospectus you have confirmed to the
Managers, the Company and the Selling Shareholder, that (i) you have understood and agree to the
terms set out herein, (ii) (a) you and the electronic mail address you have given to us are not located
in the United States, its territories and possessions or (b) you are a person that is a qualified
institutional buyer within the meaning of Rule 144A under the U.S. Securities Act, (iii) you consent to
delivery by electronic transmission, (iv) you will not transmit the attached Prospectus (or any copy of
it or part thereof) or disclose, whether orally or in writing, any of its contents to any other person
except with the consent of the Managers and (v) you acknowledge that you will make your own
assessment regarding any legal, taxation or other economic considerations with respect to your
decision to purchase the Offer Shares.
You are reminded that the attached Prospectus has been delivered to you on the basis that you are a
person into whose possession this Prospectus may be lawfully delivered in accordance with the laws of
the jurisdiction in which you are located and you may not, nor are you authorized to, deliver this
Prospectus, electronically or otherwise, to any other person and in particular to any U.S. address.
Failure to comply with this directive may result in a violation of the U.S. Securities Act of 1933 (the
U.S. Securities Act) or the applicable laws of other jurisdictions.
Restrictions: NOTHING IN THIS ELECTRONIC TRANSMISSION CONSTITUTES AN OFFER OF
SECURITIES FOR SALE IN THE UNITED STATES OR ANY OTHER JURISDICTION WHERE IT IS
UNLAWFUL TO DO SO.
ANY OFFER SHARES BEING SOLD 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 OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES EXCEPT (1) IN ACCORDANCE WITH RULE 144A UNDER
THE U.S. SECURITIES ACT TO A PERSON THAT THE HOLDER AND ANY PERSON ACTING ON ITS
BEHALF REASONABLY BELIEVES IS A QIB THAT IS ACQUIRING SUCH OFFER SHARES FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE QIBs, OR (2) IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT AND APPLICABLE STATE OR
LOCAL SECURITIES LAWS.
THE ATTACHED PROSPECTUS MAY NOT BE FORWARDED OR DISTRIBUTED TO ANY OTHER PERSON
AND MAY NOT BE REPRODUCED IN ANY MANNER WHATSOEVER. DISTRIBUTION OR REPRODUCTION
OF THE ATTACHED PROSPECTUS IN WHOLE OR IN PART IS UNAUTHORIZED. FAILURE TO COMPLY
WITH THIS DIRECTIVE MAY RESULT IN A VIOLATION OF THE U.S. SECURITIES ACT OR THE
APPLICABLE SECURITIES LAWS OF OTHER JURISDICTIONS.
Under no circumstances shall this Prospectus constitute an offer to sell or the solicitation of an offer to
buy nor shall there be any sale of the Offer Shares in any jurisdiction in which such offer, solicitation
or sale would be unlawful. Recipients of this Prospectus who intend to purchase any Offer Shares are
reminded that any such purchase may only be made on the basis of the information contained in the
Prospectus.

This Prospectus is being distributed only to and is directed only at persons in member states of the
European Economic Area (with the exception of Norway) who are qualified investors within the
meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC), as amended, and any
relevant implementing measure in each Member State of the European Economic Area. This
Prospectus is being distributed only to and is directed only at (i) persons who are outside the United
Kingdom; or (ii) investment professionals falling within Article 19(5) of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005, as amended (the Order); or (iii) high net worth
entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a)
to (d) of the Order (all such persons in (ii) and (iii) being referred to as relevant persons). The Offer
Shares are available only to, and any invitation, offer or agreement to purchase or otherwise acquire
the Offer Shares will be engaged in only with, relevant persons. Any person who is within the United
Kingdom and not a relevant person should not act or rely on this Prospectus or any of its contents.
This Prospectus has been sent to you in an electronic form. You are reminded that documents
transmitted via this medium may be altered or changed during the process of electronic transmission
and consequently none of the Managers, any person who controls any of the Managers, the Company
or the Selling Shareholder, any director, officer, employee or agent of any of them or any affiliate of
any such person accepts any liability or responsibility whatsoever in respect of any difference between
the Prospectus distributed to you in electronic format and the hard copy version of the Prospectus.
The materials relating to the offering do not constitute, and may not be used in connection with, an
offer or solicitation in any place where offers or solicitations are not permitted by law. If a jurisdiction
requires that the offering be made by a licensed broker or dealer and the Managers or any affiliate of
the Managers is a licensed broker or dealer in that jurisdiction, the offering shall be deemed to be
made by the Managers or such affiliate on behalf of the Selling Shareholder in such jurisdiction.
None of the Managers or any of their respective affiliates or any of their respective directors, officers,
employees or agents accepts any responsibility whatsoever as to the accuracy, completeness or
verification of the information in this document. The Managers and any of their respective affiliates
accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they
might otherwise have in respect of such document. Any decision to purchase the Offer Shares in the
offer should be made solely on the basis of information contained in this document. No representation
or warranty, express or implied, is made by any of the Managers or any of their respective affiliates as
to the accuracy, completeness or verification of the information set out in this document.
The Managers are acting exclusively for Odfjell Drilling Ltd and BCB Paragon Trust Limited as trustee
of the Larine Trust (as the Selling Shareholder) and no one else in connection with the offer. They will
not regard any other person (whether or not a recipient of this document) as their client in relation to
the offer and will not be responsible to any other person for providing the protections afforded to their
clients nor for giving advice in relation to the offer or any transaction or arrangement referred to
herein.

ODFJELL DRILLING LTD
(An exempted company limited by shares incorporated under the laws of Bermuda)
Initial public offering of up to 56,000,000 Shares with an indicative price range of NOK 37 to NOK 48 per Share
Listing of the Companys shares on the Oslo Stock Exchange

This prospectus (the Prospectus) has been prepared in connection with the initial public offering (the Offering) of up to 56,000,000
common shares (the Sale Shares) of Odfjell Drilling Ltd (the Company), an exempted company limited by shares incorporated under the
laws of Bermuda (together with its consolidated subsidiaries, Odfjell Drilling or the Group), and the related listing (the Listing) on
Oslo Brs, a stock exchange operated by Oslo Brs ASA (the Oslo Stock Exchange) of the Companys shares, each with a par value of
USD 0.01 (the Shares). The Offer Shares (as defined below) are offered by BCB Paragon Trust Limited, as trustee of the Larine Trust (the
Selling Shareholder). The Company will not receive any of the proceeds of the Offering.
The Offering consists of: (i) a private placement to (a) investors in Norway, (b) investors outside Norway and the United States of America
(the U.S. or the United States), subject to applicable exemptions from the prospectus requirements, and (c) qualified institutional
buyers (QIBs) in the United States as defined in, and in reliance on, Rule 144A (Rule 144A) under the U.S. Securities Act of 1933, as
amended (the U.S. Securities Act) (the Institutional Offering), and (ii) a retail offering to the public in Norway (the Retail
Offering). All offers and sales outside the United States will be made in compliance with Regulation S under the U.S. Securities Act
(Regulation S). In addition, the Selling Shareholder has granted DNB Markets, on behalf of the Managers (as defined below), an option to
purchase up to 4,000,000 additional Shares (the Additional Shares and, together with the Sale Shares, the Offer Shares), equal to up
to approximately 7% of the number of Sale Shares sold in the Offering (representing up to 2% of the Shares in issue in the Company),
exercisable, in whole or in part, within a 30-day period commencing at the time at which if sold trading in the Shares commences on the
Oslo Stock Exchange, expected to be on 30 September 2013, to cover any over-allotments made in connection with the Offering on the terms
and subject to the conditions described in this Prospectus (the Over-Allotment Option). Assuming the Over-Allotment Option is exercised
in full, the Offering will amount to 60,000,000 Shares.
The price (the Offer Price) at which the Offer Shares are expected to be sold will be between NOK 37 and NOK 48 per Offer Share (the
Indicative Price Range). The Offer Price may be set within, below or above the Indicative Price Range. The Offer Price will be determined
through a bookbuilding process and will be set by the Selling Shareholder in consultation with the Company and the Joint Bookrunners.
Investors in the Retail Offering will receive a discount of NOK 1,000 on their aggregate amount payable for the Offer Shares allocated to such
investors. The Offer Price, and the number of Offer Shares sold in the Offering, is expected to be announced through a stock exchange notice
on or before 30 September 2013 at 07:30 hours (Central European Time, CET). The offer period for the Institutional Offering (the
Bookbuilding Period) will commence at 09:00 hours (CET) on 16 September 2013 and close at 15:00 hours (CET) on 27 September
2013. The application period for the Retail Offering (the Application Period) will commence at 09:00 hours (CET) on 16 September 2013
and close at 12:00 hours (CET) on 27 September 2013. The Bookbuilding Period and the Application Period may be shortened or extended
beyond the set times by the Company, in consultation with the Selling Shareholder and the Joint Bookrunners, but will in no event be
shortened to expire prior to 12:00 hours (CET) on 23 September 2013 or extended beyond 15:00 hours (CET) on 11 October 2013.
The Shares, including the Sale Shares and any Additional Shares, will be registered in the Norwegian Central Securities Depository (the
VPS) in book-entry form. All Shares will rank in parity with one another and carry one vote per Share.
Investing in the Offer Shares involves a high degree of risk. See Section 2 Risk factors beginning on page 17.
The Offer Shares 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 are being offered and sold: (i) in the United States only to persons who are QIBs in
reliance on Rule 144A or another exemption from the registration requirements under the U.S. Securities Act; and (ii) outside the United
States in compliance with Regulation S. The distribution of this Prospectus and the offer and sale of the Offer Shares in certain jurisdictions
may be restricted by law. Persons in possession of this Prospectus are required to inform themselves about and to observe any such
restrictions. See Section 19 Selling and transfer restrictions.
Prior to the Offering, the Shares have not been publicly traded. The Company applied for the Shares to be admitted for trading and listing on
the Oslo Stock Exchange on 12 September 2013, and completion of the Offering is subject to the approval of the listing application by the
board of directors of the Oslo Stock Exchange.
The due date for the payment of the Offer Shares is expected to be on or about 2 October 2013 and 3 October 2013 in the Retail Offering and
the Institutional Offering, respectively. Delivery of the Offer Shares is expected to take place on or about 2 October 2013 and 3 October 2013
in the Retail Offering and the Institutional Offering, respectively, through the facilities of the VPS, Euroclear Bank S.A./N.V. as operator of the
Euroclear System and Clearstream Banking S.A. Trading in the Shares on the Oslo Stock Exchange is expected to commence on or about 30
September 2013, on an if sold basis, under the ticker code ODL. If closing of the Offering does not take place on such dates or at all, the
Offering may be withdrawn, resulting in all applications for Offer Shares being disregarded, any allocations made being deemed not to have
been made and any payments made being annulled. All dealings in Shares prior to settlement and delivery are at the sole risk of the parties
concerned.
Joint Global Coordinators
and Joint Bookrunners
ABG Sundal Collier DNB Markets Goldman Sachs International
Co-Lead Managers
Arctic Securities Danske Bank Markets Swedbank First Securities
The date of this Prospectus is 13 September 2013
Odfjell Drilling Ltd - Prospectus
ii

IMPORTANT INFORMATION
This Prospectus has been prepared in connection with the Offering of the Offer Shares and the Listing of the Shares on the Oslo Stock Exchange. For the
definitions of certain technical terms and other terms used in this Prospectus, see Section 22 Definitions and glossary.
This Prospectus has been prepared to comply with the Norwegian Securities Trading Act of 29 June 2007 no. 75 (the Norwegian Securities Trading
Act) and related secondary legislation, including the Commission Regulation (EC) no. 809/2004 implementing Directive 2003/71/EC of the European
Parliament and of the Council of 4 November 2003 regarding information contained in prospectuses, as amended (the EU Prospectus Directive), and
as implemented in Norway. This Prospectus has been prepared solely in the English language. However, a summary in Norwegian has been prepared in
Section 21 Norwegian Summary (Norsk Sammendrag). The Financial Supervisory Authority of Norway (Nw.: Finanstilsynet) (the Norwegian FSA)
has reviewed and approved this Prospectus in accordance with Sections 7-7 and 7-8 of the Norwegian Securities Trading Act. The Norwegian FSA has not
controlled or approved the accuracy or completeness of the information included in this Prospectus. The approval by the Norwegian FSA only relates to
the information included in accordance with pre-defined disclosure requirements. The Norwegian FSA has not made any form of control or approval
relating to corporate matters described or referred to in this Prospectus.
The Company has engaged ABG Sundal Collier, DNB Markets, part of DNB Bank ASA, and Goldman Sachs International as Joint Global Coordinators and
Joint Bookrunners (together, the Joint Bookrunners) and Arctic Securities, Danske Bank Markets and Swedbank First Securities, as Co-Lead Managers
(together, the Co-Lead Managers). The Joint Bookrunners and the Co-Lead Managers are jointly referred to as the Managers.
The distribution of this Prospectus and the offer and sale of the Offer Shares in certain jurisdictions may be restricted by law. This
Prospectus does not constitute an offer of, or an invitation to purchase, any of the Offer Shares in any jurisdiction in which such offer or
sale would be unlawful. Neither this Prospectus nor any advertisement or any other offering material may be distributed or published in
any jurisdiction except under circumstances that will result in compliance with applicable laws and regulations. Persons in possession of
this Prospectus are required to inform themselves about and to observe any such restrictions. In addition, the Shares are subject to
restrictions on transferability and resale and may not be transferred or resold except as permitted under applicable securities laws and
regulations. Investors should be aware that they may be required to bear the financial risks of this investment for an indefinite period of
time. Any failure to comply with these restrictions may constitute a violation of applicable securities laws. See Section 19 Selling and
transfer restrictions.
This Prospectus and the terms and conditions of the Offering as set out herein and any sale and purchase of Offer Shares hereunder shall be governed by
and construed in accordance with Norwegian law. The courts of Norway, with Oslo as legal venue, shall have exclusive jurisdiction to settle any dispute
which may arise out of or in connection with the Offering or this Prospectus.
In making an investment decision, prospective investors must rely on their own examination, and analysis of, and enquiry into the Group
and the terms of the Offering, including the merits and risks involved. None of the Company, the Selling Shareholder or the Managers, or any of
their respective representatives or advisers, is making any representation to any offeree or purchaser of the Offer Shares regarding the legality of an
investment in the Offer Shares by such offeree or purchaser under the laws applicable to such offeree or purchaser. Each investor should consult with his
or her own advisors as to the legal, tax, business, financial and related aspects of a purchase of the Offer Shares.
All Sections of the Prospectus should be read in context with the information included in Section 4 General information.
Consent under the Exchange Control Act 1972 (and its related regulations) has been obtained from the Bermuda Monetary Authority for
the issue and transfer of the Shares to and between residents and non-residents of Bermuda for exchange control purposes provided that
the Shares are listed on the Oslo Stock Exchange. In granting such consent, neither the Bermuda Monetary Authority nor any other
relevant Bermuda authority or government body accepts any responsibility for the Companys financial soundness or the correctness of
any of the statements made or opinions expressed in this Prospectus.

NOTICE TO NEW HAMPSHIRE RESIDENTS
NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR A LICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF
THE NEW HAMPSHIRE REVISED STATUTES WITH THE STATE OF NEW HAMPSHIRE NOR THE FACT THAT A SECURITY IS EFFECTIVELY
REGISTERED OR A PERSON IS LICENSED IN THE STATE OF NEW HAMPSHIRE CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF
NEW HAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE AND NOT MISLEADING. NEITHER ANY SUCH FACT
NOR THE FACT THAT AN EXEMPTION OR EXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION MEANS THAT THE SECRETARY
OF STATE HAS PASSED IN ANY WAY UPON THE MERITS OR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY
PERSON, SECURITY OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TO ANY PROSPECTIVE PURCHASER, CUSTOMER
OR CLIENT ANY REPRESENTATION INCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

NOTICE TO INVESTORS IN THE UNITED STATES
Because of the following restrictions, prospective investors are advised to consult legal counsel prior to making any offer, resale, pledge or other transfer
of the Shares. The Offer Shares 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, sold, pledged or otherwise transferred within the United States except pursuant to
an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act and in compliance with any applicable state
securities laws. Accordingly, the Offer Shares will not be offered or sold within the United States, except in reliance on the exemption from the
registration requirements of the U.S. Securities Act under Rule 144A. The Offer Shares will be offered outside the United States in compliance with
Regulation S. Prospective purchasers are hereby notified that sellers of Offer Shares may be relying on the exemption from the provisions
of Section 5 of the U.S. Securities Act provided by Rule 144A under the U.S. Securities Act. See Section 19.2.1 United States.
Any Shares offered or sold in the United States will be subject to certain transfer restrictions as set forth under Section 19.3.1 United States.
The securities offered hereby have not been recommended by any United States federal or state securities commission or regulatory authority.
Furthermore, the foregoing authorities have not passed upon the merits of the Offering or confirmed the accuracy or determined the adequacy of this
Prospectus. Any representation to the contrary is a criminal offense under the laws of the United States.
In the United States, this Prospectus is being furnished on a confidential basis solely for the purposes of enabling a prospective investor to consider
purchasing the particular securities described herein. The information contained in this Prospectus has been provided by the Company and other sources
iii

identified herein. Distribution of this Prospectus to any person other than the offeree specified by the Managers or their representatives, and those
persons, if any, retained to advise such offeree with respect thereto, is unauthorised and any disclosure of its contents, wi thout prior written consent of
the Company, is prohibited. This Prospectus is personal to each offeree and does not constitute an offer to any other person or to the public generally to
purchase Offer Shares or subscribe for or otherwise acquire any Shares.

ENFORCEMENT OF CIVIL LIABILITIES
The Company is an exempted company limited by shares incorporated under the laws of Bermuda. As a result, the rights of holders of the Shares will be
governed by Bermuda law and the Companys memorandum of association and Bye-Laws. The rights of shareholders under Bermuda law may differ from
the rights of shareholders of companies incorporated in other jurisdictions. With one exception, none of the Interim Directors or members of the New
Board of Directors are residents of the United States, and a substantial portion of the Companys assets are located outside the United States. As a result,
it may be difficult for investors in the United States to effect service of process on the Company or its directors and executive officers in the United States
or to enforce in the United States judgments obtained in U.S. courts against the Company or those persons, including judgments based on the civil
liability provisions of the securities laws of the United States or any State or territory within the United States. It is doubtful whether courts in Norway or
Bermuda will enforce judgments obtained in other jurisdictions, including the United States, against the Company or its directors or officers under the
securities laws of those jurisdictions or entertain actions in Bermuda against the Company or its directors or officers under the securities laws of other
jurisdictions. In addition, awards of punitive damages in actions brought in the United States or elsewhere may not be enforceable in Norway or
Bermuda. The United States does not currently have a treaty providing for reciprocal recognition and enforcement of judgments (other than arbitral
awards) in civil and commercial matters with either Norway or Bermuda.

AVAILABLE INFORMATION
The Company has agreed that, for so long as any of the Offer Shares are restricted securities within the meaning of Rule 144(a)(3) under the U.S.
Securities Act, it will during any period in which it is neither subject to Sections 13 or 15(d) of the U.S. Securities Exchange Act of 1934, as amended (the
U.S. Exchange Act), nor exempt from reporting pursuant to Rule 12g3-2(b) under the U.S. Exchange Act, provide to any holder or beneficial owners
of Shares, or to any prospective purchaser designated by any such registered holder, upon the request of such holder, beneficial owner or prospective
owner, the information required to be delivered pursuant to Rule 144A(d)(4) of the U.S. Securities Act.

NOTICE TO UNITED KINGDOM INVESTORS
This Prospectus is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) investment professionals falling
within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order) or (iii) high net worth entities, and
other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as
Relevant Persons). The Offer Shares are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such
Shares will be engaged in only with, Relevant Persons. Any person who is not a Relevant Person should not act or rely on this document or any of its
contents.

NOTICE TO INVESTORS IN THE EEA
In any member state of the European Economic Area (the EEA) that has implemented the EU Prospectus Directive, other than Norway (each, a
Relevant Member State), this communication is only addressed to and is only directed at qualified investors in that Member State within the meani ng
of the EU Prospectus Directive. The Prospectus has been prepared on the basis that all offers of Offer Shares in any Relevant Member State outside
Norway will be made pursuant to an exemption under the EU Prospectus Directive from the requirement to produce a prospectus for offers of shares.
Accordingly, any person making or intending to make any offer within any Relevant Member State (other than Norway) of Offer Shares which are the
subject of the Offering contemplated in this Prospectus may only do so in circumstances in which no obligation arises for the Company or any of the
Managers to publish a prospectus or a supplement to a prospectus under the EU Prospectus Directive for such offer. Neither the Company nor the
Managers have authorised, nor do they authorise, the making of any offer of Shares through any financial intermediary, other than offers made by
Managers which constitute the final placement of Offer Shares contemplated in this Prospectus.
Each person in a Relevant Member State other than, in the case of paragraph (a), persons receiving offers contemplated in this Prospectus in Norway,
who receives any communication in respect of, or who acquires any Offer Shares under, the offers contemplated in this Prospectus will be deemed to
have represented, warranted and agreed to and with the Managers and the Company that:
a) it is a qualified investor as defined in the EU Prospectus Directive, and
b) in the case of any Offer Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the EU Prospectus Directive,
(i) such Offer Shares acquired by it in the Offering have not been acquired on behalf of, nor have they been acquired with a view to their
offer or resale to, persons in any Relevant Member State other than qualified investors, as that term is defined in the EU Prospectus
Directive, or in circumstances in which the prior consent of the Managers has been given to the offer or resale; or (ii) where such Offer
Shares have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those Offer
Shares to it is not treated under the EU Prospectus Directive as having been made to such persons.
For the purposes of this provision, the expression an offer to the public in relation to any of the Offer Shares in any Relevant Member State means the
communication in any form and by any means of sufficient information on the terms of the offer and any Shares to be offered so as to enable an investor
to decide to purchase any of the Offer Shares, as the same may be varied in that Relevant Member State by any measure implementing the EU
Prospectus Directive in that Relevant Member State, and the expression EU Prospectus Directive means Directive 2003/71/EC (and amendments
thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing
measure in each Relevant Member State and the expression 2010 PD Amending Directive means Directive 2010/73/EU.
See Section 19 Selling and transfer restrictions for certain other notices to investors.

iv

STABILISATION
In connection with the Offering, DNB Markets (the Stabilisation Manager), or its agents, on behalf of the Managers, may engage in transactions that
stabilise, maintain or otherwise affect the price of the Shares for up to 30 days from the commencement of if sold trading of the Offer Shares on the
Oslo Stock Exchange. Specifically, the Stabilisation Manager may over-allot Offer Shares or effect transactions with a view to supporting the market price
of the Offer Shares at a level higher than that which might otherwise prevail. The Stabilisation Manager and its agents are not required to engage in any
of these activities and, as such, there is no assurance that these activities will be undertaken; if undertaken, the Stabilisation Manager or its agents may
end any of these activities at any time but in any case must end at the end of the 30-day period mentioned above. Save as required by law or regulation,
the Stabilisation Manager does not intend to disclose the extent of any stabilisation transactions under the Offering.

ADDITIONAL IMPORTANT INFORMATION
For additional important information, including on the presentation of financial information in this Prospectus, forward-looking statements and the
sourcing of industry data included herein, and exchange rate data, see Section 4 General information.
1

TABLE OF CONTENTS
Section Page
1 SUMMARY ....................................................................................................................................... 2
2 RISK FACTORS .............................................................................................................................. 17
3 RESPONSIBILITY FOR THE PROSPECTUS ........................................................................................... 43
4 GENERAL INFORMATION ................................................................................................................. 44
5 REASONS FOR THE OFFERING AND THE LISTING ............................................................................... 49
6 DIVIDENDS AND DIVIDEND POLICY ................................................................................................. 50
7 INDUSTRY AND MARKET OVERVIEW ................................................................................................. 51
8 BUSINESS OF THE GROUP ............................................................................................................... 63
9 CAPITALISATION AND INDEBTEDNESS ............................................................................................. 87
10 SELECTED FINANCIAL INFORMATION ............................................................................................... 89
11 OPERATING AND FINANCIAL REVIEW ............................................................................................. 100
12 BOARD OF DIRECTORS, MANAGEMENT, EMPLOYEES AND CORPORATE GOVERNANCE........................... 131
13 THE SELLING SHAREHOLDER ......................................................................................................... 143
14 RELATED PARTY TRANSACTIONS.................................................................................................... 144
15 CORPORATE INFORMATION AND DESCRIPTION OF SHARE CAPITAL ................................................... 146
16 SECURITIES TRADING IN NORWAY ................................................................................................ 156
17 TAXATION ................................................................................................................................... 161
18 TERMS OF THE OFFERING ............................................................................................................. 166
19 SELLING AND TRANSFER RESTRICTIONS ........................................................................................ 178
20 ADDITIONAL INFORMATION .......................................................................................................... 183
21 NORWEGIAN SUMMARY (NORSK SAMMENDRAG) ............................................................................. 184
22 DEFINITIONS AND GLOSSARY ....................................................................................................... 199

Appendix A: Bye-Laws of Odfjell Drilling Ltd ....................................................................................................... A1
Appendix B: Financial statements for the years ended 31 December 2012, 2011 and 2010 ...................................... B1
Appendix C: Interim financial information for the three and six month periods ended 30 June 2013 and
2012 ........................................................................................................................................... C1
Appendix D: Application form for the Retail Offering ............................................................................................ D1
Appendix E: Application form for the Retail Offering in Norwegian ......................................................................... E1

2

1 SUMMARY
Summaries are made up of disclosure requirements known as Elements. These Elements are numbered in
Sections A E (A.1 E.7) below. This summary contains all the Elements required to be included in a summary for
this type of securities and the issuer. Because some Elements are not required to be addressed, there may be gaps
in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the
summary because of the type of securities and issuer, it is possible that no relevant information can be given
regarding the Element. In this case a short description of the Element is included in the summary with the mention
of not applicable.
Section A Introduction and Warnings
A.1 Warning This summary should be read as introduction to the Prospectus;
any decision to invest in the securities should be based on consideration
of the Prospectus as a whole by the investor;
where a claim relating to the information contained in the Prospectus is
brought before a court, the plaintiff investor might, under the national
legislation of the Member States, have to bear the costs of translating
the Prospectus before the legal proceedings are initiated; and
civil liability attaches only to those persons who have tabled the
summary including any translation thereof, but only if the summary is
misleading, inaccurate or inconsistent when read together with the other
parts of the Prospectus or it does not provide, when read together with
the other parts of the Prospectus, key information in order to aid
investors when considering whether to invest in such securities.

Section B - Issuer
B.1 Legal and commercial
name
Odfjell Drilling Ltd
B.2 Domicile and legal form,
legislation and country of
incorporation
Odfjell Drilling Ltd was incorporated on 16 November 2005 as an
exempted company limited by shares under the laws of Bermuda and in
accordance with the Bermuda Companies Act.
B.3 Current operations,
principal activities and
markets
Odfjell Drilling is an integrated drilling, engineering and well services
provider with more than 40 years of experience focusing on the offshore
harsh environment and deepwater markets. Today the Group has
approximately 3,100 employees operating in more than 20 countries
worldwide. Odfjell Drilling operates through three segments: Mobile
Offshore Drilling Units (MODU), Well Services and Drilling & Technology.
Odfjell Drillings clients are primarily major oil and gas companies.
(i) Mobile Offshore Drilling Units (MODU)
In the MODU segment, the Group operates drilling units owned
by the Group and by third parties. Odfjell Drilling currently owns
the three harsh environment semisubmersible drilling rigs
Deepsea Atlantic, Deepsea Stavanger and Deepsea Bergen.
Deepsea Atlantic and Deepsea Stavanger were delivered in 2009
and 2010, respectively, and are both sixth-generation ultra-
deepwater semisubmersible drilling rigs. Deepsea Bergen is a
third-generation semisubmersible drilling rig built in 1983 and
has been continually upgraded to meet changes in regulatory
requirements and client demands. Further, through a joint
venture, Deep Sea Metro, the Group has a 40% ownership
3

interest in two sixth-generation ultra-deepwater drillships,
Deepsea Metro I and Deepsea Metro II, which were delivered in
2011. The Group charters its drillings rigs through a mixture of
medium- and long-term contracts with major oil and gas
companies, which include Statoil, BP, BG and Petrobras.
The Group has one harsh environment ultra-deepwater
semisubmersible drilling rig under construction with expected
delivery from DSME in May 2014. The rig will be named Deepsea
Aberdeen and is contracted to BP Exploration for a period of
seven years with expected commencement of operations in the
fourth quarter of 2014. In addition, the Group holds a 50%
ownership interest in Odfjell Galvo B.V., a joint-venture
company established with Galvo Oil and Gas Holding B.V. Odfjell
Galvo B.V. holds 20% of the shares in three Dutch special
purpose companies, each of which has entered into an
engineering, procurement and construction contract for the
construction of a drillship mainly at Estaleiro Jurong Aracruz in
Brazil. The drillships are expected to be delivered in the period
from July 2016 to December 2018.
The MODU segment also offers management services to other
owners of semisubmersibles, drillships and jack-ups, mainly
operational management, management of regulatory
requirements, marketing, contract negotiations and client
relations, preparations for operation and mobilisation. Odfjell
Drilling is currently responsible for the management of the
following mobile offshore drilling units owned by third parties or
owned jointly by the Group and third parties: (i) Deepsea Metro I
and Deepsea Metro II and (ii) Island Innovator. In addition,
Odfjell Galvo Perfuraes Ltda, a subsidiary of Odfjell Galvo
B.V., is to provide management services to Petrobras in
connection with the fifteen-year rig contracts on the three
drillships to be delivered under the Brazilian joint-venture
mentioned above.
(ii) Well Services
The Well Services segment provides casing and tubular running
services (both automated and conventional) as well as drilling
tool and tubular rental services, both for exploration wells and for
production purposes. The Group provides services in more than
20 countries and to more than 50 drilling rigs. Odfjell Drilling has
more than 30 years of experience in the global well services
market, and the Company is of the opinion that it is one of the
leaders in remote operated handling equipment for casing and
tubular running services. In the drilling tool rental business, the
Group benefits from a well-developed supplier base, and offers a
large inventory of modern and high quality drilling tools and
equipment, which have been manufactured and certified in
accordance with applicable industry standards. It aims to be a
single supply source for drillers and operators and also has the
capacity to design custom-made equipment. The Well Services
segment currently serves approximately 50 clients, of which 10
constitute material volumes.

4

(iii) Drilling & Technology
The Drilling & Technology segment is divided into two business
areas: Platform Drilling and Technology. The main service
offering of the Platform Drilling business area is production
drilling and well completion on clients rigs. Other types of
services offered are slot recovery, plug and abandonment, work-
overs and maintenance activities. The Group has 35 years of
experience in platform drilling operation and has been one of the
leading platform drilling service providers in the North Sea since
the 1980s, focusing on the high-end of the market for platform
drilling services.
The Technology business area offers engineering services ranging
from design and engineering to building supervision, project
management and operational support for newbuild projects, SPS
certifications and yard stays. The Technology business area
performs smaller or medium sized stand alone projects, including
engineering, procurement, construction and installation projects.
The Technology business area has a successful track record of
MODU newbuild projects and yard stays spanning 40 years. It
also occupies a strong position in the North Sea market. The
Technology business area has approximately 400 employees and
90 contractors in total. Its offices are located close to its key
clients in Norway, the UK and the Philippines.
B.4a Significant recent trends
affecting the issuer and
the industry in which it
operates
Growth and demand within the offshore oil and gas services industry are
affected by the following key factors:
(i) Oil and gas prices and demand: Oil and gas E&P spending is the
key driver of demand in the oil and gas services industry. E&P
spending is directly linked to the earnings of oil and gas
companies which are, in turn, dependent on average oil and gas
prices. Volatility in oil prices can therefore reduce the ability of oil
and gas companies to budget for increased E&P spending.
However, while market expectations of a potential decline in oil
prices will affect E&P spending and activity, ultra-deepwater
projects, being large projects with longer lead times and long-
term outlooks, are less affected by short-term changes in oil
price.
(ii) Reserve replacements: The future production capacity of the oil
and gas industry depends on the ability of oil and gas companies
to maintain a sustainable reserve replacement ratio through the
discovery and development of new reservoirs or improvements in
oil recovery techniques. Currently, oil and gas companies are
barely able to fully replace the hydrocarbons they produce, and
the IEA reports that proven reserves of oil worldwide (an
indication of the near- to medium-term potential for new
production) increased slightly by 1,523 billion barrels, or 3.6%, at
the end of 2011, compared to the year before (IEA, World Energy
Outlook 2012, 12 November 2012).
(iii) Increased emphasis on E&P spending: Oil and gas companies are
increasing both their total E&P spending as well as their
proportion of E&P spending on offshore activities. The largest
growth in E&P spending in recent years has been in deepwater
exploration and production, partly driven by the lack of new,
5

large, onshore and shallow water discoveries. Future upstream
investments will have an increased offshore focus, as exploration
and development continues to move towards harsher and deeper
waters.
(iv) Drilling technology and innovation: Recent advances in offshore
technology have improved the ability of oil and gas companies to
develop reservoirs in deeper waters, and in harsh and more
remote locations. A new class of drilling rigs has emerged, with
the ability to drill wells of up to 40,000 feet, in water depths of up
to 12,000 feet, and with them, new types of subsea construction
vessels and production facilities.
(v) General political and economic environment: Changes in the
political, economic and regulatory environment across regions
affect global demand for oil services. The political and regulatory
regimes of a country also have a significant impact on the level of
oil and gas extraction activity within its territory. Changes in tax
rules could also alter the profitability of certain projects and
accordingly, E&P spending.
(vi) Increased focus on QHSE: Due to the potentially serious
consequences of an accident within the offshore oil and gas
industry, the industry has developed high standards to mitigate
risks associated with QHSE. There has been increased focus on
this area after the Macondo incident in 2010, and, to an
increasing extent, oil and gas companies will contract only with
oil and gas companies that have the procedures and know-how to
adequately manage these risks. This trend has increased the
barriers to entry in the industry.
The Group has experienced generally good market conditions and
operating performance during the first half of 2013. The Group believes
that the current revenue backlog provides a relatively high degree of
financial visibility for the next few years. The Group believes the outlook
for its three business segments is positive.
The MODU segment has a strong medium- to long-term outlook in the
drilling market. Deepsea Aberdeen, which is expected to commence
operations in the fourth quarter of 2014, and potential incremental
investment opportunities are expected to drive the Groups growth.
Although the Deep Sea Metro joint venture so far has been loss-making
due to relatively high financing cost in this joint venture and low
financial utilisation of Deepsea Metro II, the Group expects this joint
venture to contribute positively in the future due to Deepsea Metro Is
contract extension at higher day rates in combination with a more
normalised financial utilisation of Deepsea Metro II. The Group also
expects continued strong growth in the Well Services segment in the
coming years in-line with recent years. Finally, in the Drilling &
Technology segment, the Group expects modest growth for the Platform
Drilling business area based on existing backlog and growth in the
Technology business area as a consequence of expected high activity in
the drilling industry in the coming years.
The Groups management contract for Dalian Developer was terminated
by Dalian Deepwater Developer Ltd on 4 September 2013 following a
30-day grace period as a result of Dalian Deepwater Developer Ltds
6

termination of its construction contract for the drillship.
B.5 Description of the Group Odfjell Drilling Ltd, the parent company of the Group, is a holding
company. The operations of the Group are carried out by the Groups
operating subsidiaries. Odfjell Drilling Ltd has two directly wholly-owned
subsidiaries, Odfjell Offshore Ltd. (holding company for the Drilling
Units) and Odfjell Drilling Services Ltd. (holding company for the Groups
MODU Management business area and the Drilling & Technology and
Well Services segments), both incorporated in Bermuda.
B.6 Interests in the Company
and voting rights
Shareholders owning 5% or more of the Shares have an interest in the
Companys share capital which is notifiable pursuant to the Norwegian
Securities Trading Act. The table below shows the ownership percentage
held by such notifiable shareholders.
Shareholders Number of Shares Percent
Odfjell Partners Ltd. ............................................................. 140,000,000 70
BCB Paragon Trust Limited, as trustee of the Larine Trust ......... 60,000,000 30
Total.................................................................................. 200,000,000 100
There are no differences in voting rights between the shareholders.
Following the completion of the Offering, Odfjell Partners Ltd. will control
a majority of the Shares.
The Company is not aware of any arrangements the operation of which
may at a subsequent date result in a change of control of the Company.
B.7 Selected historical key
financial information
The following selected financial information is derived from the Groups
audited financial statements (including the notes thereto) as of and for
the years ended 31 December 2012, 2011 and 2010 (the Financial
Statements), as well as the unaudited interim consolidated financial
information as of and for the three and six month periods ended 30 June
2013 and 2012 (the Interim Financial Statements).
The Financial Statements for the year ended 31 December 2012, with
comparable figures for the year ended 31 December 2011, have been
prepared in accordance with IFRS, as adopted by the EU, while the
Financial Statements for the year ended 31 December 2011 and 2010
have been prepared in accordance with NGAAP. The Interim Financial
Statements, combined with relevant information in the financial review,
have been prepared in accordance with IAS 34.
The selected financial information presented herein should be read in
connection with Section 11 Operating and financial review and the
Financial Statements and Interim Financial Statements (included in
Appendix B and Appendix C to the Prospectus).
As of and for the three
months ended
30 June
As of and for the six
months ended
30 June
As of and for the year
ended
31 December
(In USD millions)
2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2012
(IFRS)
(audited)
2011
(IFRS)
(audited)
Consolidated statement of income
Operating revenue .............................................. 289.0 259.3 585.2 525.2 1,093.8 1,056.7
EBITDA .............................................................. 113.3 80.8 201.9 161.2 331.0 382.4
Operating profit (EBIT) ........................................ 77.2 44.9 128.2 88.9 183.7 237.4
Profit/(loss) for the period .................................... (9.2) 13.0 12.3 45.6 116.9 121.3

7

As of and for the three
months ended
30 June
As of and for the six
months ended
30 June
ended
31 December
(In USD millions)
2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2012
(IFRS)
(audited)
2011
(IFRS)
(audited)
Consolidated statement of financial
position
Total non-current assets ...................................... - - 2,231.1 2,307.8 2,323.4 2,158.4
Total current assets ............................................. - - 509.1 414.4 480.9 582.2
Total assets ........................................................ - - 2,740.2 2,722.2 2,804.4 2,740.6
Total equity ........................................................ - - 1,083.6 1,079.9 1,154.3 1,032.8
Total non-current liabilities ................................... - - 1,285.3 1,327.3 1,233.7 1,410.6
Total current liabilities ......................................... - - 371.3 315.0 416.4 297.2
Total liabilities .................................................... - - 1,656.7 1,642.3 1,650.1 1,707.8
Total equity and liabilities ..................................... - - 2,740.2 2,722.2 2,804.4 2,740.6

Consolidated statement of cash flow
Net cash generated from operating activities .......... 61.1 62.6 115.9 145.4 267.2 197.6
Net cash used in investing activities ...................... 23.2 (155.0) 4.4 (237.6) (305.9) (213.0)
Net cash used in financing activities ...................... (60.2) (49.7) (78.0) (49.7) (61.0) 66.0
Net change in cash and cash equivalents ............... 24.0 (142.1) 42.3 (141.9) (99.7) 50.6
Cash and cash equivalents at period end ................ 245.2 161.8 245.2 161.8 200.6 303.1

ended
31 December
(In NOK millions)
2011
(NGAAP)
(audited)
2010
(NGAAP)
(audited)
Consolidated statement of income
Total operating income ................................................................................................................. 5,939.9 4,750.9
Total operating expenses .............................................................................................................. 4,833.8 4,756.2
Operating profit/loss ..................................................................................................................... 1,106.1 (5.3)
Net profit for the year ................................................................................................................... 653.1 305.3

Consolidated statement of financial position
Total fixed assets ......................................................................................................................... 12,653.5 12,144.4
Total current assets ...................................................................................................................... 3,736.0 3,159.1
Total assets ................................................................................................................................. 16,389.5 15,303.4
Total equity ................................................................................................................................. 6,416.7 5,944.7
Total non-current liabilities ............................................................................................................ 8,866.3 8,033.8
Total current liabilities .................................................................................................................. 1,106.6 1,325.0
Total liabilities ............................................................................................................................. 9,972.9 9,358.7
Total equity and liabilities .............................................................................................................. 16,389.5 15,303.4

Consolidated statement of cash flow
Net cash generated from operating activities ................................................................................... 698.7 134.6
Net cash used in investing activities ............................................................................................... (957.5) (3,025.4)
Net cash used in financing activities ............................................................................................... 475.9 1,567.0
Net change in cash and cash equivalents ........................................................................................ 217.1 (1,323.8)
Cash and cash equivalents at 31.12 ............................................................................................... 1,822.4 1,605.3

B.8 Selected key pro forma
financial information
Not applicable. There is no pro forma financial information.
B.9 Profit forecast or estimate Not applicable. No profit forecast or estimate is made.
8

B.10 Audit report qualifications Not applicable. There are no qualifications in the audit reports.
B.11 Insufficient working
capital
Not applicable. The Company is of the opinion that the working capital
available to the Group is sufficient for the Groups present requirements,
for the period covering at least 12 months from the date of this
Prospectus.

Section C - Securities
C.1 Type and class of
securities admitted to
trading and identification
number
The Company has one class of shares in issue, and all shares in that
class have equal rights to all such other shares in that class as set out in
the Companys Bye-Laws. The Shares have been created under the
Bermuda Companies Act and are registered in the VPS under ISIN
BMG671801022.
C.2 Currency of issue The Shares are issued in USD, but will be quoted and traded in NOK on
the Oslo Stock Exchange.
C.3 Number of shares in issue
and par value
At the date of this Prospectus, the Companys authorised share capital is
USD 2,300,000 consisting of 230,000,000 Shares with a par value of
USD 0.01 each, of which 200,000,000 Shares have been issued.
C.4 Rights attaching to the
securities
Pursuant to the Bye-Laws, the holders of Shares have no pre-emptive,
redemption, conversion or sinking fund rights. The holders of Shares are
entitled to one vote per Share on all matters submitted to a vote of the
holders of Shares.
Under Bermuda law, a company may not declare or pay dividends if
there are reasonable grounds for believing that: (i) the company is, or
would after the payment be, unable to pay its liabilities as they become
due; or (ii) that the realisable value of its assets would thereby be less
than its liabilities. Under the Companys Bye-Laws, each of the Shares
are entitled to dividends, as and when dividends are declared by the
Board of Directors, subject to any preferred dividend right of the holders
of any preference shares.
C.5 Restrictions on transfer The Bye-Laws provide that the Board of Directors may decline to
register the transfer of any interest in any Share in the register of
members or decline to direct any registrar, appointed by the Company,
to register the transfer where such transfer would result in 50% or more
of the shares or votes in the Company being held, controlled or owned
directly or indirectly by individuals or legal persons resident for tax
purposes in Norway or connected to a Norwegian business activity, in
order to avoid the Company being deemed a Controlled Foreign
Company as such term is defined under the Norwegian tax rules.
Subject to the above, but notwithstanding anything else contrary in the
Bye-Laws, shares that are listed or admitted to trading on an Appointed
Stock Exchange may be transferred in accordance with the rules and
regulations of such exchange. All transfers of uncertificated shares shall
be made in accordance with and be subject to the facilities and
requirements of the transfer of title to shares in that class by means of
the VPS or any other relevant system concerned and, subject thereto, in
accordance with any arrangements made by the Board of Directors in
accordance with the Bye-Laws. The Board of Directors shall refuse any
transfer unless the registration of such transfer satisfies all applicable
consents, authorisations and permissions of any governmental body or
9

agency in Bermuda. The Board of Directors may also refuse to recognise
an instrument of transfer of a share unless it is accompanied by the
relevant share certificate (if one has been issued) and such other
evidence of the transferor's right to make the transfer as the Board of
Directors shall reasonably require.
Please also see Section 19 Selling and transfer restrictions.
C.6 Admission to trading On 12 September 2013, the Company applied for admission to trading
of its Shares on the Oslo Stock Exchange. It is expected that the board
of directors of the Oslo Stock Exchange will approve the listing
application of the Company on 25 September 2013, subject to certain
conditions being met. See Section 18.12 Conditions for completion of
the Offering Listing and trading of the Offer Shares.
The Company currently expects commencement of trading in the Shares
on the Oslo Stock Exchange on an if sold basis, on or around 30
September 2013, and on an ordinary basis on or around 3 October
2013. The Company has not applied for admission to trading of the
Shares on any other stock exchange or regulated market.
C.7 Dividend policy The Company aims to ensure that shareholder returns reflect the
Companys value creation and will consist of both dividends and a
positive share price development. The Company will target a long term
dividend annual pay-out representing approximately 30 40% of its net
profit on a consolidated basis. Since the Company is in a phase involving
considerable investments, there is no plan for dividend payment for the
financial year ended 31 December 2013. The Company has a high focus
on value creation and will have a dividend policy that will preserve the
interest of the Company and its shareholders.
When deciding whether to declare and pay an annual dividend, the
Board of Directors will take into consideration market outlook, contract
backlog, cash flow generation, capital expenditure plans and funding
requirements whilst maintaining adequate financial flexibility. The Board
of Directors may revisit the dividend policy from time to time. The
proposal in any year to pay any dividend is subject to: (i) the limitations
found in the terms of certain loans made to the Group and (ii)
sufficiency of distributable reserves.

Section D - Risks
D.1 Key risks specific to the
Company or its industry
Risks relating to the industry in which the Group operates
(i) The Groups business depends on the level of activity in oil and
gas exploration, as well as the identification and development of
oil and gas reserves and production in offshore areas worldwide,
particularly in harsh and ultra-deep water environments. In
particular, oil and gas prices and market expectations of potential
changes in these prices significantly affect the level of exploration
and production activity by oil and gas companies. Due to the
significant investments in exploration and, often, production
made by the Groups clients at or before the time they contract
for services provided by the MODU segment and the Platform
Drilling business area, these businesses are typically impacted by
longer term E&P spending decisions based on long-term price
trends, whereas the Technology business area and the Well
Services segment are more sensitive to E&P spending decisions
10

by clients made in response to short-term fluctuations in oil and
gas prices. Any decrease in demand for any of the Groups
business segments services could have a material adverse effect
on the Groups business, results of operations, cash flow and
financial condition.
(ii) Uncertainty relating to global economic conditions and
development may reduce demand for the Groups Drilling Units
and services or result in contract delays or cancellations. Any
decrease in demand caused by this uncertainty could have a
material adverse effect on the Groups results of operations, cash
flow and financial condition.
(iii) 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. Periods of excess drilling unit supply
intensify the competition in the industry and can result in drilling
units being idle for long periods of time. An over-supply of drilling
units could be caused by the entry into service of new and
upgraded units or by competitors shifting drilling units into those
regions where the Groups Drilling Units operate. Oversupply of
the equipment that the Group rents to clients (Rental
Equipment), as offered by the Well Services segment, could lead
to that segment experiencing decreased prices and/or client
orders for its Rental Equipment. Either of these occurrences may
materially impact the Groups results of operations.
(iv) The oil and gas services industry in which the Group operates is
highly competitive and fragmented and includes both large and
small competitors that compete with the Group. The Groups
operations may be materially adversely affected if its current
competitors or new market entrants introduce new products or
services with characteristics similar to, or better than, the
Groups products and services or expand into service areas where
the Group operates. Competitive pressures or other factors that
result in significant price competition, particularly during industry
downturns, could have a material adverse effect on the Groups
business, results of operations, cash flow and financial condition.
(v) The Groups business is subject to numerous operating hazards
the occurrence of which could also subject the Group to property,
environmental and other damage claims by third parties. The
Groups insurance policies and contractual rights to indemnity
may not adequately cover losses and the Group does not have
insurance coverage or rights to an indemnity for all risks. The
occurrence of a significant accident or other adverse event which
is not fully covered by the Groups insurance or any enforceable
or recoverable indemnity from a client could result in substantial
losses for the Group.
(vi) The Groups segments operate in various jurisdictions which
subjects the Group to risks inherent in international operations
that may be beyond the Groups control such as war, natural
disasters, political unrest, public health threats and the
inconsistent application of foreign laws and regulations. Some of
these risks could disrupt the Groups operations and thereby have
a material adverse effect on the Groups business, results of
11

operations, cash flow and financial condition. Moreover, the
Group operates in many developing market countries which
brings with it the inherent risks associated with fraud, bribery,
corruption and international sanctions regimes. Failure to comply
with such laws could result in material fines and penalties and
damage the Groups reputation.
Risks relating to the Group
(i) The Groups backlog may not be realised due to a number of
reasons including the actions of its clients or its own inability to
perform its obligations under its contracts. The Groups backlog
represents the contracted future revenue under contracts for
Drilling Units and services provided by its MODU segment and
Platform Drilling business area. The Group presents backlog both
inclusive and exclusive of any priced optional periods exercisable
by clients calculated to reflect the nominal value of the contract,
as detailed in Section 11.2.3 Backlog. 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 time
frames anticipated, or at all. If the Group is unable to realise
backlog amounts this could have a material adverse effect on the
Groups results of operations, cash flows and financial condition.
(ii) The Groups future performance depends on its ability to renew
and extend existing contracts and to win new contracts. The
Groups ability to renew or extend existing contracts or sign new
contracts will largely depend on prevailing market conditions. If
the Group is unable to sign new contracts that start immediately
after the end of its current contracts, or in the case of the MODU
segment or the Platform Drilling business area, if new contracts
are entered into at day rates or prices substantially below the
existing day rates or prices, or on terms otherwise less
favourable compared to existing contract terms, or which leave
the Group with mobilisation or demobilisation costs that cannot
be fully recovered, the Groups business, results of operations,
cash flow and financial condition may be adversely affected.
Risks relating to operations
(i) The Group, in particular the MODU segment and the Platform
Drilling business area, is subject to client concentration risk. If
any of the Groups major clients fail to compensate the Group,
terminate their contracts, fail to renew their existing contracts 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, this could have a material adverse effect on the Groups
results of operations.
(ii) The Groups operating and maintenance costs will not necessarily
fluctuate in proportion to changes in operating revenues. In a
situation where a Drilling Unit faces longer idle periods,
reductions in costs may not be immediate as some of the crew
may be required to prepare Drilling Units for the idle period.
Thus, there can be no assurance that the Group will be successful
in reducing its operating costs under circumstances where its
revenues may also have decreased. To the extent changes in the
Groups operating and maintenance costs are not proportionate
12

to changes in operating revenues it could have a material
adverse effect on the Groups business, results of operations,
cash flow and financial condition.
(iii) The Groups newbuild drilling unit construction projects are
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. The Group
also provides consultancy and project management services on
other newbuild projects where it may or may not have an
ownership interest. Significant cost overruns or delays in projects
may result in loss of revenue, potential penalties from the client
or cancellation by the client. If any of these risks materialises,
this could have a material adverse effect on the Groups results
of operations, cash flow and financial condition.
(iv) The Group conducts a portion of its operations through joint
ventures and is, therefore, subject to the risks and uncertainties
associated with participating in joint ventures. Differences in
views among joint venture partners may result in delayed
decisions or failures to agree on major issues. Should a joint
venture partner sell its shares in the joint venture, a change of
control event may be triggered under the bonds used to the
finance the joint ventures, unless the Group purchases those
shares. Further, if the Groups partners do not meet their
contractual obligations, the respective joint venture may be
unable to adequately perform and deliver its contracted services,
requiring the Group to make additional investments or perform
additional services. The Group could be liable for both its own
obligations and those of its partners, which may result in reduced
profits or, in some cases, significant losses on the project. These
factors could have a material adverse effect on the business
operations of the joint venture and, in turn, the Groups business
operations and reputation.
(v) The operation and development of the Groups business depends
on its retention of key personnel and its ability to recruit, retain
and develop skilled personnel for its business. Shortages of
qualified personnel or the Groups inability to obtain and retain
qualified personnel could have a material adverse effect on the
Groups business.
(vi) A loss of a major tax dispute or a successful tax challenge to the
Groups operating structure or to the Groups tax payments,
among other things, could result in a higher tax rate on the
Groups earnings, which could have a material adverse effect on
the Groups earnings and cash flows. From time to time, the
Groups tax payments may be subject to review or investigation
by tax authorities of the jurisdictions in which the Group
operates. Specifically, the Group is currently subject to an
ongoing tax audit pertaining to Deepsea Atlantic (which may
have a negative impact on liquidity in the amount of
approximately USD 50 million) and a tax dispute pertaining to
Deepsea Bergen (where if the district courts verdict is upheld on
appeal, the USD 62.8 million loss (already expensed as of 30
June 2013) for the Group will be final).
13

Risks related to Group structure
(i) The Group currently conducts its operations through, and most of
the Groups assets are owned by, the Groups subsidiaries. As
such, the cash that the Group obtains from its subsidiaries is the
principal source of funds necessary to meet its obligations. The
inability to transfer cash from the Groups subsidiaries or joint
ventures may mean that the Group may not be permitted to
make the necessary transfers from its subsidiaries or joint
ventures to meet its obligations or pay dividends to its
shareholders. A payment default by the Group, or any of the
Groups subsidiaries, on any debt instruments would have a
material adverse effect on the Groups business, results of
operations, cash flow and financial condition.
D.3 Key risks specific to the
securities
Risks relating to the Shares
(i) Following completion of the Offering, it is expected that Odfjell
Partners Ltd. will remain the major shareholder of the Group and
will, accordingly, continue to have a majority of the shareholder
vote. Thereby, it is expected that Odfjell Partners Ltd. will have
the ability to significantly influence the outcome of matters
submitted for a vote of the Companys shareholders, including
election of members of the Board of Directors. There can be no
assurance that the commercial goals of Odfjell Partners Ltd. and
the Company will always remain aligned, and that this
concentration of ownership will always be in the best interest of
the Groups other shareholders. Further, while it is expected that
Odfjell Partners Ltd. will remain the major shareholder of the
Company after the Offering, no assurance can be given that this
will continue on a permanent basis. If Odfjell Partners Ltd. was
not to remain a major shareholder of the Company, or if its
commercial goals were not in the best interest of the Group, this
could have a material adverse effect on the market value of the
Shares.
(ii) After completion of the Offering there will only be a limited free
float of the Shares. The limited free float may have a negative
impact on the liquidity of the Shares and may result in a low
trading volume of the Shares, which could have an adverse effect
on the then prevailing market price for the Shares.
Risks related to the Companys incorporation in Bermuda
(i) The 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. These provisions could make it more
difficult for a third party to acquire the Company, even if the third
partys offer may be considered beneficial by many shareholders.

Section E - Offer
E.1 Net proceeds and
estimated expenses
The Selling Shareholder will receive the proceeds of the Offering.
The total costs and expenses of, and incidental to, the Listing and the
Offering are estimated to amount to NOK 89 million (excluding VAT) if
all Offer Shares are sold by the Selling Shareholder and the Company
decides to pay the discretionary fee in full (based on a price of NOK
14

42.50 per Share which is the mid-point of the Indicative Price Range).
The costs and expenses will be paid by the Company.
E.2a Reasons for the Offering
and use of proceeds
(i) To facilitate a sustainable shareholding structure which supports
the Companys long-term strategy, by offering the Selling
Shareholder an opportunity to sell all of its Shares.
(ii) To enhance the Companys financing sources, thereby increasing
its strategic flexibility for future growth opportunities.
(iii) To enhance the Companys ability to attract talent by raising the
profile of the Group and its brand.
The estimated net amount of proceeds of the Offering is NOK 2,461
million.
The Selling Shareholder will receive the proceeds of the Offering. The
Company will not receive any of the proceeds of the Offering.
E.3 Terms and conditions of
the Offering
The Offering consists of up to 56,000,000 Sale Shares, all of which are
existing, validly issued and fully paid-up registered Shares with a par
value of USD 0.01, offered by the Selling Shareholder. The Sale Shares
represent, and will upon completion of the Offering represent, up to
28% of the Shares in issue in the Company. In addition, the Joint
Bookrunners may elect to over-allot up to 4,000,000 Additional Shares,
equalling up to approximately 7% of the number of Sale Shares
(representing up to 2% of the Shares in issue in the Company). The
Selling Shareholder has granted DNB Markets, on behalf of the
Managers, an Over-Allotment Option to purchase a corresponding
number of Additional Shares to cover any such over-allotments.
Assuming the Over-Allotment Option is exercised in full, the Offering will
amount to up to 60,000,000 Shares, representing up to 30% of the
Shares.
The Offering consists of:
An Institutional Offering, in which Offer Shares are being
offered (a) to investors in Norway, (b) investors outside
Norway and the United States, subject to applicable exemptions
from the prospectus requirements, and (c) in the United States
to QIBs, as defined in, and in reliance on Rule 144A of the U.S.
Securities Act. The Institutional Offering is subject to a lower
limit per application of NOK 2,500,000.
A Retail Offering, in which Offer Shares are being offered to the
public in Norway subject to a lower limit per application of an
amount of NOK 10,500 and an upper limit per application of
NOK 2,499,999 for each investor. Investors in the Retail
Offering will receive a discount of NOK 1,000 on their
aggregate amount payable for the Offer Shares allocated to
such investors. Investors who intend to place an order in
excess of NOK 2,499,999 must do so in the Institutional
Offering. Multiple applications by one applicant in the Retail
Offering will be treated as one application with respect to the
maximum application limit and the discount.
All offers and sales outside the United States will be made in compliance
with Regulation S.
15

The Bookbuilding Period for the Institutional Offering is expected to take
place from 16 September 2013 at 09:00 hours (CET) to 27 September
2013 at 15:00 hours (CET). The Application Period for the Retail Offering
will take place from 16 September 2013 at 09:00 hours (CET) to 27
September 2013 at 12:00 hours (CET). The Company, in consultation
with the Selling Shareholder and the Joint Bookrunners, reserves the
right to shorten or extend the Bookbuilding Period and Application Period
at any time.
The Managers expect to issue notifications of allocation of Offer Shares
in the Institutional Offering on or about 30 September 2013, by issuing
contract notes to the applicants by mail or otherwise. DNB Markets,
acting as settlement agent for the Retail Offering, expects to issue
notifications of allocation of Offer Shares in the Retail Offering on or
about 30 September 2013, by issuing allocation notes to the applicants
by mail or otherwise.
Payment by applicants in the Institutional Offering will take place
against delivery of Offer Shares. Delivery and payment for Offer Shares
in the Institutional Offering is expected to take place on or about 3
October 2013.
The due date of payment in the Retail Offering is on or about 2 October
2013. Subject to timely payment by the applicant, delivery of the Offer
Shares allocated in the Retail Offering is expected to take place on or
about 2 October 2013.
E.4 Material and conflicting
interests
The Managers or their affiliates have provided from time to time, and
may provide in the future, investment and commercial banking services
to the Company and its affiliates in the ordinary course of business, for
which they may have received and may continue to receive customary
fees and commissions. The Managers do not intend to disclose the
extent of any such investments or transactions otherwise than in
accordance with any legal or regulatory obligation to do so.
Beyond the abovementioned, the Company is not aware of any interest
of natural and legal persons involved in the Offering.
E.5 Selling shareholders and
lock-up agreements
The Selling Shareholder is BCB Paragon Trust Limited, as trustee of the
Larine Trust. Marianne Odfjell is a beneficiary of the trust. As of the date
of this Prospectus, the Selling Shareholder holds 60,000,000 Shares in
the Company, corresponding to 30% of the issued and outstanding
Shares.
Following completion of the Offering, the Selling Shareholder will not
hold any Shares, assuming (i) the Offering is fully subscribed, (ii) the
Additional Shares are allotted and (iii) the Over-Allotment Option is
exercised in full. To the extent the Stabilisation Manager, on behalf of
the Managers, redelivers any of the Shares borrowed pursuant to the
Lending Option to the Selling Shareholder at the end of the stabilisation
period, the Selling Shareholder has the right to require Odfjell Partners
Ltd. to purchase 50% of such redelivered Shares from the Selling
Shareholder and Odfjell Partners Ltd. has a corresponding right to
require the Selling Shareholder to sell 50% of any redelivered Shares.
In connection with the Purchase Agreement, Odfjell Partners Ltd., the
16

Selling Shareholder, the Company and Simen Lieungh (the President
and CEO of Odfjell Drilling) will give an undertaking that will restrict
their ability to issue, sell or transfer Shares for nine months after the
date of the Purchase Agreement. For more information about these
restrictions, please see Section 18.14 Lock-up.
E.6 Dilution resulting from the
Offering
Not applicable. No new shares will be issued in the Offering.
E.7 Estimated expenses
charged to investor
Not applicable. The expenses related to the Offering will be paid by the
Company.
17

2 RISK FACTORS
Investing in the Shares involves inherent risks. Before deciding whether or not to participate in the Offering, an
investor should consider carefully all of the information set forth in this Prospectus, and in particular, the specific
risk factors set out below. An investment in the Shares is suitable only for investors who understand the risk
factors associated with this type of investment and who can afford a loss of all or part of their investment.
If any of the risks described below materialise, individually or together with other circumstances, they may have a
material adverse effect on the Groups business, results of operations, cash flow and financial condition, which may
cause a decline in the value and trading price of the Shares that could result in a loss of all or part of any
investment in the Shares.
The order in which the risks are presented below is not intended to provide an indication of the likelihood of their
occurrence or of their severity or significance.
2.1 Risks relating to the industry in which the Group operates
2.1.1 Market conditions
The Groups 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
The Groups business depends on the level of activity in oil and gas exploration, as well as the identification and
development of oil and gas reserves and production in offshore areas worldwide, particularly in harsh and ultra-
deepwater environments. The availability of quality drilling prospects, exploration success, relative production
costs, the stage of reservoir development, political concerns and regulatory requirements all affect the Groups
clients levels of expenditure and drilling campaigns. In particular, oil and gas prices and market expectations of
potential changes in these prices significantly affect the level of exploration and production (E&P) activity by oil
and gas companies.
Oil and gas prices are volatile and cyclical and are affected by numerous factors beyond the Groups control,
including, but not limited to:
worldwide demand for oil and gas as well as industrial services and power generation and the
competitive position of oil and gas as an energy source compared with alternative fuels;
the cost of exploring for, developing, producing and delivering oil and gas;
capital expenditures by major national and international oil companies;
current oil and gas production, consumer capacity and price levels and expectations regarding future
energy prices;
the ability of the Organisation of Petroleum Exporting Countries (OPEC) to set and maintain
production levels and impact pricing, as well as the level of production in non-OPEC countries;
government laws and regulations;
political, economic and weather conditions and incidents, including conflicts and natural disasters in
oil producing countries and their impact on the worlds financial and commercial markets;
major accidents in the industry, including major spills, blowouts and explosions, and any resulting
changes to regulations, or client safety requirements; and
technological advances affecting both exploration, development and production technology and
energy consumption.
18

The demand for the Groups services and, accordingly, the prices its Well Services segment and Drilling &
Technology segment can achieve and, in the long term, the day rates the Groups MODU segment can achieve
depend on the level of E&P activity and expenditure by clients, and are therefore affected by trends in oil and gas
prices.
Due to the significant investments in exploration and, often, production made by the Groups clients at or before
the time they contract for services provided by the MODU segment and the Platform Drilling business area, these
businesses are typically impacted by longer term E&P spending decisions based on long-term price trends, whereas
the Well Services segment and the Technology business area are more sensitive to E&P spending decisions by
clients made in response to short-term fluctuations in oil and gas prices. Moreover, given the high E&P costs in
ultra-deepwater and harsh environments, a significant decrease in oil and gas prices over a protracted period
(rather than the short term) may result in such projects becoming uneconomical for the Groups clients. This may
result in a decrease in demand for the MODU segment and the Platform Drilling business areas services. Any of
these developments affecting demand in any of the Groups business segments could have a material adverse
effect on the Groups business, results of operations, cash flow, financial condition and, ultimately, ability to pay
dividends.
Uncertainty relating to global economic conditions and development may reduce demand for the
Groups Drilling Units and services or result in contract delays or cancellations
Continued volatility and sustained weakness in general economic conditions and global or regional financial
markets have negatively affected and may continue to negatively affect oil and gas prices and/or create
uncertainty that can cause oil and gas companies to cut E&P spending budgets. Limitations on the availability of
capital or higher costs of capital for financing expenditures, or the desire to preserve liquidity, may cause potential
clients to make additional reductions in future capital budgets and outlays and could result in project modifications,
delays and/or cancellations. Such adjustments could reduce demand for drilling services generally, and the Groups
Drilling Units and services specifically, which could have a material adverse effect on the Groups results of
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 Groups results of
operations
The oil and gas services industry in which the Group operates is characterised by periods of high demand for
drilling units, short drilling unit supply and high day rates, followed by periods of low demand, excess drilling unit
supply, and low day rates and utilisation, largely owing to changes in oil and gas prices and their impact on client
expenditures. Periods of excess drilling unit supply intensify the competition in the industry and can result in
drilling units being idle for long periods of time.
In the past, significant spikes in oil and gas prices have led to high levels of drilling unit construction orders in the
offshore market. Significant spikes in oil and gas prices have been and could be followed by periods of sharp and
sudden declines in oil and gas prices, which in turn may result in declines in utilisation and day rates, and an
increase in the number of idle drilling units without long-term contracts.
The entry into service of new and upgraded ultra-deepwater units will increase supply and could lead to a reduction
in the utilisation and day rates of existing drilling units as new drilling units are absorbed into the market. Further,
a lack of visibility as to planned orders for new drilling units beyond 2015 makes it difficult to predict the extent of
the potential oversupply, which may exacerbate the risk of excess drilling unit supply. In addition, oil and gas
companies may delay agreeing new contracts or contracts extensions pending the expected availability of this
additional capacity with the expectation that increased capacity will allow them to obtain lower day rates.
The risk of decreased day rates is significant for the MODU segment. Revenue for the MODU segment represented
56.9% of the Groups operating revenue
1
in the year ended 31 December 2012 and 55.8% of the Groups
operating revenue for the six months ended 30 June 2013. In periods of excess drilling unit supply, the MODU
segment may be required to maintain idle Drilling Units or enter into contracts at lower day rates until market
conditions improve. The Group may also experience an over-supply in its markets as a result of competitors
shifting drilling units or equipment into those regions where the Groups Drilling Units may then be located. These

1
Operating revenue before group eliminations and corporate overheads.
19

events could materially adversely affect the Groups results of operations, cash flow and financial condition.
Further, prolonged periods of low utilisation and/or day rates could also have a material adverse effect on the value
of the Drilling Units.
Oversupply of the equipment that the Group rents to clients (Rental Equipment), as offered by the Well
Services segment (this segment represented 17.1% of the Groups operating revenue
2
for the year ended 31
December 2012 and 17.5% of the Groups operating revenue for the six months ended 30 June 2013), could lead
to that segment experiencing decreased prices and/or client orders for its Rental Equipment. Currently, the Group
has a limited number of competitors in this segment, although that may change in the future. There can be no
assurances that the Well Services segment will not experience oversupply and, as a result, a decrease in day rates,
lump sum payments and/or client orders for its Rental Equipment in the future.
Competition within the oil and gas services industry may have a material adverse effect on the Groups
ability to market its services
The oil and gas services industry is highly competitive and fragmented and includes several large competitors in
the markets the Group serves, or will serve, as well as numerous small competitors that compete with the Group
on a local basis. The Groups operations may be materially adversely affected if its current competitors or new
market entrants introduce new products or services with features, performance, prices or other characteristics
similar to, or better than, the Groups products and services or expand into service areas where the Group
operates. Competitive pressures or other factors that result in significant price competition, particularly during
industry downturns, could have a material adverse effect on the Groups business, results of operations, cash flow
and financial condition.
Certain of the MODU segments competitors for drilling unit contracts are significantly larger than the Group, both
in respect of fleet size and financial position. Such competitors greater resources could allow them to better
withstand industry downturns, compete more effectively on the basis of the size of their fleet, financial strength,
technology and geographic scope, and retain skilled personnel.
Further, as a result of declining demand for new ships in the shipbuilding sector, shipyards are offering drilling unit
rig construction at reduced rates and accelerated build schedules, which could offer both existing players and new
market entrants a quicker and less costly route into the drilling sector and increase competition. Any further
construction of new drilling units could increase supply and competition and exacerbate the negative impact on
utilisation and day rates for the Groups MODU segment.
The Well Services segment has a limited number of global competitors, but competes with various local and smaller
suppliers in each of its geographic markets. Such smaller suppliers may be in a preferred position locally as they
may be able to offer lower prices and may also have longer existing relationships with local clients. The increase in
competition may result in a loss of market share for the Well Services segment, which could have a negative
impact on the segments or the Groups revenue.
The Groups Platform Drilling business area currently has only two main competitors in the markets the Group
serves, although no assurances can be given that this will not change in the future.
The Groups Technology business area operates in a highly competitive market and may, as a consequence, suffer
periods of low utilisation and/or lower day rates. Further, there can be no assurance that competition will not
increase in the future.
2.1.2 Legal, regulatory and environmental risks
Governmental laws and regulations relating to the oil and gas industry could hinder or delay the
Groups operations, increase the Groups operating costs, reduce demand for its services and/or
restrict the Groups ability to provide its services or operate its Drilling Units
As the Group depends on demand for services from oil and gas companies, it is also affected by changing laws and
regulations relating to its clients and the oil and gas industry. The Group is also exposed to changes in
recommended industry practices and applicable standards, including classification requirements regarding the
design, construction and maintenance of mobile offshore drilling units, and materials, equipment and machinery.

2
Operating revenue before group eliminations and corporate overheads.
20

The laws and regulations affecting the Groups business include, among others, laws and regulations relating to:
protection of the environment;
quality of health and safety (including in relation to mandatory or recommended replacement or
modifications of drilling unit equipment on drilling units);
employment and labour actions;
import-export quotas, wage and price controls, imposition of trade barriers, income and capital
repatriation controls and other forms of government regulation and economic conditions;
the imposition of moratoriums on drilling in certain locations (as were implemented in the Gulf of
Mexico following the Macondo incident (as discussed below)), which can lead to increased drilling unit
capacity in other geographic markets and ultimately increased global competition; and
taxation and subsidies.
The Group and its clients are required to invest financial and managerial resources to comply with these laws and
regulations. The Group cannot predict the future costs of complying with these laws and regulations, and any new,
or changes to current, laws or regulations could materially increase the Groups expenditures in the future.
Existing laws or regulations, or the adoption of new laws or regulations limiting exploration or production activities
by oil and gas companies or imposing more stringent restrictions on such activities, could have a material adverse
effect on the Group by increasing its operating costs, reducing the demand for its services and restricting its ability
to provide its services or operate its Drilling Units. Further, the Groups clients may, as a consequence of certain
new laws and regulations, have the contractual right to request changes to the Drilling Units and/or Rental
Equipment, the implementation of which may increase the Groups operating costs.
Regulatory authorities may exercise discretion in monitoring compliance and in interpreting and enforcing
applicable laws and regulations. Future inspections by regulatory authorities may conclude that the Group has
violated applicable laws or regulations. If the Group is unable to refute these conclusions or to remedy these
violations, the regulatory authorities may impose fines, criminal and/or administrative penalties or other sanctions,
including compelling the Group to cease certain of its business activities. The resulting loss of profits could have a
material adverse effect on the Groups business, results of operations, cash flow and financial condition.
The impact of the Macondo incident led to an aggressive overhaul of the oil and natural gas regulatory
process that has significantly impacted oil and gas development in the US Gulf of Mexico and may also
lead to further regulations that may impact drilling operations in other regions
On 20 April 2010, the ultra-deepwater floater Deepwater Horizon sank after a blowout of the Macondo well in the
Gulf of Mexico off the coast of the United States which caused a fire and an explosion on the rig (the Macondo
incident). In response to this incident, the US government has undertaken an aggressive overhaul of the offshore
oil and natural gas regulatory process that has significantly impacted oil and gas development in the US Gulf of
Mexico. Although the new compliance regulations are only related to drilling operations in the US Gulf of Mexico,
the repercussions of the incident have caused and may continue to cause a general increase in industry regulation
and/or operating costs with respect to drilling activities in the countries in which the Group operates. While the
Group does not expect to experience any material impact on its operations as a result of these events in the short
term, there is no assurance that its operations will not be adversely affected by future developments in the
industry or related regulation. In response to the Macondo incident and the related regulatory changes and scrutiny
of offshore drilling, oil and gas clients or industry regulators could impose additional equipment or procedural
requirements. These additional requirements could impact the capital cost of the Drilling Units and Rental
Equipment, and the operating costs of the Group, which could in turn have a material adverse effect on the Groups
business, results of operations, cash flow and financial condition.

21

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 Groups business, results of
operations and financial condition
The Groups operations are subject to regulations controlling the discharge of materials into the environment,
requiring removal and clean-up of materials that may harm the environment, controlling carbon dioxide emissions
or otherwise relating to the protection of the environment. The Group incurs, and expects to continue to incur,
capital and operating costs to comply with environmental laws and regulations. The technical requirements of
environmental laws and regulations are becoming increasingly expensive, complex and stringent.
As an owner of mobile offshore drilling units and provider of services to oil and gas companies, the Group may be
liable (under applicable laws and regulations or contractually) for damages and costs incurred in connection with
spills of oil and other chemicals and substances related to the operations of its Drilling Units and the provision of its
services. The Group may also be subject to significant fines in connection with spills, which could have a material
adverse effect on the Groups business, results of operations, cash flow and financial condition.
Generally, laws and regulations protecting the environment have become more stringent in recent years. Although,
generally, the Groups clients are the primary parties responsible for compliance, laws and regulations may, in
some cases, impose direct and strict liability, rendering a company or a person liable for environmental damage
without regard to negligence. For example, the Group may be subject to the Norwegian Pollution Act of 13 March
1981 and the Norwegian Maritime Act of 24 June 1994. These laws and regulations may expose the Group to
liability for the conduct of, or conditions caused by, third parties (including clients and contractors), or for acts that
were in compliance with all applicable laws at the time they were performed. The application of these requirements
or the adoption of new requirements could have a material adverse effect on the Groups business, results of
In accordance with industry practice, the Groups clients take primary responsibility for any environmental pollution
as a result of the clients use of the Drilling Units under the Groups contracts, although, in accordance with
customary industry practice, the Group, through the Well Services segment, typically assumes liability for pollution
emanating from its own Rental Equipment. The Group has generally been able to obtain some degree of
contractual indemnification pursuant to which its clients agree to protect, hold harmless and indemnify the Group
against liability for pollution, well and environmental damage, including, in the case of well services, for exposure
beyond pollution from its Rental Equipment. However, generally in the oil and gas services industry there is
increasing pressure from clients to pass on a larger portion of the liabilities to contractors, such as the Group, as
part of their risk management policies. There can be no guarantee that the Group will be able to prevent or
mitigate the increased apportionment of risk for environmental liabilities to contractors. Further, there can be no
assurance that the Group can obtain indemnities in its contracts or that, in the event of extensive pollution and
environmental damage, its clients would have the financial capability to fulfil their contractual obligations. Further,
such indemnities may be deemed legally unenforceable based on relevant law, including as a result of public policy.
For example, a US court, in connection with certain litigation related to the Macondo incident, recently held that an
indemnity was unenforceable on these grounds.
Failure to comply with the complex laws and regulations governing international trade could adversely
affect the Groups operations
The shipment of goods, services and technology by each of the Groups business segments across international
borders subjects the Group to extensive trade laws and regulations. Import activities are governed by unique
customs laws and regulations in each of the Groups countries of operation. Moreover, many countries control the
export and re-export of certain goods, services and technology and impose related export recordkeeping and
reporting obligations. Governments also may impose economic sanctions or embargoes against certain countries,
persons and other entities that may restrict or prohibit transactions involving such countries, persons and entities.
The laws and regulations concerning import activity, export recordkeeping and reporting, export control and
economic sanctions are complex and constantly changing. These laws and regulations may be enacted, amended,
enforced or interpreted in a manner that materially impacts the Groups operations. Shipments can be delayed and
denied export or entry for a variety of reasons, some of which are outside the Groups control and some of which
may result from failure to comply with existing legal and regulatory regimes. Shipping delays or denials could
cause unscheduled operational downtime or delay in deliverables. Any failure to comply with applicable legal and
regulatory trading obligations could also result in criminal and civil penalties and sanctions, such as fines,
22

imprisonment, debarment from government contracts, seizure of shipments and loss of import and export
privileges.
2.1.3 Operational and country risks
The Groups business involves numerous operating hazards. If a significant accident or other event
occurs, and is not fully covered by the Groups insurance or any enforceable or recoverable indemnity,
it could materially adversely affect the Groups results of operations, cash flows and financial condition
The Groups operations are subject to hazards inherent in drilling for oil and gas, such as blowouts, reservoir
damage, loss of production, loss of well control, lost or stuck drill strings, equipment defects, craterings, fires,
explosions and pollution. Contract drilling and the provision of well services require the use of heavy equipment
and exposure to hazardous conditions. In particular, the MODU segments operations are subject to hazards
inherent in marine operations, such as capsizing, grounding, navigation errors, collision, oil and hazardous
substance spills, damage from severe weather conditions and marine life infestations.
Damage to the environment could also result from the Groups operations and services, particularly from spillage of
fuel, lubricants or other chemicals and substances used in drilling operations, or extensive uncontrolled fires. The
Group may also be subject to property, environmental and other damage claims by oil and gas companies.
In addition, accidents or other operating hazards could result in the suspension of operations because of related
machinery breakdowns, abnormal drilling conditions, failure of subcontractors to perform or supply goods or
services, or personnel shortages, which may in turn have a material adverse effect on the Groups business, results
of operations, cash flow and financial condition.
The Groups insurance policies and contractual rights to indemnity may not adequately cover losses, and the Group
does not have insurance coverage or rights to an indemnity for all risks. In addition, the Groups insurance
coverage will not provide sufficient funds in all situations to protect the Group from all liabilities that could result
from its operations, the amount of the Groups insurance cover may be less than the related impact on enterprise
value after a loss, and the Groups coverage also includes policy limits. As a result, the Group retains the risk
through self-insurance for any losses in excess of these limits. The Group may also decide to retain substantially
more risk through self-insurance in the future.
Although it is the Groups policy to obtain contractual indemnities, it may not always be able to negotiate such
provisions. Further, indemnities that the Group receives from clients may not be easily enforced and may be of
limited value if the relevant clients do not have adequate resources to indemnify the Group.
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 against liability from all of the consequences of the hazards and risks described
above. The occurrence of a significant accident or other adverse event which is not fully covered by the Groups
insurance or any enforceable or recoverable indemnity from a client could result in substantial losses for the Group
and could materially adversely affect the Groups results of operations, cash flow and financial condition.
Please see Section 8.13 Insurance for a discussion of the Groups insurance and indemnities.
The Groups 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
The Group currently operates in more than 20 countries, thereby exposing it to risks that are inherent to
conducting international operations
The Groups international operations involve additional risks due to factors beyond the Groups control, including:
terrorist acts, war and civil disturbances;
seizure, nationalisation or expropriation of property or equipment;
political unrest or revolutions;
23

actions by environmental organisations;
natural disasters;
pollution or environmental damage;
public health threats;
claims by employees, third parties or clients;
the inability to repatriate income or capital;
complications associated with repairing and replacing equipment in remote locations;
delays or difficulties in obtaining necessary visas and work permits for its employees;
wage and price controls, imposition of trade barriers and other forms of government regulation and
economic conditions; and
country-specific regulatory or financial requirements.
Some of these risks, which may require or result in evacuation of personnel, cancellation of contracts or the loss of
personnel or assets, could limit or disrupt the Groups operations and thereby have a material adverse effect on the
Groups business, results of operations, cash flow and financial condition.
International oil and gas service providers are subject to various laws and regulations in various countries and
jurisdictions, including laws and regulations relating to:
the equipment requirements for, and operation of, drilling units, fixed installations and provision of
well services;
repatriation of foreign earnings;
oil and gas exploration and development;
taxation of offshore earnings and the earnings of expatriate personnel;
customs duties on the importation of drilling units and equipment;
the use and compensation of local employees; and
the use of local suppliers, contractors, representatives and/or agents by the Group.
Some foreign governments favour or require (i) the awarding of drilling contracts to local contractors or to drilling
units and/or equipment completely or partially owned by their own citizens, (ii) the use of a local
representative/agent, (iii) the use of local suppliers, (iv) local registration of companies or branches of the operator
and/or (v) foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction. These
practices, known as local content requirements, may, to the extent that there is a limited supply of local
suppliers, partners and contractors qualified for the Groups services, materially adversely affect the Groups ability
to compete or to operate in those regions as well as the Groups costs and ultimately its results of operations.
It is difficult to predict what governmental regulations may be enacted in the future or how the local authorities
implementation, interpretation or enforcement of such regulations could adversely affect the international drilling
industry and the Groups business. Further, failure to comply with applicable laws and regulations, including those
relating to sanctions and export restrictions, may subject the Group to exclusion from the relevant market, loss of
future and existing contracts, and criminal sanctions or civil remedies, including fines, denial of export privileges,
injunctions or seizures of assets. While the Group maintains policies designed to comply with various foreign laws
and regulations, it may not be possible for the Group to detect or prevent every violation in every jurisdiction in
24

which its employees, agents, sub-contractors or joint venture partners are located. The Group or its directors,
officers, and employees may therefore be subject to civil and criminal penalties and to reputational damage.
Physical infrastructure and logistics systems in some of the areas where the Group operates are in poor
condition
Physical infrastructure and logistics systems, such as roads, air transport facilities and lines of communication, in
certain areas of the world, including certain parts of Africa where the Group operates, may be under developed and
may not have been adequately funded and maintained. This may have an effect on the efficiency and safety of the
Groups operations in these regions due to reduced efficiency, predictability and safety in the transportation of
equipment and personnel.
Breakdowns or failures of any part of the physical infrastructure or logistics systems in the areas where the Group
operates may disrupt the Groups normal business activities, cause the Group to suspend operations or result in
environmental damage to the surrounding areas.
Such circumstances, or any further deterioration of the physical infrastructure in the areas where the Group
operates, may increase the costs of doing business and interrupt business operations, any or all of which could
have a material adverse effect on the Groups business, results of operations, cash flow and financial condition. In
addition, as many new discoveries of oil are made in areas of the world that may still be developing the relevant
infrastructure, the Groups exposure to this risk may increase in the future.
The Groups international operations are exposed to the risk of acts of piracy, which could result in
increasing costs of operations
Acts of piracy on ocean-going vessels have increased in frequency in recent years, including significantly in the Gulf
of Aden off the coast of Somalia and in West Africas Gulf of Guinea. The Gulf of Aden has, since 14 October 2008,
been listed as a conditional trading area of a war risk zone and a higher premium has been paid to insurers since 1
December 2008. The Drillship Deepsea Metro I operates offshore of the East Coast of Africa, specifically Tanzania,
under a drilling contract with BG and Deepsea Stavanger operates offshore of Angola in West Africa under a drilling
contract with BP. Their operations and costs of operations may thus be affected by these circumstances. For
example, insurance premiums payable could increase significantly and insurance coverage may be more difficult to
obtain if the piracy risk spreads geographically or continues to increase in frequency. In addition, crew costs could
also increase in such circumstances. The foregoing could have a material adverse effect on the Groups business,
results of operations, cash flows and financial condition, which could be exacerbated should the Group expand its
operations in countries subject to the risk of piracy or if acts of piracy begin to impact geographic markets in which
the Group operates.
The Group does business in jurisdictions with inherent risks relating to fraud, bribery and corruption
Doing business in international developing markets brings with it inherent risks associated with enforcement of
obligations, fraud, bribery and corruption. Fraud, bribery and corruption are more common in some jurisdictions
than in others, and certain of the countries in which the Group operates and conducts business may experience
high levels of government and business corruption. In addition, the oil and gas industries have historically been
vulnerable to corrupt or unethical practices.
While the Group maintains anti-corruption training programmes, codes of conduct and other safeguards designed
to prevent the occurrence of fraud, bribery and corruption, 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 and/or its directors, officers and employees may
therefore be subject to civil and criminal penalties, including significant fines, and to reputational damage.
Furthermore, alleged or actual involvement in corrupt practices or other illegal activities by the Groups joint
venture partners or others with which the Group conducts business could also damage the Groups reputation and
business. Due to the Groups international expansion, Odfjell Drilling is increasingly exposed to these risks through
its use of various agents and representatives for whose actions on the Groups behalf Odfjell Drilling remains
responsible. Instances of fraud, bribery and corruption, and violations of laws and regulations in the jurisdictions in
which the Group operates, including the UK Bribery Act and provisions of the Norwegian Criminal Act of 22 May
1902 No. 10, could have a material adverse effect on its results of operations and financial condition. In addition,
as a result of the Groups anti-corruption training programmes, codes of conduct and other safeguards, there is a
risk that the Group could be at a commercial disadvantage and may fail to secure contracts within certain
25

jurisdictions, to the benefit of other companies who may not have, or comply with, such anti-corruption
safeguards.
The Group does business in jurisdictions that are subject to sanction regimes
The Group has conducted 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. The Group has typically generated revenue in some of these countries through the
performance of well services and the rental of well equipment. The Group has recently completed contracts with
clients in Cuba and Iran. The Group has no current commitments in such countries or in other countries subject to
sanctions, but there can be no assurance that the Group will not expand its operations into countries subject to
sanctions. Further, there can be no assurance that the relevant sanction regimes will not be expanded to include
countries in which the Group currently operates. Failure to comply with sanctions could result in material fines and
penalties, and damage to the Groups reputation. This could negatively affect the market price of the Shares. While
the Group believes that it is in compliance with all applicable sanctions and embargo laws and regulations, and
intends to maintain such compliance, there can be no assurance that the Group will be in compliance in the future,
particularly as the scope of certain laws may be unclear and may be subject to changing interpretations.
2.2 Risks relating to the Group
The Groups backlog may not be ultimately realised
As of 30 June 2013, the Group had a backlog in its MODU segment and Platform Drilling business area of
approximately USD 5,704 million inclusive of priced optional periods. The Groups backlog represents the
contracted future revenue under contracts for the Drilling Units and services provided by its MODU segment and
Platform Drilling business area. The Group presents backlog both inclusive and exclusive of any priced optional
periods exercisable by clients calculated to reflect the nominal value of the contract, detailed in Section 11.2.3
Backlog. 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.
Backlog is computed based on contractual terms with the relevant client; however, revenue included in the backlog
may be subject to price indexation clauses.
There are a number of reasons why the Group may fail to realise expected backlog, including:
cancellation, early termination or successful renegotiation of contracts by clients as a result of, among
other reasons, adverse market conditions and, where the MODU segment enters into management
contracts for newbuilds, delay in the delivery of such newbuilds;
clients discretionary invocation of suspension periods;
clients exercise of variation provisions, for example for the modification of a Drilling Unit;
an inability of the Group to perform its obligations under contracts, including for reasons beyond its
control; and
a default by a client and failure to pay amounts owed.
Some of the Groups clients may experience liquidity issues, which could worsen if oil and gas prices decline to
lower levels for an extended period of time. Liquidity issues could encourage clients who are experiencing financial
difficulties to seek to repudiate, cancel or renegotiate agreements with the Group or result in such clients
bankruptcy, insolvency or similar actions. The ability of the Groups clients to perform their obligations under their
contracts with the Group may also be negatively impacted by uncertainty surrounding the development of the
world economy and credit markets.
The Groups inability to realise backlog amounts could have a material adverse effect on the Groups results of
operations, cash flows and financial condition.
26

The Groups contracts may be subject to early termination due to certain events
Some of the Groups existing clients have, and future clients may have, the right to terminate their contracts
without cause in compliance with applicable notice periods. In addition, under certain circumstances, the Groups
existing contracts permit, and future 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. Many of these events are beyond the Groups control. Early termination of contracts may decrease the
MODU segments or the Platform Drilling business areas utilisation levels and reduce the revenue received by any
businesses affected by the termination.
Although in relation to contracts for the MODU segment, clients may be required to pay the Group an early
termination fee in certain circumstances, termination fees are generally not available under contracts for the Well
Services segment, the Platform Drilling business area or the Technology business area. Even if the Group is entitled
to early termination payments, such payments may not fully compensate the Group for the loss of the contract or
the costs associated with the contract that it cannot fully eliminate.
During periods of challenging market conditions, the Group may be subject to an increased risk of its clients
seeking to repudiate or delay commencement of their contracts, including through claims of non-performance.
If the Groups clients cancel their contracts with the Group and the Group is unable to secure new contracts on a
timely basis and on substantially similar terms, or if contracts are suspended for an extended period of time, the
Groups backlog could be reduced, which may have a material adverse effect on the Groups results of operations,
cash flow and financial condition. See Section 11.2.3 Backlog.
The Groups future business performance depends on its ability to renew and extend existing contracts,
and to win new contracts
The Groups revenue is derived from contractual arrangements and its business areas use various contractual
formats.
Contracts for the MODU segment, the Well Services segment and the Platform Drilling business area are
customarily for fixed lengths of time, although the MODU segments Drilling Units may also have well-based
contracts, which are contracts defined by completion of a specific service rather than the performance of a service
for a fixed period of time. Currently, all of the Groups drilling unit contracts are for fixed lengths of time. Contracts
for the MODU segment and the Platform Drilling business area may include extension options that are exercisable
at the discretion of the client. The extension options do not represent guaranteed commitments from clients to
extend the period of the contract and there can be no assurance that the Groups clients will exercise the extension
options or that the work performed under such extension options will be at prevailing market day rates or prices at
the time the option to extend is exercised, as the Group agrees the day rates and prices for extension periods at
the time of signing the original contract.
While the Group actively markets its Drilling Units prior to the end of a contract in anticipation of a client choosing
not to exercise its extension option(s), if the client decides not to exercise the option(s), then the Group will need
to secure a new contract for that Drilling Unit and any time lag in doing so could lead to a period of non-utilisation.
Although the MODU segments most recent contracts include a one-year notice period for non-renewal, some of its
older contracts include a six-month notice period, which the Group regards as a tight timeframe for agreeing a new
contract. Further, similar challenges may arise in relation to well-based contracts, as the timing and completion of
services may be difficult to predict for such contracts.
For most of its businesses, particularly for the MODU segment, the Well Services segment and the Platform Drilling
business area, the Group is primarily awarded contracts and, in certain circumstances, successfully renews certain
existing contracts by participating in tender processes. However, some of the Groups contracts, especially the
Technology business areas contracts, are entered into following direct negotiations with clients. Where the Group
tenders for contracts, it is generally difficult to predict whether the Group will be awarded contracts on favourable
terms or at all. The tenders are affected by a number of factors beyond the Groups control, such as market
conditions, competition (including the intensity of the competition in a particular market), financing arrangements
and governmental approvals required by clients.
27

In addition, the MODU segment is often required to pre-qualify to participate in tender processes by meeting
certain thresholds of operational performance, including quality, health, safety and environment (QHSE)
requirements, and by demonstrating its ability to provide available equipment and sufficiently comply with local
requirements. Generally, these thresholds and requirements for inclusion on pre-approved tender lists have
become more stringent in recent years. If the Group fails to be pre-approved by clients for participation in tender
processes, the Group will not be considered for inclusion in certain tender processes, the Groups business activities
and/or utilisation may drop below expected levels, and its business, results of operations, cash flow and financial
position may be adversely affected.
Certain of the MODU segments contracts are due to expire in the next two years: one contract with BP on Deepsea
Stavanger will expire during 2014; one contract with Statoil on Deepsea Atlantic will expire during 2015; one
contract with BG on Deepsea Metro I will expire during 2014; and one contract with Petrobras on Deepsea Metro II
will expire during 2015. These contracts include provisions for extension, but there can be no guarantee that such
options will be exercised. Also, certain of the Well Services and Drilling & Technology segments contracts are due
to expire in the next two years. For further information on these contracts, see Section 8.5.2.3 Key contracts and
Section 8.5.3.3 Key contracts.
The Groups ability to renew or extend existing contracts or sign new contracts will largely depend on prevailing
market conditions. If the Group is unable to sign new contracts that start immediately after the end of its current
contracts or, in the case of the MODU segment or the Platform Drilling business area, if new contracts are entered
into at day rates or prices substantially below the existing day rates or prices, or on terms otherwise less
favourable compared to existing contract terms, or which leave the Group with mobilisation or demobilisation costs
that cannot be fully recovered, the Groups business, results of operations, cash flow and financial condition may
be adversely affected.
Unforeseen or unanticipated risks, costs or timing when bidding on or managing contracts could
adversely affect the Groups business, results of operations and financial condition
In preparation for a tender of a new contract, the Group assesses its current capacity, and, if it is awarded the
contract, it determines how to deploy resources in order to perform its obligations under the contract. The Groups
financial and operating performance depends on making accurate assumptions and estimates, as well as identifying
key issues and risks (including, but not limited to, the degree of complexity of the project assumptions regarding
rig efficiency or utilisation of equipment, operational expenses, mobilisation costs, tax payments, availability of
skilled personnel and availability of critical equipment with long lead times) with respect to potential projects at the
tender stage of the project, and ensuring that the pricing and contractual arrangements in relation to each project
adequately safeguard the Group against, or compensate it for, such risks. Assumptions are particularly necessary
when tendering for a new client or entering new product or geographic markets, as the Group does not yet have
the experience on which it can base its assumptions for the tender. The Group must manage project risks
efficiently and adapt to changes that occur during the life of a project. Even when a risk is properly identified, the
Group may be unable to or may not accurately quantify it. Unforeseen or unanticipated risks, incorrect
assumptions when bidding for a contract or unexpected client variation orders under contractual variation
provisions (including, for example, orders for the modification of a Drilling Unit) may lead to increased costs for the
Group and could adversely affect the Groups business, results of operations, cash flow and financial condition.
2.3 Risks relating to operations
The Group, and in particular the MODU segment and the Platform Drilling business area, is exposed to
client concentration risk
The Group currently has three rigs and two drillships in operation. As of 30 June 2013, four clients, Statoil, BP, BG
(including a relevant assignment to Ophir) and Petrobras, account for all of the MODU segments backlog. In
addition, as of 30 June 2013, five clients, Statoil, BP, Talisman, TAQA and Wintershall, account for all of the
Platform Drilling business areas backlog.
A number of factors could lead to a deterioration in the Groups relationships with its major clients, including, for
example, any disputes between the Group and its clients with regard to, among other things, contract terms, non-
performance, quality of deliverables or additional costs exceeding the contract price or for work performed but not
included in the original contract specifications. These types of claims can arise for a number of reasons, including
delays to or changes from the initial project scope. The Groups client concentration may exacerbate the impact of
these disputes on the Group.
28

The Groups results of operations and cash flows could be materially adversely affected if any of its major clients
fail to compensate the Group for its services, were to terminate their contracts with or without cause, fail to renew
their existing contracts 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 Groups operating and maintenance costs will not necessarily fluctuate in proportion to changes in
operating revenues
In a situation where a Drilling Unit faces longer idle periods, reductions in costs may not be immediate as some of
the crew may be required to prepare Drilling Units for the idle period. Should Drilling Units be idle for a longer
period, the Group may seek to redeploy crew members who are not required to maintain the Drilling Units to active
Drilling Units to the extent possible. However, there can be no assurance that the Group will be successful in
reducing its costs under circumstances where its revenues may also have decreased.
Rental Equipment maintenance costs fluctuate depending upon the type of activity the drilling unit is performing
and the age and condition of the Rental Equipment.
To the extent that changes in the Groups operating and maintenance costs are not proportionate to changes in
operating revenues there may be a material adverse effect on the Groups business, results of operations, cash
The Groups newbuild projects are subject to risks which could cause delays or cost overruns and have
a material adverse effect on the Groups business, results of operation, cash flows and financial
condition
The Group currently has an interest in newbuild projects, including the construction of Deepsea Aberdeen with
Daewoo Shipbuilding & Marine Engineering Co., Ltd. (DSME) and the construction of three drillships in Brazil
through the joint venture Odfjell Galvo B.V. Deepsea Aberdeen is expected to be delivered in May 2014 and,
following mobilisation to location, it is expected to commence its seven-year contract for BP Exploration in the UK
West of Shetland region in the fourth quarter of 2014. The Group also provides consultancy and project
management services on other newbuild projects where it may or may not have an ownership interest in the
project, such as the Island Innovator where the owners completion of the construction and commencement of
operations has been delayed due to an incident at the yard during the pre-operations phase. The provision by the
Group of such consultancy and management services will be subject to potential liabilities toward contracting
parties, third parties and relevant authorities. Any contractual liabilities could include increased project cost and
other incurred costs and also liability for delayed commencement. The Group will also consider additional newbuild
projects in the future, as appropriate. All present or future newbuild construction projects are or 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, including:
shortages of equipment, materials or skilled labour;
unscheduled delays in the delivery of ordered materials and equipment or shipyard construction;
failure of equipment to meet quality and/or performance standards;
financial or operating difficulties experienced by equipment vendors or the shipyard;
lack of capacity at shipyards;
unanticipated actual or purported change orders;
inability to obtain required permits or approvals;
unanticipated cost increases between order and delivery;
design or engineering changes;
29

the occurrence of accidents/incidents or other safety hazards;
work stoppages and other labour disputes; and
adverse weather conditions or any other events of force majeure.
Significant cost overruns or delays in projects under construction could materially adversely affect the Groups
results of operations, cash flow and financial condition. Additionally, failure to complete a project on time or failure
to meet technical or operational requirements imposed by relevant regulations or regulatory authorities may result
in the delay or loss of revenue from that drilling unit and potential penalties from the client or cancellation by the
client. While the Group seeks to allow a sufficient window after delivery of a drilling unit from the shipyards to
customise the drilling unit according to client specifications and to mobilise the drilling unit as required for
commencement of the contract, there can be no assurance that commencement will occur within the agreed
delivery window. Should the Group fail to meet the delivery requirements in order to commence the contract, it
could be liable for liquidated damages and other contractual remedies, or the client may cancel the contract. New
drilling units may experience start-up difficulties following delivery or other unexpected operational issues that
could result in uncompensated downtime or the cancellation or termination of drilling contracts, which could also
materially adversely affect the Groups results of operations, cash flow 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
The operation of the Drilling Units requires effective maintenance routines and functioning equipment. Certain
pieces of equipment are critical for the Drilling Units performance of the drilling services as required in client
contracts. While efforts are made to continuously identify the need for critical spare parts and equipment, there
exists a risk of unpaid downtime resulting from the time needed to repair or replace equipment which may have a
long delivery time should there not be readily available spare parts. In addition, downtime and suspension periods
may be prolonged due to complications with repairing or replacing equipment as the Drilling Units may be situated
in remote locations.
The Drilling Units go through an off-hire period in connection with the special period survey (SPS) each fifth year
to obtain re-classification. This is normally done at a shipyard. There is a risk that the duration of the yard stay is
longer than scheduled, with a potential impact on utilisation, and that the costs related to the required work
exceed its budget.
The decreased utilisation would typically result in decreased day rates for the Drilling Units and any cost overruns
may have a material adverse effect on the Groups results of operations, cash flows and financial condition. See
Section 11.2.2 Revenue generation.
Disruptions of deliveries by the Groups suppliers could increase operating costs, decrease revenues
and adversely impact the Groups operations. In addition, consolidation of suppliers may limit the
Groups ability to obtain supplies and services when needed at an acceptable cost or at all
The Group relies, and will in the future continue to rely, on a significant supply of consumables, spare parts and
equipment to operate, maintain, repair and upgrade its fleet of Drilling Units and maintain and develop its Well
Services segments business. Certain parts and equipment the Group uses in its operations may be available from
only a small number of suppliers, manufacturers or service providers, or in some cases must be sourced through a
single supplier, manufacturer or service provider. A disruption in the deliveries from such third-party suppliers,
manufacturers or service providers, capacity constraints, production disruptions, price increases, quality control
issues, recalls or other decreased availability of parts and equipment could adversely affect the Groups ability to
meet its commitments to clients, adversely impact the Groups operations and revenues or increase the Groups
operating costs.
In addition, during the last decade the number of available suppliers for drilling packages to the MODU segments
Drilling Units has reduced due to industry consolidation, resulting in fewer alternatives for sourcing key supplies,
replacement parts, and services. The drilling packages for the Drilling Units are complicated and require a long lead
time to deliver, so proper management of procurement is required and, once selected, the Group must continue to
use the same supplier for replacement parts. Further, certain key equipment used in the Groups business may be
protected by patents and other intellectual property of the suppliers, sub-suppliers or others. This may limit the
30

Groups ability to obtain supplies and services when needed, at an acceptable cost or at all. Cost increases, delays
or unavailability could materially adversely affect the Groups future operations and result in higher rig downtime
due to delays in repair and maintenance of the Groups fleet, which may in turn have a material adverse effect on
the Groups business, results of operations, cash flow and financial condition.
The Group conducts a portion of its operations through joint ventures, exposing it to risks and
uncertainties, many of which are outside its control
The Group conducts a portion of its operations through large, project-specific joint ventures, where control may be
shared with unaffiliated third parties, such as the joint venture in connection with its ultra-deepwater drillships
Deepsea Metro I and II (in which it has a 40% share ownership) and the Groups 50% share ownership in the
Odfjell Galvo B.V. joint venture, which holds 20% of the shares of three Dutch special purpose companies, each of
which has entered into an engineering, procurement and construction contract for the construction of a drillship in
Brazil. Please see Section 8.1.1 Mobile Offshore Drilling Units (MODU) for more information on the Groups joint
venture in Brazil.
As with any joint venture arrangement, differences in views among the joint venture participants may result in
delayed decisions or in failures to agree on major issues. The Groups obligations in respect of, and the Groups
ability to receive any dividends from, its joint ventures depend on the terms and conditions of its shareholders
agreements and its relationships with its respective joint venture partners. There can be no assurance that the
Group will continue its relationships with its joint venture partners or that its joint venture partners will want to
pursue the same strategies as the Group. If a joint venture partner sells its shares in the joint venture, a change of
control event may be triggered under the bonds used to finance the joint venture, unless the Group purchases
those shares. For example, Chloe Marine has issued a USD 150 million bond loan (the net proceeds from which
were used, among other things, to pay the delivery instalment for Deepsea Metro II) which contains a put option
exercisable by a holder if any person other than the joint venture partners or an investment grade company
operating in the oil and gas industry becomes an owner of 50% or more of Deep Sea Metro. See Section 11.8.1
Material borrowings.
The Group also cannot control the actions of its joint venture partners, including any non-performance, default or
bankruptcy of such partners, and the Group typically shares liabilities on a joint and several basis with its joint
venture partners under these joint venture arrangements. If the Groups partners do not meet their contractual
obligations, the joint venture may be unable to adequately perform and deliver its contracted services, requiring
the Group to make additional investments or perform additional services to ensure the adequate performance and
delivery of services to the client. The Group could be liable for both its own obligations and those of its partners,
which may result in reduced profits or, in some cases, significant losses on the project. Additionally, these factors
could have a material adverse effect on the business operations of the joint venture and, in turn, the Groups
business operations, reputation, results of operations, cash flows and financial condition.
Operating through joint ventures in which the Group has a minority interest could result in the Group having
limited control over many decisions made with respect to projects and internal controls relating to projects. These
joint ventures may not be subject to the same requirements regarding internal controls and internal control
reporting that the Group follows. As a result, internal control issues may arise, which could have a material adverse
effect on the Groups financial condition and results of operation. Additionally, in order to establish or preserve
relationships with joint venture partners, the Group may agree to risks and contributions of resources that are
proportionately greater than the returns the Group could receive, which could reduce its income and returns on
these investments compared to what the Group may have received if the risks and resources the Group contributed
were always proportionate to its returns.
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 engages third-party subcontractors to perform some parts of its projects, primarily for certain elements
of the Technology business areas engineering projects. The Group may not have the skills to perform the work
undertaken by its subcontractors and any inability to hire qualified subcontractors could hinder the successful
completion of a project. Further, the Groups employees may not be able to monitor or control the performance of
these subcontractors as efficiently as they could if that work was performed by the Group itself. The Group may
suffer losses on contracts if the amounts it is required to pay for subcontractor services exceed its original
31

estimates. While the Group seeks to mitigate the risks associated with subcontractors by imposing contractual
obligations on its subcontractors that mirror those it has with its clients, obtaining insurance cover for the entire
project and (in some cases) requesting bank guarantees to cover non-performance by subcontractors of the
relevant parts of the projects, the subcontracting of work exposes the Group to risks associated with non-
performance, delayed performance or sub-standard performance.
The Groups purchase of existing drilling units, spare parts and equipment carries risks associated with
the quality of such assets
The Group has in the past acquired existing equipment, supplies and replacement parts as a way of renewing parts
of its Drilling Units and Rental Equipment, and may acquire existing drilling units, equipment, supplies and
replacement parts in the future. Unlike newly built assets, existing assets purchased by the Group will typically not
carry warranties with respect to their condition. While the Group generally inspects any existing assets prior to
purchase, such an inspection would normally not provide the Group with as much knowledge of its condition as it
would possess if the asset had been built for the Group and operated by the Group during its life. Repairs and
maintenance costs for existing assets are difficult to predict and may be more substantial than for newly built
equipment. These costs could have a material adverse effect on the Groups business, results of operations, cash
The Group may not be able to successfully implement its strategies
The Groups strategies as described in Section 8.3 Overall strategy are: (i) to continue to focus on the harsh
environment and ultra-deepwater markets; (ii) to increase cost efficiencies without compromising on health and
safety standards; (iii) to expand prudently; and (iv) to achieve a balanced portfolio that includes a diversity of
clients, a mix of medium- and long-term contacts and growth across all of its segments. Maintaining and expanding
the Groups operations and achieving its other objectives involve inherent costs and uncertainties and there is no
assurance that the Group will achieve its objectives. There is no assurance that the Group will be able to undertake
these activities within its expected time-frame, that the cost of any of the Groups objectives will be at expected
levels or that the benefits of its objectives will be achieved within the expected timeframe or at all. The Groups
strategies may also be affected by factors beyond its control, such as volatility in the world economy and in each of
its markets, the capital expenditure and investment by its clients and the availability of acquisition opportunities in
a market. Any failures, material delays or unexpected costs related to the implementation of the Groups strategies
could have a material adverse effect on its business, financial condition, cash flow and results of operations.
Loss of key personnel or the failure to obtain or retain highly skilled personnel could materially
adversely affect the Groups operations
The Groups success depends on its retention of key personnel and its ability to recruit, retain and develop skilled
personnel for its business. The demand for personnel with the capabilities and experience required in the oil and
gas services industries is high, and success in attracting and retaining such employees is not guaranteed. There is
intense competition for skilled personnel and there are, and may continue to be, shortages in the availability of
engineers and other appropriately skilled people at all levels. Shortages of qualified personnel or the Groups
inability to obtain and retain qualified personnel could have a material adverse effect on the Groups business,
results of operations, cash flow and financial condition, and particularly on the Drilling & Technology segment due
to the engineering and technical experience required in this segment.
Labour interruptions could have a material adverse effect on the Groups operations
As of 30 June 2013, the Group had approximately 1,000 employees in its MODU segment (including employees of
its Deep Sea Metro joint venture in Brazil), 450 employees in its Well Services segment and 1,500 employees in its
Drilling & Technology segment. Labour interruptions in any of these segments may materially impact the Group. In
particular, the Groups Drilling Units are operated with offshore crews and onshore personnel, many of whom are
organised in labour unions. Although the Group has not experienced any labour disruptions in connection with its
own personnel since 2004, there can be no assurance that labour disruptions by the Groups employees will not
occur in the future. Further, unionised employees of third parties on whom the Group relies may be involved in
strikes or other forms of labour unrest, causing operational disruptions for the Group. For example, unionised
employees of private security companies at airports in Norway went on strike in 2012, which resulted in increased
operational costs for the Group because timely crew changes were prevented by a lack of transportation to offshore
rigs. Such industrial actions could result in additional costs to the Group, as well as limitations on the Groups
32

ability to operate its Drilling Units or provide services to its clients, which may have a material adverse impact on
its business, results of operations, cash flow and financial condition.
The Groups labour costs and related operating costs could increase as a result of a number of factors
A number of factors could increase the Groups labour costs and potentially affect other costs of operations. For
example, high growth within the industry in recent years has increased the cost of qualified personnel and
equipment. There may also be increased costs related to local content requirements.
Although the Groups contracts with clients typically include price escalation clauses, which establish agreed annual
rate increases typically linked to a relevant index to cover the Groups increased costs, there can be no assurance
that such clauses will be sufficient to fully compensate the Group for the higher personnel expenses or related
operational costs. Further, certain countries where the Group operates may lack a suitable price escalation index,
which makes it difficult for the Group to negotiate an acceptable escalation clause. The Groups incurrence of
additional labour related costs could have a material adverse effect on the Groups business, results of operations
cash flow and financial condition.
Damage to the Groups reputation and business relationships may have an adverse effect beyond any
monetary liability
The Groups business depends on client goodwill, the Groups reputation and on maintaining good relationships
with its clients, joint venture partners, suppliers, employees and regulators. Any circumstances that publicly
damage the Groups goodwill, injure the Groups reputation or damage the Groups 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 Group relies heavily on information technology (IT) systems in order to communicate with its Drilling Units
and achieve its business objectives, such as replication technology that allows each Drilling Units maintenance
support system to remain operative even if the central maintenance system is non-operative. The Group relies
upon industry accepted security measures and technology such as access control systems to securely maintain
confidential and proprietary information maintained on its IT systems, and market standard virus control systems.
However, the Groups portfolio of hardware and software products, solutions and services and its enterprise IT
systems may be vulnerable to damage or disruption caused by circumstances beyond its control, such as
catastrophic events, power outages, natural disasters, computer system or network failures, computer viruses,
cyber attacks or other malicious software programmes. The failure or disruption of the Groups IT systems to
perform as anticipated for any reason could disrupt the Groups business and result in decreased performance,
significant remediation costs, transaction errors, loss of data, processing inefficiencies, downtime, litigation, and
the loss of suppliers or clients. A significant disruption or failure could have a material adverse effect on the
Groups business operations, financial performance and financial condition.
The Group may not be able to keep pace with a significant step change in technological development
The market for the Groups services is affected by significant technological developments that have resulted in, and
will likely continue to result in, substantial improvements in equipment functions and performance throughout the
industry. As a result, the Groups future success and profitability will be dependent in part upon its ability to:
improve existing services, Drilling Units and Rental Equipment;
address the increasingly sophisticated needs of its clients; and
anticipate major changes in technology and industry standards and respond to technological
developments on a timely basis.
If the Group is not successful in acquiring new equipment or upgrading its existing Drilling Units or Rental
Equipment, or the technical skill set of its employees, on a timely and cost-effective basis in response to
technological developments or changes in industry standards, or if a significant step change in technology provides
33

an alternative method for drilling, this could have a material adverse effect on the Groups business, results of
Policies, procedures and systems to safeguard employee health, safety and security may not be
adequate or sufficiently implemented or adhered to
The Group has detailed and specialised policies, procedures and systems to safeguard employee health, safety and
security. The Group aims to follow best practices for employee health, safety and security in every country in which
the Group operates. However, if these policies, procedures and systems are not adequate, or employees or
contractors do not receive adequate training or instructions, or the Groups safety policies are not implemented
properly in local jurisdictions, the consequences could be severe including injury or loss of life, which could impair
the Groups reputation and operations and cause it to incur significant liability. Distance from certain principal
locations can create further difficulty for the Group in implementing and impressing upon local workforces its
policies on matters such as health and safety, and can present challenges in the supervision of its sub-contracted
employees.
Further, the Groups clients and/or other third parties are generally responsible for securing the areas surrounding
the Drilling Units and the onshore bases from which the Group operates. Accordingly, the Group may have limited
to no control over security measures and other systems designed to avoid or mitigate such hazards and must rely
on third parties to ensure the security of the Drilling Units from risks. Although the Groups clients generally
assume the responsibility and costs for security, there can be no assurance that the Group will not be required to
assume the responsibility and costs for security in the areas surrounding its Drilling Units and onshore bases in the
future.
Failure to deliver consistently high standards across all fields of operations could create risks for the Group,
including legal action and reputational risks, and could impact its success in winning future contracts.
2.4 Risks relating to laws, regulation and litigation
The Group may be subject to litigation that could have a material adverse effect on the Groups
business, results of operations, cash flow and financial condition
The operating hazards inherent in the Groups business expose the Group to litigation, including personal injury
litigation and environmental litigation. Providing drilling and well services, project management, engineering and
construction services involves the risk of contractual and professional errors, omissions, warranty claims and other
liability claims, as well as negative publicity that may adversely affect the Groups business, financial condition and
results of operations. The Group is also exposed to intellectual property and tax litigation as well as maritime
lawsuits, which could result in the possible seizure of the Drilling Units as security. While the Group is currently not
involved in any litigation that, in its view, may have a material adverse effect on the Groups financial position or
profitability, there can be no assurance that the Group may not become involved in such litigation in the future.
The Group cannot predict with certainty the outcome or effect of any claim or other litigation matter. Any future
litigation may have a material adverse effect on the Groups business, results of operations, cash flow, financial
condition and have a potential negative outcome. There also may be significant costs associated with bringing or
defending such lawsuits, and managements attention to these matters may divert their attention from the Groups
operations.
Technology disputes involving the Group, the Groups suppliers or sub-suppliers could impact the
Groups operations
The services provided by the Group utilise patented or otherwise proprietary technology, and consequently involve
a potential risk of infringement of third party rights. It is not uncommon for industry participants to pursue legal
action to protect their intellectual property. For example, Transocean has recently sued certain competitors for
allegedly infringing its US patent for dual activity drilling. In 2009, the Norwegian courts ruled that Transoceans
two patents on dual activity drilling in Norway were invalid, but Transocean may continue to pursue similar patent
actions in other jurisdictions, creating a risk that other oil and gas services companies operating in these
jurisdictions may be subject to legal action. The Group is not currently aware of other patents that create the risk
of the Group infringing third party rights. However, there can be no assurance that other industry participants,
including Transocean, will not pursue legal action against the Group to protect intellectual property that the Group
utilises in Norway or in other jurisdictions in which the Group operates. Where such industry participants pursue
34

legal action, it could result in limitations on the Groups ability to use the patented technology or require the Group
to pay a fee for the continued use of intellectual property.
The majority of the intellectual property rights relating to the Drilling Units and related Rental Equipment are
owned by the Groups suppliers or sub-suppliers. In the event that one of the Groups suppliers or sub-suppliers, or
the Group, becomes involved in a dispute over infringement of intellectual property rights relating to assets owned
or used by the Group, the Group may lose access to repair services, replacement parts, or could be required to
cease use of the relevant assets or intellectual property. The Group could also be required to pay royalties for the
use of such assets or intellectual property. The consequences of technology disputes involving the Groups
suppliers could materially adversely affect the Groups business, results of operations and financial condition.
Certain of the Groups contracts with its suppliers provide the Group with contractual rights to indemnity from the
supplier against intellectual property lawsuits on a limited basis. However, such contractual rights to indemnity
may not adequately cover losses or cover all risks, and no assurances can be given that the Groups suppliers will
be willing or financially able to indemnify the Group against these risks, or that such contractual indemnities will
protect the Group from adverse consequences of such technology disputes.
In addition, the Group, and in particular its Well Services segment (which has the most established intellectual
property portfolio of the Groups business segments), may choose to pursue legal action to protect the Groups
intellectual property. If the Group is unable to protect and maintain its intellectual property rights, or if there are
any successful intellectual property challenges or infringement proceedings against the Group, its ability to
differentiate its service offerings could diminish. There are currently no such cases ongoing, but there is no
guarantee that such cases or claims will not be raised in the future.
In addition, from time to time, the Group may pursue action to challenge patents of competitors, suppliers and
others. Should these cases not succeed, the Group may be subject to legal costs and may not be able to use the
patented technology or may have to pay a fee for the continued use of such patents.
The consequences of any of the intellectual property disputes with third parties described above could materially
adversely affect the Groups business, results of operations and financial condition.
The Group is exposed to risk due to its use of certain trademarks such as the Odfjell name
The Group has the right to use the Odfjell name, logo and domain and has registered the trademarks Odfjell
Drilling, Deepsea and its corporate logo in multiple jurisdictions in which it operates. However, there are other
companies unrelated to the Group that may have similar names or marks, including Odfjell SE, a shipping group
that also has the right to use the Odfjell name.
The Group can make no assurances that in the future it will retain the right to continue to use its trademarks in its
operations and marketing in any jurisdiction, particularly where unrelated companies using the same name already
hold a relevant trademark. Further, the Group has no control over the actions of other such companies using the
Odfjell name. Actions by such companies could harm the Groups reputation, which could in turn materially
adversely affect the Groups business, results of operations, cash flow and financial condition.
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 Groups earnings
The Group will from time to time conduct operations through various subsidiaries in countries throughout the
world. Tax laws and regulations are highly complex and subject to interpretation and change. For example, if
Norwegian shareholders control a company (i.e. directly or indirectly own or control at least 50% of the shares or
the capital of the company) resident in a low tax jurisdiction, such Norwegian shareholders may be subject to
Norwegian taxation according to the Norwegian Controlled Foreign Corporations regulations (Norwegian CFC-
regulations). Such taxation could apply with respect to certain of the subsidiaries of the Group if the Group
becomes subject to the control of Norwegian shareholders. If the Norwegian shareholders of the Group are subject
to Norwegian CFC taxation, such Norwegian shareholders are taxed in Norway on their proportionate share of the
net profits generated by the relevant foreign company, calculated according to Norwegian tax regulations. The
income will be subject to Norwegian taxation, currently at a rate of 28%. For the purposes of minimising this risk,
the Companys Bye-Laws provide that the Board of Directors may decline to register the transfer of any interest in
any Share in the register of members or decline to direct any registrar, appointed by the Company, to register the
35

transfer where such transfer would result in 50% or more of the shares or votes in the Company being held,
controlled or owned directly or indirectly by individuals or legal persons resident for tax purposes in Norway or
connected to a Norwegian business activity, in order to mitigate the possibility that the Company is deemed a
Controlled Foreign Company as such term is defined under the Norwegian tax rules. Norwegian tax legislation
may, however, be subject to changes which can also possibly be made on a retrospective basis, and there can be
no assurance that this approach will continue to mitigate the impact of the relevant tax legislation in the future.
A loss of a major tax dispute or a successful tax challenge to the Groups operating structure or to the
Groups tax payments, among other things, could result in a higher tax rate on the Groups earnings,
which could have a material adverse effect on the Groups earnings and cash flows
From time to time, the Groups tax payments may be subject to review or investigation by tax authorities of the
jurisdictions in which the Group operates. If any tax authority successfully challenges the Groups operational
structure, intercompany pricing policies, the taxable presence of its subsidiaries in certain countries, or if the Group
loses a material tax dispute in any country, or any tax challenge of the Groups tax payments is successful, the
Groups effective tax rate on its earnings could increase substantially and the Groups earnings and cash flows from
operations could be materially adversely affected. There are, for instance, several transactions taking place
between the companies in the Group, which must be carried out in accordance with arms length principles in order
to avoid adverse tax consequences. Statutory documentation on a transfer pricing policy with the aim of
determining arms length prices for intercompany transactions has been established in order to minimise this risk.
However, there can be no assurance that the tax authorities will conclude that the Groups transfer pricing policy
calculates correct arms length prices for intercompany transactions, which could lead to an adjustment of the
agreed price, which would in turn lead to an increased tax cost for the Group.
In relation to the tax audit pertaining to Deepsea Atlantic, the Norwegian tax authorities have notified Odfjell
Invest AS, a subsidiary of the Company, that Odfjell Invest AS was not entitled to a claimed tax deduction under
Norwegian tax rules, resulting in an increase of the taxable income for 2009 of NOK 103,305,720 and for 2010 of
NOK 520,607,220. The notice of reassessment also states that there is an omission of declaring a payment of hire
from Statoil as income, resulting in an increase in income for 2010 of NOK 6,552,467. Furthermore, the Norwegian
tax authorities have notified Odfjell Invest AS that the bareboat charter between Odfjell Invest AS and Odfjell
Invest I is not in accordance with the arms length principle, resulting in a reduction of NOK 209,434,800 in
bareboat hire for the 2009 to 2012 period. The potential tax exposure in relation to the tax investigations relating
to Deepsea Atlantic amounts to USD 39.0 million, excluding interest cost. Estimated potential interest cost
amounts to USD 9 million at the date of this Prospectus but is subject to increase depending on the actual timing of
potential payment. Odfjell Invest AS intends to dispute any assessment based on the notification, and hence no
expense is recognised in the Interim Financial Information for the six months ended 30 June 2013, as the
Companys best estimate of the amount it will ultimately pay is nil. Odfjell Invest AS will revert to the tax
authorities within the deadline for response. However, as Odfjell Invest AS will need to pay the full amount
immediately upon the receipt of the final claim amount from the Norwegian tax authorities, there may be a
negative impact on liquidity in the amount of USD 50 million if the Norwegian tax authorities do not change their
assessment based on input from Odfjell Invest AS. If the Norwegian tax authorities do not change their assessment
and Odfjell Invest AS reclaims the full amount through the court system there may be a temporary liquidity impact
even if Odfjell Invest AS is ultimately successful in the dispute.
In relation to the tax dispute pertaining to Deepsea Bergen, there is currently a dispute between Odfjell Rig Ltd.
and the Norwegian tax authorities as to whether Odfjell Rig Ltd., a subsidiary of the Company, has a limited tax
liability in Norway as a result of its participation interest in Deep Sea Drilling Company II KS (DSDCII), the
owner of the rig Deepsea Bergen. The disputed amount (before-tax income) is approximately NOK 387,000,000 for
2009, 2010 and 2011. The district court presiding over the dispute concluded that the bareboat charter business of
DSDCII was carried out from Norway, and thus a limited tax liability exists for the owner Odfjell Rig Ltd. The
district court also concluded that a tax exemption under Norwegian tax rules was not applicable. The Company will
appeal this case. If the district courts verdict is upheld on appeal, the USD 62.8 million loss (already expensed as
of 30 June 2013) for the Company will be final. The loss is comprised of USD 24.5 million in payable tax (which has
already been paid) and USD 38.3 million in deferred tax. The additional impact on cash in such scenario will be
20% of the deferred tax to be paid in 2014 with the remaining balance to be paid on a declining basis (i.e. 20% of
the remaining balance) each year.
36

For further discussion of the tax audit case and tax court case related to Odfjell Invest AS and Odfjell Rig Ltd,
respectively, see Section 8.10 Litigation and disputes. In addition to the tax court case and the tax audit case
described in Section 8.10 Litigation and disputes, the tax authorities have notified that they are looking into
whether the capital asset pricing model (CAPM) applied in 2009 and 2010 under the bareboat charter between
Deep Sea Drilling Company II KS, as owner of the rig Deepsea Bergen, and Deep Sea Drilling Company KS is in
accordance with the arms length principle, as they consider the CAPM method poorly fit in this case. The outcome
of the tax audit is currently pending.
2.5 Risks related to financing and market risk
In order to execute the Groups growth strategy, the Group may require additional capital in the future,
which may not be available
The Groups MODU and Well Services segments are capital intensive and, to the extent the Group does not
generate sufficient cash from operations, the Group may need to raise additional funds through debt or additional
equity financings to execute the Groups growth strategy and to fund capital expenditures, including for the
construction of any newbuild Drilling Units. Adequate sources of capital funding may not be available when needed
or may not be available on favourable terms. The Groups ability to obtain such additional capital or financing will
depend in part upon prevailing market conditions as well as conditions of its business and its operating results, and
those factors may affect its efforts to arrange additional financing on satisfactory terms. If the Group raises
additional funds by issuing additional shares or other equity or equity-linked securities, it may result in a dilution of
the holdings of existing shareholders. If funding is insufficient at any time in the future, the Group may be unable
to fund maintenance requirements and acquisitions, take advantage of business opportunities or respond to
competitive pressures, any of which could adversely impact the Groups results of operations, cash flow and
The Groups existing or future debt arrangements could limit the Groups liquidity and flexibility in
obtaining additional financing, in pursuing other business opportunities or the Companys ability to
declare dividends to its shareholders
As at 30 June 2013, the book value of the Groups current and non-current borrowings was USD 1.358.6 million,
representing 49.6% of its total equities and liabilities. See Section 9 Capitalisation and indebtedness. The current
indebtedness and future indebtedness that the Group may incur could affect the Groups future operations, as a
portion of the Groups cash flow from operations will be dedicated to the payment of interest and principal on such
debt and will not be available for other purposes. Covenants contained in the Groups debt agreements require the
Company, its subsidiaries and/or the Group to meet certain financial measures. These may affect the Groups
flexibility in planning for, and reacting to, changes in its business and limit the Groups ability to dispose of assets
or use the proceeds from such dispositions, withstand current or future economic or industry downturns or
compete with others in the industry for strategic opportunities. In addition, such financial measures do and could
further place restrictions on the Groups ability to declare dividends to its shareholders. See Section 11.8.1
Material borrowings for further information on any restrictive covenants pertaining to the Groups existing debt
arrangements. The Groups ability to meet its debt service obligations and to fund planned expenditures, including
construction costs for its newbuild project(s), will be dependent upon the Groups future performance, which will be
subject to general economic conditions, industry cycles and financial, business and other factors affecting the
Groups operations, many of which are beyond the Groups control. The Groups future cash flows may be
insufficient to meet all of its debt obligations and contractual commitments, and any such insufficiency could
adversely affect the Groups business. To the extent that the Group is unable to repay its indebtedness as it
becomes due or at maturity, the Group may need to refinance its debt, raise new debt, sell assets or repay the
debt with the proceeds from equity offerings.
Additional indebtedness or equity financing may not be available to the Group in the future for the refinancing or
repayment of existing indebtedness, and the Group may not be able to complete asset sales in a timely manner
sufficient to make such repayments.
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
If the Group is unable to comply with the restrictions and covenants in the agreements governing its indebtedness
or in current or future debt financing agreements, there could be a default or cancellation under the terms of those
37

agreements. The Groups ability to comply with these restrictions and covenants, including meeting financial ratios
and measures, is dependent on its future performance. See Section 11.8.1 Material borrowings for further
information on any restrictive covenants pertaining to the Groups existing debt arrangements. If a default occurs
under these agreements, lenders could terminate their commitments to lend or accelerate the outstanding loans
and declare all amounts borrowed due and payable. Borrowings under debt arrangements that contain cross-
acceleration or cross-default provisions may also be accelerated and become due and payable. In addition, certain
of the Groups financing agreements include change of control provisions which if triggered could result in the
Group having to immediately prepay all amounts, including interest, accrued and owing under the relevant facility.
If any of these events occur, the Group cannot guarantee that its assets will be sufficient to repay in full all of its
outstanding indebtedness, and the Group may be unable to find alternative financing. Even if the Group could
obtain alternative financing, that financing might not be on terms that are favourable or acceptable. The
occurrence of such events may have a material adverse effect on the Groups results of operations, cash flow and
Interest rate fluctuations could affect the Groups cash flow and financial condition
The Group has incurred, and may in the future incur, significant amounts of debt. The Group is exposed to interest
rate risk primarily in relation to its long-term borrowings issued at floating interest rates. The Group evaluates the
share of interest rate hedging based on an assessment of the Groups total interest rate risk and currently has a
combination of borrowings that bear interest at fixed and floating rates in order to limit exposure to interest rate
risk. Close to 50% of the Groups long-term debt was hedged at the time of the Prospectus. There can be no
assurance that such hedging arrangements will be effective or that all of the Groups interest rate exposure will be
hedged. See Section 11.8.1 Material borrowings. As such, movements in interest rates could have material
adverse effects on the Groups cash flow and financial condition.
Fluctuations in exchange rates and non-convertibility of expenses could result in financial losses for
the Group
The Group has currency exposure to both transaction risk and translation risk.
Transaction risk arises when future commercial transactions or recognised assets or liabilities are denominated in a
currency that is not the entitys functional currency. The Group is exposed to transaction risks due to fluctuations in
exchange rates as it receives revenue primarily in USD but its relevant operating expenses are primarily in local
currencies. In certain markets where the Group operates, it may experience currency exchange losses when
revenue is received and expenses are paid in non-convertible currencies or when the Group does not hedge an
exposure to the relevant foreign currency. The Group may also incur losses as a result of an inability to collect
revenue due to a shortage of convertible currency available in the country of operation or controls over currency
exchange.
Translation risk arises due to the conversion of amounts denominated in foreign currencies to USD, the Groups
reporting and functional currency. Given the international nature of the Groups business, a significant portion of its
assets, liabilities, revenues and expenses are denominated in currencies other than USD. In addition, some of the
Groups subsidiaries have other reporting and functional currencies, including NOK, GBP and EUR. Consequently,
any change in exchange rates between its operating subsidiaries functional currencies and USD affects its
consolidated income statement and balance sheet when the results of those operating subsidiaries are translated
into USD for reporting purposes. Because the Company does not hedge its exposure to such currency translation
risks, decreases in the value of its operating subsidiaries functional currencies against the USD may reduce those
operating subsidiaries contributions in USD terms to the Companys business, financial condition, results of
operations and cash flow.
2.6 Risks related to Group structure
The Company is a holding company and is dependent upon cash flow from subsidiaries to meet its
obligations and in order to pay dividends to its shareholders
The Group currently conducts its operations through, and most of the Groups assets are owned by, the Groups
subsidiaries. As such, the cash that the Group obtains from its subsidiaries is the principal source of funds
necessary to meet its obligations. Contractual provisions or laws, including laws or regulations related to the
repatriation of foreign earnings, as well as the Groups subsidiaries financial condition, operating requirements,
restrictive covenants in its debt arrangements and debt requirements, may limit the Groups ability to obtain cash
38

from subsidiaries or joint ventures that it requires to pay its expenses or meet its current or future debt service
obligations or to pay dividends to its shareholders. For example, the Norwegian Limited Liability Companies Act
imposes certain legal restrictions on dividends, loans and advances from Norwegian subsidiaries that may affect
the ability of the Groups subsidiaries to transfer funds to the Company. Applicable tax laws may also subject such
payments to the Group by subsidiaries to further taxation. See Section 11.8.1 Material borrowings for further
information on any restrictive covenants pertaining to the Groups existing debt arrangements.
The inability to transfer cash from the Groups subsidiaries or joint ventures may mean that, even though the
Group may have sufficient resources on a consolidated basis to meet its obligations or to pay dividends to its
shareholders, the Group may not be permitted to make the necessary transfers from its subsidiaries or joint
ventures to meet such obligations or to pay dividends to its shareholders. Likewise, the Group may not be able to
make necessary transfers from its subsidiaries in order to provide funds for the payment of its obligations, for
which the Group is or may become responsible under the terms of the governing agreements of the Groups
indebtedness. A payment default by the Group, or any of the Groups subsidiaries, on any debt instrument would
have a material adverse effect on the Groups business, results of operations, cash flow and financial condition.
The Groups 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 believes that acquisition opportunities may arise from time to time, and that any such acquisition could
be significant. At any given time, discussions with one or more potential sellers may be at different stages.
However, any such discussions may not result in the consummation of an acquisition transaction, and the Group
may not be able to identify or complete any acquisitions or make assurances that any acquisitions the Group
makes will perform as expected or that the returns from such acquisitions will support the investment required to
acquire or develop them. The Group cannot predict the effect, if any, that any announcement or consummation of
an acquisition would have on the trading price of the Shares.
Any future acquisitions could present a number of risks, including:
the risk of using management time and resources to pursue acquisitions that are not successfully
completed;
the risk of failing to identify material problems during due diligence;
the risk of over-paying for assets;
the risk of failing to arrange financing for an acquisition as may be required or desired;
the risk of incorrect assumptions regarding the future results of acquired operations;
the risk of failing to integrate the operations or management of any acquired operations or assets
successfully and timely; and
the risk of diversion of managements attention from existing operations or other priorities.
In addition, the integration and consolidation of acquisitions requires substantial human, financial and other
resources, including management time and attention, and may depend on the Groups ability to retain the acquired
business existing management and employees or recruit acceptable replacements. Ultimately, if the Group is
unsuccessful in integrating any acquisitions in a timely and cost-effective manner, the Groups results of
operations, cash flow and financial condition could be materially adversely affected.
The Group has engaged in divestments that may subject it to associated risks and liabilities
The Group has provided certain representations, warranties and indemnities in connection with the businesses it
has sold, including in connection with the recent disposal of its rig mooring business, Deep Sea Mooring AS and
related mooring equipment in May 2013. As a result, the Group may be subject to the risk of liability for breach of
representations and warranties and/or indemnity obligations in favour of the respective buyers. For example, in the
sale and purchase agreement related to the sale of the rig mooring business, the Group agreed to provide certain
39

representations and warranties regarding the operations of Deep Sea Mooring AS and the condition of the related
equipment. While the Group does not currently believe there will be claims under these representations, warranties
and indemnities, it is possible that claims could be made against the Group in the future. If such a claim or claims
were successful, it could have a material adverse effect on the Groups results of operations, cash flows and
financial position.
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
The fair market value of the Drilling Units and Rental Equipment currently owned by the Group and/or those the
Group may acquire in the future, may increase or decrease depending on a number of factors, including:
general economic and market conditions affecting the offshore contract drilling industry, including
competition from other offshore contract drilling companies;
types, sizes and ages of the Drilling Units and Rental Equipment;
supply and demand for drilling units and equipment;
cost of newbuilds;
prevailing level of drilling services contract day rates;
Drilling Unit day rates and utilisation rates;
government laws and regulations, including environmental protection laws and regulations and such
laws becoming more stringent due to, inter alia, accidents such as the Macondo incident; and
technological advances.
If the book value of any Drilling Unit or Rental Equipment exceeds the fair market value, the Group may suffer
impairment of the book value of its assets and consequently suffer a loss. Further, an impairment may cause a
breach of the Groups equity level and equity ratio under the financial covenants of certain of its financing
arrangements. See Section 11.8.1 Material borrowings. Also, should the Group sell any Drilling Unit or Rental
Equipment when prices have fallen, the sale may be at a loss. The book value of the Drilling Units, including
construction in progress and periodic maintenance represented 58.9% of the Groups total assets as at 31
December 2012. Such loss could have a material adverse effect on the Groups business prospects, results of
operations, cash flow and financial condition. See Section 2.1.2 Risks relating to the industry in which the Group
operates Legal, Regulatory and Environmental Risks The impact of the Macondo incident led to an aggressive
overhaul of the oil and natural gas regulatory process that has significantly impacted the oil and gas development
in the US Gulf of Mexico and may also lead to further regulations that may impact drilling operations in other
regions and Section 2.1.1 Risks Relating to the Industry in which the Group Operates Market Conditions 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 Groups results of operations.
2.7 Risks relating to the Shares
Odfjell Partners Ltd. will remain the controlling shareholder of the Company at completion of the
Offering and will have significant voting power and the ability to influence matters requiring
shareholder approval
Following completion of the Offering, it is expected that Odfjell Partners Ltd. will remain the major shareholder of
the Group and will, accordingly, continue to have a majority of the shareholder vote, thereby having the ability to
significantly influence the outcome of matters submitted for the vote of the Companys shareholders, including the
election of members of the Board of Directors. The commercial goals of Odfjell Partners Ltd. as a shareholder, and
those of the Group, may not always be aligned and this concentration of ownership may not always be in the best
interest of the Groups other shareholders. For example, Odfjell Partners Ltd. could delay, defer or prevent a
change of control, impede a merger, deny a potential future equity offering, amalgamation, consolidation, takeover
or other business combinations involving the Group, or discourage a potential acquirer from attempting to obtain
40

control of the Group. Although it is expected that Odfjell Partners Ltd. will remain the major shareholder of the
Company after the Offering, no assurance can be given that this will continue on a permanent basis. If Odfjell
Partners Ltd. were no longer a major shareholder of the Company, or if its commercial goals were not in the best
interest of the Group, this could have a material adverse effect on the market value of the Shares.
The price of the Shares may fluctuate significantly
The trading price of the Shares could fluctuate significantly in response to a number of factors beyond the Groups
control, including, but not limited to, quarterly variations in operating results, adverse business developments,
changes in financial estimates and investment recommendations or ratings by securities analysts, or any other risk
discussed herein materialising or the anticipation of such risk materialising.
In recent years, the global stock markets have experienced extreme price and volume fluctuations. This volatility
has had a significant impact on the market price of securities issued by many companies, including companies in
the oil and gas services industry. Those changes may occur without regard to the operating performance of these
companies. The price of the Shares may therefore fluctuate based upon factors that have little or nothing to do
with the Group, and these fluctuations may materially affect the price of the Shares.
There is no existing market for the Shares, and an active trading market may not develop
Prior to the Listing, there was no public market for the Shares, and there can be no assurance that an active
trading market will develop, or be sustained or that the Shares may be resold at or above the Offer Price. The
market value of the Shares could be substantially affected by the extent to which a secondary market develops for
the Shares following the completion of this Offering.
Future sales, or the possibility for future sales, of substantial numbers of Shares may affect the Shares
market price
The Company cannot predict what effect, if any, future sales of the Shares, or the availability of Shares for future
sales, will have on their market price. Sales of substantial amounts of the Shares in the public market following the
Offering, including by Odfjell Partners Ltd. (which, following the Offering, will hold approximately 70% of the
shares of the Company), or the perception that such sales could occur, may adversely affect the market price of
the Shares, making it more difficult for holders to sell their Shares at a time and price that they deem appropriate.
Although Odfjell Partners Ltd., as of the date of this Prospectus, is subject to an agreement with the Joint
Bookrunners that, subject to certain conditions and exceptions, restricts its ability to sell or transfer its Shares for a
period of nine months after the first time of sale relating to the Offering, the representatives of the Joint
Bookrunners may, in their sole discretion and at any time, waive the restrictions on sales or transfer during this
period. Additionally, following this period, all Shares owned by Odfjell Partners Ltd. will be eligible for sale in the
public market, subject to applicable securities laws restrictions.
Future issuances of Shares or other securities may dilute the holdings of shareholders and could
materially affect the price of the Shares
It is possible that the Company may in the future decide to offer additional Shares or other securities in order to
finance new capital-intensive projects, in connection with unanticipated liabilities or expenses or for any other
purposes. See Section 2.2 Risks relating to the Group. There can be no assurance the Company will not decide to
conduct further offerings of securities in the future. Depending on the structure of any future offering, certain
existing shareholders may not be able to purchase additional equity securities. If the Company raises additional
funds by issuing additional equity securities, holdings of existing shareholders may be diluted.
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
The Shares will be priced and traded in NOK on the Oslo Stock Exchange and, although any future payments of
dividends on the Shares will be denominated in USD, such dividends will be distributed through the VPS in NOK.
Investors registered in the VPS whose address is outside Norway and who have not supplied the VPS with details of
any NOK account, will however receive dividends by check in their local currency, as exchanged from the NOK
amount distributed through the VPS. If it is not practical in the sole opinion of DNB Bank ASA, being the Company's
VPS registrar, to issue a check in a local currency, a check will be issued in U.S. dollars. The issuing and mailing of
checks will be executed in accordance with the standard procedures of DNB Bank ASA, Foreign Payments
Department. The exchange rate(s) that is applied will be DNB Bank ASA's exchange rate on the date and time of
41

day for execution of the exchange for the issuance of cheque. Exchange rate movements of NOK will therefore
affect the value of these dividends and distributions for investors whose principal currency is not NOK.
Furthermore, the market value of the Shares as expressed in foreign currencies will fluctuate in part as a result of
foreign exchange fluctuations. This could affect the value of the Shares and of 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
Beneficial owners of the Shares that are registered in a nominee account (such as through brokers, dealers or
other third parties) may not be able to vote such Shares unless their ownership is re-registered in their names with
the VPS prior to the general meetings. The Group can provide no assurances that beneficial owners of the Shares
will receive the notice of a general meeting in time to instruct their nominees to either effect a re-registration of
their Shares or otherwise vote their Shares in the manner desired by such beneficial owners.
The transfer of Shares is subject to restrictions under the securities laws of the United States and other
jurisdictions
The Shares have not been registered under the U.S. Securities Act or any U.S. state securities laws or any other
jurisdiction outside Norway and Bermuda and are not expected to be registered in the future. As such, the Shares
may not be offered or sold except pursuant to an exemption from the registration requirements of the U.S.
Securities Act and applicable securities laws. See Section 19 Selling and transfer restrictions. In addition, there
can be no assurance that shareholders residing or domiciled in the United States will be able to participate in future
capital increases or rights offerings.
Bermuda law permits the transfer of shares listed or admitted to trading on an appointed stock exchange (as such
term is defined in the Companies Act 1981, as amended, of Bermuda (the Bermuda Companies Act) (an
Appointed Stock Exchange)) such as the Oslo Stock Exchange, to be effected in accordance with the rules of
such stock exchange without a written instrument of transfer. Further, the Bermuda Monetary Authority pursuant
to the Exchange Control Act 1972 and associated regulations has granted (i) its consent for the issue and transfer
of the Shares to and between residents and non-residents of Bermuda for exchange control purposes provided that
the Shares are listed on the Oslo Stock Exchange or any other Appointed Stock Exchange on or within fourteen
days, or the relevant issue or transfer, and (ii) a general permission for the issue and transfer of shares and/or
securities in companies incorporated in Bermuda from and/or to a non-resident of Bermuda where such company
has any Equity Securities (meaning a share issued by a Bermuda company which entitles the holder to vote for or
to appoint one or more directors or a security which by its terms is convertible into a share which entitles the
holder to vote for or appoint one or more directors) listed on an Appointed Stock Exchange. Accordingly, the
Shares can be registered in the VPS and title to the Shares can be evidenced and transferred without a written
instrument and the consent and the general permission of the Bermuda Monetary Authority for the issuance and
transfer of shares shall apply as long as the Shares are listed and traded on the Oslo Stock Exchange. If the Shares
are no longer listed or admitted to trading on the Oslo Stock Exchange or any other Appointed Stock Exchange, or
if the Oslo Stock Exchange ceases to be an Appointed Stock Exchange, the Shares may only be transferred by
written instrument in accordance with the terms of the Bye-Laws of the Company and with the prior consent of the
Bermuda Monetary Authority.
The Company may be unwilling or unable to pay any dividends in the future
Pursuant to the Companys dividend policy, dividends are only expected to be paid if certain conditions described in
Section 6.1 Dividend policy are fulfilled. In addition, the Company may choose not, or may be unable, to pay
dividends in future years. The amount of dividends paid by the Company, if any, for a given financial period, will
depend on, among other things, the Companys future operating results, cash flows, financial position, capital
requirements, the sufficiency of its distributable reserves, the ability of the Companys subsidiaries to pay
dividends to the Company, credit terms, general economic conditions and other factors that the Company may
deem to be significant from time to time.
The Shares are listed on an if sold basis until delivery of the Shares, which could result in all
conditional trades being reversed
The Shares will be listed on the Oslo Stock Exchange on an if sold basis. Therefore, the Shares will be tradeable
on the Oslo Stock Exchange before the Shares are delivered to each investor. If the Purchase Agreement is
terminated due to certain force majeure events, the Shares will not be delivered to the investors. All trades with
42

the Shares will be cancelled and reversed. Such events could adversely affect the participants in the Offering and
those who trade in the Shares during the period of conditional trading.
The limited free float of the Shares may have a negative impact on the liquidity of and market price for
the Shares
After completion of the Offering, 28% of the Companys issued and outstanding share capital (30% of the issued
and outstanding share capital if the Over-Allotment Option is exercised in full) will be publicly held if the Offering is
fully subscribed. Approximately 70% of the issued and outstanding share capital is expected to be held by Odfjell
Partners Ltd. The limited free float may have a negative impact on the liquidity of the Shares and result in a low
trading volume of the Shares, which could have an adverse effect on the then prevailing market price for the
Shares.
2.8 Risks related to the Companys 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 is an exempted company limited by shares incorporated under the laws of Bermuda. As a result, the
rights of holders of the Shares will be governed by Bermuda law and the Companys memorandum of association
and Bye-Laws. The rights of shareholders under Bermuda law may differ from the rights of shareholders of
companies incorporated in other jurisdictions. With one exception, the Companys Interim Directors and members
of the New Board of Directors are not residents of the United States, and a substantial portion of the Companys
assets are located outside the United States. As a result, it may be difficult for investors in the United States to
effect service of process on the Company or its directors and executive officers in the United States or to enforce in
the United States judgments obtained in US courts against the Company or those persons, including judgments
based on the civil liability provisions of the securities laws of the United States or any State or territory within the
United States. It is doubtful whether courts in Bermuda will enforce judgments obtained in other jurisdictions,
including the United States, against the Company or its directors or officers under the securities laws of those
jurisdictions or entertain actions in Bermuda against the Company or its directors or officers under the securities
laws of other jurisdictions. The United States and Bermuda do not currently have a treaty providing for reciprocal
recognition and enforcement of judgments (other than arbitral awards) in civil and commercial matters.
The Company has anti-takeover provisions in its Bye-Laws that may discourage a change of control
The Companys 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. These provisions provide that:
the Board of Directors can decline to register certain transfers of shares where the transfer would
result in 50% or more of the issued and outstanding shares or votes of the Company being held,
controlled by or owned directly or indirectly by individuals or legal persons resident for tax purposes
in Norway or such shares or votes being effectively connected to a Norwegian business activity, in
order to avoid the Company being deemed a Controlled Foreign Company pursuant to Norwegian
tax rules; and
the Board of Directors can, subject to prior approval of the Companys shareholders, determine the
powers, preferences and rights of the Companys shares including any preference shares and, subject
to prior shareholder approval, to issue the shares and/or preference shares without further
shareholder approval.
These provisions could make it more difficult for a third party to acquire the Company, even if the third partys
offer may be considered beneficial by many shareholders.
Various conditions may cause an adverse tax effect for the shareholder if the Company pays dividends
Dividends declared and paid by a Bermuda company may be subject to local tax in the investors home country,
and each investor should make such investigations for himself/herself. Norwegian investors will be subject to
taxation as dividends will be deemed as taxable income for the receiver, and such dividends will be subject to 28%
tax and the same tax rate will apply with respect to capital gains for such investors. See Section 17 Taxation
below for more details.
43

3 RESPONSIBILITY FOR THE PROSPECTUS
3.1 The Board of Directors of Odfjell Drilling Ltd
This Prospectus has been prepared in connection with the Offering described herein and the Listing of the Shares
on the Oslo Stock Exchange.
The Board of Directors of Odfjell Drilling Ltd accepts responsibility for the information contained in this Prospectus.
The members of the Board of Directors confirm that, after having taken all reasonable care to ensure that such is
the case, the information contained in this Prospectus is, to the best of their knowledge, in accordance with the
facts and contains no omission likely to affect its import.

13 September 2013
The Board of Directors of Odfjell Drilling Ltd

Helene Odfjell
Chairman
Marianne Odfjell
Director
Kirk L. Davis
Director

Carl-Erik Haavaldsen
Director
Bengt Lie Hansen
Director

3.2 The Selling Shareholder
The Selling Shareholder confirms that the Offer Shares are being offered free of any liens or encumbrances.

13 September 2013
For BCB Paragon Trust Limited, as trustee of the Larine Trust

Neil W. de ste Croix
Director
Luciano Aicardi
Director

44

4 GENERAL INFORMATION
4.1 Other important investor information
The information contained herein is current as of the date hereof and subject to change, completion and
amendment without notice. In accordance with Section 7-15 of the Norwegian Securities Trading Act, significant
new factors, material mistakes or inaccuracies relating to the information included in this Prospectus, which are
capable of affecting the assessment by investors of the Offer Shares between the time of approval of this
Prospectus by the Norwegian FSA and the Listing of the Offer Shares on the Oslo Stock Exchange, will be included
in a supplement to this Prospectus. Neither the publication nor distribution of this Prospectus, nor the sale of any
Offer Share, shall under any circumstances imply that there has been no change in the Groups affairs or that the
information herein is correct as of any date subsequent to the date of this Prospectus.
No person is authorised to give information or to make any representation concerning the Group or in connection
with the Offering or the sale of the Offer Shares other than as contained in this Prospectus. If any such information
is given or made, it must not be relied upon as having been authorised by the Company or the Managers or by any
of the affiliates, representatives, advisors or selling agents of any of the foregoing.
The Company has furnished the information in this Prospectus. No representation or warranty, express or implied
is made by the Managers as to the accuracy, completeness or verification of the information set forth herein, and
nothing contained in this Prospectus is, or shall be relied upon as, a promise or representation in this respect,
whether as to the past or the future. The Managers assume no responsibility for the accuracy or completeness or
the verification of this Prospectus and accordingly disclaim, to the fullest extent permitted by applicable law, any
and all liability whether arising in tort, contract or otherwise which they might otherwise be found to have in
respect of this Prospectus or any such statement.
None of the Company, the Selling Shareholder or the Managers, or any of their respective affiliates,
representatives, advisers or selling agents, is making any representation to any offeree or purchaser of the Offer
Shares regarding the legality of an investment in the Offer Shares. Each investor should consult with his or her
own advisors as to the legal, tax, business, financial and related aspects of a purchase of the Offer Shares.
In connection with the Offering, each of the Managers and any of their respective affiliates, acting as an investor
for its own account, may take up Offer Shares in the Offering and in that capacity may retain, purchase or sell for
its own account such securities and any Offer Shares or related investments and may offer or sell such Offer
Shares or other investments otherwise than in connection with the Offering. Accordingly, references in the
Prospectus to Offer Shares being offered or placed should be read as including any offering or placement of Offer
Shares to any of the Managers or any of their respective affiliates acting in such capacity. None of the Managers
intends to disclose the extent of any such investment or transactions otherwise than in accordance with any legal
or regulatory obligation to do so.
4.2 Presentation of financial and other information
4.2.1 Financial information
The Groups audited consolidated financial statements as of and for the year ended 31 December 2012, with
comparable figures as of and for the year ended 31 December 2011, have been prepared in accordance with
International Financial Reporting Standards as adopted by the European Union (IFRS) (the IFRS Financial
Statements), while the Groups audited consolidated financial statements as of and for the year ended 31
December 2011 and 2010 are prepared in accordance with Norwegian General Accepted Accounting Principles
(NGAAP) (the NGAAP Financial Statements) (collectively referred to as the Financial Statements). The
Groups unaudited interim financial statements as of and for the three and six month periods ended 30 June 2013
and 2012 (the Interim Financial Statements), has been prepared in accordance with International Accounting
Standard (IAS) 34. The Financial Statements and Interim Financial Statements are attached hereto as Appendix
B and Appendix C, respectively. The Financial Statements for the years ended 31 December 2012, 2011, and 2010
have been audited by PricewaterhouseCoopers AS, as set forth in their report thereon included herein.
PricewaterhouseCoopers AS has issued a review report of the Interim Financial Statements for the three and six
month periods ended 30 June 2013 and 2012, as set forth in their report thereon included herein. The Financial
Statements and the Interim Financial Statements are together referred to as the Financial Information.
45

For a discussion of the material differences between IFRS and NGAAP, please see Section 10.10 Analysis of
material differences between IFRS and NGAAP. Please refer to note 26 of the Financial Statements for the year
ended 31 December 2012 for a reconciliation of IFRS to NGAAP. Potential investors should consult their own
professional advisers for an understanding of the differences between IFRS and NGAAP, and how these differences
might affect the Financial Information herein.
Odfjell Drilling presents the Financial Information in USD (presentation currency), other than the NGAAP Financial
Statements which have been presented in NOK. In this Prospectus, the 2009 and 2010 numbers that are presented
in NOK have been converted to USD with a USD/NOK rate of 6.282 and 6.045 the Norges Bank average for 2009
and 2010, respectively.
4.2.2 Non-IFRS financial measures
In this Prospectus, the Company presents certain non-IFRS financial measures and ratios, including CAGR, interest
coverage, net interest bearing debt, interest bearing debt and return on invested capital (which is measure of the
Companys achieved return on its investments, including businesses recently disposed).
The non-IFRS financial measures presented herein are not measurements of performance under IFRS or other
generally accepted accounting principles and investors should not consider any such measures to be an alternative
to: (a) operating revenues or operating profit (as determined in accordance with generally accepted accounting
principles), as a measure of the Groups operating performance; or (b) any other measures of performance under
generally accepted accounting principles. The non-IFRS financial measures presented herein may not be indicative
of the Groups historical operating results, nor are such measures meant to be predictive of the Groups future
results. The Company believes that the non-IFRS measures presented herein are commonly reported by companies
in the markets in which it competes and are widely used by investors in comparing performance on a consistent
basis without regard to factors such as depreciation and amortisation, which can vary significantly depending upon
accounting methods (particularly when acquisitions have occurred) or based on non-operating factors. Accordingly,
the Group discloses the non-IFRS financial measures presented herein to permit a more complete and
comprehensive analysis of its operating performance relative to other companies and across periods, and of the
Groups ability to service its debt. Because companies calculate the non-IFRS financial measures presented herein
differently, the Groups presentation of these non-IFRS financial measures may not be comparable to similarly
titled measures used by other companies.
4.2.3 Industry and market data
In this Prospectus, the Company has used industry and market data obtained from independent industry
publications, market research, and other publicly available information, including from The Norwegian Petroleum
Directorate
3
, International Energy Agency (IEA)
4
, Rystad Energy
5
, IHS Petrodata database
6
, KCA Deutag
7
,
Archer
8
, Petoro
9
and other publicly available information. While the Company has compiled, extracted and
reproduced industry and market data from external sources, the Company has not independently verified the
correctness of such data. Further, although certain graphs in Section 7 Industry and market overview are based
on IHS Petrodata information, IHS Petrodata has not taken part in the preparation of these graphs. The Company
cautions prospective investors not to place undue reliance on the above mentioned data. Unless otherwise
indicated in the Prospectus, the basis for any statements regarding the Groups competitive position is based on
the Companys own assessment and knowledge of the market in which it operates.
Although the industry and market data is inherently imprecise, the Company confirms that where information has
been sourced from a third party, such information has been accurately reproduced and that as far as the Company
is aware and is able to ascertain from information published by that third party, no facts have been omitted that
would render the reproduced information inaccurate or misleading. Where information sourced from third parties
has been presented, the source of such information has been identified.

3
Information from this source in the Prospectus is available at http://www.npd.no/en/.
4
Information from this source in the Prospectus is available by subscription at www.worldenergyoutlook.org/.
5
Information from this source in the Prospectus is available by subscription at www.rystadenergy.com.
6
Information from this source in the Prospectus is available by subscription at www.ihs.com/info/en/a/ods-petrodata/index.aspx.
7
Information from this source in the Prospectus is available at www.kcadeutag.com.
8
Information from this source in the Prospectus is available at www.archerwell.com.
9
Information from this source in the Prospectus is available at www.petoro.no.
46

Industry publications or reports generally state that the information they contain has been obtained from sources
believed to be reliable, but the accuracy and completeness of such information is not guaranteed. The Company
has not independently verified and cannot give any assurances as to the accuracy of market data contained in this
Prospectus that was extracted from these industry publications or reports and reproduced herein. Market data and
statistics are inherently predictive and subject to uncertainty and not necessarily reflective of actual market
conditions. Such statistics are based on market research, which itself is based on sampling and subjective
judgments by both the researchers and the respondents, including judgments about what types of products and
transactions should be included in the relevant market.
As a result, prospective investors should be aware that statistics, data, statements and other information relating
to markets, market sizes, market shares, market positions and other industry data in this Prospectus (and
projections, assumptions and estimates based on such information) may not be reliable indicators of the Groups
future performance and the future performance of the industry in which it operates. Such indicators are necessarily
subject to a high degree of uncertainty and risk due to the limitations described above and to a variety of other
factors, including those described in Section 2 Risk factors and elsewhere in this Prospectus.
4.2.4 Other information
In this Prospectus, all references to NOK are to the lawful currency of Norway, all references to USD are to the
lawful currency of the United States, all references to GBP are to the lawful currency of the United Kingdom, all
references to EUR are to the lawful common currency of the EU member states who have adopted the Euro as
their sole national currency and all references to BRL are to the lawful currency of Brazil.
4.2.5 Rounding
Certain figures included in this Prospectus have been subject to rounding adjustments (by rounding to the nearest
whole number or decimal or fraction, as the case may be). Accordingly, figures shown for the same category
presented in different tables may vary slightly. As a result of rounding adjustments, the figures presented may not
add up to the total amount presented.
4.3 Cautionary note regarding forward-looking statements
This Prospectus includes forward-looking statements that reflect the Companys current views with respect to
future events and financial and operational performance. All statements other than statements of historical facts
included in this Prospectus, including, but not limited to, statements relating to the Companys financial position,
the risks specific to the Groups business, the strengths of the Group, business strategy and the implementation of
strategic initiatives, as well as other statements relating to the Groups future business development and financial
performance, are forward-looking statements. These forward-looking statements can often, but not necessarily, be
identified by the use of forward-looking terminology, including the terms assumes, projects, forecasts,
estimates, expects, anticipates, believes, plans, intends, may, might, will, would, can, could,
should or, in each case, their negative, or other variations or comparable terminology. These forward-looking
statements are not historic facts. They appear in a number of places throughout this Prospectus and include
statements regarding the Companys intentions, beliefs or current expectations concerning, among other things,
financial position, operating results, liquidity, prospects, growth, strategies and the industry in which the Group
operates, such as, but not limited to, with respect to number of wells to be drilled and demand for ultra-deepwater
drilling units in the future, exploration and production companies ultra-deepwater drilling unit backlog in the future
and yard capacity for building of new ultra-deepwater units in the future.
Prospective investors in the Shares are cautioned that forward-looking statements are not guarantees of future
performance and that the Groups actual financial position, operating results and liquidity, and the development of
the industry in which the Group operates, may differ materially from those made in, or suggested, by the forward-
looking statements contained in this Prospectus. The Company cannot guarantee that the intentions, beliefs or
current expectations upon which its forward-looking statements are based will occur.
By their nature, forward-looking statements involve, and are subject to, known and unknown risks, uncertainties
and assumptions as they relate to events and depend on circumstances that may or may not occur in the future.
Because of these known and unknown risks, uncertainties and assumptions, the outcome may differ materially
from those set out in the forward-looking statements. Important factors that could cause those differences include,
but are not limited to:
47

the effect of changes in demand, pricing and competition for the Groups existing and future drilling
units;
wells to be drilled and demand for ultra-deepwater drilling units in the future;
exploration and production companies ultra-deepwater drilling unit backlog in the future;
yard capacity for building of new ultra-deepwater units in the future;
the competitive nature of the business the Group operates in and the competitive pressure and changes
to the competitive environment in general;
earnings, cash flow, dividends and other expected financial results and conditions;
the price volatility of oil and gas products;
the ability to secure sufficient employment opportunities for the Groups existing Drilling Units as the
term of the drilling contracts for these units expire, and the new, planned rig Deepsea Aberdeen when
this has been delivered;
the utilisation level for the Groups existing drilling units and the new, planned rig Deepsea Aberdeen;
the state of the Groups relationships with major clients, suppliers and joint venture partners;
the quality of goods and services provided to or on behalf of the Group by suppliers, joint venture
partners and subcontractors;
delay or cost overruns in the construction projects for the new, planned rig Deepsea Aberdeen;
level of required repair, maintenance expenditures and replacement costs on the existing and new
drilling units of the Group;
technological changes and new products and services introduced into the Groups market and industry;
fluctuations of interest and exchange rates;
changes in general economic and industry conditions, including changes to tax rates and regimes;
political, governmental, social, legal and regulatory changes (including regulations relating to bribery
and corruption, health, safety and the environment);
dependence on and changes in management and failure to retain and attract a sufficient number of
skilled personnel;
access to funding; and
legal proceedings.
Some of the risks that could affect the Groups future results and could cause results to differ materially from those
expressed in the forward-looking statements are discussed in Section 2 Risk factors.
The information contained in this Prospectus, including the information set out under Section 2 Risk factors,
identifies additional factors that could affect the Groups financial position, operating results, liquidity and
performance. Prospective investors in the Shares are urged to read all Sections of this Prospectus and, in
particular, Section 2 Risk factors for a more complete discussion of the factors that could affect the Groups
future performance and the industry in which the Group operates when considering an investment in the Company.
48

These forward-looking statements speak only as of the date on which they are made. The Company undertakes no
obligation to publicly update or publicly revise any forward-looking statement, whether as a result of new
information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to
the Company or to persons acting on the Companys behalf are expressly qualified in their entirety by the
cautionary statements referred to above and contained elsewhere in this Prospectus.
4.4 Exchange rates
The following table sets forth, for the previous five years as indicated, information regarding the average, high, low
and period end reference rates for the Norwegian kroner, expressed in NOK per USD, in each case rounded to the
nearest three decimal places, based on the daily exchange rate announced by the Central Bank of Norway:
Fiscal year
Average
1
High Low Period end
2008 .................................................................................. 5.650 7.294 4.958 7.002
2009 .................................................................................. 6.290 7.237 5.541 5.777
2010 .................................................................................. 6.047 6.702 5.617 5.813
2011 .................................................................................. 5.606 6.020 5.220 5.968
2012 .................................................................................. 5.821 6.147 5.535 5.566
2013 (through 11 September 2013) ....................................... 5.810 6.198 5.444 5.917
1 Represents the average of the noon buying rates on the last day of each month during the respective period.
The following table sets forth, for the previous six months indicated, information regarding the average, high, low
and period end reference rates for the Norwegian kroner, expressed in NOK per USD, in each case rounded to the
nearest three decimal places, based on the daily exchange rate announced by the Central Bank of Norway:
Month
Average
1
High Low Period end
March ................................................................................. 5.769 5.847 5.686 5.826
April ................................................................................... 5.791 5.910 5.699 5.820
May .................................................................................... 5.824 5.886 5.751 5.854
June ................................................................................... 5.869 6.144 5.724 6.028
July .................................................................................... 6.028 6.198 5.877 5.925
August ................................................................................ 5.965 6.113 5.845 6.113
Through 11 September ......................................................... 6.043 6.101 5.917 5.917
1 Represents the average of the noon buying rates each day during the respective period.
No representation is made that the NOK amounts have been or could have been converted into USD, or vice versa,
at the exchange rates indicated in the tables above or any other exchange rate.
49

5 REASONS FOR THE OFFERING AND THE LISTING
The Company believes that the benefits of the Offering and the Listing include the following:
(i) Facilitating a sustainable shareholding structure which supports the Company's long-term
strategy. The Selling Shareholder and the Board have decided to apply for the listing of the Companys
Shares in order to offer the Selling Shareholder an opportunity to sell all of its shares. After the
completion of the Offering, Odfjell Partners Ltd. (which is indirectly controlled by Helene Odfjell) will
remain the major shareholder of the Company. The majority shareholders objective is to be a long-term
supportive shareholder to Odfjell Drilling, focused on the long-term value creation of the Company and
securing the long-term dividend capacity.
(ii) Increasing strategic flexibility and enhancing financing sources for future growth
opportunities. To date, the Company has financed its growth strategy through internal resources and
believes it will be able to fund its existing growth plans without additional equity financing. The Company
will continue to evaluate incremental growth investments and acquisitions and may, as one of the options,
decide to raise additional equity financing in order to fund attractive opportunities in the future.
(iii) Enhancing the Companys ability to attract talent. The Company believes that its attractiveness as
an employer will increase as a publicly listed company as the listing is expected to raise the profile of the
Group and thereby improve perceptions of the Groups business and brand with current and potential
employees. The ability to attract qualified employees is core to the Companys growth ambitions.
50

6 DIVIDENDS AND DIVIDEND POLICY
6.1 Dividend policy
The Company aims to ensure that shareholder returns reflect the Companys value creation and will consist of both
dividends and a positive share price development. The Company will target a long-term dividend annual pay-out
representing approximately 30 40% of its net profit on a consolidated basis. Since the Company is in a phase
involving considerable investments, there is no plan for dividend payment for the financial year ending 31
December 2013. The Company has a high focus on value creation and will have a dividend policy that will preserve
the interest of the Company and its shareholders.
When deciding whether to declare and pay an annual dividend, the Board of Directors will take into consideration
market outlook, potential growth opportunities, contract backlog, cash flow generation, capital expenditure plans
and funding requirements whilst maintaining adequate financial flexibility. The Board of Directors may revisit the
dividend policy from time to time.
The proposal in any year to pay any dividend is further subject to:
The limitation, found in the terms of certain loans made to the Group, that the Company may only
distribute dividends in an amount up to 50% of its net income (adjusted for any write downs of rigs and
after taxes paid) in its previous financial year. Further, there are restrictions on Chloe Marine and Golden
Close paying dividends to the Deep Sea Metro joint venture partners. See Section 11.8 Borrowings, loans
receivable and contractual obligations; and
Sufficiency of the distributable reserves.
For the financial year 2012 the Company declared a dividend of NOK 50 million (equalling to NOK 0.25 per Share).
Declared dividends for the financial year 2011 and 2010 were each NOK 45 million, paid in 2012 and 2011,
respectively (equalling to NOK 0.225 per Share each year).
6.2 Legal constraints on the distribution of dividends
A Bermuda company may not declare or pay a dividend, or make a distribution out of contributed surplus, if there
are reasonable grounds for believing that (i) the company is, or would after the payment be, unable to pay its
liabilities as they become due; or (ii) the realisable value of the companys assets would thereby be less than its
liabilities. Contributed surplus is defined for purposes of section 54 of the Bermuda Companies Act to include the
proceeds arising from donated shares, credits resulting from the redemption or conversion of shares at less than
the amount set up as nominal capital and donations of cash and other assets to the Company. Under the Bye-
Laws, the Board of Directors may declare dividends and distributions without the approval of the general meeting
of shareholders. Further, the Companys subsidiaries may be subject to applicable legal constraints on the
distribution of dividends in the jurisdiction in which they are incorporated, such as sufficiency of distributable
reserves.
6.3 Manner of dividend payments
Although any future payments of dividends on the Shares will be denominated in USD, such dividends will be
distributed through the VPS in NOK. Any dividend will be paid to the shareholders through the VPS. Investors
registered in the VPS whose address is outside Norway and who have not supplied the VPS with details of any NOK
account, will however receive dividends by check in their local currency, as exchanged from the NOK amount
distributed through the VPS. If it is not practical in the sole opinion of DNB Bank ASA, being the Company's VPS
registrar, to issue a check in a local currency, a check will be issued in U.S. dollars. The issuing and mailing of
checks will be executed in accordance with the standard procedures of DNB Bank ASA, Foreign Payments
Department. The exchange rate(s) that is applied will be DNB Bank ASA's exchange rate on the date and time of
day for execution of the exchange for the issuance of cheque. Dividends will be credited automatically to the VPS
registered shareholders NOK accounts, or in lieu of such registered NOK account, by check, without the need for
shareholders to present documentation proving their ownership of the Shares.

51

7 INDUSTRY AND MARKET OVERVIEW
7.1 Introduction
Odfjell Drilling is an integrated drilling, engineering and well services provider, offering a fleet of mobile offshore
drilling units along with engineering services, well services and platform operation services to both onshore and
offshore drilling operations, with an offshore focus.
7.2 General industry drivers
Growth and demand within the offshore oil and gas services industry are affected by the following key factors:
(i) Oil and gas prices and demand: Oil and gas E&P spending is the key driver of demand in the oil and gas
services industry. E&P spending is directly linked to the earnings of oil and gas companies which are, in
turn, dependent on average oil and gas prices. Volatility in oil prices can therefore reduce the ability of
oil and gas companies to budget for increased E&P spending. However, while market expectations of a
potential decline in oil prices will affect E&P spending and activity, ultra-deepwater projects, being large
projects with longer lead times and long-term outlooks, are less affected by short-term changes in oil
price.
According to the IEA, global oil demand is expected to increase steadily to 99.7 mb/d in 2035, from 87.4
mb/d in 2011, and the average price of crude oil is predicted to rise to USD 125/barrel (in year 2011
dollars) by 2035 (IEA, World Energy Outlook 2012, 12 November 2012). Non-OECD oil consumption is
forecast to average out at approximately 46.5 mb/d in 2014, an increase of 1.4 mb/d (or 3.1%)
compared to 2013 and well above the OECD average of 45.5 mb/d. China is forecast to remain the main
engine of demand growth in 2014, followed by the rest of Asia and the Middle East, with demand
projected to increase by 385 kb/d, 325 kb/d and 225 kb/d, respectively (IEA Oil Market Report, 10 July
2013).
(ii) Reserve replacements: The future production capacity of the oil and gas industry depends on the ability
of oil and gas companies to maintain a sustainable reserve replacement ratio through the discovery and
development of new reservoirs or improvements in oil recovery techniques. Currently, oil and gas
companies are barely able to fully replace the hydrocarbons they produce, and the IEA reports that
proven reserves of oil worldwide (an indication of the near- to medium-term potential for new
production) increased slightly by 1,523 billion barrels, or 3.6%, at the end of 2011, compared to the
year before (IEA, World Energy Outlook 2012, 12 November 2012).
(iii) Increased emphasis on E&P spending: Oil and gas companies are increasing both their total E&P
spending as well as their proportion of E&P spending on offshore activities. According to the IEA (IEA,
World Energy Outlook 2012, 12 November 2012), upstream oil and gas investments rose by
approximately 8% in 2012 relative to 2011, reaching a new record of USD 619 billion an increase of
20% compared to 2008 and five times the level of investments in 2000. The largest growth in E&P
spending in recent years has been in deepwater exploration and production, partly driven by the lack of
new, large, onshore and shallow water discoveries. The IEA predicts that upstream oil and gas
investments will remain high in the coming years, with global investments averaging USD 615 billion per
year (IEA, World Energy Outlook 2012, 12 November 2012). Future upstream investments will have an
increased offshore focus, as exploration and development continues to move towards harsher and
deeper waters.
52

Offshore E&P spending on drilling and well services worldwide

Source: Rystad Energy as of 6 September 2013
(iv) Drilling technology and innovation: Recent advances in offshore technology have improved the ability of
oil and gas companies to develop reservoirs in deeper waters, and in harsh and more remote locations.
A new class of drilling rigs has emerged, with the ability to drill wells of up to 40,000 feet, in water
depths of up to 12,000 feet, and with them, new types of subsea construction vessels and production
facilities.
(v) General political and economic environment: Changes in the political, economic and regulatory
environment across regions affect global demand for oil services. The political and regulatory regimes of
a country also have a significant impact on the level of oil and gas extraction activity within its territory.
Changes in tax rules could also alter the profitability of certain projects and accordingly, E&P spending.
(vi) Increased focus on QHSE: Due to the potentially serious consequences of an accident within the offshore
oil and gas industry, the industry has developed high standards to mitigate risks associated with QHSE.
There has been increased focus on this area after the Macondo incident in 2010, and, to an increasing
extent, oil and gas companies will contract only with oil and gas companies that have the procedures
and know-how to adequately manage these risks. This trend has increased the barriers to entry in the
industry.
7.3 The mobile offshore drilling market
7.3.1 Introduction
The market for mobile offshore drilling units is commonly divided into segments based on rig type and capabilities
with respect to water depths and geographical area of operation. There are three main types of mobile offshore
drilling units: semi-submersibles, drillships and jack-ups, and four water depth categories: shallow water (0 to 500
feet), midwater (500 to 3,000 feet), deepwater (3,000 to 7,500 feet) and ultra-deepwater (7,500 feet and more).
Mobile offshore drilling units are also designated harsh environment or non-harsh environment, according to the
geographical segment in which they are designed to operate (see Section 7.3.3 The harsh environment market
below). Mobile offshore drilling units are generally marketed on a worldwide basis and are transported between
locations through the use of built-in propulsion systems or external rig-moving vessels.
In recent years, a large influx of newbuild deliveries has created two further classes of units: modern rigs (fifth and
sixth generation rigs) and rigs built prior to 2000. The older class of rigs receive lower day rates compared to
modern rigs and have poorer utilisation visibility, because contract durations and the lead-time between signing
and drilling are shorter.
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Day-rates for semi-submersibles /drillships built before 2000 versus after 2000 (3 months average)

Based on data from IHS Petrodata as of 8 September 2013
7.3.2 The ultra-deepwater market
Oil and gas companies have increasingly ventured into deepwater regions in their search for new reserves, leading
the ultra-deepwater market to experience its strongest period of growth to date. Historically, most ultra-deepwater
rigs operated offshore West Africa, Brazil and in the Gulf of Mexico and these areas still account for the majority of
the ultra-deepwater rigs currently operating. Ultra-deepwater exploration has also expanded to South East Asia,
East Africa as well as China and India. Additionally, oil and gas companies have been moving into Arctic waters
offshore Greenland, Alaska, Russia and Norway.
Geographical market overview key harsh and deepwater locations

Source: Company information
The ultra-deepwater market is dominated by modern rigs: fifth and sixth generation semi-submersibles and
drillships, and is the fastest growing segment in the offshore drilling industry. Industry demand for new and
modern rigs has meant that ultra-deepwater units can also be found operating in shallow water to deepwater
areas, as most new floaters are built with ultra-deepwater capabilities. Due to the large scale of ultra-deepwater
projects, the segment generally benefits from demand visibility and has been relatively resistant to fluctuations in
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Odfjell Drilling locations

54

E&P spending caused by short-term oil price movement. Its long-term outlook has been boosted by several large
discoveries that are being developed into projects with significant drilling intensity.
The number of deepwater discoveries has steadily increased over the past decade. Most of these are expected to
develop into producing fields. The average lead time from discovery to a producing field is usually 6 9 years, thus
development drilling is expected to be one of the key sources of rig demand in the future. Development drilling
typically starts 1 2 years prior to well production.
Offshore discoveries on increasing water depths

Source: Rystad as of 15 February 2013 (fsw: feet of salt water)
According to PwCs Africa Oil and Gas Survey of June 2013, Africa is estimated to hold more than 132 billion barrels
of proven oil reserves, and produced 9 million barrels per day of crude oil in 2011: 81% of this oil production came
from Nigeria, Libya, Algeria, Egypt and Angola. Offshore West Africa is one of the most active ultra-deepwater
regions in the world with a large fleet of ultra-deepwater drilling units in operation, with further rigs under
construction that are expected to enter the market. Following this success, major oil and gas companies have in
recent years directed their attention to East Africa. There is strong growth in this region, and its limited
infrastructure is driving demand for support services, such as engineering, equipment rental and well services.
Activity in this East Africa is currently focused on exploration drilling.
Brazil is another one of the most promising deepwater drilling regions in the world, with an estimated 14 billion
barrels of proven oil reserves, according to the IEA (IEA, World Energy Outlook 2012, 12 November 2012). The
pre-salt fields (Lula, Cernambi and Guara being the biggest) are expected to drive most of the growth in Brazils oil
production. If the resources in the fields mentioned above are proven, they would increase Brazils total proven oil
reserves by up to two-thirds (IEA, World Energy Outlook 2012, 12 November 2012). According to Petrobras, the
Brazilian national oil company, the company will ramp-up its domestic oil production significantly, from current
production of 2.5 million barrels per day to 5 million barrels per day by 2020. Petrobras has been actively procuring
equipment and drilling units to help it achieve this goal, including deepwater and ultra-deepwater drilling rigs.
Petrobras has been one of the most active charterers of ultra-deepwater rigs over the last five years. In 2012,
Petrobras finalised an order with Sete Brasil and its partners for 29 ultra-deepwater rigs to be built in Brazil. These
rigs have each been chartered for 15 years, with delivery scheduled for 48 90 months after the award.
The Macondo incident on 20 April 2010 created short term uncertainties in the oil and gas services industry. After
the US government introduced a federal drilling moratorium, a significant number of rig years (meaning the
number of days the rigs were operating, divided by the number of days in the period) were lost in the Gulf of
Mexico. Drilling activity in the Gulf of Mexico has since resumed, with several new contracts being awarded since
the Macondo incident and the region is currently one of the most active ultra-deepwater drilling regions in the
world.
The global fleet of ultra-deepwater rigs has grown significantly over the past decade. As the graph below
illustrates, the fleet has multiplied since 2000.
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Number of ultra-deepwater rigs in the market (including 4 rigs in 2015 ordered by Sete Brasil and partners for 2015
delivery

Average day-rates for ultra-deepwater rigs fell from their peak of approximately USD 600,000 per day in 2008 and
decreased to approximately USD 410,000 in 2010, before steadily increasing again as contracting activity
improved. As of 6 September 2013, the market is deemed to be strong, with several ultra-deepwater contracts
reported within the range of a high of USD 500,000 per day and a low of USD 600,000 per day.
Average day rates for ultra-deepwater fleet (3 months average)

7.3.3 The harsh environment market
Oil exploration and development is increasing in colder and more remote areas, such as the Arctic, off of the west
coast of Australia and the Falkland Islands. These harsh environment locations are often characterised by low
temperatures, rough seas, strong winds, limited daylight and in some cases the challenges of encountering ice.
These conditions impose high barriers to entry from an operational perspective, thus suppliers in the harsh
environment market have tended to enjoy higher utilisation rates and both longer contract durations and lead-
times compared to other offshore drilling markets.
Rigs designed to operate in harsh environments are built to higher specifications than rigs intended for non-harsh
environments. They are usually semi-submersibles due to their superior stability in rough seas. These rigs are also
equipped with a larger generator capacity for greater thruster power as well as increased lighting and heat-tracing.
The derrick and other deck locations are often winterised (meaning working areas on deck are covered and
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sheltered) for a safer working environment. Modern harsh environment rigs are designed to operate in all seasons,
ice conditions permitting, whereas older harsh environment rigs cannot work during the winter in certain areas.
Because of their specialised features and the need to comply with extensive regulatory requirements, harsh
environment rigs cost more to build than rigs intended for non-harsh environments. As harsh environment rigs are
more expensive to build, they usually command a premium day rate, as illustrated in the table below. However,
day rates will fluctuate depending on the demand for harsh environment rigs. As drilling activity in harsh
environments is projected to increase while the pool of suitable rigs remains limited, harsh environment rigs are
expected to continue to command premium day rates in the future.
Day rates for harsh and non-harsh 3
rd
generation and newer semi-submersibles (3 months average)

7.3.4 The Norwegian rig market
The Norwegian rig market has some of the highest barriers to entry in the drilling industry, as all rigs operating on
the NCS need to meet more stringent regulatory requirements and special technical requirements. These
requirements have limited the supply of new rigs in Norway, and few newbuilds delivered in recent years have
been built according to Norwegian specifications. The historical development and current size of the fleet of semi-
submersibles and drillships on the NCS is illustrated below. Due to limited supply of suitable rigs, contract coverage
for the semi-submersible fleet in Norway is relatively high, giving companies operating in Norway relatively good
visibility on rig utilisation.
Fleet of semi-submersibles and drillships in Norway

From its peak in 2000, Norwegian oil production has declined. To compensate for this declining trend, the number
of drilled wells has increased significantly since 2008. According to the CEO of Petoro, manager of the Norwegian
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Governments oil and gas licenses on the NCS, there is a substantial challenge to secure sufficient rigs to drill
production wells for securing the value in existing fields as well as exploration wells (Petoro Annual Results 2012).
Continued high drilling activity on the NCS

Source: Norwegian Petroleum Directorate 2012
Some of the largest discoveries on the NCS to date were made in 2011 and 2012: the major Johan Sverdrup oil
and gas field in the North Sea and the Skrugard and Havis discoveries in the Barents Sea. Drilling contracts in
Norway generally have shown longer durations and longer lead times compared to other comparable offshore
drilling markets. Most of the recent awarded day rates for modern and high-specification semi-submersibles in
Norway range from USD 480,000 USD 580,000, depending on contract type and length.
Operating expense and tax levels, which affect the level of day rates, vary significantly across different markets
and the Company believes that the UK is the closest peer market to the Norwegian rig market, although operating
expenses generally are significantly lower in the UK due to the Norwegian crew rotation requirements. Recently,
there has been an increased demand for standard semi-submersibles in the UK which has led to day-rates higher
than USD 350,000. As a result of certain changes brought in by the UK government, there is now greater certainty
regarding taxation and allowances on the UK Continental Shelf (the UKCS) going forward, which is expected to
result in a decrease in decommissioning activity on the UKCS. The rig market in the UK works as an alternative
market for rigs operating in Norway. It is less complicated to relocate a rig operating in Norway to the UKCS than it
is to relocate a rig from the UKCS to the NCS, due to the high barriers to entry in the NCS.
It is expected that there will be a continued need for fleet renewal in Norway over the next few years, especially
since the Macondo incident has highlighted the importance of having modern equipment. Almost 50% of the
floaters operating in Norway are more than 20 years old and the average age of the floater fleet is close to 19
years. The lifetime of a rig is typically 30 35 years, although major upgrades and maintenance projects can
significantly extend this.
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Age profile of floaters in Norway

7.3.5 The newbuild market
As shown in the chart below, very few new rigs were ordered between late 2008 and late 2010. A large number of
orders were subsequently placed in the fourth quarter of 2010 and the first quarter of 2011, mostly by established
drillers. Since the end of 2011, newbuild activity has been relatively high and Sete Brasil, together with partners,
has placed orders for 29 rigs to be built in Brazil.
Time of order for rig newbuilds (excluding 29 units ordered through Sete Brasil and its partners)

Newbuild prices have come down from their peak in mid-2008. The yard cost for a standard ultra-deepwater
drillship or semi-submersible can vary considerably depending on the equipment and specifications. The latest
orders of ultra-deepwater drilling units have generally cost between USD 530 million and USD 560 million in yard
cost. A yard cost of between USD 530 million and USD 560 million typically translates into a total cost of between
USD 600 million and USD 650 million, which includes the cost of, among other things, capitalised interest, spare
parts, contingency and construction management. Harsh-environment semi-submersibles are more expensive to
build than drillships as they have more complex specifications.

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The graph below illustrates the age profile of the floater fleet.
Age profile of floater fleet (Sete Brasil rigs included with expected delivery starting 2015 onwards)

7.4 The well services market
Odfjell Drillings Well Services segment provides a wide range of services to the drilling industry, including tubular
and casing running services, drill tool rental, fishing services and well bore cleaning. The clients and consumers for
these service areas are oil and gas companies involved in drilling operations, both onshore and offshore.
Tubular and casing running services involve the handling and installation of multiple joints of pipe to establish a
closed and controllable perimeter for the well (the casing) and the installation of a smaller pipe inside the wellbore
to transport oil and gas from the reservoir to the surface (the production string). The casing of a wellbore isolates
the wellbore from the surrounding geologic formations and water table, provides structural integrity and pressure
resistance, and allows well operators to target specific zones for production. Efficient tubular services are vital to
the management of the overall cost of a well, and are therefore an important part of the process of producing oil
and gas.
The well services industry is subject to the same market drivers that affect the offshore oil and gas services
industry generally. See Section 7.2 General industry drivers. Well service providers also supply services to
onshore drilling operations, thus they have access to a considerably larger market than just the offshore drilling
sector.
An increased emphasis on improving safety standards and reducing the risk of pollution has increased oil and gas
companies focus on well integrity, particularly in offshore environments. Given the central role casing and tubular
running services play in ensuring the structural integrity, reliability and safety of a well, the quality and reputation
of companies that provide these services are becoming increasingly important to winning contracts. As of 6
September 2013, Rystad estimates that USD 28 billion will be spent on offshore well service activities in 2013,
representing approximately 8% of total offshore E&P spending (USD 358 billion) in 2013. As wells become more
complex and are drilled to greater depths, tubular services must provide solutions to increasingly challenging
technical problems. Onshore wells are being constructed with longer horizontal laterals and deviated well bores,
while offshore drilling is being carried out in deeper waters and to greater well depths. This requires longer and
heavier strings, as well as tubular handling equipment capable of accommodating a more elaborate spectrum of
equipment and hydraulic control lines deployed inside the well. These complicated drilling methods require new and
more complex tubular services which are causing suppliers to develop new techniques and specialised tools to
satisfy client demand.
The costs of deepwater drilling have increased with their complexity. Although several recent fixtures of ultra-
deepwater rigs have been reported just below or above USD 600,000 per day, the total cost per day of drilling
offshore, after including all related services, frequently exceeds USD 1,000,000. Consequently, it is important for
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oil and gas companies to have efficient tubular services in order to minimise cost and maximise productivity. Oil
companies generally spend more money on tubular services for more complex offshore wells compared to onshore.
Offshore well service spending by geographical areas

Source: Rystad as of 6 September 2013
The casing and tubular running services sector is composed of a few large international service companies as well
as smaller, local companies that operate in a limited geographic area.
7.5 The drilling and technology market
Odfjell Drilling engages in operations of offshore drilling platforms and the provision of engineering and support
services through its Drilling & Technology business segment. The industry drivers described in Section 7.2 General
industry drivers also apply to this market. On the NCS, Statoil is the leading operator: the rigs it operates account
for the majority of all oil and gas production on the NCS. Demand for drilling and technology services on the NCS is
thus largely dependent on Statoils E&P spending.
Offshore E&P spending on maintenance on the NCS by Statoil

Source: Rystad as of 6 September 2013
7.5.1 The platform drilling market
Onshore drilling on a producing field is carried out from fixed platforms, whereas offshore drilling on a producing
field may be carried out through the use of either mobile offshore drilling units or fixed or floating platforms with
built-in drilling equipment. Such equipment also enables the production facility to conduct maintenance on existing
wells without the use of mobile offshore drilling units. Platform drilling services relate to the provision of a
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specialised crew to operate the drilling equipment on board fixed or floating platforms. This crew is also responsible
for the maintenance of all equipment relating to drilling operations.
The job of the platform drilling crew is very similar to the work performed by the drilling crew on mobile offshore
drilling units, with some differences depending on whether the wellhead is dry or submerged, and on the drilling
equipment, which may be automatic or manual. On facilities with dry wellheads, the blowout preventer (BOP) is
located on deck, whereas on facilities with wellheads located on the seabed, the BOP is placed on the wellhead and
is often referred to as a subsea BOP. The drilling equipment associated with subsea BOPs is very similar to the
equipment used on floating drilling rigs, while the equipment for surface located BOPs is similar to the equipment
used on jack-ups and onshore drilling rigs. Most of the production facilities that Odfjell Drilling services are fixed
platforms that stand on the seabed and have surface BOPs.
There are a variety of offshore production platforms that have been built with their own drilling equipment. These
include Spars, Tension Leg Platforms (TLPs), semi-submersibles and Floating Production Storage and Offloading
units (FPSOs). Whether a production facility is built with its own drilling equipment depends on a variety of factors.
Water depth is an important factor: it is more common to install drilling equipment on a fixed production plant for a
large field than on a floating deepwater installation. The size of the field and the expected number of wells to be
drilled is another factor. The characteristics of the reservoir and the accessibility of hydrocarbons from the
production plant are also important parameters. The graph below shows how many of the common types of
floating deepwater production platforms operating worldwide are built with its own drilling equipment.
Number of production units worldwide (with and without drilling capabilities)

Based on data from IHS Petrodata FPSO base as of 9 September 2013
The demand for platform drilling services is directly linked to the number of active platform drilling contracts in the
market. A stabile, high oil price that will support the aim of oil and gas companies to maintain production on their
existing fields and new technology that increases overall recovery rates are also important drivers for the platform
drilling services industry. The number of new production platforms built with their own drilling equipment also
affects the level of activity in the market.
The market for platform drilling contracts on the UKCS and NCS has been relatively stable and predictable in recent
years, as illustrated in the chart below. Further growth is expected as there is a pipeline of new contracts for
drilling in locations such as the Mariner, Bressay, Clair Ridge and Gudrun fields.
The platform drilling services market on the NCS and UKCS is dominated by KCA Deutag, Archer and Odfjell
Drilling. Outside the North Sea, the industry is serviced by several smaller companies, often with local focus. KCA
Deutag is the worlds largest platform drilling company and has operations all over the world.
212
109
14 5
20
7
2
0
36
16
3
21
78
0
50
100
150
200
250
FPSO FSO Semi Spar Other TLP Total # of units
with drilling
module
No drilling module With drilling module
62

7.5.2 The engineering market
There is demand for engineering services at all stages of offshore drilling units life cycle. Engineering services are
requested for the design of newbuilds as well as for the modification and maintenance of existing offshore drilling
units, both fixed and floating. Engineering expertise may also be needed when units are to be decommissioned.
Demand for engineering services is thus affected by several factors, but foremost the level of activity in the
offshore oil and gas industry. For Odfjell Drilling, the activity in the North Sea is of particular importance as this is a
core market for the Company. The need for modifications to existing rigs and platforms is dependent on the age of
the respective rig or platform, changing reservoir characteristics for the relevant fields and general maintenance
requirements. As a large number of oil and gas drilling units approach the end of their designated life expectancy,
life enhancement programmes or decommissioning projects are other sources of demand for engineering services.
Engineering services within the offshore oil and gas industry are either provided for a specific project or to a
particular client over a period of time. Projects provided over a period of time typically relate to maintenance, to
ensure offshore drilling equipment is in the condition stipulated by relevant regulations, or such projects may be
provided under frame agreements where the engineering company is tasked with the assessment and upgrading of
platforms. Project specific engineering services typically have a more defined scope, and may relate to a specific
modification on a rig, a newbuild project or preparations for a yard stay.
The offshore engineering market is predominantly serviced by specialised engineering companies and yards
specialising in the maintenance, modification and upgrade of offshore drilling and production units.

63

8 BUSINESS OF THE GROUP
8.1 Business overview
Odfjell Drilling is an integrated drilling, engineering and well services provider with more than 40 years of
experience focusing on the offshore harsh environment and deepwater markets. Today the Group has
approximately 3,100 employees operating in more than 20 countries worldwide. Odfjell Drilling operates through
three segments: Mobile Offshore Drilling Units (MODU), Well Services and Drilling & Technology. Odfjell Drillings
clients are primarily major oil and gas companies. Below is an overview of the segments of Odfjell Drilling:

The following table sets forth each segments revenues, EBITDA, plant, property and equipment (PP&E) and
number of employees for the year ended 31 December 2012.

Year ended 31 December 2012

MODU Well Services Drilling & Technology
Revenues (USD millions) ........................................................................................ ...................... 693.4
1
208.2 316.0
EBITDA (USD millions) ........................................................................................... 285
1
95 25
PP&E (USD millions) ............................................................................................. 2,311
2
176 -
Employees (as of 30 June 2013) .............................................................................
1,013
3
449 1,520

1 Including 40% of Deep Sea Metro.
2 Includes property, plant and equipment for the Drilling Units, periodic maintenance and construction in progress and 40% of non-current assets of
Deep Sea Metro.
3 Includes Deepsea Metro II personnel in Brazil.
8.1.1 Mobile Offshore Drilling Units (MODU)
In the MODU segment, the Group operates drilling units owned by the Group and by third parties. Odfjell Drilling
currently owns the three harsh environment semisubmersible drilling rigs Deepsea Atlantic, Deepsea Stavanger
and Deepsea Bergen. Deepsea Atlantic and Deepsea Stavanger were delivered in 2009 and 2010, respectively, and
are both sixth-generation ultra-deepwater semisubmersible drilling rigs. Deepsea Bergen is a third-generation
semisubmersible drilling rig built in 1983 and has been continually upgraded to meet changes in regulatory
requirements and client demands. Further, through a joint venture, Deep Sea Metro, the Group has a 40%
ownership interest in two sixth-generation ultra-deepwater drillships, Deepsea Metro I and Deepsea Metro II, which
were delivered in 2011. The Group charters its drillings rigs through a mixture of medium- and long-term contracts
with major oil and gas companies, which include Statoil, BP, BG and Petrobras.
The Group has one harsh environment ultra-deepwater semisubmersible drilling rig under construction with
expected delivery from DSME in May 2014. The rig will be named Deepsea Aberdeen and is contracted to BP
Exploration for a period of seven years with expected commencement of operations in the fourth quarter of 2014.
In addition, the Group holds a 50% ownership interest in Odfjell Galvo B.V., a joint-venture company established
with Galvo Oil and Gas Holding B.V. Odfjell Galvo B.V. holds 20% of the shares in three Dutch special purpose
companies, each of which has entered into an engineering, procurement and construction contract with Dolphin Rig
7 PTE LTD, Dolphin Rig 3 PTE LTD and Dolphin Rig 5 PTE LTD, respectively, for the construction of a drillship mainly
at Estaleiro Jurong Aracruz in Brazil. A guarantee has been issued by the Jurong Shipyard PTE LTD in favour of the
three Dutch special purpose companies for the prompt payment and performance of all covenants, agreements,
64

obligations and liabilities of the three Dolphin Rig entities. All three drillships are based on the Jurong shipyards
proprietary Espadon drillship design. The shipyard is in the process of constructing a prototype of this drillship at
their own risk. The drillship is currently being constructed in Singapore, following which it will be moved to Brazil
for completion in order to satisfy local content requirements in Brazil. The drillships are expected to be delivered in
July 2016 (Guarapari), August 2017 (Itaoca) and December 2018 (Siri). The remaining 80% ownership of these
companies is held by Sete Brasil. Each of the three special purpose companies has entered into a fifteen-year rig
contract with Petrobras. The drillships are part of the Project Sete newbuilding programme, pursuant to which Sete
Brasil will build 29 rigs for Petrobras in Brazil. As of 30 June 2013, USD 6.4 million of Odfjell Drillings USD 45
million investment commitment in Odfjell Galvo B.V. has been paid. The remainder is expected to be paid over
the period up to 2018.
The MODU segment also offers management services to other owners of semisubmersibles, drillships and jack-ups,
mainly operational management, management of regulatory requirements, marketing, contract negotiations and
client relations, preparations for operation and mobilisation. Odfjell Drilling is currently responsible for the
management of the following mobile offshore drilling units owned by third parties or owned jointly by the Group
and third parties: (i) Deepsea Metro I and Deepsea Metro II and (ii) Island Innovator. In addition, Odfjell Galvo
Perfuraes Ltda, a subsidiary of Odfjell Galvo B.V., is to provide management services to Petrobras in connection
with the fifteen-year rig contracts on the three drillships to be delivered under the Brazilian joint-venture
mentioned above. Odfjell Drilling only offers management services to rigs owned by third parties to the extent such
rigs will not directly compete with rigs owned by Odfjell Drilling. Below is an overview of Odfjell Drillings history in
MODU management:

8.1.2 Well Services
The Well Services segment provides casing and tubular running services (both automated and conventional) as well
as drilling tool and tubular rental services, both for exploration wells and for production purposes. The Group
provides services in more than 20 countries, from 11 bases in Europe, Asia and the Middle East, with particular
focus on the offshore markets in the North Sea and the Middle East. In total, the Group provides well services to
more than 50 drilling rigs. Odfjell Drilling has more than 30 years of experience in the global well services market,
and the Company is of the opinion that it is one of the leaders in remote operated handling equipment for casing
and tubular running services. In the drilling tool rental business, the Group benefits from a well-developed supplier
base, and offers a large inventory of modern and high quality drilling tools and equipment, which have been
manufactured and certified in accordance with applicable industry standards. It aims to be a single supply source
for drillers and operators and also has the capability to design custom-made equipment. The Well Services
segment currently serves approximately 50 clients, of which 10 constitute material volumes.
8.1.3 Drilling & Technology
The Drilling & Technology segment is divided into two business areas: Platform Drilling and Technology. The main
service offering of the Platform Drilling business area is production drilling and well completion on clients rigs.
Other types of services offered are slot recovery, plug and abandonment, work-overs and maintenance activities.
In this business area, the Group offers platform drilling services on both fixed production platforms and on floating
production platforms with subsea blowout preventers (BOPs). The Group has 35 years of experience in platform
drilling operations and has been one of the leading platform drilling service providers in the North Sea since the
1980s, focusing on the high-end of the market for platform drilling services. Within the Platform Drilling business
area, the Groups clients are Statoil, BP, Talisman, TAQA and Wintershall (operations under the contract with
Wintershall are expected to commence in October 2013).
Controlled
units
Third
party
1970 1980 1990 2000 2010
Atlantic
Bergen
Delta
Stavanger
Aberdeen
Itaoca
Siri
Guarapari
Metro I
Metro II
Freedom
Intrepid
Stardrill
Duchess
Ice
Chancellorville
Lomond
Southern Cross
Pioneer
Island Innovator
Dalian Developer
Driller
Saga
Trym
Gulnare
Amazone
Matdrill
Cicero
Viking Driller
Pacific
Petrolia
Chris Chenery
Omega
Trym
Delta
65

The Technology business area offers engineering services ranging from design and engineering to building
supervision, project management and operational support for newbuild projects, SPS certifications and yard stays.
The Technology business area performs smaller or medium sized stand alone projects, including engineering,
procurement, construction and installation projects. The services are provided internally and to external clients that
represent a diverse group, consisting mainly of owners of mobile offshore drilling units and oil and gas companies.
The Technology business area has a successful track record of MODU newbuild projects and yard stays spanning 40
years. It also occupies a strong position in the North Sea market. With respect to newbuild projects, the Group
currently provides engineering services mainly to Odfjell Drillings own units (Deepsea Atlantic (2006 2009),
Deepsea Stavanger (2007 2010), Deepsea Metro I (2008 2011), Deepsea Metro II (2008 2011) and Deepsea
Aberdeen (2012 present)). With respect to yard stays, the Technology business area provides services to drilling
contractors and to both internal and external clients (e.g. the Drilling Units, Songa Trym (2011 2012), Songa
Delta (2011 2012) and Island Innovator (2012 2013)). The Technology business area has operations in the
North Sea, Singapore, the Philippines, South Korea, Brazil, Angola and Tanzania and has approximately 400
employees and 90 contractors in total. Its offices are located close to its key clients in Norway (approximately 290
employees and 60 contractors), the UK (approximately 10 employees and 25 contractors) and the Philippines
(approximately 50 employees). Since 1973, the Group has been successfully involved in 31 newbuilding projects
and more than 70 commissioning, upgrade and renewal projects on fixed and floating drilling units.
The Group holds a 50% ownership interest in Ross Holding AS, the parent company of Ross Offshore AS, which is a
provider of well and reservoir management services, including carbon storage. The joint venture was formed in
connection with Odfjell Drillings sale of Odfjell Well Management AS to Ross Offshore AS in 2011. See Section 8.4
History. The Group also holds a 50% ownership interest in PSW Group AS, a drilling and subsea service provider.
8.2 Competitive strengths
8.2.1 An experienced, integrated and safe drilling service provider
The Group is an integrated drilling services provider, building on experience and expertise developed during its 40-
year operating history of delivering an integrated portfolio of complementary drilling and engineering services to its
clients. The Company is of the opinion that its integrated business model provides the Group with a competitive
advantage in its core markets due to its expertise in multiple areas of drilling services, its integrated operations
and its large organisational size.
The Group has extensive experience in harsh environment and deepwater drilling. In particular, the Company has a
strong footprint on the NCS, which is one of the most demanding offshore markets with high barriers to entry due
to stringent regulatory and technical requirements. The Group has a long-standing and strong relationship with
Statoil, the major oil and gas company on the NCS, dating back to 1979. Odfjell Drillings strong operational track
record is further evidenced by the Groups ability to maintain relationships with other major oil and gas clients such
as BP, Petrobras and BG through long-term contracts. For example, following the agreement for the first rig
contract entered into with BP in 1977 regarding the rig Deepsea Saga, the Group has secured several contracts
with BP across all of its segments. Odfjell Drilling has maintained these relationships in its core markets and as it
has pursued global expansion into Brazil and Africa.
Operationally, the Group not only has an advanced harsh environment and ultra-deepwater drilling fleet, the
Groups Well Services and Drilling & Technology segments are also focused on harsh environment and ultra-
deepwater areas, thereby allowing the Group to support its clients in challenging operations through
complementary services. The Company believes that its operational experience, capabilities and expertise in harsh
environments and complex wells across all three of its segments provide a competitive advantage as the drilling
industry moves towards regions with harsher environments, deeper waters and more complex wells.
The Group has also developed and maintained a strong QHSE culture and performance. After the Macondo incident,
there has been an increased focus in QHSE issues by regulators. As a result, many major oil and gas companies
have imposed increasingly stringent QHSE rules on their contractors, especially in challenging regions where the
QHSE risks are higher. Odfjell Drilling is pre-qualified to tender for a number of potential clients where QHSE track
record is one of the key criteria taken into consideration. Furthermore, Odfjell Drilling has been awarded Talismans
Best Performance by Key Contractor Partner in 2010 and BPs Key Supplier Safety Award in December 2012 and
was the first operator to enter into a deepwater drilling contract with BP after the Macondo incident. The Company
66

is of the opinion that it benefits from its strong QHSE track record and standards when competing for new
contracts.
8.2.2 Modern and advanced fleet of ultra-deepwater and harsh environment drilling units
Odfjell Drilling operates a modern and advanced harsh environment and ultra-deepwater drilling fleet. The
semisubmersible drilling rigs Deepsea Atlantic and Deepsea Stavanger are, and the newbuild semisubmersible
drilling rig Deepsea Aberdeen will be, capable of operating in ultra-deepwater and harsh environments. The
midwater semisubmersible drilling rig Deepsea Bergen is capable of operating in harsh environments. The drillships
Deepsea Metro I and Deepsea Metro II are sister vessels, and Deepsea Atlantic and Deepsea Stavanger are sister
rigs. Further, Deepsea Aberdeen will have the same design as Deepsea Atlantic and Deepsea Stavanger.
The similarity of the Drilling Units allows for interoperability among crews and operating systems, which may allow
members of the Groups crews to serve interchangeably amongst the sister units. Additionally, the similarity in
technical specifications and equipment makes spare parts interchangeable amongst the sister units, reducing the
capital requirements associated with keeping spare parts in stock and lowering maintenance and supply chain
costs. The Company believes that the relative uniformity of the MODU assets and efficient rig management
systems allow Odfjell Drilling to operate with a competitive cost structure and improved efficiency. The Groups
Well Services and Drilling & Technology segments are well-suited to support efficient operations of the MODU
assets.
8.2.3 Strong well services and engineering competence with demonstrated project execution capabilities
The Group is one of the leading providers in the market for tubular running services. The Groups Well Services
segment has a technologically advanced product and service portfolio, which includes automated tubular running
services, remote operated handling equipment and a rental business with a large inventory of down-hole tools. The
Company believes that its Rental Equipment is among the most modern in the industry and has been manufactured
to high industry standards. The Well Services segment also has a proven track record of establishing and
developing new services and business from in-house technological developments, joint developments with external
parties and from being an early adopter of new commercially available technology. For example, the new
generation, fully mechanical, Casing Running Tool (CRTi) has had a positive impact on the Groups casing
operations by reducing the number of required personnel, saving rig time and improving safety by eliminating the
need for personnel presence in high-risk working areas on the drill floor. The CRTi is also expected to increase the
success rate of setting casing through problem zones. The technological achievements of the Technology business
area have led to improved quality and safety results in its operations, and have reduced the impact of its
operations on the environment.
The Well Services segment has demonstrated steady revenue growth (CAGR of 12% in the period 2009 2012,
with an average annual EBITDA margin of 44% during the same period) and has historically provided consistent
cash flow to the Group. The Company foresees growth opportunities in its Well Services segment, with its
expanding client base and its Rental Equipment supplied in more than 20 countries providing a basis for growth.
The Well Services segment is a key element of the Groups strategy of providing integrated drilling services to
clients. The segment has expanded gradually to markets such as Africa, Brazil and the Middle East, and expects to
find further growth opportunities by following clients from other segments to new regions.
Odfjell Drilling has more than 400 skilled engineers (including 90 contractors). The engineers support all three
segments; their services include newbuilding supervision, project management, surveys and upgrading in the
MODU segment, detail engineering related to Rental Equipment and remote operated casing services in the Well
Services segment and upgrading or maintenance of drilling equipment and general modifications in the Drilling &
Technology segment. Since 1973, the Group has been successfully involved in 31 newbuilding projects, more than
70 commissioning, upgrade and renewal projects on fixed and floating drilling units, and has implemented
innovative design and technology with core expertise within harsh environment and deepwater drilling operations.
For example, the Group has introduced innovative technologies such as integrated onshore support centres with
real-time transfer of operational and technical data between the offshore drilling units and the onshore support
centres, which facilitate the movement of personnel from offshore to onshore, resulting in more accurate and
efficient support to the offshore operations and projects. These capabilities are important for running cost-efficient
operations on the platforms in the Drilling & Technology segment and for the MODU segment where the
engineering capabilities of the Group allow the Group to take delivery of drilling units and operate them in an
efficient manner.
67

The Group is a leading provider of fixed platform drilling services for rigs located on the NCS and UKCS. Currently,
the Group has a large number of contracts in its Drilling & Technology segment. Notably it was awarded the
maximum number of contracts allowed to be awarded to a single contractor from Statoil in 2012. The average
contract length (including optional periods) remaining as of 30 June 2013 for the Groups Drilling & Technology
segment was 8.7 years per platform. As contracts for 10 out of 20 platforms are still in their first year of operation
or have not started as of 30 June 2013, the Drilling & Technology segment is expected to experience a sustained
and high level of activity in the coming years. In the past, the Group has been able to add and sell other services
under its contracts and thereby achieve greater economies of scale through more efficient usage of overhead and
support functions. The Company intends to build on these experiences to achieve greater cost-efficiencies in the
future. The Groups multiple contact points with its clients across its three segments provide cross selling
opportunities. For example, Odfjell Drilling has been awarded several contracts with BP across its three segments
throughout their long-standing relationship:
Rig contract for Deepsea Saga awarded in 1977 (MODU);
Platform drilling contract on the Gyda platform awarded in 1989 (Drilling & Technology);
Rig contract for Deepsea Duchess awarded in 1992 (MODU);
Well intervention contract on the Gyda and Ula platform awarded in 2002 (Well Services);
Rig contract for Deepsea Bergen awarded in 2003 (MODU);
Well intervention contract on several UK fields awarded in 2003 (Well Services);
Platform drilling contract in the UK sector awarded in 2009 (Drilling & Technology);
Rig contract for Deepsea Stavanger awarded in 2011 (MODU); and
Rig contract for Deepsea Aberdeen awarded in 2012 (MODU).
The same strategy has been followed with other key clients such as Shell, Statoil and BG Group who are the
Groups clients across several segments.
8.2.4 Favourable market dynamics with key Odfjell Drilling strengths matching underlying growth drivers
The global nature of the Groups organisation benefits it by affording the Group: (i) the ability to serve clients in
several geographic locations; (ii) multiple revenue sources; (iii) increased flexibility in asset deployment; (iv) the
ability to expand segment operations through existing relationships in other locations; and (v) the ability to use its
experience in the challenging North Sea basin which is relevant as key growth areas globally are expected to be in
challenging regions. Further, Odfjell Drilling is well-placed to respond to certain key trends in the offshore drilling
industry:
Oil and gas companies are seeking to drill deeper wells in deeper water and in harsher environments
Odfjell Drilling has an advanced fleet of ultra-deepwater and harsh environment Drilling Units;
Drilling operations are increasing in complexity, and are taking place in more challenging reservoirs
Odfjell Drilling has multiple drilling competencies and strong engineering capabilities;
Oil and gas companies are demanding more efficient operations to reduce total well costs Odfjell Drilling
is increasing its automated operations across all of its segments;
There is increasing focus on technology, innovation and the integration of services Odfjell Drilling has a
reputation for quick implementation of new technologies; and
68

Strong focus on QHSE and an increasingly demanding regulatory climate Odfjell Drilling has a strong
QHSE track record, evidenced by its strategic partnerships with BP and Statoil for improved, safer and
more efficient drilling operations.
8.2.5 Solid financial profile with diversified and predictable cash flow
Odfjell Drilling has a mix of long- and medium-term contracts within the MODU segment and the Platform Drilling
business area with an order backlog as of 30 June 2013 of USD 5.7 billion including priced option periods, and USD
3.4 billion excluding priced option periods. Backlog is not calculated for the Groups Well Services segment, the
Technology business area or the rig management contracts in the MODU segment. This backlog provides the Group
with cash flow visibility. The Groups mix of long- and medium-term contracts also provides upside potential if the
Group is able to obtain new contracts upon expiration of old contracts and the drilling market remains strong. In
addition, the Groups presence in the engineering, well services and third-party rig management services sectors
helps provide multiple sources of income from segments, thereby providing more stable cash flow and lower
volatility compared to the MODU segment. The Groups MODU segment, consisting of five drilling units, has been
able to ensure a utilisation rate of approximately 93% for the five drilling units from 1 January 2013 until 30 June
2013. See Section 11.2.2 Revenue generation. Deepsea Aberdeen is expected to commence its contract with BP
in the fourth quarter of 2014 and contribute to an increase in EBITDA thereafter. Odfjell Drilling generally had good
performance in the first half of 2013 with growth in EBITDA from all segments compared to the first half of 2012.
8.2.6 Highly experienced organisation with reputable and experienced management team
The Groups senior management team has extensive experience in the oil and gas industry, and particularly in
oilfield services, drilling and engineering, both at the corporate and divisional level, with an average of 24 years of
experience. In addition, the Group has developed significant human capital throughout the organisation based on
its long history and strong ability to attract and retain competent personnel as a result of its reputation as an
attractive employer. Through the Groups employee development programmes, a strong QHSE culture has been
established, which the Company believes is a strong competitive advantage. The Company believes that the
management teams experience, technical expertise and strong client relationships, together with its continued
investments in the Groups employees, enhance its ability to deliver superior service to clients and operate
effectively on a global basis.
8.3 Overall strategy
The Group has developed an overall business strategy that includes the following elements:
8.3.1 Continue to focus on the harsh environment and ultra-deepwater markets
As a result of an increase in long-term demand for oil and gas and the depletion of existing reservoirs, it is
expected that offshore drilling activities will increasingly move towards the more under-developed regions which
are generally characterised by harsher environments and deeper waters. The Groups strategic goal is to be the
preferred partner for drilling operations, engineering projects and well services in the harsh environment market
and selected ultra-deepwater markets. In support of this strategy, the Groups MODU segment will take delivery of
a new harsh environment ultra-deepwater semisubmersible drilling rig in May 2014, and continue to increase
technical expertise and capabilities operating in these regions in the Drilling & Technology and Well Services
segments.
8.3.2 Increase cost efficiencies without compromising on health and safety standards
The Group is pursuing ways to increase cost efficiencies and it intends to continue to do so without compromising
its QHSE standards. The Group has introduced several initiatives to save costs including pursuing greater
operational integration by moving offshore positions onshore and selected onshore positions to lower cost
countries. For example, the Group has approximately 50 employees in the Philippines providing engineering and
support functions. As a large drilling services provider, the Group will continue to look for synergies by
standardising procedures, technology, systems and controls. The Company also expects to benefit from economies
of scale due to the relative uniformity of the fleet in combination with business expansion in geographical areas
where the Group is already present.
8.3.3 Prudent expansion
Historically, Odfjell Drilling has expanded its business in a prudent and conservative manner and the Company
expects to continue pursuing growth that is sustainable and within acceptable risk parameters. The Company is
69

aiming for organic expansion within all three of its segments, but intends to enter new markets by pursuing a
prudent growth strategy which may be achieved through joint ventures with local partners in order to reduce risk
and also to leverage local partners expertise operating in the market. The Company intends to promote all three
segments and capitalise on cross-selling opportunities when expanding and entering into new markets. As an
example, following the first rig contract entered into with BP in 1977 regarding the rig Deepsea Saga, the Group
has secured several contracts with BP across all of its segments. Further, the Company intends to grow its MODU
fleet by ordering additional rigs to the extent that it is able to secure acceptable advance contracts or is following
advanced leads or discussions with strong, credit-worthy clients and the Company has appropriate balance sheet
capacity to accommodate such projects. The Company does not intend to order additional MODU rigs on a
speculative basis. For example, the Group commenced the construction of Deepsea Aberdeen after entering into a
rig contract with BP. The Company is of the opinion that the Listing will enhance the Groups ability to pursue this
strategy by broadening its investor base and providing it with additional means to finance expansion.
8.3.4 Achieve a balanced portfolio that includes a diversity of clients, a mix of medium- and long-term
contracts, and growth across all of its segments
All of the Drilling Units are contracted to major oil and gas companies such as Statoil, BP, Petrobras and BG. Across
the Groups Drilling & Technology and Well Services segments, the core client base includes Statoil, BP, Talisman,
Shell, Schlumberger and Halliburton. The Company intends to focus on building strong long-term relationships with
a diverse range of oil and gas and service companies who can benefit from the Groups wide service offering.
In addition to having a diverse and strong client base, the Company intends to maintain a balanced mix of
medium- and long-term contractual periods in order to secure more predictable earnings as well as the capacity to
react to and benefit from market improvements.
As the three segments provide the Group with different strengths and exposure to market risks, the Company
intends to grow its three segments proportionally going forward. While the Groups MODU segment requires a high
initial capital investment and exposes the Group to greater price volatility when contracts are renegotiated, the
Drilling & Technology and Well Services segments are less capital intensive and provide the Group with a steadier
source of income with relatively lower market risks. The diversity of segments provides the Group with a
competitive advantage as an integrated drilling service provider, and also allows the Group to manage its business
and market risks more efficiently.
8.4 History
8 February 2013 marked the 40-year anniversary since the Companys predecessor was founded. Odfjell Drilling
can, however, trace its roots back to 1914, when the shipping company Odfjell A/S was first established,
developing into an industry leader in the chemical tankers shipping industry. Towards the end of the 1960s, the
Odfjell family decided to construct a semisubmersible drilling rig in Norway, built and funded by Norwegians, as the
activity in the oil industry was growing rapidly. In October 1971, the Odfjell family led a Norwegian investment
group that formed the company Deep Sea Drilling Company A/S.
The Aker group was initially a key partner of Odfjell Drilling, as its first construction contract was signed with Aker.
After meeting several oil companies, a drilling contract was agreed with ELF in Paris on 15 January 1973, and the
rig was delivered on 15 February 1974. This contract breakthrough and subsequent successful newbuild
development, led to the establishment of Odfjell Drilling and Consulting Company A/S, which was later renamed
Odfjell Drilling A/S, on 8 February 1973.
When the Statfjord A platform was built, Odfjell Drilling rented its core machinery to the operating company,
Mobil. Based on its past experience, Odfjell Drilling was able to build, own and operate drilling facilities for Mobils
new and prestigious Statfjord B platform in 1978. This was the first platform drilling contract ever awarded to a
Norwegian company. In the years that followed, Odfjell Drilling established services in casing handling, tool rental
and maintenance of drilling equipment, and well maintenance and engineering services. In an industry that was
changing rapidly, the Group diversified its services to maintain a foothold in several business and geographical
areas. In 1977, Odfjell Drilling established an office in the UK with the aim to manage its business on the UKCS.
The Groups presence in the UK has gradually increased over the years.
In the 1980s, Odfjell Drilling acquired ownership of several drilling rig projects in Asia. Accordingly, Odfjell Drilling
Asia Pte Ltd was established in Singapore with the responsibility to manage the Groups involvement in ten
70

different rigs and drillships that were active in Southeast Asia. In parallel with the projects in Asia, the Group also
had the drilling rig Omega offshore South Africa, and further had presence in Italy, Benin and Libya. The Groups
well service division secured contracts in the Netherlands, the UK and Canada in the 1980s, and, as its business
grew geographically, the services it offered were managed from offices and bases in 20 countries across Europe,
Africa and Asia. Today, several international contracts are managed from the office in Dubai, UAE.
During 2002 and 2003, a new business was established in Aberdeen, UK to manage new platform drilling contracts
for fixed installations. In recent years, the Group has succeeded in its strategic establishment in Brazil and a new
office in Rio de Janeiro today monitors drilling activities in Brazil. With drilling activity in Europe, Africa and
America, and well service activities also in Asia, Odfjell Drilling has established a global presence.
In recent years, the Group has completed several material transactions, including: the listing of Odfjell Invest Ltd.
(a jack-up drilling company) in 2004 (divested in 2005); the listing of the second Odfjell Invest Ltd. (a company
owning semisubmersible drilling rigs) in 2006 (the company was delisted in 2009 and became wholly-owned by
Odfjell Drilling in 2010); the sale of the offshore mobile drilling units Deepsea Trym and Deepsea Delta in 2007 and
2008, respectively; the sale of Odfjell Consulting AS in 2010; the sale of Odfjell Well Management AS in 2011 and
the sale of Deep Sea Mooring AS and related mooring equipment in 2013. These dispositions have been part of the
Groups strategy to complete a significant fleet renewal in which focus has shifted from mid-water drilling rigs to
drilling rigs capable of ultra-deepwater drilling in addition to adjustment of its portfolio of services in order to meet
changing market conditions.
Throughout the Groups 40-year-long history, Odfjell Drilling has owned many different types of rigs, from jack-ups
to floating rigs and drillships. Over the past few years, Odfjell Drilling has completed a significant fleet renewal,
shifting its focus from mid-water drilling rigs to drilling rigs capable of ultra-deepwater drilling. Today, Odfjell
Drilling owns two sixth-generation ultra-deepwater harsh environment semisubmersible drilling rigs, Deepsea
Stavanger and Deepsea Atlantic, in addition to one third-generation harsh environment semisubmersible drilling
rig, Deepsea Bergen. The Group has an additional sixth-generation ultra-deepwater harsh environment
semisubmersible drilling rig under construction, Deepsea Aberdeen, and a 40% ownership interest in two sixth-
generation ultra-deepwater drillships, Deepsea Metro I and Deepsea Metro II and an indirect 10% ownership
interest in the three sixth-generation ultra-deepwater drillships Guarapari, Itaoca and Siri currently under
construction. For a description of the current legal structure of the Group, please see Section 15.2 Legal
structure.
8.5 Main assets and key contracts
8.5.1 Mobile Offshore Drilling Units
8.5.1.1 Main assets
Below is an overview of the Drilling Units. For a discussion of the securities pledged on these assets please see
Sections 11.8.1 and 11.8.2 Material borrowings and Deep Sea Metro material borrowings.

Deepsea Atlantic/
Deepsea
Stavanger
1

Deepsea Aberdeen

Deepsea Metro I/
Deepsea Metro II
2

Deepsea Bergen
GENERAL
Type
6
th
generation semi 6
th
generation semi 6
th
generation drillship 3
rd
generation semi
Yard
DSME DSME HHI Aker Verdal
Delivery

Feb 2009 (July 2010) May 2014 June 2011(Nov 2011) February 1983
3

Next Classification
Feb 2014 (July 2015) June 2016 (Nov 2016) Q3 2015
Design
Enhanced GVA 7500 Enhanced GVA 7500 Gusto P 10,000 Aker H-3.2 modified
Harsh environment
Yes Yes No Yes
Winterisation prepared
Yes, -20
0
C Yes, -20
0
C No Yes, -10
0
C

DIMENSIONS

Displacement drilling mt
55,100 (56,100) 56,100 67,700 28,000
Air gap/Free board drilling mt
13,5 13,5 7,3 12,5
Deck area m
2

86.4 x 99 86.4 x 99 38 x 126 67.4x53.9

71

Deepsea Atlantic/
Deepsea
Stavanger
1

Deepsea Aberdeen

Deepsea Metro I/
Deepsea Metro II
2

Deepsea Bergen
GENERAL CAPACITIES

Design water depth ft
10,000 10,000 10,000 1,500
Outfitted water depth ft
1,640 (10,000) 2,050 10,000 1,500
Minimum water depth ft
230 230 1,000 230
Drilling depth ft
37,500 37,500 40,000 20,500
VDL Survival moored/DP mt
6,500/7,500 6,000/7,300 20,000 4,100
Transit speed kn
7 7 12 5
POB
128 (192) 158 210 110
Station keeping
DP3 & Mooring DP3 & Mooring DP3 Mooring
Main deck crane mt
100/85 100/100 165/100/85/85 65/30
Total power MW
44 44 44 9
Thruster power MW
8 x 4 8 x 4,2 6 x 5 4 x1,1
Liquid mud volume m
3

1,800 1,800 3,300 600

DRILLING EQUIPMENT

Drilling package
Dual NOV Dual NOV Dual NOV NOV
BOPMUX
15kpsi 6 rams 15kpsi 6 rams 15kpsi 6 rams
BOP Hydr contr
15kpsi 4 rams
4
15kpsi 5 rams 15kpsi 4 rams
Top drive st
1,000 1,000 1,000 650
Aux top drive st
500/No topdrive 500 750 N/A
Mud pumps Hp
4 x 2,200 4 x 2,200 4 x 2,200 3 x 1,600
Riser tensioners kips
3,200 3,200 3,500 640
Setback capacity tons
1,000 1,000 1,700 300
Motion compensation
Dual Active Drawwork Dual Active Drawwork Active Drawwork Passive/Active

1 Where Deepsea Stavanger deviates from Deepsea Atlantic, Deepsea Stavanger is shown in brackets.
2 Where Deepsea Metro II deviates from Deepsea Metro I, Deepsea Metro II is shown in brackets.
3 Upgraded in 1988, 1994, 1999, 2000, 2003, 2005, 2010 and 2012.
4 Only Deepsea Atlantic.
Below is an overview of the three drillships Guarapari, Itaoca and Siri which are under construction mainly at
Estaleiro Jurong Aracruz shipyard in Brazil, and are owned by the three special purpose companies in which Odfjell
Galvo B.V. holds a 20% interest:

Guarapari

Itaoca

Siri
GENERAL
Type
6
th
th
th
generation drillship
Yard
Estaleiro Jurong Aracruz Estaleiro Jurong Aracruz Estaleiro Jurong Aracruz
Expected delivery

July 2016 August 2017 December 2018
Design
Jurong Espadon Jurong Espadon Jurong Espadon

GENERAL CAPACITIES

Design water depth ft
10,000 10,000 10,000
Drilling depth ft
40,000 40,000 40,000

CONTRACT

Contract length
15 years 15 years 15 years
Day rate
1,2
USD
518,457 524,597 528,697

1 The day rates have a USD, EUR and BRL component. The USD figures provided for the day rates are rounded figures based on the currency
exchange rates as of 3 October 2011 of EUR/USD of 1.3518 and USD/BRL of 1.845 which Odfjell Drilling uses for internal calculations. In addition to
the day rates there are bonus elements of up to 15% linearly from 93% to 98% utilisation.
2 Escalation clauses not yet agreed.
For commercial reasons, the Company is currently assessing the possibility of, and potential for, relocating
ownership of some of the Groups rigs and rig owning management activities from Bermuda to Singapore,
72

including, but not limited to transferring some of the rigs to new rig companies incorporated in Singapore and
transferring the rig owning management activities to a new rig management company incorporated in Singapore.
8.5.1.2 Main clients and competitors
Odfjell Drillings clients in the MODU segment include major national and international oil and gas companies, of
which the largest are Statoil, BP, BG and Petrobras, which account for approximately 80% of the MODU segments
total revenues in the year ended 31 December 2012. The Group has established long-term relationships with its
largest clients, and has in particular a long-standing and strong relationship with Statoil, the major oil and gas
company on the NCS, and BP, dating back to 1979 and 1977, respectively.
The mobile offshore drilling industry consists of a large number of drilling contractors. As the industry has
experienced significant consolidation, in particular after the financial downturn in 2008, some market participants
have gained significant market shares. Odfjell Drilling is focusing on harsh environment as well as deep- and ultra-
deepwater drilling. Although, there are a limited number of companies in the drilling industry which focus solely on
the ultra-deepwater segment, the drilling industry consists of many companies with different types of drilling
assets and operations, with companies such as Transocean, Noble, Ensco, Seadrill, North Atlantic Drilling, Ocean
Rig, Diamond, Saipem, Maersk, Stena, Fred Olsen Energy and Pacific Drilling considered to be the main
competitors of the Group within this segment.
8.5.1.3 Key contracts
Rig contracts
The rigs Deepsea Bergen and Deepsea Atlantic are both contracted to Statoil and operate on the NCS. Deepsea
Stavanger is contracted to BP Angola for operations off the shores of Angola. Deepsea Metro I is contracted to BG
and Ophir Energy and is operating off the shores of Tanzania and Kenya, while Deepsea Metro II is contracted to
Petrobras for operations offshore Brazil. Deepsea Aberdeen has a contract with BP Exploration with scheduled
commencement in the fourth quarter of 2014 in the West of Shetland region of the UK, following expected delivery
in May 2014. The firm order backlog from these rig contracts amounted to USD 2.4 billion, with an additional USD
0.75 billion in priced options as of 30 June 2013.
The following is a summary of the key terms of the rig contracts:

Deepsea Stavanger

Deepsea Atlantic

Deepsea Aberdeen
Contract
holder/charterer ..................
Odfjell Invest II Ltd. Odfjell Invest AS
Odfjell Drilling Shetland
Limited
Operator .............................. BP Statoil BP
Area of operation .................
Offshore Angola
Norwegian Continental
Shelf
UK, West of Shetland
Commencement ................... November 2011 August 2009 Q4 2014 (expected)
End of contract term (firm
period) .................................
November 2014 August 2015
7 years after
commencement
Options to extend contract
term .....................................
2 x 12 months 1 x 24 months 3 x 12 months
Contract law ........................ English Norwegian English
Day rate ...............................
Firm contract:
USD 420,000
Options:
Options are unpriced
4

Firm contract:
USD 560,839
(mix of USD/NOK) until 4
August 2014, then USD
575,839 (mix of
USD/NOK) until 4 August
2015
1,2

Option:
USD 585,839 (mix of
USD/NOK)
1

Firm contract:
USD 454,775
(mix of USD/GBP)
2,3

Options:
Options are unpriced
4

Mobilisation charge .............. N/A N/A
USD 35,000,000 (excl.
73

Deepsea Stavanger

Deepsea Atlantic

Deepsea Aberdeen
fuel)
Termination clause .............. Termination:
The operator may
terminate the contract at
its convenience.
Termination fee
(maximum):
Remaining contract period
multiplied by 75% of the
day rate.

Termination:
The operator may
its convenience.
Termination fee
(maximum):
day rate.

Termination:
The operator may
its convenience.
Termination fee
(maximum):
day rate.

1 The day rates have both a USD (approximately 75%) and a NOK (approximately 25%) component. The USD figures provided for such day rates
are rounded figures based on the currency exchange rate of USD/NOK 5.75 which Odfjell Drilling uses for internal calculations.
2 The contract includes escalation clauses intended to cover cost increases.
3 The day rate has both a USD (approximately 75%) and a GBP (approximately 25%) component. The USD figures provided for such day rate is a
rounded figure based on the currency exchange rate of USD/GBP 0.641 which Odfjell Drilling uses for internal calculations.
4 The day rates for the optional periods are to be mutually agreed.

Deepsea Bergen

Deepsea Metro I

Deepsea Metro II
Contract holder/charterer....
Deep Sea Drilling
Company I AS

Deep Sea Metro Holland III
B.V.

Deep Sea Metro Holland
B.V.
(party to the Charter
Agreement)
Odfjell Gesto De
Perfuraes do Brasil
Ltda (party to the Service
Agreement)
Operator .............................. Statoil BG and Ophir Energy Petrobras
Area of operation ................. Norwegian Continental
Shelf

Offshore Tanzania and
Kenya
Offshore Brazil
Commencement ................... June 2012 June 2013 May 2012
End of contract term (firm
period) .................................
June 2017 November 2014 May 2015
Options to extend contract
term .....................................
1 x 12 months 1 x 18 months One, up to 1,095 days
Contract law ........................ Norwegian English Brazilian
Day rate ...............................
Firm contract:
USD 353,878 (mix of
USD/NOK)
1,2

Option:
Same as for firm contract

Firm contract:
USD 676,471 (Tanzania)
and USD 575,000 (Other)
until 6 June 2014, then USD
683,529 (Tanzania) and
USD 581,000 (Other) from 7
June 2014 to end of contract
term
Option:
Option is unpriced
4

Firm contract:
Service Agreement:
USD 81,485
2,3

Charter Agreement:
USD 350,400
2,3
Incentive fee:
Up to 10%
Option:
Option is unpriced
4

Mobilisation charge .............. N/A N/A N/A
Termination clause .............. Termination:
The operator may
its convenience.
Termination fee
(maximum):

Termination:
The operator may terminate
the contract at its
convenience.
Termination fee (maximum):
multiplied by 98% of the day

Termination:
Service agreement /
Charter agreement: No
termination at
convenience.
74

Deepsea Bergen

Deepsea Metro I

Deepsea Metro II
day rate.
rate, less any savings
realised to contract holder
for the remainder of the
period.

1 The day rate has both a USD (approximately 60%) and a NOK (approximately 40%) component. The USD figure provided for such day rate is a
rounded figure based on the currency exchange rate of USD/NOK 5.75 which Odfjell Drilling uses for internal calculations.
2 The contract includes escalation clauses intended to cover cost increases.
3 The daily operating rate of the Service Agreement is denominated in BRL. The aggregate day rate of both the Service Agreement and Charter
Agreement thus comprises a USD (approximately 80%) and a BRL (approximately 20%) component; the USD figure provided for such day rate
is a rounded figure, based on the currency exchange rate of USD/BRL 2.0175 which Odfjell Drilling uses for internal calculations.
4 The day rate for the optional period are to be mutually agreed.
Management contracts
The following is a summary of the key terms of the management contracts for the management of mobile offshore
drilling units owned by third parties or jointly by Odfjell Drilling and third parties:

Deep Sea Metro

Maracc
Units .................................................................................... Deepsea Metro I and
Deepsea Metro II
Island Innovator
Contract holder .................................................................... Odfjell Drilling AS Odfjell Drilling AS
Length ................................................................................. 5 years from delivery of
each Drillship
5 years from delivery
Fee structure ....................................................................... Fixed daily fee of USD
5,445 per Drillship, 5%
EBITDA incentive fee and
a mark-up of 10% on
reimbursable operating
costs
1

Fixed daily fee of USD
5,500, 5% EBITDA
incentive fee and 25% of
any client bonuses
2

Termination clause ..............................................................
Termination:
No termination at
convenience.
Termination fee:
If terminated due to
owners default, total loss
of the drillship or certain
change of control events
on the part of the owner,
1.5% of the fair market
value of the Drillship.

Termination:
Either party may
terminate the agreement
at their convenience,
subject to 12 months
prior notice.
Termination fee:
If terminated due to
owners default or at
owners convenience, (i)
for a period of 12 months,
the owner shall pay
manager the fixed daily
fee and the incentive fee,
and (ii) for the remaining
contract period the owner
shall pay to the manager
the fixed daily fee. Items
(i) and (ii) are however
always limited to the
maximum amount of USD
6 million.
Contract law ........................................................................
English Norwegian

1 All managers direct and indirect onshore support cost and offshore personnel cost to be paid by Golden Close and Chloe Marine in addition to the
fees for Deepsea Metro I and Deep Sea Metro II, respectively.
2 All managers direct and indirect onshore support cost and offshore personnel cost to be paid by Maracc in addition to the fees.
75

The Groups management contract for Dalian Developer was terminated by Dalian Deepwater Developer Ltd on 4
September 2013 following a 30-day grace period as a result of Dalian Deepwater Developer Ltds termination of its
construction contract for the drillship.
The Construction Contract
Odfjell Rig III Ltd. is party to a construction contract signed 12 November 2011, effective 20 December 2011, with
DSME for the construction and delivery of Deepsea Aberdeen, with scheduled delivery in May 2014 (the
Construction Contract).
The contract price is approximately USD 622

million, subject to variations due to adjustments or modifications. The
payments of the contract price are as follows:
(i) The first instalment in the amount of USD 94,002,700 (approximately 15% of the contract price) was
paid in the first quarter of 2012.
(ii) The second instalment in the amount of USD 527,850,000 (approximately 85% of the contract price) will
be due upon delivery, subject to variations due to adjustments or modifications, if any. Please see
Section 11.8.1 Material borrowings for a description of the bank loan facility agreement related to the
second instalment.
Additional project costs are estimated to be USD 91 million (net of the mobilisation fee of USD 35 million), and
include costs relating to operational preparation (approximately USD 58.6 million), project management
(approximately USD 25 million), contingencies and variation orders (approximately USD 19.1 million) and
projected financing costs (approximately USD 23.6 million. As of 30 June 2013, USD 28 million of these additional
project costs had been paid; the remainder is expected to be financed with cash on the balance sheet. Accordingly,
the all-in ready to drill cost of Deepsea Aberdeen is approximately USD 713 million. As of the date of this
Prospectus, construction of Deepsea Aberdeen is on schedule.
Odfjell Rig III Ltd. is entitled to liquidated damages if Deepsea Aberdeen is delivered more than 60 days after the
contractual delivery date, as extended by permissible delays, and/or in the event of deficiencies in the variable load
capacity of Deepsea Aberdeen. In the event of a delay of more than 240 days, Odfjell Rig III Ltd. is entitled to
terminate the Construction Contract. A refund guarantee from Korea Eximbank covers the total amount of USD
94,002,700.
DSME is entitled to terminate the Construction Contract in the event that (a) Odfjell Rig III Ltd. fails to pay any of
the instalments; (b) Odfjell Rig III Ltd. fails to take delivery of the rig; (c) Odfjell Rig III Ltd. fails to comply with
any of its material obligations under the contract; or (d) Odfjell Rig III Ltd. and/or the corporate guarantor
becomes insolvent.
Shareholders agreement and shareholder loan agreement regarding Deep Sea Metro
In connection with the establishment of the Deep Sea Metro joint venture, the Company entered into a
shareholders agreement with Metro Exploration and Deep Sea Metro on 10 October 2008. The shareholders
agreement provides, inter alia, that the Company is entitled to appoint two out of the five members of the board of
directors and that all decisions at board and shareholders meetings must be approved by at least one
representative of each joint venture partner. Odfjell Drilling has a right of first refusal and a tag-along right upon
sale of shares in Deep Sea Metro. There are no drag-along obligations. In a deadlock situation, Odfjell Drilling may
require Metro Exploration to purchase all of its shares in Deep Sea Metro at their fair market value.
On 4 May 2012, the Company through its wholly-owned subsidiary Odfjell Offshore Ltd., as lender, entered into a
loan agreement with Deep Sea Metro. The shareholder loan was made available to fund working capital and other
funding requirements in relation to Deepsea Metro II, which was delayed in its initial operations. The shareholder
loan was initially in the principal amount of USD 80 million, but was reduced to USD 53 million after part of the
loan was converted into shares in Deep Sea Metro following several shareholder capital calls in 2012 under the
shareholders agreement. In June 2013, the shareholder loan was increased by USD 12 million. As of 30 June
2013, the outstanding balance of the shareholder loan was USD 65 million excluding accrued interest.
76

Under the terms of the loan agreement, Deep Sea Metro is required to repay the shareholder loan in full on the
final maturity date in May 2015. Interest is payable at the rate of 12% per annum, payable semi-annually in May
and November. The shareholder loan is prepayable if certain events occur, including if any material assets of Deep
Sea Metro are sold or if a surplus of cash is received as a result of a refinancing of the Deep Sea Metro groups
debt. As of 30 June 2013, total gross interest bearing debt on the balance sheet of Deep Sea Metro was USD 973.5
million (net of capitalised fees).
Further, Metro Exploration has pledged its 60% interest in the shares of Deep Sea Metro in favour of the lender.
The shareholder loan restricts the payment of dividends by Deep Sea Metro prior to the full repayment of the
shareholder loan.
The table below sets out the key financial data for Deep Sea Metro on a 100% basis from Deep Sea Metros audited
consolidated financial statements for the financial years ended 31 December 2012 and 2011, and from Deep Sea
Metros unaudited financial information for the six months period ended 30 June 2013 and 2012, prepared in
accordance with simplified IFRS pursuant to section 3-9 of the Norwegian Accounting Act and with the Directives of
simplified IFRS specified by the Norwegian Ministry of Finance on 21 January 2008.
Deep Sea Metro (100%)
Six months ended 30 June Year ended 31 December
(USD millions)
2013
(simplified IFRS)
(unaudited)
2012
(simplified IFRS)
(unaudited)
2012
(Simplified IFRS)
(audited)
2011
(Simplified IFRS)
(audited)
Total operating income ........................................................................................................... 166.1 96.4 246.4 2.4
Operating expenses ................................................................................................................
(85.6) (48.1) (129.9) (10.5)
EBITDA ............................................................................................................................... 80.5 48.3 116.5 (8.1)
Depreciation and impairment ...................................................................................................
(36.7) (21.0) (57.7) (0.5)
Operating profit (EBIT) ....................................................................................................... 43.8 27.3 58.8 (8.6)
Net financial items .................................................................................................................
(47.3) (34.4) (83.5) (3.5)
Profit before tax .................................................................................................................. (3.5) (7.1) (24.7) (12.1)
Tax ......................................................................................................................................
(11.4) (6.5) (19.3) (0.2)
Net profit ............................................................................................................................
(14.9) (13.6) (44.0) (12.3)

Non-current assets ................................................................................................................. 1,617.4 1,657.5 1,646.0 1,602.3
Cash ..................................................................................................................................... 81.1 80.0 115.7 137.2
Current assets .......................................................................................................................
72.9 78.6 58.9 32.2
Total assets ......................................................................................................................... 1,771.4 1,816.1 1,820.6 1,771.7
Equity ................................................................................................................................... 755.5 726.6 767.3 740.6
Non-current liabilities ............................................................................................................. 940.2 1,048.9 974.9 952.3
Current liabilities ....................................................................................................................
75.7 40.6 78.5 78.8
Total equity and liabilities ...................................................................................................
1,771.4 1,816.1 1,820.6 1,771.7
Joint venture agreement with Galvo Oil and Gas Holding B.V. regarding Odfjell Galvo B.V.
In connection with the establishment of Odfjell Galvo B.V, Odfjell Drilling Netherlands B.V. entered into a joint
venture agreement with Galvo Oil and Gas Holding B.V. on 20 July 2012 for the purpose of governing the 50/50
ownership in Odfjell Galvo B.V. The joint venture agreement provides, inter alia, that the board of directors shall
consist of up to four directors to be jointly appointed by the shareholders, and that certain reserved matters
require a unanimous resolution by the shareholders. Furthermore, there are certain transfer restrictions, including
a lock-up period, right of first offer and a tag along right.
On 29 August 2012, Odfjell Galvo B.V. invested in 20% of the shares in each of the three Dutch special purpose
companies, Guarapari Drilling B.V., Itaoca Drilling B.V. and Siri Drilling B.V., whereby each has entered into an
engineering, procurement and construction contract for the construction of a drillship with the Jurong shipyard. The
remaining 80% ownership is held by Sete Brasil, through Sete International GmbH. Odfjell Galvo B.V is also the
owner of Odfjell Galvo Perfuraes Ltda, a company established under the laws of Brazil which will provide
management services in connection with the three drillships under construction at the Estaleiro Jurong Aracruz
shipyard. All three special purpose companies have entered into a fifteen-year charter contract with Petrobras and
Odfjell Galvo Perfuraes Ltda has entered into corresponding service agreements with Petrobras.
77

8.5.2 Well Services
8.5.2.1 Main assets
The Well Services segments assets mainly consist of casing and tubular running and rental drilling, wellbore
cleaning and fishing equipment which is rented to rig sites from the Well Services segments bases around the
world. It also employs skilled technicians providing casing and tubing running, fishing and wellbore cleanout
services. The drill tool rental equipment includes a broad range of high performance drilling tools covering all
drilling phases from exploration to completion and intervention.
Below is an overview of the capex of the Well Services segment and the book value of the Rental Equipment of the
Well Services segment for the years 2010 to 2012. In addition, Rental Equipment typically has a value beyond the
length of its life for depreciation purposes, as it can be utilised in regions with less demanding environmental and
regulatory requirements. The average age of the Rental Equipment is 4 to 5 years.
(In USD million)
Year ended 31 December
1

2012 2011 2010
Capex of the Well Services segment................................................................... ...................... 68 52 34
of which relates to the divested mooring business ..................................................... 11 13 6
Book value of Rental Equipment ....................................................................... 173 139 133
of which relates to the divested mooring business ..................................................... 41 37 34
Accumulated cost price of Rental Equipment ..................................................... 406 319 283
of which relates to the divested mooring business .....................................................
67 55 45

1 The 2010 numbers are not directly comparable with the 2011 and 2012 numbers as the 2010 numbers were prepared using NGAAP and the 2011
and 2012 numbers were prepared using IFRS. The 2010 numbers were reported in NOK and have been converted to USD using an exchange rate
of USD/NOK 6.045 from Norges Bank average exchange rate for the year.
Statoil, Shell, Schlumberger, BP, Songa, Dragon Oil, Baker Hughes, Halliburton, Maersk and Petrom are Odfjell
Drillings largest external clients within the Well Services segment, accounting for 60% of the Well Services
segments total revenues in the year ended 31 December 2012. The Group has developed good long-term
relationships with its clients in the Well Services segment, which include the most active operators and drilling
contractors in the North Sea. For example, the Groups client relationships with Shell, Statoil and BP within the Well
Services segment date back to more than a decade. Approximately 80% of Odfjell Drillings main clients were also
clients of the Groups Well Services segment five years ago.
Odfjell Drillings main competitors within the Well Services segment in the North Sea are Weatherford, Franks
International and a number of smaller local service providers. Globally, competitors include Weatherford, Franks
International, ITS, Tesco, Workstrings, Schlumberger, Baker Hughes and various local service providers.
The contract portfolio of the Well Services segment consists of a combination of exclusive and non-exclusive
framework agreements, under which the clients may call upon services to be provided periodically on pre-agreed
terms, as well as exclusive service agreements priced at day rates or for lump sum payments. The Well Services
segments contract portfolio consists mainly of contracts where the Group is the primary provider. However, under
some contracts the Group is the secondary provider or the back-up provider. Most rental service contracts do not
impose a delivery obligation on the Group, while most casing contracts do impose such an obligation.
The rental service contracts are for rental of equipment only, with the exception of fishing contracts which also
include hire of an operator. Casing and tubular running contracts are a combination of equipment rental and
personnel hire with teams of personnel on rotation to operate the casing running.

78

Below is an overview of Odfjell Drillings key service contracts. The estimated total revenues of these contracts,
calculated from 30 June 2013 to the expiry of the relevant contracts, are approximately USD 123 million.
Client

Scope of work

Commencement date

Expiry date
(incl options)
Statoil
Casing Running Services
MODU rigs (Norway)

10 December 2008

31 December
2014
(2
nd
option)
Shell
Casing running services
(Norway, UK, Netherlands,
Ireland)

1 March 2013

1 March 2019
(NO)
30 April 2021
(UK/NL/IR)
BP
Casing running services
(Norway)

1 June 2010
1 June 2015 (2
nd

option)
Schlumberger
Rental of stabilisers, subs,
collars etc. (Europe)

1 September 2007
31 December
2014
Dragon Oil
Casing Running Services,
fishing and rental of drilling
tools (Turkmenistan)

10 December 2009
30 November
2013
Halliburton
Rental of stabilisers, subs,
collars etc. (Europe)

1 October 2004
30 September
2013
Maersk Drilling
Rental of drill pipe and
accessories (Norway and
Denmark)

25 August 2010

25 August 2016
OMV Petrom
Rental of drilling jars, casing
scrapers etc. (Romania)

1 April 2012

9 February 2017
(fishing and
milling) / 31
March 2017
(tubular running)
8.5.3.1 Main assets
The main assets of the Drilling & Technology segment are human resources and system capital. The Platform
Drilling business area has approximately 1,100 employees, both offshore and onshore, located in Norway and the
UK, while the Technology business area has approximately 400 employees, whereof more than 300 engineers in
Norway, the UK, South Korea, the Philippines and the Middle East, in addition to approximately 90 contractors.
Drilling & Technologys management system combines experience, technology and core values. The management
system comprises the Groups consolidated procedures and guidelines for each type of operation the Drilling &
Technology segment undertakes globally, including installation specific procedures and checklists. Further, the
systems also include environments for measurement, controlling and validation of QHSE-performance,
maintenance and drilling operations.
Odfjell Drillings clients in the Drilling & Technology segment are typically large oil and gas companies. The main
clients within this segment are Statoil, BP and Talisman, accounting for 74% of the Drilling & Technology segments
total revenues in 2012. However, based on newly awarded contracts under which operations will commence in
2013, TAQA and Wintershall will also be key clients in this segment going forward.
Odfjell Drillings main competitors within the Platform Drilling business area are Archer and KCA Deutag. The
Technology business areas competitors are mainly local yards and smaller engineering companies specialising in
drilling services. None of these engineering companies are associated with a drilling contractor and hence cannot
offer the same overall engineering and operational services as Odfjell Drilling.
Platform drilling contracts
Below is an overview of Odfjell Drillings key platform drilling contracts on the NCS and UKCS:
79

Statoil

BP

Talisman
Installations/platforms ................................................................................. Visund, Njord,
Heidrun, Snorre A,
Snorre B, Sleipner A
and Grane

Clair, Andrew,
Bruce, Magnus
and Clair Ridge

Claymore, Clyde,
Saltire, Piper,
Tartan and Fulmar
Contract holder .............................................................................................. Odfjell Drilling
Management AS

Odfjell Drilling UK
Ltd
Odfjell Drilling UK
Ltd
Operator ........................................................................................................ Statoil BP Talisman Sinopec
Area of operation ...........................................................................................
Norwegian
Continental Shelf

UK Continental
Shelf

UK Continental
Shelf
Commencement ............................................................................................. October 2012 October 2012 October 2013
End of contract term (firm period) .................................................................
October 2016
1

December 2014
(July 2016)
2

October 2015
Options to extend contract term .................................................................... 3 x 2 year 3 x 2 year 2 x 1 year
Contract law .................................................................................................. Norwegian English English

1 The contract (or parts thereof) may be cancelled by Statoil at its convenience by giving 60 days notice. In such case, Statoil
is only liable to pay the unpaid balance due for the part of work already performed, as well as documented and necessary
expenses incurred as a direct result of the cancellation.
2 Clair Ridge only.

Wintershall

TAQA

Statoil
Installations/platforms .................................................................................
Brage Harding Mariner
1

Contract holder .............................................................................................. Odfjell Drilling
Management AS

Odfjell Drilling UK
Ltd

Odfjell Drilling UK
Ltd
Operator ........................................................................................................ Wintershall TAQA Statoil UK
Area of operation ........................................................................................... Norwegian
Continental Shelf

UK Continental
Shelf

UK Continental
Shelf
Commencement ............................................................................................. October 2013 June 2013 November 2016
End of contract term (firm period) ................................................................. October 2016 June 2015 November 2020
Options to extend contract term .................................................................... 3 x 2 year 1 x 2 year 3 x 2 year
Contract law .................................................................................................. Norwegian English Norwegian

1 This contract contains an option for Statoil to enter into a platform drilling contract with Odfjell Drilling for the Bressay
Platform on the UKCS, such contract to begin in 2017 and to have a duration of four years, with three options to extend the
contract by two years.
As of 30 June 2013, the Platform Drilling business area had a firm contract backlog of USD 824 million (USD 251
million in 2014 alone), and the total value of optional periods was approximately USD 1,762 million.
During the 2008 to 2012 period, add-on services from the Well Services segment and the Technology business
area to a selected client in the Platform Drilling business area averaged 30% of the initial platform drilling contract
revenue in the same period. The additional services provided included: (i) engineering services, including studies,
modifications, upgrades and equipment installations and (ii) rental services and casing operational services.
Technology contracts
The Technology business areas services are provided under contracts that vary between short- to medium-term
reimbursable fixed rates or cost-plus contracts. Fixed rate contracts involve fixed revenue amounts being received
by the Group upon completion of certain milestones whereas cost-plus contracts involve clients paying the costs of
inputs with the addition of an agreed percentage of profit to the Group. The services are generally contracted
under existing framework agreements with oil companies and rig owners.
80

The Technology business area has three different sources of revenue: external clients, indirect external clients
(that is, clients of the Groups Platform Drilling business area who are also offered engineering services) and
affiliated companies.
(i) External clients: In terms of external clients, the Technology business area has strong relationships with
the drilling contractors Songa (with which Odfjell Drilling entered into a lease and management
agreement that expired in August 2012) and Maracc, which together accounted for approximately 35%
of the Technology business areas revenues for the year ended 31 December 2012. The Group also has
inter alia a framework agreement with Lundin for consultancy services.
(ii) Indirect external clients: The Technology business area generates a significant part of its revenues from
long-term contracts with clients of the Platform Drilling business area who are also offered engineering
services. Odfjell Drilling currently has drilling modification frame agreements on the majority of
platforms where it is also the drilling contractor. This accounted for approximately 30% of the
Technology business areas revenue for the year ended 31 December 2012.
The key indirect external clients include Statoil, BG, BP, Talisman and Wintershall. The Company expects
to see additional volume to the Technology business areas portfolio in Norway based on the recently
awarded platform drilling contracts with Statoil in 2012, the award of the Mariner contract with Statoil
and the optional extension in connection with Bressay, which is expected to be exercised by Statoil.
(iii) Affiliated companies: In addition, the Technology business area derives its revenues from various
affiliated companies within Odfjell Drilling such as the partly-owned Deep Sea Metro joint venture. This
accounted for approximately 35% of the Technology business areas revenues in the year ended 31
December 2012.
Shareholders agreements
Odfjell Drilling Technology Ltd. and Subsea Technology Group AS, the owner of the remaining shares in Ross
Holding AS, have entered into a shareholders agreement to govern their joint shareholding in Ross Holding AS.
Further, Odfjell Drilling Technology Ltd. has entered into a shareholders agreement with Dalseide og Flysand AS,
the joint-venture partner in PSW Group AS.
8.6 Key operational focus areas and long-term strategy and growth opportunities
8.6.1 Mobile Offshore Drilling Units
8.6.1.1 Key operational focus areas
The key operational focus areas of the MODU segment are to: (i) enhance training of employees, in particular, local
onshore personnel and crew; (ii) ensure longer contracts for expatriate personnel in order to reduce rotation and
increase competence levels onboard rigs; (iii) continue to carry out management training for onshore and offshore
senior personnel and strengthen the Groups onshore support organisation; (iv) strengthen logistics and the supply
system for critical spare parts; (v) increase subsea equipment competence and training; and (vi) further
strengthen the Groups interaction with BOP vendors.
8.6.1.2 Long-term strategy and growth opportunities
The long-term strategy and growth opportunities for the MODU segment are to: (i) continue to focus on the harsh
environment and ultra-deepwater markets; (ii) establish at least three MODU operations on the NCS, in Africa and
in Brazil through prudent growth; (iii) work closely with a select number of blue-chip oil and gas companies; (iv)
achieve a balanced mix of medium- and long-term contractual periods; and (v) increase cost efficiencies without
compromising on QHSE standards.
8.6.1.3 Well Services
The key operational focus areas of the Well Services segment are to: (i) deliver safe and high quality services and
meet clients needs and expectations; (ii) train and enhance the competence of its personnel and the organisation;
(iii) conduct lean and cost-efficient operations and increase process standardisation and efficiency throughout the
organisation; (iv) increase market awareness of the Well Services segment; (v) continue to develop existing
81

product lines to stay ahead of competition; and (vi) ensure that it has proprietary equipment and/or methods for
all service areas.
The long-term strategy and growth opportunities for the Well Services segment are to: (i) expand its portfolio of
well bore clean-up, fishing and remedial and well abandonment services; (ii) continue international expansion by
targeting areas and product lines with high profit margins and high equipment utilisation potential, and by
capitalising on existing client relationships and the presence of the Groups MODUs in new areas; and (iii) consider
selective acquisitions of new technology or well service companies.
The key operational focus areas of the Platform Drilling business area are to: (i) secure efficient operations for its
contract portfolio; (ii) maintain a high level of QHSE performance; (iii) improve operating margins on existing
contracts through add-on sales; (iv) increase the volume of cross-divisional sales and business; and (v) integrate
operations by moving tasks onshore.
The key operational focus areas of the Technology business areas are to: (i) achieve continued profitable growth by
hiring an additional 50 new engineers each year and by broadening and growing its portfolio and client base
globally; (ii) deliver consistently high-quality services; (iii) build adequate capabilities; and (iv) establish a new
engineering hub.
The long-term strategy and growth opportunities for the Platform Drilling business area are to: (i) maintain its
position as one of the leading providers of platform drilling services in the North Sea; (ii) extend its scope of
services; (iii) continue its strong focus on safe and efficient operations; and (iv) use its competitive advantages
and market position to establish a firm presence in a region outside the North Sea (e.g. in the Gulf of Mexico or
West Africa), and follow clients into new regions.
The long-term strategy and growth opportunities of the Technology business area are to: (i) maintain its position
as one of the leading providers of drilling engineering and technology services on the NCS and UKCS; (ii)
selectively expand into new potential business areas such as subsea drilling, completion and well intervention, plug
and abandonment and modular drilling units; (iii) introduce new drilling technology; and (iv) broaden its service
portfolio.
8.7 Health, safety and environment
The Groups ability to provide safe and reliable services is crucial to its future development. The Group strives to
improve its efforts in health, safety, security and the environment and its main objective is to achieve zero faults
through continuous improvement. Throughout its 40-year history, the Group has endeavoured to develop
governance structure, organisational competence, capacity and a leadership culture that promote the objective of
maintaining the highest safety standards. Through this approach, the Group aims to safeguard the health of all
people involved in its operations, reduce environmental risks through effective risk management and develop a
quality culture in which tasks are performed right the first time and in which the goal is to constantly strive to add
value for clients. The highest priorities in all QHSE efforts are to manage risks and prevent injuries to personnel.
Improved risk management and the strengthening of safety barrier management are important measures in order
to ensure a high safety level and prevent major accidents.
The Group believes that, particularly after the Macondo incident in the US Gulf of Mexico, the Groups and its
competitors QHSE records and ability to provide safe operations have become increasingly important to compete
for and win contracts. Maintenance of a strong QHSE record acts as a high barrier to entry, limiting smaller and
speculative providers participation in the market. See Section 7.2 General industry drivers. The Group believes
that it has and will continue to benefit from this trend in view of its long and strong QHSE track record.

82

The following table summarises Odfjell Drillings QHSE results for the years ended 31 December 2012, 2011 and
2010.

2012 2011 2010
Lost time incident frequency (H1) per 1 million working hours
1
................................
1.4 2.1 3.3
Total recordable incident frequency (H2) per 1 million working hours
2
.......................
3.8 5.9 8.9
Dropped objects frequency per 1 million working hours
3
..........................................
6.5 5.6 4.3
Sick leave percentage of total normal working days
4
...............................................
3.2 3.0 3.2

1 Lost time incidents during the last twelve months multiplied by 1 million divided by the number of actual working hours during the last twelve
months.
2 Lost time incidents and incidents resulting in medical treatment during the last twelve months multiplied by 1 million divided by the number of
actual working hours during the last twelve months.
3 Number of dropped objects (above 40 joule) during the last 12 months multiplied by 1 million divided by the number of actual working hours during
the last twelve months.
4 Number of hours absent divided by total normal working days.
On 10 April 2013, there was a fire in a machine room onboard Deepsea Metro II. The fire was isolated and put out
rapidly and all emergency procedures were followed and all personnel was quickly accounted for. There were no
injuries to personnel. The offshore crew was supported by Odfjell Drillings emergency organisation.
8.8 Employees
At the date of this Prospectus, the Group had approximately 3,100 employees (including approximately 150
employees for Deepsea Metro II operation in Brazil) and approximately 290 contractors (whose actions the Group
remains responsible for). The table below shows the development in the numbers of full-time employees and
contractors over the last three years.
Full-time employees Contractors

30 June
2013
31 Dec
2012
31 Dec
2011
31 Dec
2010
30 June
2013
31 Dec
2012
31 Dec
2011
31 Dec
2010
Total Group ........................................................................................................ ......................
3,080 2,918 2,732 2,556 283 246 159 106
1

By segment: ......................................................................................................... ......................
- MODU ............................................................................................................... 1,013 968 943 801 168 167 96 76
- Well Services...................................................................................................... 449 418 361 369 16 21 6 -
1

- Drilling & Technology .......................................................................................... 1,520 1,443 1,354 1,386 99 58 57 30
1

1 Approximate figures.
Each of the Groups local offices are encouraged to source and train its own local workforce rather than use
expatriate personnel and the Group utilises in-house training schemes to promote this. In most jurisdictions, the
senior workforce consists of expatriates, while the local workforce is trained onsite. The Company is of the opinion
that its employee relations are good and has experienced neither significant labor-related work stoppages nor high
turnover rates in each of 2012, 2011 and 2010 or in the six months ended 30 June 2013.
The Group has specific procedures for screening, hiring, monitoring and training contractors. During the period of
hire, the contractors are assigned an internal sponsor that follows the contractors during training and deliveries
through an onboard programme to secure the correct level of quality in deliveries and utilisation. The onboard
programme is based on a defined checklist.
8.9 Dependency on contracts, patents and licences
It is the Companys opinion that the Groups existing business or profitability is not dependent upon any contracts
other than the rig contracts, as further described in Section 8.5.1.3 Key contracts Rig contracts and the
financing agreements, as further described in Section 11.8.1 Material borrowings.
It is further the opinion of the Company that the Groups existing business or profitability is not dependant on any
patents or licences.
83

8.10 Litigation and disputes
From time to time, the Company and other companies in the Group are involved in litigation, disputes and other
legal proceedings arising in the normal course of its business. During the course of the preceding twelve months,
the Group has been and is currently involved in the following tax cases:
8.10.1 Tax court case
Odfjell Rig Ltd. is a company incorporated in Bermuda, and its ultimate shareholder is the Company. During the
years 2009 to 2011 Odfjell Rig Ltd. was the owner (limited partner) of 52.913% of Deep Sea Drilling Company II
KS (DSDCII), which was the owner of the rig Deepsea Bergen. The general partner of DSDCII was Deep Sea
Drilling Company AS, and additionally there were two other limited partners. The rig Deepsea Bergen has operated
on the NCS since spring 2006 under a bareboat charter with Deep Sea Drilling Company KS. All main decisions
pertaining to the rig (purchase, sale, financing etc) are made by the partnership meeting of DSDCII. The company
Odfjell Drilling AS resident in Norway has been contracted to carry out the day-to-day operations/management
of the bareboat charter.
The dispute between Odfjell Rig Ltd. and the Norwegian tax authorities is whether Odfjell Rig Ltd. has a limited tax
liability to Norway as a result of its ownership in DSDCII. The tax authorities made their decision for the years
2009 to 2010 on 29 June 2012, and later also for 2011. The case for 2009 to 2011 was brought before the
Norwegian courts by Odfjell Rig Ltd. pursuant to a writ of summons on 20 December 2012, and the district court
made its decision on 12 July 2013. For all three income years, the disputed amount (before-tax income) is
approximately NOK 387,000,000.
The district court concluded that the bareboat charter business of DSDCII was carried out from Norway, and thus a
limited tax liability exists for the owner Odfjell Rig Ltd. on the basis of the Norwegian Tax Act section 2-3 para. 1,
letter b. The district court came to this conclusion inter alia on the basis that the day-to-day management of the
bareboat charter by Odfjell Drilling AS in Bergen involves considerable activity in Norway on behalf of DSDCII, and
also that the rig Deepsea Bergen has been deployed within Norwegian jurisdiction (i.e. on the NCS). Furthermore,
the district court concluded that a tax exemption in the Norwegian Tax Act section 2-34 was not applicable as this
only relates to international business which in the courts opinion is not the case as long as the rig is operated on
the NCS.
The Company will appeal the district courts judgement, however, if the district courts verdict is upheld on appeal,
the USD 62.8 million loss (already expensed as of 30 June 2013) for the Company will be final. The loss is
comprised of USD 24.5 million in payable tax (which already has been paid) and USD 38.3 million in deferred tax.
The additional impact on cash will be 20% of the deferred tax to be paid in 2014 with the remaining balance to be
paid on a declining basis (i.e. 20% of the remaining balance) each year.
8.10.2 Tax audit case
Odfjell Invest I Ltd. (Odfjell Invest I), a wholly-owned subsidiary of the Group incorporated in Bermuda, is the
owner of the rig Deepsea Atlantic, which has been leased to Odfjell Invest AS under a bareboat charter at a fixed
day rate of USD 300,000. Odfjell Invest AS has in turn entered into a drilling contract with Statoil for the provision
of drilling services to Statoil on the NCS. Soon after commencement of drilling services under the drilling contract,
Statoil stopped paying the operating rate based on the contention that Odfjell Invest AS was not able to provide
the drilling services as contemplated by the drilling contract. Odfjell Invest AS challenged Statoils decision to stop
payment of the operating rate and instigated legal proceedings to recover lost income. Odfjell Invest AS lost the
court case in the first instance. As part of a settlement with Statoil, Odfjell Invest AS decided not to appeal the
decision. Odfjell Invest AS has taken the position that it had no legal basis for stopping payment of bareboat hire
to Odfjell Invest I under the bareboat charter during the period of non-payment of the operating rate by Statoil
under the drilling contract.
The tax authorities have notified that they do not consider Odfjell Invest AS as entitled to a tax deduction under
the Norwegian Tax Act section 6-1, resulting in an increase of the taxable income for 2009 of NOK 103,305,720
and for 2010 of NOK 520,607,220. Following the tax audit (report dated 5 July 2013) the notice of reassessment
also relates to the omission of taking a payment of hire from Statoil as income, resulting in an increase of the
income for 2010 of NOK 6,552,467. Furthermore, the tax authorities have notified that they do not consider the
bareboat charter between Odfjell Invest AS and Odfjell Invest I to be in accordance with the arm's length principle.
84

This results in a total reduction of bareboat hire for the years 2009 to 2012 of NOK 209,434,800. The above
notifications from the tax authorities have not yet resulted in any decision of reassessment.
The potential tax exposure amounts to USD 39.0 million excluding interest cost. Estimated potential interest cost
amounts to USD 9 million as per the date of this Prospectus, but is subject to increase depending on actual time of
a potential payment. Odfjell Invest AS will dispute any assessment based on the notification, and hence no tax
expense is recognised in the Interim Financial Statements for the six months period ended 30 June 2013, as the
Companys best estimate of the amount it will ultimately pay is nil. Odfjell Invest AS will revert to the tax
authorities within the deadline for response. However, as Odfjell Invest AS will need to pay the full amount
immediately upon the receipt of the final claim amount from the Norwegian tax authorities, there may be a
negative impact on liquidity in the amount of USD 50 million if the Norwegian tax authorities do not change their
assessment based on input from Odfjell Invest AS. If the Norwegian tax authorities do not change their assessment
and Odfjell Invest AS reclaims the full amount through the court system there may be a temporary liquidity impact
even if Odfjell Invest AS is ultimately successful in the case.
For the first half year of 2013, there is an additional tax exposure of USD 2 million related to the transfer pricing
issue of Deepsea Atlantic as described above.
Other than this, the Company nor any other company in the Group are, nor have been during the course of the
preceding twelve months involved in any legal, governmental or arbitration proceedings which may have, or have
had in the recent past, significant effects on the Groups financial position or profitability, and the Company is not
aware of any such proceedings which are pending or threatened.
8.11 Regulation
The Group is subject to a large number of national and international regulatory and environmental laws and
regulations governing all business activities of the Group in the respective jurisdictions.
This includes, in particular, provisions on (i) permitting, (ii) energy operations, (iii) waste treatment, (iv) water
protection and (v) the handling, storage and transport of hazardous goods and chemical substances. Further, the
Group is subject to requirements on occupational health and safety as well as export control regulations. Also, laws
relating to the import and operation of drilling rigs and related onshore and offshore equipment, currency
conversions and repatriation, taxation of offshore earnings and earnings of expatriate personnel or the use of local
employees and suppliers by foreign contractors may be affected.
The application of the various laws and regulations depends on the specific facilities, installations and activities at
the business locations in the relevant jurisdictions. For example, the permits of public authorities required for a
specific business operation depend on many individual factors, including the specific purpose of the facility, its
capacity and physical structure, the environmental impacts originating from the facility, and the existence of any
auxiliary facilities. Operational sites may have to comply with several environmental and regulatory requirements.
In addition, environmental liabilities can occur due to public or civil environmental laws.
Generally, the provisions under environmental and regulatory laws applicable to the Groups operations are
regularly subject to change. They are continuously being adapted, at the national and international levels, in
particular by the European Union, to the level of technical sophistication and the increased need for safety and
environmental protection in the energy sector. Due to the broad geographical scope of the Groups business
operations, the contents and details as well as the practice of enforcement of the applicable legal framework varies
throughout the different jurisdictions concerned. Generally, non-compliances may result in administrative (e.g.
fines or suspension or withdrawal of permits) or criminal sanctions.
The Groups offshore activities are subject to numerous specific laws and regulations in the form of international
conventions and treaties, national, state and local laws, in particular relating to the maritime environment, and
national and international regulations in force in the jurisdictions in which the Group operates or is registered.
These regulations include, but are not limited to, the International Convention for the Safety of Life at Sea 1974,
the International Convention for the Prevention of Pollution from Ships 1973, the International Safety Management
Code for the Safe Operation of Ships and for Pollution Prevention, the International Convention on Civil Liability for
Oil Pollution Damage 1969, the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001,
85

the International Convention for the Control and Management of Ships Ballast Water and Sediments 2004, which is
expected to enter into force in the course of the year 2014, the Convention on the Prevention of Marine Pollution
by Dumping of Waste and other Matters 1972 (as amended by the 1996 London Protocol) and the International
Convention on Standards of Training, Certification and Watchkeeping for Seafarers 1978. These laws and standards
govern safety and the discharge of materials into the environment or otherwise relate to environmental protection.
In certain circumstances, these laws may impose strict liability, rendering companies in the Group liable for
environmental and natural resource damages without regard to negligence or fault on the part of the Group.
Implementation of new environmental laws or regulations that may apply to the oil and gas or offshore
accommodation industries may impact on the Groups business activity, financial condition or results of operations.
For example, a number of countries have announced that they are undertaking a review of the regulation of the
offshore drilling industry following the Macondo incident in the Gulf of Mexico in 2010. Please see Section 2 Risk
factors for an overview of risk factors relating to environmental laws and regulations applicable to the Group.
8.12 Intellectual property and information technology
The intellectual property rights relating to the Drilling Units and related equipment are the proprietary rights of the
Groups suppliers or sub-suppliers. Please see Section 2.4 Risk relating to laws, regulation and litigation
Technology disputes involving the Group, the Groups suppliers or sub-suppliers could impact the Groups
operations for an overview of risk factors relating to potential technology disputes.
The Group has several trademarks registered in countries all over the world, including among others the name
Odfjell Drilling, Deepsea and the Odfjell Drilling logo. Further, although not material to the business of the
Group as a whole, the Well Services segment has several patents registered and applications pending with the
intention of patenting various processes relating to operational aspects and improvements.
The Group further relies on information technology systems to communicate with its Drilling Units and conduct its
business. The Group has implemented customary virus control systems and access control systems, and
continuously evaluates its information technology and information security. Information technology systems that
support for instance maintenance processes are implemented so that each Drilling Units system is operative
independently of whether the central system is operative or not (replication technology). The Group also relies
upon security measures and technology to securely maintain confidential and proprietary information maintained
on its information technology systems.
8.13 Insurance
As is customary in the oilfield services industry, the Group mitigates its exposure to the risks normally associated
with a drilling contractors operation such as environmental damage and accidents through indemnification
arrangements and insurance policies.
The Groups charter and service contracts generally contain contractual indemnities against liability for pollution,
well and environmental damages, damages to equipment and property, and personal injury. These indemnities
provide that the Groups clients, the oil and gas companies, will retain liability and indemnify the Group for (i)
environmental pollution caused by any oil, gas, water or other fluids and pollutants originating from below the
seabed, (ii) damage to client and third-party equipment and property including any damage to the sub-surface and
reservoir, and (iii) personal injury to or death of client personnel.
The Group also carries insurance coverage for its operations and is self-insured for certain claims in amounts that
the Company believes to be customary and reasonable to retain for its own account. The Group maintains
insurance worldwide for liability arising from its operations, and its insurance covers all of its material assets,
including all capital items such as the Drilling Units and Rental Equipment. Among the risks insured are loss of, or
damage to, the Drilling Units (hull and machinery), third-party property, death or injury to employees and/or third
parties (protection and indemnity insurance and third party liability insurance) and statutory workers
compensation.
To cover the Groups charter contracts, it maintains the following insurance coverage: (i) hull and machinery, (ii)
protection and indemnity, and (iii) war risk insurance.
86

To protect the Groups service contracts, the Group has an insurance policy for general third party- and product
liability. The policy covers NOK 130 million per occurrence of legal liability for damage caused to a third party and
an annual aggregate limit of NOK 50 million for professional indemnity as a result of faulty product design,
feasibility or engineering studies etc. Odfjell Drillings general third party- and product liability insurance policy
does, however, expressly exclude coverage for certain types of environmental damages normally being the
responsibility of the Groups clients, the oil and gas companies. In all locations, except North America, the policy
covers only environmental damages that are the direct and unavoidable consequences of a sudden, unforeseen and
identifiable event and, in the case of recoverable pollution damage, the policy also covers clean-up related
expenses imposed by public authorities.
The Group also maintains an insurance policy for transport and storage of the Groups equipment (excluding the
Drilling Units) for coverage of up to NOK 53 million per occurrence.
The determination of the appropriate level of insurance coverage is made on an individual asset basis taking into
account several factors, including the age, market value, cash flow value and replacement value of the asset in
hand. However, there can be no assurance that the amount of insurance the Groups carries is sufficient to protect
the Group fully in all events, and a successful liability claim for which the Groups is underinsured or uninsured
could have a material adverse effect on the Group. Additionally, insurance rates have in the past been subject to
wide fluctuations, and changes in coverage could result in less coverage, increases in cost or higher deductibles
and retentions. See Section 2 Risk factors.
Odfjell Drilling has not made any material insurance claims under any of its insurance policies during 2012, 2011
and 2010 or in the six-month period ended 30 June 2013.
87

9 CAPITALISATION AND INDEBTEDNESS
9.1 Capitalisation
The tables below should be read in conjunction with the information included elsewhere in this Prospectus,
including Section 10 Selected financial information and the Financial Statements and the Interim Financial
Statements and related notes, included in Appendix B and Appendix C of this Prospectus.
The following table sets forth information about the Groups unaudited consolidated capitalisation as of 30 June
2013. There has been no material change since 30 June 2013.
As of 30 June 2013
(In USD millions)
Actual
(unaudited)
Indebtedness
Current financial debt:
Guaranteed and secured ..................................................................................................................... -
Guaranteed but unsecured .................................................................................................................. -
Secured but unguaranteed
1
................................................................................................................. 180.9
Unguaranteed and unsecured .............................................................................................................. -

Non-current financial debt:
Guaranteed and secured ..................................................................................................................... -
Guaranteed but unsecured .................................................................................................................. -
Secured but unguaranteed
1
................................................................................................................. 1,177.6
Unguaranteed and unsecured ..............................................................................................................
-
Total indebtedness ..........................................................................................................................
1,358.6

Shareholders equity
Share capital ..................................................................................................................................... -
2

Other contributed capital..................................................................................................................... 331.8
Other reserves ................................................................................................................................... (75.3)
Retained earnings ..............................................................................................................................
827.0
Total equity .....................................................................................................................................
1,083.6
Total capitalisation ..........................................................................................................................
2,442.2

1 Secured by pledges either on receivables and bank deposits or plant and equipment. Please also see Section 11.8.1 Material borrowings.
2 The share capital of the Company as of the date of this Prospectus is USD 2,000,000. Please see Section 15.4 Share capital history for the
development in the Companys issued share capital following 30 June 2013.
The Group is not aware of any indirect or contingent indebtedness other than the tax audit case described in
Section 8.10 Litigation and disputes.
9.2 Indebtedness
The following table sets forth information about the Groups unaudited net indebtedness as of 30 June 2013.
As of 30 June 2013
(Figures in USD millions)
Actual
(unaudited)
Net indebtedness

(A) Cash ...........................................................................................................................................
140.6
(B) Time deposits ...............................................................................................................................
104.6
(C) Trading securities .........................................................................................................................
-
(D) Liquidity (A)+(B)+(C) ..............................................................................................................
245.2
(E) Current financial receivables .....................................................................................................
-
(F) Current bank debt .........................................................................................................................
-
(G) Current portion of non-current debt ................................................................................................
180.9
88

As of 30 June 2013
(Figures in USD millions)
Actual
(unaudited)
(H) Other current financial debt ...........................................................................................................
-
(I) Current financial debt (F)+(G)+(H) ...........................................................................................
180.9
(J) Net current financial indebtedness (I)-(E)-(D) ..........................................................................
(64.3)
(K) Non-current bank loans .................................................................................................................
1,177.6
(L) Bonds issued ................................................................................................................................
-
(M) Other non-current loans ................................................................................................................
-
(N) Non-current financial indebtedness (K)+(L)+(M) .....................................................................
1,177.6
(O) Net financial indebtedness (J)+(N) ..........................................................................................
1,113.3
9.3 Working capital statement
The Company is of the opinion that the working capital available to the Group is sufficient for the Groups present
requirements, for the period covering at least 12 months from the date of this Prospectus.
89

10 SELECTED FINANCIAL INFORMATION
10.1 Introduction
The tables set out in this Section 10 present selected financial information derived from the Groups audited
consolidated financial statements (including the notes thereto) as of and for the years ended 31 December 2012,
2011 and 2010 (the Financial Statements) (included in Appendix B), as well as the unaudited interim consolidated
financial information as of and for the three and six month periods ended 30 June 2013 and 2012 (the Interim
Financial Statements) (included in Appendix C). The Financial Statements for the year ended 31 December 2012,
with comparable figures for the year ended 31 December 2011, have been prepared in accordance with IFRS, as
adopted by the EU, while the Financial Statements for the year ended 31 December 2011 and 2010 have been
prepared in accordance with NGAAP. The Interim Financial Statements, combined with relevant information in the
financial review, has been prepared in accordance with IAS 34. For a discussion of the material differences between
IFRS and NGAAP please see Section 10.10 Analysis of material differences between IFRS and NGAAP.
The Interim Financial Statements does not include all of the information required for full annual financial
statements of the Group and should be read in conjunction with the Financial Statements.
The Companys auditor is PricewaterhouseCoopers AS, Dronning Eufemias gate 8, 0191 Oslo, Norway.
PricewaterhouseCoopers AS and its auditors are members of The Norwegian Institute of Public Accountants (Nw.
Den Norske Revisorforening). PricewaterhouseCoopers AS has been the Companys auditor since 2009. The
Financial Statements have been audited by PricewaterhouseCoopers AS, and the auditors reports are included
together with the Financial Statements in Appendix B. The Interim Financial Statements has not been audited,
however, PricewaterhouseCoopers AS has issued a review report on the interim financial information in the Interim
Financial Statements. The review report is included together with the Interim Financial Statements in Appendix C.
PricewaterhouseCoopers AS has not audited, reviewed or produced any report on any other information provided in
this Prospectus.
The amounts from the Financial Information are presented in USD, rounded to the nearest million, unless otherwise
stated. However, the amounts from the NGAAP Financial Statements are presented in NOK, rounded to the nearest
million. As a result of rounding adjustments, the figures in one or more rows or columns included in the financial
information may not add up to the total of that row or column. Please see Note 26 to the Groups audited financial
statements for the year ended 31 December 2012 for a comparison of the financial information prepared in
accordance with NGAAP for the year ended 31 December 2011 and presented in USD with the financial information
prepared in accordance with IFRS for the year ended 31 December 2012 and presented in NOK.
The selected financial information presented herein should be read in connection with Section 11 Operating and
financial review and the Financial Statements and Interim Financial Statements (included in Appendix B and
Appendix C to the Prospectus).
10.2 Summary of accounting policies and principles
For information regarding accounting policies and the use of estimates and judgments, please refer to note 1 of the
Financial Statements as of and for the year ended 31 December 2012, included in this Prospectus as Appendix B.
10.3 Condensed consolidated income statement
The table below sets out selected data from the Groups audited consolidated income statement for the years
ended 31 December 2012 and 2011 and from the unaudited consolidated interim income statement for the three
and six month periods ended 30 June 2013 and 2012.
Three months ended
30 June
Six months ended
30 June
Year ended
31 December
(In USD millions)
2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2012
(IFRS)
(audited)
2011
(IFRS)
(audited)
Operating revenue .............................................. 289.0 259.3 585.2 525.2 1,093.8 1,056.7
Other gains/losses .............................................. 21.1 0.7 21.4 1.2 3.4 46.0
Share of profit from joint ventures ........................ (2.3) (1.7) (4.6) (3.3) (13.4) (6.8)
90

Three months ended
30 June
Six months ended
30 June
Year ended
31 December
(In USD millions)
2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2012
(IFRS)
(audited)
2011
(IFRS)
(audited)
Personnel expenses ............................................. (132.2) (116.5) (271.2) (241.1) (486.2) (465.7)
Other operating expenses ....................................
(62.4) (61.0) (128.8) (120.8) (266.6) (247.8)
EBITDA ............................................................ 113.3 80.8 201.9 161.2 331.0 382.4
Depreciation and impairment ................................
(36.1) (35.8) (73.7) (72.3) (147.3) (145.0)
Operating profit (EBIT) .................................... 77.2 44.9 128.2 88.9 183.7 237.4
Net financial items ..............................................
(15.5) (24.7) (38.7) (26.9) (35.7) (83.9)
Profit/(loss) before tax .................................... 61.7 20.2 89.5 61.9 148.0 153.5
Income taxes .....................................................
(70.9) (7.3) (77.2) (16.4) (31.2) (32.2)
Profit/(loss) for the period ..............................
(9.2) 13.0 12.3 45.6 116.9 121.3
The table below sets out other financial data for the Group.
Three months ended
30 June
Six months ended
30 June
Year ended
31 December

2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2011
(IFRS)
(unaudited)
Revenue growth ............................................
11.5% - 11.4% - 3.5% -
EBITDA growth .............................................
40.2% - 25.3% - (13.4%) -
EBIT growth .................................................
71.8% - 44.3% - (22.6%) -
EBITDA-margin .............................................
39.2% 31.2% 34.5% 30.7% 30.3% 36.2%
EBIT-margin .................................................
26.7% 17.3% 21.9% 16.9% 16.8% 22.5%
The table below sets out selected data from the Groups audited consolidated income statement for the years
ended 31 December 2011 and 2010.
Year ended
31 December
(In NOK millions)
2011
(NGAAP)
(audited)
2010
(NGAAP)
(audited)
Operating income ......................................................................................................................... 5,924.9 4,724.9
Gain on sale of assets ................................................................................................................... 15.0 26.0
Income from associates ................................................................................................................ (41.6) 25.7
Personnel expenses ...................................................................................................................... (2,614.5) (2,544.8)
Other operating expenses .............................................................................................................
(1,397.2) (1,673.1)
EBITDA ..................................................................................................................................... 1,886.6 558.7
Depreciation and impairment .........................................................................................................
(822.1) (538.3)
Operating profit/loss ................................................................................................................ 1,106.1 (5.3)
Net financial items .......................................................................................................................
(272.3) 280.8
Profit/loss before tax ................................................................................................................ 833.8 275.5
Income taxes ..............................................................................................................................
(180.6) 29.8
Profit/(loss) for the period .......................................................................................................
653.1 305.3
Attributable to non-controlling interests .......................................................................................... 69.8 59.7
Attributable to owners of Odfjell Drilling Ltd ....................................................................................
583.4 245.6
10.4 Condensed consolidated statement of comprehensive income
The table below sets out selected data from the Groups audited consolidated statement of comprehensive income
for the years ended 31 December 2012 and 2011 and from the unaudited consolidated interim statement of
comprehensive income for the three and six month periods ended 30 June 2013 and 2012. As the statement of
91

comprehensive income does not exist under NGAAP, the figures for the year ended 31 December 2010 are not
included in the table.
Three months ended
30 June
Six months ended
30 June
Year ended
31 December
(In USD millions)
2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2012
(IFRS)
(audited)
2011
(IFRS)
(audited)
Profit/(loss) for the period ..............................
(9.2) 13.0 12.3 45.6 116.9 121.3
Items that will not be reclassified to profit or
loss:

Actuarial gain/(loss) on post employment
benefit obligations ...............................................
- 3.5 - 7.3 15.7 (16.3)
Total.................................................................
- 3.5 - 7.3 15.7 (16.3)
Items that are or may be reclassified to profit
or loss:

Interest rate swaps, reclassified to profit or
loss ................................................................... - - - - - 23.5
Forward foreign exchange contracts,
reclassified to profit or loss................................... - - - - - (4.6)
Cash flow hedges ................................................ 3.7 0.1 4.2 (0.5) (1.7) (0.1)
Currency translation differences ...........................
(4.7) (4.6) (14.4) 0.6 7.2 (37.0)
Total.................................................................
(1.1) (4.6) (10.3) 0.1 5.5 (18.3)
Other comprehensive income, net of tax ..........
(1.1) (1.1) (10.3) 7.4 21.3 (34.6)
Comprehensive income for the period ..............
(10.3) 11.9 2.1 53.0 138.1 86.7
Attributable to non-controlling interests ................. - 4.3 1.0 8.0 14.8 11.3
Attributable to owners of Odfjell Drilling Ltd ..........
(10.3) 7.6 1.1 45.0 123.4 75.4
10.5 Condensed consolidated statement of financial position
The table below sets out selected data from the Groups audited consolidated statement of financial position as of
31 December 2012 and 2011 and from the unaudited consolidated interim statement of financial position as of 30
June 2013 and 2012.

As of
30 June
As of
31 December
(In USD millions)
2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2012
(IFRS)
(audited)
2011
(IFRS)
(audited)
Assets

Intangible assets
1
................................................................................. 26.9 28.9 29.9 32.3
Property, plant and equipment
2,3
............................................................. 1,777.9 1,867.2 1,871.9 1,794.8
Financial fixed assets .............................................................................
426.3 411.7 421.6 331.3
Total non-current assets ....................................................................
2,231.1 2,307.8 2,323.4 2,158.4
Spare parts .......................................................................................... 4.3 3.3 3.0 3.7
Trade receivables .................................................................................. 227.6 206.5 242.1 250.4
Other current assets .............................................................................. 32.0 42.7 35.3 24.9
Cash and cash equivalents .....................................................................
245.2 161.8 200.6 303.1
Total current assets ...........................................................................
509.1 414.4 480.9 582.2
Total assets ........................................................................................
2,740.2 2,722.2 2,804.4 2,740.6
Equity and liabilities
Total paid-in capital ............................................................................... 331.8 331.8 331.8 339.1
Other equity ......................................................................................... 751.7 723.3 793.7 671.0
Non-controlling interests ........................................................................
- 24.8 28.8 22.7
Total equity ........................................................................................
1,083.6 1,079.9 1,154.3 1,032.8
Borrowings ........................................................................................... 1,177.6 1,223.5 1,140.5 1,290.0
Post employment benefits ...................................................................... 55.6 70.1 62.1 87.0
92

As of
30 June
As of
31 December
(In USD millions)
2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2012
(IFRS)
(audited)
2011
(IFRS)
(audited)
Deferred tax liability .............................................................................. 32.9 0 0 0
Other non-current liabilities ....................................................................
19.2 33.8 31.0 33.6
Total non-current liabilities ................................................................
1,285.3 1,327.3 1,233.7 1,410.6
Borrowings ........................................................................................... 180.9 144.9 211.3 117.8
Trade payables ..................................................................................... 38.5 30.8 36.0 34.4
Other current liabilities ..........................................................................
151.8 139.3 169.1 145.0
Total current liabilities .......................................................................
371.3 315.0 416.4 297.2
Total liabilities ...................................................................................
1,656.7 1,642.3 1,650.1 1,707.8
Total equity and liabilities ..................................................................
2,740.2 2,722.2 2,804.4 2,740.6
Equity ratio
4
......................................................................................... 39.5% 39.7% 41.2% 37.7%
Net debt to LTM EBITDA
4,5
..................................................................... 2.99 - 3.48 2.89
Interest coverage
4
................................................................................ 6.99 5.48 5.74 6.86
Debt/equity
4
........................................................................................ 1.25 1.27 1.17 1.36
Net interest bearing debt/equity
4
............................................................ 1.03 1.12 1.00 1.07

1 The Groups main intangible fixed assets are goodwill and deferred income tax asset. At 31 December 2012, goodwill accounted for USD 29
million compared to USD 27 million at 31 December 2011. Goodwill as of 31 December 2012 related to the following acquisitions: USD 23.2
million for the group structuring in 2002, USD 0.5 million for the acquisition of Drilltools AS in 2004 and USD 3.3 million for the acquisition of
Ntera Ltd in 2005, there was also a currency translation difference of USD 2.1 million. At 31 December 2012, deferred income tax asset
accounted for USD 0.8 million compared to USD 5.3 million at 31 December 2011.
2 1 The Groups main tangible fixed assets are Drilling Units, its Aberdeen newbuild and Rental Equipment. At 31 December 2012, the book value of
the MODU segments tangible fixed assets, which includes Drilling Units, periodic maintenance and construction in progress as well as 40% of
Deep Sea Metros non-current assets, was USD 2,311 million compared to USD 2,252 million at 31 December 2011. The book value of the
Groups own rigs, which includes periodic maintenance and construction in progress, was USD 1,652 million at 31 December 2012 and USD 1,611
million at 31 December 2011. The book value of the Well Services segments tangible fixed assets at 31 December 2012 was USD 173 million (of
which USD 41 million was related to the mooring business) compared to USD 139 million (of which USD 37 million was related to the mooring
business) at 31 December 2011. At December 31, 2012, the accumulated cost price of Rental Equipment in use was USD 406 million (of which
USD 67 million was related to the mooring business) compared to USD 319 million (of which USD 55 million was related to the mooring business)
at 31 December 2011. At 30 June 2013, the book value of the MODU segments tangible fixed assets, which includes Drilling Units, periodic
maintenance and construction in progress as well as 40% of Deep Sea Metros non-current assets, was USD 2,262.9 million compared to USD
2,332.5 million at 30 June 2012. The book value of the Groups own rigs, which includes periodic maintenance and construction in progress, was
USD 1,616.0 million at 30 June 2013 and USD 1,669.5 million at 30 June 2012. The book value of the Well Services segments tangible fixed
assets at 30 June 2013 was USD 122.1 million compared to USD 151.9 million (of which USD 39.1 million was related to the mooring business) at
30 June 2012. At 30 June 2013, the accumulated cost price of Rental Equipment in use was USD 368.6 million compared to USD 266.5 million (of
which USD 59.5 million was related to the mooring business) at 30 June 2012.
3 The table below sets out a breakdown of the cost price and book value of the Groups tangible fixed assets as at 31 December 2012. The table
presents the cost price and book value of Rental Equipment from those of other machinery and equipment.

Mobile
drilling units
Periodic
maintenance
Construction
in progress
Well service
equipment
Other
machinery
1

and
equipment
Total fixed
assets
Tangible fixed assets
Cost price 1 January 2012 ......................................... 1,748 117 318 105 2,288
Additions ................................................................. 19 6 109 68 43 245
Disposals and other .................................................. (7) (72) (7)
Currency translation differences .................................
0 27 6 33
Cost price 31 December 2012 ................................
1,767 123 109 406
2
82 2,487
Accumulated depreciation and
impairment losses 1 January 2012.............................. 211 43 180 59 493
Depreciation for the year ........................................... 75 22 42 8 147
Disposals and other .................................................. (1) (0) (4) (35) (41)
Currency translation differences .................................
(2) 16 3 16
Accumulated depreciation and
impairment losses 31 December
2012 ......................................................................
282 65 233 35 616
Carrying amounts 31 December
2012 ......................................................................
1,485 58 109 173
3
48 1,872

1 Includes an idle second BOP available for Deepsea Atlantic and similar units.
2 Includes USD 67 million, the book value of the Rental Equipment related to the mooring business, which was disposed of in 2013.
3 Includes USD 41 million, the book value of the Rental Equipment related to the mooring business, which was disposed of in 2013.
93

4 Unaudited
5 Net debt consists of non-current and current borrowings less cash and cash equivalents.
The table below sets out selected data from the Groups audited consolidated statement of financial position as of
31 December 2011 and 2010.

As of
31 December
(In NOK millions)
2011
(NGAAP)
(audited)
2010
(NGAAP)
(audited)
Assets
Intangible assets .......................................................................................................................... 145.0 194.1
1
..................................................................................................... 10,508.3 10,543.8
Financial fixed assets ....................................................................................................................
2,000.2 1,406.5
Total non-current assets ...........................................................................................................
12,653.5 12,144.4
Spare parts ................................................................................................................................. 269.1 164.0
Trade receivables ......................................................................................................................... 1,500.7 1,236.1
Other current assets ..................................................................................................................... 149.5 153.5
Cash and bank deposits ................................................................................................................
1,816.6 1,605.3
Total current assets ..................................................................................................................
3,736.0 3,159.1
Total assets ...............................................................................................................................
16,389.5 15,303.4
Total paid-in capital ...................................................................................................................... 1,989.5 1,986.0
Other equity ................................................................................................................................ 4,290.9 3,803.1
Non-controlling interests ...............................................................................................................
136.2 155.7
Total equity ...............................................................................................................................
6,416.6 5,944.7
Borrowings .................................................................................................................................. 8,404.7 7,748.1
Post employment benefits ............................................................................................................. 196.3 186.9
Other non-current liabilities ...........................................................................................................
265.2 98.8
Total non-current liabilities .......................................................................................................
8,866.3 8,033.8
Trade payables ............................................................................................................................
205.9 201.3
Other current liabilities .................................................................................................................
900.7 1,123.7
Total current liabilities ..............................................................................................................
1,106.6 1,325.0
Total liabilities ..........................................................................................................................
9,972.9 9,358.7
Total equity and liabilities .........................................................................................................
16,389.5 15,303.4
Interest coverage
2
........................................................................................................................ 6.17 2.88
Debt/equity
2
................................................................................................................................ 1.31 1.31
Net interest bearing debt/equity
2
...................................................................................................
1.03 1.04

1 1 The book value of the Rental Equipment at 31 December 2011 was NOK 831.7 million (of which NOK 222.8 million was related to the rig mooring
business) compared to NOK 781.5 million (of which NOK 201.5 million was related to the rig mooring business) at 31 December 2010. The
accumulated cost price of the Rental Equipment in use at 31 December 2011 was NOK 1,910.7 million (of which NOK 330.3 million was related to
the rig mooring business) compared to NOK 1,657.3 (of which NOK 268.1 million was related to the rig mooring business) at 31 December 2010.
2 Unaudited.
10.6 Condensed consolidated statement of cash flow
The table below sets out selected data from the Groups audited consolidated statements of cash flows for the
years ended 31 December 2012 and 2011 and from the unaudited consolidated interim statements of cash flows
for the three and six month periods ended 30 June 2013 and 2012.

94

Three months ended
30 June
Six months ended
30 June
Year ended
31 December
(In USD millions)
2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2012
(IFRS)
(audited)
2011
(IFRS)
(audited)
Cash flow from operating activities

Profit before income tax ....................................... 61.7 20.2 89.5 61.9 148.0 153.5
Adjustments for:
Depreciation and impairment ................................ 36.1 35.8 73.7 72.3 147.3 145.0
Unrealised loss on interest rate swaps ................... (4.3) 0.2 (7.0) (0.1) (1.6) 23.4
Interest expense net ......................................... 12.1 13.1 24.5 26.8 50.3 51.9
Borrowing cost .................................................... 1.3 1.3 6.0 2.7 4.6 24.4
Share of (profit)/loss from joint ventures ............... 2.3 1.7 4.6 3.3 13.4 6.8
Net (gain)/loss on sale of shares ........................... (3.1) - (3.1) - - (46.0)
Net (gain)/loss on sale of tangible fixed assets ....... (18.0) (0.7) (18.3) (1.2) (2.6) 0.4
Post-employment benefit expenses less post
employment benefit payments .............................. - (3.1) (1.4) (6.3) (6.5) 6.7
Foreign exchange losses/(gain) on operating
activities ............................................................ (2.0) 20.1 (2.7) 8.3 (21.9) (25.7)
Impairment of investments in shares ..................... - - - - 0.9 -
Changes in working capital:
Spare parts ........................................................ (1.4) 0.5 (1.3) 0.3 0.7 (0.3)
Trade receivables ................................................ (1.1) 11.1 14.4 43.9 8.4 (39.4)
Trade payables ................................................... 5.8 0.9 2.5 (3.6) 1.7 -
Other accruals ....................................................
(10.7) (24.5) (21.0) (35.4) (5.2) (35.0)
Cash generated from operations ...................... 78.7 76.6 160.7 173.0 337.4 265.8
Interest paid ...................................................... (14.5) (13.2) (28.0) (24.7) (55.7) (49.1)
Income tax paid ..................................................
(3.1) (0.8) (16.7) (2.8) (14.5) (19.2)
Net cash generated from operating
activities ..........................................................
61.1 62.6 115.9 145.4 267.2 197.6

Cash flows from investing activities:
Purchase of property, plant and equipment ............ (22.1) (75.9) (38.8) (158.1) (210.9) (148.8)
Proceeds from sale of property, plant and
equipment.......................................................... 60.4 (1.3) 62.6 0.9 6.1 3.0
Loans granted to employees .................................
- (0.2) 0.1 (0.1)
0.1 (0.6)
Sub-ordinated loan to related parties .....................
(12.2) (78.4) (12.2) (78.4)
(80.0) -
Other long term receivables .................................
(4.7) 0.7 (8.2) (1.9)
(21.2) -
Purchase of shares incl. joint ventures ..................
(3.4) - (4.1) -
- (92.9)
Proceeds from sale of shares and bonds .................
5.1 - 5.1 - - 26.4
Net cash used in investing activities ................
23.2 (155.0) 4.4 (237.6) (305.9) (213.0)

Cash flows from financing activities:
Proceeds from debt to financial institutions ............ - - 347.8 - 49.4 1,413.8
Repayments of debt to financial institutions ............ (51.7) (43.8) (346.7) (43.8) (99.9) (1,324.0)
Acquisition shares non-controlling interests ............ - - (64.3) - - -
Dividends paid to owners of the parent .................. (8.6) - (14.8) - (1.8) (7.5)
Dividends paid to non-controlling interests .............
- (6.0) - (6.0) (8.7) (16.2)
Net cash used in financing activities ................
(60.2) (49.7) (78.0) (49.7) (61.0) 66.0

Net change in cash and cash equivalents .........
24.0 (142.1) 42.3 (141.9) (99.7) 50.6
Cash and cash equivalents at beginning of
period ................................................................ 218.9 305.5 200.6 303.1 303.1 274.1
Exchange gains/(losses) on cash and cash
equivalents ........................................................
2.3 (1.6) 2.2 0.6 (2.8) (21.6)
Cash and cash equivalents at end of
period ..............................................................
245.2 161.8 245.2 161.8 200.6 303.1
95

The table below sets out selected data from the Groups audited consolidated statements of cash flows for the
years ended 31 December 2011 and 2010.
Year ended
31 December
(In NOK millions)
2011
(NGAAP)
(audited)
2010
(NGAAP)
(audited)
Cash flow from operating activities
Profit before income tax ................................................................................................................ 833.8 275.5
Adjustments for:
Depreciation and impairment ......................................................................................................... 822.1 474.4
Unrealised loss on interest rate swaps ............................................................................................ (144.4) -
Share of (profit)/loss from joint ventures ........................................................................................ 41.6 (25.7)
Net (gain)/loss on sale of shares .................................................................................................... (221.9) -
Net (gain)/loss on sale of tangible fixed assets ................................................................................ (15.0) (26.0)
Post-employment benefit expenses less post employment benefit payments ....................................... 9.0 69.5
Spare parts .................................................................................................................................
(105.2) (107.6)
Trade receivables ......................................................................................................................... (264.6) (173.4)
Trade payables ............................................................................................................................ 4.7 42.9
Other accruals .............................................................................................................................
(187.5) (178.8)
Cash generated from operations ............................................................................................... 772.5 351
Income tax paid ...........................................................................................................................
(73.8) (216.2)
Net cash generated from operating activities............................................................................
698.7 134.6

Purchase of property, plant and equipment ..................................................................................... (589.0) (2,516.2)
Proceeds from sale of property, plant and equipment .......................................................................
29.7 41.8
Other long term receivables .......................................................................................................... (6.0) 177.3
Purchase of shares incl. joint ventures ........................................................................................... (624.4) (795.3)
Proceeds from sale of shares and bonds ..........................................................................................
187.8 67.1
Net cash used in investing activities .........................................................................................
(1,001.9) (3,025.4)


Net proceeds from debt to financial institutions ................................................................................ 656.67 1,679.5
Dividends paid to owners of the parent ...........................................................................................
(45.0) (40.0)
Dividends paid to non-controlling interests ......................................................................................
(90.8) (72.4)
Net cash used in financing activities .........................................................................................
520.8 1,567.0

Net change in cash and cash equivalents ..................................................................................
217.1 (1,323.8)
Cash and cash equivalents 01.01 ...................................................................................................
1,605.3 2,929.1
Cash and cash equivalents at 31.12 ..........................................................................................
1,822,4 1,605.3
10.7 Condensed consolidated statement of changes in equity
The table below sets out selected data from the Groups audited consolidated statements of changes in equity for
the years ended 31 December 2012 and 2011 and from the unaudited consolidated interim statement of changes
in equity for the six months ended 30 June 2013 and 2012.
Six months ended 30
June
Year ended 31
December
(In USD millions)

2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2012
(IFRS)
(audited)
2011
(IFRS)
(audited)
Balance at the beginning of the period .................................................
1,154.3 1,032.8 1,032.8 968.8
Profit/(loss) for the period ........................................................................
12.3 45.6 116.9 121.3
96

Six months ended 30
June
Year ended 31
December
(In USD millions)

2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
2012
(IFRS)
(audited)
2011
(IFRS)
(audited)
Other comprehensive income for the period ...............................................
(10.3) 7.4 21.3 (34.6)
Total comprehensive income for the period .........................................
2.1 53.0 138.1 86.7
Dividends ...............................................................................................
(8.6) 6.0 (16.6) (22.7)
Acquisition minority share ........................................................................
(64.3) - - -
Transactions with owners ....................................................................
(72.8) 6.0 (16.6) (22.7)
Balance at period end ..........................................................................
1,083.6 1,079.9 1,154.3 1,032.8
The table below sets out selected data from the Groups audited consolidated statements of changes in equity for
the years ended 31 December 2011 and 2010.

Year ended 31
December
(In NOK millions)
2011
(NGAAP)
(audited)
2010
(NGAAP)
(audited)
Balance at the beginning of the period ......................................................................................
5,944.7 5,047.2
Profit/(loss) for the period .............................................................................................................
653.1 305.3
Currency translation differences ..................................................................................................... (41.9) (474.7)
Other adjustments .......................................................................................................................
(3.5) 1.5
Total changes in other equity in the period ...............................................................................
607.7 (167.6)
Dividends .................................................................................................................................... (135.8) (40.0)
Net issued capital .........................................................................................................................
- 1,105.5
Transactions with owners .........................................................................................................
(135.8) 1,065.5
Balance at period end ...............................................................................................................
6,416.6 5,944.7
10.8 Segment information
The table below is derived from the notes to the Groups Financial Statements and Interim Financial Statements. As
the segment information does not exist in this format under the NGAAP Financial Statements, the 2010 figures are
not included in this table.
In accordance with the internal financial reporting, the Groups 40% ownership interest in Deep Sea Metro has
been presented in the MODU segment using the line-by-line proportionate method.
(amounts in USD millions)
Year 2012
Mobile offshore drilling
units Drilling and technology Well services
Income Statement

Total income. ............................................
693.4 316.0 208.2
EBITDA ...................................................
285.0 24.9 95.3
Depreciation & impairment. ......................... (122.7) (5.9) (42.6)
EBIT ........................................................ 162.3 19.0 52.7
Revenue growth ............................................
20.9% (1.6)% 7.9%
EBITDA growth .............................................
25.7% (41.4)% 5.3%
EBIT growth .................................................
22.8% (42.4)% 7.8%
EBITDA-margin .............................................
41.1% 7.9% 45.8%
EBIT-margin .................................................
23.4% 6.0% 25.3%
Share of group revenue
1
................................
56.9% 26.0% 17.1%
Share of group EBITDA
1
.................................
70.3% 6.1% 23.5%
Share of group EBIT
1
.....................................
69.3% 8.1% 22.5%

1 Before group eliminations and corporate overheads.

97

Year 2011
units Drilling and technology
1
Well services
Income Statement
Total income ................................................ 573.6 321.5 192.9
EBITDA ...................................................... 226.8 42.5 90.5
Depreciation & impairment. ............................
(94.6) (9.6) (41.6)
EBIT ...........................................................
132.1 32.9 48.9
Revenue growth ............................................
- - -
EBITDA growth .............................................
- - -
EBIT growth .................................................
- - -
EBITDA-margin ............................................. 39.5% 13.2% 46.9%
EBIT-margin ................................................. 23.0% 10.2% 25.4%
2
................................ 52.7% 29.5% 17.7%
2
................................. 63.0% 11.8% 25.2%
Share of group EBIT
2
..................................... 61.8% 15.3% 22.9%

1 Includes contribution from the well management business sold in 2011 of USD 17.4 million, USD 5.9 million and USD 5.8 million in operating
income, EBITDA and EBIT, respectively.
2 1 Before group eliminations and corporate overheads.

Six months ended 30 June 2013
units Drilling and technology Well services
Income Statement
Total income ................................................ 369.9 177.2 116.0
EBITDA ...................................................... 161.0 12.7 54.0
(66.2) (2.7) (20.8)
EBIT ...........................................................
94.8 10.0 33.2
Revenue growth ............................................ 10.5% 19.9% 13.7%
EBITDA growth ............................................. 22.2% 26.2% 19.4%
EBIT growth ................................................. 27.1% 37.0% 36.6%
EBITDA-margin ............................................. 43.5% 7.2% 46.6%
EBIT-margin ................................................. 25.6% 5.6% 28.6%
1
................................ 55.8% 26.7% 17.5%
1
................................. 70.7% 5.6% 23.7%
Share of group EBIT
1
..................................... 68.7% 7.2% 24.1%


units
Drilling and
technology Well services
Income Statement
Total income ................................................ 334.7 147.8 102.0
EBITDA ...................................................... 131.7 10.0 45.3
(57.1) (2.8) (21.0)
EBIT ...........................................................
74.6 7.3 24.3
Revenue growth ............................................ - - -
EBITDA growth ............................................. - - -
EBIT growth ................................................. - - -
EBITDA-margin ............................................. 39.3% 6.8% 44.4%
EBIT-margin ................................................. 22.3% 4.9% 23.8%
1
................................ 57.3% 25.3% 17.5%
1
................................. 70.4% 5.3% 24.2%
Share of group EBIT
1
..................................... 70.2% 6.9% 22.9%

98

Three months ended 30 June 2013
units
Drilling and
Income Statement
Total income ............................................. 184.4 88.7 55.5
EBITDA ................................................... 80.9 7.6 25.4
Depreciation & impairment. .........................
(33.2) (1.6) (9.6)
EBIT ........................................................
47.7 6.1 15.8

Three months ended 30 June 2012
units
Drilling and
Income Statement
Total income ............................................. 165.0 72.7 51.1
EBITDA ................................................... 63.8 5.4 23.6
Depreciation & impairment. .........................
(29.0) (1.4) (10.5)
EBIT ........................................................
34.8 4.1 13.1
10.9 Sales revenues by geographical area
The table below sets out Odfjell Drillings sales revenues by geographic area for the years ended 31 December
2012 and 2011.
Combined
year ended
31 December
In USD million
2012
(IFRS)
(unaudited)
2011
(IFRS)
(unaudited)
Sales revenues ................................................................................................... 1,094 1,057
- Norway ............................................................................................................. 839 822
- UK ................................................................................................................... 74 90
- Europe (excluding Norway and the UK) ................................................................. 24 17
- Middle East ....................................................................................................... 30 28
- Philippines ........................................................................................................ 0.2 0.3
- Africa ............................................................................................................... 127 99
The table below sets out Odfjell Drillings sales revenues by geographic area for the years ended 31 December
2011 and 2010.
Combined
year ended
31 December
In NOK million
2011
(NGAAP)
(unaudited)
2010
(NGAAP)
(unaudited)
Sales revenues ................................................................................................... 5,925 4,725
- Norway ............................................................................................................. 4,611 3,810
- UK ................................................................................................................... 505 405
- Europe (excluding Norway and the UK) ................................................................. 0 5
- Middle East ....................................................................................................... 95 119
- Philippines ........................................................................................................ 157 127
- Africa ............................................................................................................... 1 0

99

10.10 Analysis of material differences between IFRS and NGAAP
10.10.1 General
Odfjell Drilling has performed an analysis of currently prevailing standards of IFRS and NGAAP as they relate to the
activities of the Group. The purpose of this analysis was to identify material differences between IFRS and NGAAP
which are assumed to have a material effect on the Group's results, positions or cash flows presented in the
Financial Statements.
The analysis covered only those differences in accounting policies in force at the time of the preparation of the
consolidated financial statements for year ended 31 December 2012. Future developments or changes in IFRS or
NGAAP may give rise to additional differences between IFRS and NGAAP, which could have a significant impact on
the Group. No attempts have been made to identify such differences.
For the Group's consolidated financial statements as of and for the year ended 31 December 2012 prepared in
accordance with IFRS, IFRS have been applied retrospectively on the comparable figures for the year ended 31
December 2011, including the income statement and the financial positions as at 1 January 2011 and 31 December
2011.
10.10.2 Other comprehensive income
The transition from NGAAP to IFRS introduces the concept of other comprehensive income. Accumulated other
comprehensive income is often attributable to gains and losses yet to be realized from a variety of sources
including unrealised pension costs, gains and losses on securities and derivatives, foreign currency hedges and
exchange differences on translation of foreign subsidiaries. Under NGAAP such items would normally be recognised
directly in equity.
10.10.3 Goodwill
Goodwill is under NGAAP subject to amortisation over its useful life, whereas amortisation of goodwill is not
permitted according to IFRS. Goodwill is tested for impairment under both NGAAP and IFRS, but there are more
formalised requirements under IFRS relating to the frequency and calculation method.
10.10.4 Financial derivatives
The accounting treatment of financial derivatives are different under NGAAP and IFRS. The Group has several
interest rate swaps, whereas some qualify for hedge accounting under IFRS. For further details regarding the effect
of transition from NGAAP to IFRS, see note 26 in the consolidated financial statements for year ended 31
December 2012.
10.10.5 Employee benefits
The Group has applied IAS 19 (revised) when accounting for employee benefits. Under IFRS, the employee benefits
are recognised at fair value, while under NGAAP it is allowed to allocate the actuarial gains and losses over the
expected remaining period of service.
Potential investors should be aware that there are differences between IFRS and NGAAP related to the classification
of financial items in the financial statements. Such differences have not been accentuated in this analysis, as they
do not affect the figures, except in how they are presented.

100

11 OPERATING AND FINANCIAL REVIEW
The following review of the Groups financial condition and operating results should be read in conjunction with
Section 10 Selected financial information, the IFRS Financial Statements (including the notes thereto), the NGAAP
Financial Statements (including the notes thereto), and the Interim Financial Statements (and the notes thereto),
included in the appendices B and C of this Prospectus. Note 26 to the Groups Financial Statements for the year
ended 31 December 2012 discloses the impact of the Groups transition to IFRS from NGAAP in connection with the
preparation of its initial IFRS Financial Statements as at and for the year ended 31 December 2012.
The Interim Financial Statements do not include all of the information required for the full annual financial
statements of the Group and should be read in conjunction with the Financial Statements.
This review contains forward-looking statements based on current expectations and assumptions about the Groups
future business. The actual results of the Group may differ materially from those discussed in these forward-
looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those
discussed below and elsewhere in this Prospectus, including in Section 2 Risk factors and Section 4.3 Cautionary
note regarding forward-looking statements.
11.1 Overview and presentation
Odfjell Drilling is an integrated drilling, engineering and well services provider with more than 40 years experience
focusing on the offshore harsh environment and deepwater markets, including on the NCS.
11.1.1 Reporting segments
The Groups three IFRS reporting segments, with effect from 1 January 2012 are:
MODU: In the MODU segment, the Group operates drilling units wholly or partly owned by the Group.
The MODU segment also carries out management services on behalf of other owners of semi-
submersibles, drillships and jack-ups, including services related to operational management,
management of regulatory requirements, marketing, contract negotiations and client relations,
preparations for operation and mobilisation.
Well Services: The Well Services segment provides casing and tubular running services as well as
drilling tool and tubular rental services both for exploration wells and for production purposes.
Drilling & Technology: Within the Drilling & Technology segment, the main service offered by the
Platform Drilling business area is production drilling and well completion on clients rigs. Other types of
services that the Platform Drilling business area offers are slot recovery, plug and abandonment, work-
overs and maintenance activities.
The Technology business area offers engineering services, including design, project management and
operational support relating to newbuild projects, SPS and yard stays.
11.1.2 Presentation of Financial Information
The Group has prepared its financial statements under IFRS since the year ended 31 December 2012. The IFRS
Financial Statements include a comparison of the Groups consolidated income statement, statement of financial
position, statement of cash flows and statement of changes in equity as of and for the year ended 31 December
2011. Its Interim Financial Statements as of and for the three months and six months ended 30 June 2013 and
2012 have been prepared in accordance with IAS 34. The IFRS Financial Statements and the Interim Financial
Statements are presented in USD. The NGAAP Financial Statements are presented in NOK. Financial information for
2010 and 2011 prepared under NGAAP and financial information for 2012 and for the six months ended 30 June
2013 prepared under IFRS are not comparable, because they have been prepared in accordance with different sets
of accounting standards. Accordingly, no comparisons can be made between the Groups results of operations for
2010 and its results of operations for 2012 or for the six months ended 30 June 2013. Note 26 to the IFRS
Financial Statements contains reconciliations of the Groups consolidated statement of financial position,
consolidated income statement and statement of comprehensive income, in each case as previously reported under
NGAAP. Note 26 also details the principal adjustments that have been required in order to effect such a transition.
The primary differences between IFRS and NGAAP that impact the Group relate to amortisation of goodwill, net
101

pension liabilities and derivative financial instruments. IFRS financial statements do not exist for the Group as of
and for the year ended 31 December 2010.
Accordingly, in order to facilitate the comparison between periods in this operating and financial review, the
discussion and analysis of the Groups results of operations and cash flows below includes:
a discussion and analysis of the Groups results of operations and cash flows for the years ended 31
December 2012 and 2011 based on the IFRS Financial Statements; and
a discussion and analysis of the Groups results of operations and cash flows for the years ended 31
December 2011 and 2010 based on the NGAAP Financial Statements.
In connection with its transition to IFRS, the Group also adopted reporting segments to conform to IFRS
requirements to report its results of operations by operating segments in a manner that is consistent with the
internal financial reporting provided to the Groups chief operating decision-maker. This operating and financial
review therefore contains a discussion and analysis of revenue and EBIT for the Groups three IFRS reporting
segments for each of the periods covered by the IFRS Financial Statements. Under NGAAP, there is no
corresponding requirement to present business segmentation and accordingly no such segmentation exists in the
NGAAP Financial Statements. This operating and financial review does not, therefore, contain such a segmental
discussion for the periods covered by the NGAAP Financial Statements.
11.2 Key factors affecting the Groups results of operations and financial performance
11.2.1 Client demand and spending
Demand for the Groups services is principally driven by clients (primarily oil and gas companies) spending to
explore and develop oil and gas reserves and produce oil and gas products, as well as their need for ancillary
services. The Groups clients also include companies who sell products and services to the oil and gas companies.
The oil and gas companies level of E&P activity will, consequently, also affect the level of activity of these clients
and their demand for the Groups services.
The oil and gas industry is highly cyclical. Many factors can affect the level of exploration, development and
production activities by the Groups clients including macroeconomic trends in the oil and gas industry. Global
macroeconomic conditions and trends have a direct effect on the activity level of the Group, including, for example,
its ability to secure new contracts and to build a stable contract backlog, and therefore its results of operations and
financial performance. See Section 7 Industry and market overview for a discussion of the principal
macroeconomic and industry trends affecting the Groups results of operations.
During the periods under review, global industry conditions have developed favourably, with all of the oil and gas
companies with which the Group has significant client relationships increasing their level of E&P spending. E&P
spending in Norway remained high with the number of drilled wells increasing to compensate for the decline in
Norwegian oil production. In the two year period from 2009 to 2011, a total of 162 exploration wells were drilled
on the NCS compared to 184 wells during the previous seven years (The Norwegian Petroleum Directorate). See
Section 7.3.4 The Norwegian rig market for a discussion of trends in the drilling of wells on the NCS. Oil and gas
companies' budget announcements and spending plans released to date indicate growth of approximately 8% year-
on-year for the year ended 31 December 2013.
As a result of increased E&P spending and, therefore, increased demand for drilling services, the Group has been
able to maintain high utilisation of its assets and employees in all of its business segments during the periods
under review. This has generally affected the Groups results of operations positively. The results of operations of
the Groups MODU segment and its Platform Drilling business area are affected by longer-term spending decisions
of their clients, which are themselves based on long-term trends in oil and gas prices, while the results of
operations of the Technology business area and the Well Services segment are more sensitive to client decision-
making based on short-term fluctuations in oil and gas prices.
Demand for the Groups services is also positively impacted by its clients increasingly seeking opportunities in
deeper and harsher waters, as this favours the Groups products and services. Harsh environments, in particular,
and ultra-deepwater areas have high barriers to entry and the day rates that the Group earns in these areas in its
MODU segment are higher than day rates applicable in less deep waters or more benign conditions. As between
harsh environment and ultra-deepwater drilling, the Group generally earns higher day rates in harsh environments
102

in view of the difficulty of operating conditions and the Groups acknowledged expertise. See Section 7 Industry
and market overview for a discussion of day rates in harsh environments. With its sixth-generation Drilling Units,
the Group believes it is well positioned to secure drilling contracts in these areas in the future.
11.2.2 Revenue generation
The Groups three segments use different contracting models and performance indicators due to the different types
of services offered by each segment, which have an impact on revenue generation, and therefore EBIT, for each
segment.
MODU
The Group considers that the related performance indicators, contracts and day rates, and financial utilisation,
together with backlog (discussed below) are key to understanding the MODU segments revenues and results of
operations.
Contracts and day rates
For the MODU segment, the Group generally enters into medium-term (one to two years) and long-term (over two
years) Drilling Unit contracts, customarily with an option for the client to extend the contract for one or several
optional periods, and often including mobilisation fees for new contracts.
Day rates are the rates at which the MODU segment earns revenue for its services under its Drilling Unit contracts
with clients and the Group generally invoices its clients monthly in arrears. The Groups contracts provide for lower
day rates that apply under certain circumstances that prohibit or reduce the financial utilisation of the Drilling Unit
(for example delays due to weather, repairs, maintenance, standby arrangements and force majeure).
Day rates often vary by geographic market as they reflect cost levels, tax rates and capital expenditure required
for each jurisdiction, as well as the supply of available drilling units. However, changes in market day rates
generally only affect the MODU segments day rates when the MODU segment signs a new contract, as day rates
are fixed over the contract term.
The Group also enters into contracts to manage mobile offshore drilling units owned by third parties or jointly
owned by the Group and third parties. These contracts, which include contracts for services provided on the
drillships Deepsea Metro I and Deepsea Metro II as well as the rig Island Innovator, generally provide for fixed
daily fees, incentive fees based on financial performance, support fees and other commissions.
Financial utilisation
Financial utilisation for the MODU segments Drilling Units is measured on a monthly basis and comprises the actual
monthly invoice amount (encompassing different hourly day rates) for all hours in a month, expressed as a
percentage of the full day rate for all hours in a month.
Financial utilisation, by definition, does not take into account periods of non-utilisation when the Drilling Units are
not under contract. As is customary in the industry, Drilling Units are subject to periods of non-utilisation to permit
upgrades, repair, maintenance, inspections and surveys, which periods can be significant. The Drilling Units also go
through additional periods of non-utilisation in connection with the SPS each fifth year to obtain re-classification,
during which the Drilling Unit could be idle for 30 days or more. The Group estimates that its capital expenditure
every five years for SPS is USD 30 million per rig. The Group's last SPS occurred in 2010 for Deepsea Bergen. The
Groups remaining Drilling Units have not yet been subject to SPS, since all of them are less than five years old.
Deepsea Atlantic is due for SPS in 2014, Deepsea Stavanger in the third quarter of 2015 and Deepsea Metro I and
Deepsea Metro II in 2016. Financial utilisation takes into account scheduled non-utilisation that occurs after the
commencement of a contract. Accordingly, financial utilisation for Deepsea Stavanger was not adjusted during its
yard stay between the Ophir and BP contracts in 2011; however, financial utilisation took into account Deepsea
Bergens last SPS, which occurred during the term of a contract.

103

The table below sets out the historical financial utilisation for each Drilling Unit under drilling contracts in the
applicable period. Financial utilisation is measured from the commencement date to the expiry date of the drilling
contracts.
Year ended
31 December
Six months
ended Month ended

2010 2011 2012
30 June
2013
31 July
2013
31 Aug
2013
Deepsea Stavanger
1
.............................................................................................. 91.7% 91.2% 79.0% 85.9% 98.1% 84.2%
Deepsea Atlantic
2
.................................................................................................. 85.0% 97.4% 98.0% 99.3% 99.7% 98.7%
Deepsea Bergen
3
.................................................................................................. 80.1% 96.8% 97.0% 99.7% 99.5% 99.7%
Deepsea Metro I
4
.................................................................................................. - 98.8% 97.5% 97.5% 99.9% 100%
Deepsea Metro II
5
................................................................................................. - - 72.4% 81.5% 99.6% 97.6%

1 Deepsea Stavanger was delivered from the shipyard on 8 July 2010 and commenced operations for Ophir in Tanzania on 16 September 2010.
Deepsea Stavangers contract with Ophir in Tanzania ended on 18 April 2011. Between 18 April 2011 and 17 November 2011 Deepsea Stavanger
was mobilised and was at the shipyard for client modifications until commencement of operations in Angola under its contract with BP on 17
November 2011. Deepsea Stavangers low utilisation in 2012 and in the first half of 2013 was due to challenges with BOPs and subsea equipment.
2 Deepsea Atlantic was docked from 24 November 2009 due to a contractual dispute until it re-commenced operations for Statoil on the NCS on 5
December 2010. The reported utilisation above is for the period when Deepsea Atlantic re-commenced operations.
3 In 2010, the rig had a yard stay of 55 days for SPS, modifications and upgrades.
4 Deepsea Metro I was delivered from the shipyard on 22 June 2011. It commenced operations for BG in Tanzania on 26 December 2011.
5
Deepsea Metro II was delivered from the shipyard on 25 November 2011. It commenced operations for Petrobras in Brazil on 17 May 2012.
Deepsea Metro IIs low utilisation in 2012 and in the first half of 2013 was due to challenges with BOPs and subsea equipment.
Well Services
Contracts
In the Groups Well Services segment, the Group provides a wide range of services under a variety of contractual
arrangements, including medium- to long-term framework agreements (one year to four years) for Rental
Equipment and services at identified rates but generally with no volume commitment from the client, as well as
exclusive service agreements priced at day rates or for lump sum payments. The Well Services segment has both
exclusive and non-exclusive contracts. As there are generally no volume commitments under the contracts,
deployment of equipment and personnel is a key factor for revenue generation. The cost structure for Well Services
contracts generally is evenly divided between fixed and variable costs. From 2009 to 2012, the Well Services
segment had a revenue CAGR of 12% and an average EBITDA margin of 44%.
Drilling & Technology
Contracts
Within the Groups Drilling & Technology segment, the Platform Drilling business areas contracts in the NCS and
UKCS are long-term (three years and longer) for fixed periods with an option for the client to extend the contract
for additional specified periods, as is customary in the market. These contracts are customarily at fixed rates for
the firm contracted period. The cost structure for Platform Drilling contracts may differ by client and geographic
market. The Technology business areas services are provided under contracts that vary between short- to
medium-term reimbursable fixed rate or cost-plus contracts. Fixed rate contracts involve fixed revenue amounts
being received by the Group upon completion of certain milestones or fixed day rates received for the work
performed whereas cost-plus contracts involve clients paying the costs of inputs with the addition of an agreed
percentage of profit to the Group. The services are generally contracted under existing framework agreements with
oil companies and rig owners. The Technology business area generates a significant part of its revenues from long-
term contracts with clients of the Platform Drilling business area (approximately 40% of the Technology business
areas revenue for the year ended 31 December 2012).
Utilisation
As the Platform Drilling business areas contracts are long-term contracts at fixed rates, utilisation of its services is
normally fixed for the contract term. During the contract term, clients may change their production plans and,
within identified notice periods, the Group may change the services it provides. There are different day rates
applicable for the various types of services that may be provided. Capital expenditure for the Platform Drilling
business area is mainly linked to the periodic maintenance of the platforms and is approximately USD 2 million per
platform every five years. Growth in revenues in the Platform Drilling business area generally derives from new
contracts rather than price increases.
104

Most of the Technology business areas contracts are framework agreements, where the Group generates revenue
only when its personnel are being utilised under the relevant contract. Utilisation is measured as the number of
billable hours per employee expressed as a percentage of total hours available and is a key factor in revenue
growth for this business area.
11.2.3 Backlog
Backlog means contracted future revenue under contracts for Drilling Units in the MODU segment and services in
Platform Drilling business areas contracts. Backlog is not calculated for the Groups Well Services segment and
Technology business area as their contracts are typically long-term framework agreements which do not provide
for fixed volumes; however, these businesses have nonetheless had a relatively predictable revenue stream.
Backlog is also not calculated for the management contracts in the MODU segment.
The Group presents backlog both inclusive and exclusive of any priced optional periods exercisable by clients. The
Group seeks to enter into medium- (one to two years) to long-term (over two years) contracts for the MODU
segment and long-term contracts for the Platform Drilling business area, both customarily with an option for the
client to extend the contract for one or more optional periods. There are typically high costs for the client
associated with replacing Drilling Units and platform drilling contractors. This provides an incentive for clients to
exercise an option to extend the contract especially with the Platform Drilling business area. Backlog is calculated
as the aggregate of such contracted future revenue for the MODU segment and Platform Drilling business area over
the relevant contracted period for each contract.
Backlog provides an indication of future revenues, but not future EBIT, as costs may not fluctuate in proportion to
revenue. While backlog is a key performance indicator of the Groups future business, backlog may change over
time depending on any early termination of contracts, changes to the scope of work and changes to the applicable
day rate. Changes in backlog provide an early indication of the future direction of sales and earnings and also
provide an early indicator for management to adjust resource levels or seek additional sales opportunities.
As of 30 June 2013, the Groups total backlog was approximately USD 5,704 million inclusive of priced optional
periods and approximately USD 3,395 million exclusive of priced optional periods.
The following table sets out the Groups backlog for the periods indicated:
(In USD
million)
H2
2013 2014 2015 2016 2017 2018 2019 2020 After Total
Mobile
offshore
drilling
units
1
............ 325 663 524 503 417 234 164 165 123 3,118
Firm
contract .......... 325 663 439 294 234 164 164 165 123 2,571
Priced
options ........... - - 85 209 183 70 - - - 547
Platform
Drilling .......... 122 254 265 277 282 260 260 257 608 2,586
Firm
contract .......... 122 251 209 144 25 25 25 21 - 824
Priced
options ........... - 4 55 133 256 235 235 236 608 1,762
Total
backlog
2
........ 447 917 788 780 698 494 425 422 731 5,704
Firm
contract .......... 447 914 648 438 259 190 190 186 123 3,395
Priced
options ........... - 4 140 342 439 305 235 236 608 2,309

1 Includes pro-rata backlog figures according to Odfjell Drillings 40% ownership in Deep Sea Metro.
2 Total annual backlog figures may not equal the sum of firm contracts and priced option periods for the respective year due to rounding.
105

11.2.4 Costs of operations
Personnel costs
Personnel costs are the costs related to: (i) for the MODU segment, offshore crews and onshore personnel
operating the Drilling Units; (ii) for the Platform Drilling business area, onshore personnel and offshore crews that
provide the drilling and maintenance services; (iii) for the Technology business area, the engineers that perform
services; (iv) for the Well Services segment, personnel that provide the casing and tubular running services and
rental services; and (v) corporate and administrative personnel. These costs, which vary by geographic market and
location, consist of employees salaries and wages, bonuses, employers national insurance contributions, pension
expenses, other benefits and hired personnel.
The Groups operations depend on a skilled and experienced workforce of onshore personnel, offshore crew and
offshore personnel and are all labour intensive. For the Technology and Platform Drilling business areas, personnel
costs accounted for 90% of the business areas total operating costs in 2012.
For the MODU segment, the Groups personnel cost is directly correlated to the number of Drilling Units under
contract, as its crews are paid for the number of days worked at a set day rate, rather than by a salary. The Group
has in the past maintained, and may in the future maintain, a core crew on Drilling Units when they are off-hire for
shorter periods so that they can be mobilised quickly and at a lower cost when they are contracted, which may
result in the incurrence of some personnel costs even when a rig is off-hire. Subject to customer demand and
requirements, the MODU segment may also utilise subcontractors and extra personnel in addition to the
requirements specified in the contract. These personnel expenses are in general reimbursable from the client plus a
margin. For the Technology and Platform Drilling business areas and the Well Services segment it may be
necessary to use hired personnel from third parties depending on the availability and current utilisation/workload of
the Group's employees, the cost of which may be reimbursable plus a margin depending on the contract type.
Third party personnel costs in the MODU and Well Services segments and the Technology and Platform Drilling
business areas may not be reimbursable from the client if the Group needs additional personnel to fulfil its
contractual obligations. The structure described above assists the Group in adapting its cost base to reduced
activity levels.
Depreciation costs
Depreciation costs primarily consist of depreciation of the Groups Drilling Units and Rental Equipment. Drilling
Units are depreciated using the straight line method as from the date of first commencement of the unit, and
taking into account an estimated residual value (approximately 11% of the total purchase price, which the Group
defines as costs incurred until the commencement of the contract). For the purpose of calculating depreciation,
Drilling Units are divided into main components that are depreciated over their expected useful lifetime. The main
group of components are the rig, derrick and drain system (approximately 52% of the total purchase price), which
are expected to have an economic useful lifetime of 30 years, the drilling package, cranes and crew equipment
(approximately 32% of the total purchase price) which are depreciated over 20 years and other equipment
(approximately 5% of total purchase price) which is being depreciated over five years.
The Well Services segments Rental Equipment is depreciated over the expected useful life of each individual asset.
The Group's depreciation schedules are subject to on-going review based on experience and changes in technology
and other factors which impact on the expected useful life.
11.2.5 Borrowing costs
The Group has incurred, and may in the future incur, significant amounts of debt. As of 30 June 2013, the Group
had USD 1,358.6 million in interest bearing debt, representing 49.6% of its total equity and liabilities. As a result,
borrowing costs have been and may continue to be a significant cost for the Group, and the Group is, and will
continue to be exposed to interest rate risk primarily in relation to the portion of its long-term borrowings bearing
floating interest rates. The Groups current quarterly interest cost, excluding interest costs on Deep Sea Metro
debt, is approximately USD 14 million. See Section 11.8.1 Material borrowings.
The Group evaluates the extent to which it needs to enter into interest rate hedging transactions based on
assessment of the Groups total interest rate risk and currently has a combination of borrowings that bear interest
106

at fixed and floating interest rates in order to limit exposure. Approximately 50% of the Groups long-term floating
rate debt was hedged as of 30 June 2013.
Although interest rates were generally low during the periods under review, increases in interest rates may, to the
extent not hedged pursuant to the Groups hedging policies, impact the Groups cash flow and financial condition in
the future.
11.2.6 Investments in joint ventures and disposals
Historically, the Group has made material acquisitions and disposals, although no material acquisitions have been
made during the periods under review. The Group has, however, made significant investments in a joint venture
with Metro Exploration for Deep Sea Metro. In addition, the Group holds a 50% ownership interest in Odfjell Galvo
B.V., a joint-venture company established with Galvo Oil and Gas Holding B.V.
As of 30 June 2013, the Group holds a 40% ownership in Deep Sea Metro, which owns the two drillships Deepsea
Metro I and Deepsea Metro II, and which the Group accounts for under the equity method and which is reported
under share of profit/losses from joint ventures. In its segmental reporting for the MODU segment, however, the
Groups share of revenue, EBITDA and EBIT for Deep Sea Metro are included in segmental revenue, EBITDA and
EBIT, respectively. The average book value for each of these two drillships was USD 808.7 million at 30 June 2013.
The Company estimates that their market value is in the range of USD 800 850 million. The quarterly
depreciation charge for Deep Sea Metro is USD 18 million. The Groups investment in Deep Sea Metro was USD
304.5 million at 30 June 2013.
As of 30 June 2013, USD 6.4 million of Odfjell Drillings USD 45 million investment commitment in Odfjell Galvo
B.V. has been paid. The remainder is expected to be paid over the period up to 2018 with cash from the Group to
be contributed as equity in the joint venture. The Groups capital exposure is limited to the USD 45 million
commitment. However, if the drillships experience delays or cost overruns, the Group is not committed to follow up
with the remainder payment as it may instead opt to accept dilution of its equity holding in the joint venture. See
Section 8.1.1 Mobile Offshore Drilling Units (MODU) for a more detailed description of the Odfjell Galvo B.V.
joint venture.
In August 2011, the Group disposed of its well management and consulting business area, which had been part of
its Drilling & Technology segment, with a net gain of USD 43.2 million. As part of the consideration, the Group
received shares in the joint venture Ross Holding AS, a provider of total well and reservoir management, including
carbon storage. The Group holds a 50% ownership in Ross Holding AS as of 30 June 2013, with a book value of
USD 19.0 million, which it accounts for under the equity method, and which is reported under share of profit/losses
from joint ventures. In its segmental reporting for the Drilling & Technology segment, the Groups share of
revenue, EBITDA and EBIT for Ross Holding AS is not included in segmental revenue, EBITDA and EBIT,
respectively. However, the Groups share of net profit for Ross Holding AS is included in Share or profit/loss from
joint venture in the Groups income statement.
In addition, on 16 April 2013, Odfjell Partners Invest Ltd, a subsidiary of the Group, entered into sale and purchase
agreements by which it sold its rig mooring business, Deep Sea Mooring AS, which was established in 2008, and
related mooring equipment to DSM Holding AS and Equipment Rental Solutions Ltd, subsidiaries of HitecVision. The
disposal of the rig mooring business, which offered rental mooring equipment, pre-lay mooring solutions and
ancillary mooring services to oil and gas companies and rig owners in Norway, and was previously part of the Well
Services segment, was completed on 16 May 2013 with a return on invested capital of approximately 40%
including the disposal. This disposal resulted in a net gain of USD 20.6 million. The contribution of the rig mooring
business to Revenue, EBITDA and EBIT for the period from January 2013 until its sale in April 2013 was USD 11.4
million, USD 9.5 million and USD 6.7 million, respectively.

107

The table below sets out the contribution of the rig mooring business to revenue, EBITDA and EBIT for the years
ended 31 December 2012 and 2011.
Year ended
31 December
In USD million
2012
(IFRS)
(unaudited)
2011
(IFRS)
(unaudited)
Revenue .................................................................................................................................. 24.1 21.9
EBITDA .................................................................................................................................... 18.3 16.6
EBIT ........................................................................................................................................ 10.6 8.2
The Group will continue to consider acquisition and disposal opportunities as part of its business development
strategy.
11.3 Recent developments and trends
The Group has experienced generally good market conditions and operating performance since 30 June 2013. The
Group believes that the current revenue backlog provides a relatively high degree of financial visibility for the next
few years. The Group believes the outlook for its three business segments is positive.
The MODU segment has a strong medium- to long-term outlook in the drilling market. Deepsea Aberdeen, which is
expected to commence operations in the fourth quarter of 2014, and potential incremental investment
opportunities are expected to drive the Groups growth. Although the Deep Sea Metro joint venture so far has been
loss-making due to relatively high financing cost in the joint venture and low financial utilisation of Deepsea Metro
II, the Group expects this joint venture to contribute positively in the future due to Deepsea Metro Is contract
extension at higher day rates in combination with a more normalised financial utilisation of Deepsea Metro II. The
Group also expects continued strong growth in the Well Services segment in the coming years in-line with recent
years. Finally, in the Drilling & Technology segment, the Group expects modest growth for the Platform Drilling
business based on existing backlog and growth in the Technology business area as a consequence of expected high
activity in the drilling industry in the coming years.
The Groups management contract for Dalian Developer was terminated by Dalian Deepwater Developer Ltd on 4
September 2013 following a 30-day grace period as a result of Dalian Deepwater Developer Ltds termination of its
construction contract for the drillship.
11.4 Explanation of IFRS income statement line items
Operating revenue. Operating revenue primarily consists of revenue generated under the Groups contracts.
Operating revenue includes lump sum fees for mobilisation and demobilisation recognised over the contract period
and reimbursed salary and personnel expenses for crews on Drilling Units with management agreements.
Operating revenue reported for the MODU segment as reported in note 4 to the IFRS Financial Statements includes
the Groups share of revenue from Deep Sea Metro.
Other gains/losses. Other gains/losses primarily consist of gains and losses arising from disposals of well
services equipment and gains and losses from disposals of subsidiaries and other assets.
Share of profit/losses from joint ventures. Share of profit/losses from joint ventures primarily consists of the
Group's share of profit/losses from investments classified as joint ventures, including in relation to Deep Sea Metro.
The share of profit/losses from each joint venture investment is measured using the equity method in accordance
with IFRS 11.
Personnel expenses. Personnel expenses primarily consist of salaries and wages, including bonuses, and
employers national insurance contributions, pension expenses, other benefits and hired personnel (for the Groups
operations).
Depreciation and impairments. Depreciation and impairments consists primarily of depreciation of property,
plant and equipment in addition to impairment of non-current assets.
108

Other operating expenses. Other operating expenses consists primarily of administrative expenses, hired
services and subcontractors (including consultants and subcontractors for specific projects), hired well service
equipment, inspection and repair and maintenance.
Interest income. Interest income includes interest income from bank and time deposits and interest on
subordinated loans to related parties.
Operating profit (EBIT). EBIT for the Group consists of operating revenue minus total operating expenses. EBIT
for the MODU segment, as reported in note 4 to the IFRS Financial Statements, includes the Groups share of
revenue from and operating expenses of Deep Sea Metro on a line-by-line basis. However, in the Groups
consolidated income statement, its share of profit/loss from Deep Sea Metro is reported net under share of
profit/losses from joint ventures.
Borrowing cost. Borrowing cost consists primarily of interest expense on Group borrowings and fees related to
borrowing facilities.
Other financial items. Other financial items consist primarily of currency gains and losses, gains/losses on
interest rate swaps and other financial income and expenses, including interest on net pension liabilities.
Income tax (expense) income. Income tax (expense) income consists primarily of (i) income tax at domestic
tax rates applicable to profits in countries where the Group operates, (ii) change in deferred tax and (iii)
withholding tax on border crossing gross income generated in Angola.
11.5 Results of operations for the Group
11.5.1 Six months ended 30 June 2013 compared to the six months ended 30 June 2012
11.5.1.1 Income statement
The table below is extracted from the Groups Interim Financial Statements for the three month and six month
periods ended 30 June 2013 and 2012.
Three months ended
30 June
Six months ended
30 June
In USD million
2013
(unaudited)
2012
(unaudited)
2013
(unaudited)
2012
(unaudited)
Operating revenue
1
...............................................................................................
289.0 259.3 585.2 525.2
Total operating income ......................................................................................
289.0 259.3 585.2 525.2
Other gains/losses ................................................................................................ 21.1 0.7 21.4 1.2
Share of profit/(loss) from joint ventures
2
................................................................
(2.3) (1.7) (4.6) (3.3)
Total other items ................................................................................................ 18.8 (1.0) 16.8 (2.1)
Personnel expenses ............................................................................................... (132.2) (116.5) (271.2) (241.1)
Depreciation and impairments ................................................................................ (36.1) (35.8) (73.7) (72.3)
Other operating expenses ......................................................................................
(62.4) (61.0) (128.8) (120.8)
Total operating expenses ...................................................................................
(230.7) (213.4) (473.8) (434.2)
Operating profit (EBIT) ...................................................................................... 77.2 44.9 128.2 88.9
Net financial items
3
...............................................................................................
(15.5) (24.7) (38.7) (26.9)
Profit/(loss) before tax ...................................................................................... 61.7 20.2 89.5 61.9
Income tax income (expense) .................................................................................
(70.9) (7.3) (77.2) (16.4)
Profit/(loss) for the period ................................................................................
(9.2) 13.0 12.3 45.6

1 Operating revenue in the Group includes reimbursed salary and personnel expenses for crews on Drilling Units with management agreements.
2 Share of profit/loss from Deep Sea Metro is reported net under share of profit/losses from joint ventures in the Groups consolidated income
statement. This differs from the Groups segmental revenue, EBITDA, depreciation and EBIT for the MODU segment as reported in note 4 to the
IFRS Financial Statements, where the Groups share of revenue, EBITDA, depreciation and EBIT from Deep Sea Metro are included on a line-by-
line basis.
3 Other financial items consists of currency gains, other financial income, currency loses, gain/loss on interest rate swaps and other financial
expenses.
109

Operating revenue
Operating revenue for the six months ended 30 June 2013 was USD 585.2 million compared to USD 525.2 million
for the six months ended 30 June 2012, an increase of USD 60.1 million, or 11.4%. Revenue grew in all business
segments in the six months ended 30 June 2013, with a particularly strong growth in external revenue for the
Drilling & Technology segment. The increase in revenue was primarily attributable to increased average financial
utilisation for the MODU segment, a stronger market in general for Well Services, as well as new platform drilling
contracts and increased engineering activity for the Drilling & Technology segment in the six months ended 30 June
2013 compared to the six months ended 30 June 2012.
The total eliminations for operating revenue for the six months ended 30 June 2013 were USD (77.8) million, of
which USD (66.5) million related to Deep Sea Metro and USD (11.3) million related to the net of inter-segment
revenue and revenue not allocated to specific segments. The total eliminations for operating revenue for the six
months ended 30 June 2012 were USD (59.3) million, of which USD (38.5) million related to Deep Sea Metro and
USD (20.8) million related to the net of inter-segment revenue and revenue not allocated to specific segments.
MODU
Operating revenue for the MODU business segment for the six months ended 30 June 2013 was USD 369.9 million
(of which USD 66.5 million was related to Deep Sea Metro) compared to USD 334.7 million (of which USD 38.5
million was related to Deep Sea Metro) for the six months ended 30 June 2012, an increase of USD 35.2 million, or
10.5%. The increase was primarily attributable to an increase in the average utilisation for Deepsea Stavanger and
increased revenue from the management agreements with Deep Sea Metro, Dalian Developer and Island
Innovator. Utilisation for Deepsea Stavanger was low in the first half of 2012 due to BOP challenges. Although
there have also been some challenges with the BOP and subsea equipment in 2013, the average utilisation has
increased, which has contributed to the growth in operating revenue for Deepsea Stavanger. Revenue from Deep
Sea Metro operations increased by USD 28.0 million mainly due to Deepsea Metro II being in operation from 1
January to 30 June in 2013, a longer period than the period from 17 May to 30 June for which it was in operation in
the first half of 2012. This increase was partially offset by challenges with subsea equipment on Deepsea Metro II
caused by a leak on a hydraulic control line in April 2013 which was rectified during that same month. The growth
in revenue was partially offset by the expiration of the Songa Trym and Songa Delta management agreements in
2012.
Well Services
Operating revenue for the Well Services business segment for the six months ended 30 June 2013 was USD 116.0
million compared to USD 102.0 million for the six months ended 30 June 2012, an increase of USD 14.0 million, or
13.7%. The increase was primarily attributable to increased demand in all business areas in the Well Services
segment, partly offset by the disposal of the mooring business unit.
Operating revenue for the Drilling & Technology business segment for the six months ended 30 June 2013 was
USD 177.2 million compared to USD 147.8 million for the six months ended 30 June 2012, an increase of USD 29.4
million, or 19.9%. The increase was primarily attributable to an increase in platform drilling contracts, from seven
to nine contracts, in addition to increased delivery of engineering services generated through management
agreements in the MODU segment as well as engineering services to the mobile drilling unit Island Innovator.
Other gains and losses
Other gains and losses for the six months ended 30 June 2013 were USD 21.4 million compared to USD 1.2 million
for the six months ended 30 June 2012, an increase of USD 20.2 million. The increase was primarily attributable to
the disposal of Deep Sea Mooring AS and related mooring services equipment owned by Odfjell Partners Invest Ltd.
Share of loss from joint ventures
Share of loss from joint ventures for the six months ended 30 June 2013 was USD (4.6) million compared to USD
(3.3) million for the six months ended 30 June 2012, an increase of USD 1.3 million, or 40.8%. The increase was
primarily attributable to increased share of loss from Deep Sea Metro. Even though Deepsea Metro I extended its
contract with BG from early June 2013 at increased day rates, Deep Sea Metro has so far been loss-making overall
due to relatively high financing costs, low financial utilisation of Deepsea Metro II and contracted day rates lower
than those that would otherwise be obtainable in the current market for both Deepsea Metro I and Deepsea Metro
110

II. The share of loss increased in the second quarter of 2013 compared to the first quarter due to reduced financial
utilisation of Deepsea Metro II from the first to the second quarter caused by the challenges with subsea
equipment on Deepsea Metro II discussed above in Operating Revenue.
Personnel expenses
Personnel expenses for the six months ended 30 June 2013 were USD (271.2) million compared to USD (241.1)
million for the six months ended 30 June 2012, an increase of USD 30.1 million, or 12.5%. The increase was
primarily attributable to an increase in number of employees due to new platform drilling contracts.
Depreciation and impairments
Depreciation and impairments for the six months ended 30 June 2013 was USD (73.7) million compared to USD
primarily attributable to depreciation of new investments in Drilling Units and Rental Equipment in the period,
partly offset by the disposal of the mooring business in May 2013.
Other operating expenses
Other operating expenses for the six months ended 30 June 2013 were USD (128.8) million compared to USD
to meet the increased demand for the Groups services and was in line with the growth in revenue for the same
period.
Operating profit (EBIT)
Operating Profit (EBIT) for the six months ended 30 June 2013 was USD 128.2 million compared to USD 88.9
million for the six months ended 30 June 2012, an increase of USD 39.3 million, or 44.3%. The increase was
primarily attributable to growth in EBIT for all segments, in addition to a net gain from sale of the mooring
business of USD 20.6 million. The increased EBIT was partly offset by an increased share of loss from joint
ventures.
The total eliminations and corporate items for EBIT for the six months ended 30 June 2013 were USD (9.8) million,
of which USD (17.5) million related to Deep Sea Metro, USD (9.4) million related to corporate overheads, USD 20.6
million related to gains, USD (4.6) million related to the other joint ventures and disposals and USD 1.0 million
related to accounting differences. The total eliminations for EBIT for the six months ended 30 June 2012 were USD
(17.3) million, of which USD (10.9) million related to Deep Sea Metro, USD (9.2) million related to corporate
overheads, USD (3.3) million related to the other joint ventures and disposals and USD 6.1 million related to
accounting differences.
MODU
EBIT for the MODU business segment for the six months ended 30 June 2013 was USD 94.8 million compared to
USD 74.6 million for the six months ended 30 June 2012, an increase of USD 20.2 million or 27.1%. The increase
was primarily attributable to the increased EBIT for Deepsea Stavanger operations. The growth in EBIT for the
management of Deep Sea Metro, Dalian Developer and Island Innovator increased, but the increase was offset by
the expiration of management agreements for Songa Trym and Songa Delta in 2012. The Group has management
contracts for the management of mobile offshore drilling units owned by third parties or jointly by the Group and
third parties. EBIT from these management contracts grew in the six months ended 30 June 2013 as Deepsea
Metro II had been in operation for all six months, as opposed to less than two months in the six months ended 30
June 2012. In addition, the Group started managing Dalian Developer in 2013 and Island Innovator at the end of
2012, both of which further increased the EBIT from management contracts in the six months ended 30 June 2013.
The growth in EBIT from these contracts was offset by the expiration of the Groups management of Songa Trym
and Songa Delta in August 2012.
Well Services
EBIT for the Well Services business segment for the six months ended 30 June 2013 was USD 33.2 million
compared to USD 24.3 million for the six months ended 30 June 2012, an increase of USD 8.9 million, or 36.6%.
The increase was primarily attributable to the growth in revenue and stable margins relative to previous years.
111

EBIT for the Drilling & Technology business segment for the six months ended 30 June 2013 was 10.0 million
compared to USD 7.3 million for the six months ended 30 June 2012, an increase of USD 2.7 million, or 37.0%.
The increase was primarily attributable to an increased number of platform drilling contracts and growth in the
technology business.
Net financial items
Net financial items for the six months ended 30 June 2013 was USD (38.7) million compared to USD (26.9) million
for the six months ended 30 June 2012, an increase of USD (11.8) million, or (43.9%). The increase primarily
reflects an increase in net exchange losses and expensed financing fees in relation to the refinancing of Deepsea
Bergen in the period.
Profit/(loss) before taxation
For the reasons described above, profit before taxation for the six months ended 30 June 2013 was USD 89.5
million compared to USD 61.9 million for the six months ended 30 June 2012, an increase of USD 27.6 million, or
44.6%.
Income tax expense
Taxation expense for the six months ended 30 June 2013 was USD 77.2 million compared to USD 16.4 million for
the six months ended 30 June 2012, an increase of USD 60.9 million. The increase was primarily attributable to
USD 62.8 million in recognised tax expense following the outcome of the tax court case described in Section 8.10.1
Tax court case. The Group is appealing the outcome of the case.
If the courts verdict in the tax court case is upheld on appeal, the USD 62.8 million loss (already expensed as of
30 June 2013) for the Company will be final. The loss is comprised of USD 24.5 million in payable tax (which has
already been paid) and USD 38.3 million in deferred tax. The additional impact on cash in such scenario will be
20% of the deferred tax to be paid in 2014 with the remaining balance to be paid on a declining basis (i.e. 20% of
the remaining balance) each year.
Profit/(loss) for the period
For the reasons described above, Group profit from continuing operations for the six months ended 30 June 2013
was USD 12.3 million compared to USD 45.6 million for the six months ended 30 June 2012, a decrease of USD
33.3 million, or 73.0%.
11.5.2 Year ended 31 December 2012 compared to the year ended 31 December 2011
The table below is extracted from the Groups IFRS Financial Statements for the year ended 31 December 2012
and including the year ended 31 December 2011 comparative period.
Year ended
31 December
In USD million
2012
(audited)
2011
(audited)
Operating revenue
1
...................................................................................................................
1,093.8 1,056.7
Total operating income ..........................................................................................................
1,093.8 1,056.7
Other gains/losses .................................................................................................................... 3.4 46.0
Share of profit/(loss) from joint ventures
2
....................................................................................
(13.4) (6.8)
Total other items ....................................................................................................................
(10.0) 39.1
Personnel expenses ................................................................................................................... (486.2) (465.7)
Depreciation and impairments .................................................................................................... (147.3) (145.0)
Other operating expenses ..........................................................................................................
(266.6) (247.8)
Total operating expenses .......................................................................................................
(900.1) (858.4)
Operating profit (EBIT) ..........................................................................................................
183.7 237.4
Interest income ........................................................................................................................ 7.4 3.6
Borrowing costs ........................................................................................................................ (64.0) (80.5)
112

Year ended
31 December
In USD million
2012
(audited)
2011
(audited)
Other financial items
3
................................................................................................................
20.9 (7.1)
Financial income/(expenses) .................................................................................................
(35.7) (83.9)
Profit/(loss) before tax .......................................................................................................... 148.0 153.5
Income tax income/(expense) ....................................................................................................
(31.2) (32.2)
Profit/(loss) for the period ....................................................................................................
116.9 121.3
Of which attributable to the equity holders of the parent ................................................................ 102.5 108.8
Of which non-controlling interests ............................................................................................... 14.3 12.4

1 Operating revenue in the Group includes reimbursed salary and personnel expenses for crews on Drilling Units with management agreements.
2 Share of profit/loss from Deep Sea Metro is reported net under share of profit/losses from joint ventures in the Groups consolidated income
statement. This differs from the Groups segmental revenue, EBITDA, depreciation and EBIT for the MODU segment as reported in note 4 to the
IFRS Financial Statements, where the Groups share of revenue, EBITDA, depreciation and EBIT from Deep Sea Metro are included on a line-by-
line basis.
3 Other financial items consists of currency gains, other financial income, currency loses, gain/loss on interest rate swaps and other financial
expenses.
Operating revenue
Operating revenue for the year ended 31 December 2012 was USD 1,093.8 million compared to USD 1,056.7
million for the year ended 31 December 2011, an increase of USD 37.1 million, or 3.5%. The increase in operating
revenue was primarily attributable to an increase in operating revenues from the MODU and Well Services
segments. This was partially offset by a decrease in the Drilling & Technology segments operating revenues.
The total eliminations for operating revenue in 2012 were USD (123.8) million, of which USD (98.6) million related
to Deep Sea Metro and USD (25.3) million related to other revenue, including inter-segment revenue. The total
eliminations for operating revenue in 2011 were USD (31.0) million, of which USD (0.9) million related to Deep Sea
Metro and USD (30.1) million related to other revenue, including inter-segment revenue.
MODU
Total operating revenue for the MODU segment for the year ended 31 December 2012 was USD 693.4 million (of
which USD 98.6 million was related to Deep Sea Metro) compared to USD 573.6 million (of which USD 0.9 million
was related to Deep Sea Metro) for the year ended 31 December 2011, an increase of USD 119.8 million, or
20.9%. The increase was primarily attributable to the first full year of operations in 2012 for Deepsea Metro I, as
well as the commencement of operations for Deepsea Metro II in May 2012. Deepsea Metro I was delivered from
the shipyard in June 2011 and commenced operations in December 2011. Deepsea Stavangers contract with Ophir
ended in April 2011 and the drilling unit was mobilised from April to November 2011, a period which included a
yard stay for client modifications.
Well Services
Total operating revenue for the Well Services segment for the year ended 31 December 2012 was USD 208.2
million compared to USD 192.9 million for the year ended 31 December 2011, an increase of USD 15.3 million, or
7.9%. The increase was primarily attributable to new client contracts and increased orders under framework
agreements as a result of the Groups increased investments in Rental Equipment.
Total operating revenue for the Drilling & Technology segment for the year ended 31 December 2012 was USD
316.0 million compared to USD 321.2 million for the year ended 31 December 2011, a decrease of USD 5.2 million,
or 1.6%. The decrease was primarily due to the sale of the well management and consulting business in 2011.
Operating revenues were otherwise stable between the periods.
Other gains/losses
Other gains for the year ended 31 December 2012 were USD 3.4 million compared to USD 46.0 million for the year
ended 31 December 2011, a decrease of USD 42.6 million, or 92.6%. The gain in 2012 was due to gain on
disposals of casing, mooring and Rental Equipment as a result of payments by clients for loss or damage to
113

equipment, while the gain in 2011 was primarily due to the disposal of the well management and consulting
business.
Share of loss from joint ventures
Share of loss from joint ventures for the year ended 31 December 2012 was USD (13.4) million compared to USD
(6.8) million for the year ended 31 December 2011, an increase of USD 6.6 million. The increase in share of loss
from joint ventures was primarily attributable to an increased loss in the Deep Sea Metro group. Operational costs
are generally higher in the start-up phase of drilling unit operations, and 2012 was the first full year of operations
for Deepsea Metro I, and Deepsea Metro II commenced operations in May 2012. In particular, financing costs
increased for Deep Sea Metro in 2012 following the new borrowing facilities in connection with delivery of the two
drillships Deepsea Metro I and II from the shipyard in 2011, which also contributed to the increased share of loss.
Personnel expenses
Personnel expenses for the year ended 31 December 2012 were USD (486.2) million compared to USD (465.7)
million for the year ended 31 December 2011, an increase of USD 20.5 million, or 4.4%. The increase in personnel
expenses was primarily attributable to: (i) increases in wages in certain markets due to increased activity and
higher competition for qualified personnel in those jurisdictions; and (ii) increased personnel costs for the
management of Deepsea Metro I and Deepsea Metro II under the management agreement with Deep Sea Metro,
reflecting the full year of operations for Deepsea Metro I in 2012 and the commencement of operations of Deepsea
Metro II in May 2012. The increase was partly offset by a reduction in personnel costs following the expiration of
the Songa Delta and Songa Trym management contracts in mid 2012.
Depreciation and impairment
Depreciation and impairment for the year ended 31 December 2012 was USD (147.3) million compared to USD
(145.0) million for the year ended 31 December 2011, an increase of USD 2.3 million, or 1.6%. There were no
impairments in either 2011 or 2012. The increase in depreciation and impairment was primarily attributable to
depreciation on additions of property, plant and equipment in 2012 as a result of additional Rental Equipment and
upgrades on Drilling Units.
Other operating expenses for the year ended 31 December 2012 were USD (266.6) million compared to USD
(247.8) million for the year ended 31 December 2011, an increase of USD 18.8 million, or 7.6%. The increase in
other operating expenses was primarily due to the Group's Drilling Units starting up operations in new geographical
areas at the end of 2011 and over the course of 2012. This included an increase in other operating expenses such
as training costs and travel expenses in connection with the mobilisation of Drilling Units outside the NCS (i.e., in
Brazil, Angola and Tanzania).
Operating profit (EBIT)
EBIT for the year ended 31 December 2012 was USD 183.7 million compared to an EBIT of USD 237.4 million for
the year ended 31 December 2011, a decrease of USD 53.7 million or 22.6%. The decrease was due to higher
other gains in 2011 as a result of the disposal of the well management and consulting business and increased
personnel costs and increased share of losses from joint ventures in 2012, which more than offset the increase in
revenue in the MODU and Well Services segments in 2012.
The total eliminations and corporate items for EBIT in 2012 were USD (50.3) million, of which USD (23.5) million
related to Deep Sea Metro, USD (23.3) million related to corporate overheads, USD (13.4) million related to the
other joint ventures and disposals and USD 9.9 million related to accounting differences. The total eliminations for
EBIT in 2011 were USD 23.6 million, of which USD 3.4 million related to Deep Sea Metro, USD (16.5) million
related to corporate overheads and USD 36.4 million related to the other joint ventures and disposals.
MODU
EBIT for the MODU segment for the year ended 31 December 2012 was USD 162.3 million (of which USD 23.5
million related to Deep Sea Metro) compared to EBIT of USD 132.1 million (of which USD (3.4) million related to
Deep Sea Metro) for the year ended 31 December 2011, an increase of USD 30.2 million or 22.9%. The increase in
EBIT for MODU was primarily attributable to growth in revenue reflecting the first full year of operations in 2012 for
114

Deepsea Stavanger and Deepsea Metro I, as well as the commencement of operations in May 2012 for Deepsea
Metro II, which was partially offset by higher costs associated with the initial operations of these Drilling Units.
Well Services.
EBIT for the Well Services segment for the year ended 31 December 2012 was USD 52.7 million compared to USD
48.9 million for the year ended 31 December 2011, an increase of USD 3.8 million, or 7.7%. The increase was
primarily attributable to increased revenue (as described above) and stable margins.
EBIT for the Drilling & Technology segment for the year ended 31 December 2012 was USD 19.0 million compared
to USD 32.8 million for the year ended 31 December 2011, a decrease of USD 13.8 million, or 42.0%. The
decrease was primarily attributable to the disposal of the higher margin well management and consulting business.
Margins were also affected by the Platform Drilling business areas contract with Statoil which, in 2012 included
work on two new platforms which carry higher start-up costs associated with the initial part of the contract period.
Interest income
Interest income for the year ended 31 December 2012 was USD 7.4 million compared to USD 3.6 million for the
year ended 31 December 2011, an increase of USD 3.7 million. The increase primarily reflected an increase in
interest income from a shareholder loan provided by the Group to Deep Sea Metro in 2012. See Section 8.5.1.3
Key contracts Shareholders agreement and shareholder loan agreement regarding Deep Sea Metro.
Borrowing cost
Borrowing cost for the year ended 31 December 2012 was USD (64.0) million compared to USD (80.5) million for
the year ended 31 December 2011, a decrease of USD 16.5 million, or 20.5%. The decrease was primarily
attributable to the reversal of capitalised borrowing expenses following the refinancing of long-term borrowings in
2011. See Section 11.8.1 Material borrowings.
Other financial items for the year ended 31 December 2012 consisted of a gain of USD 20.9 million compared to a
loss of USD (7.1) million for the year ended 31 December 2011. The gain in 2012 was primarily attributable to a
gain on interest rate swaps of USD 1.6 million in 2012 compared to a loss of USD (26.2) million on interest rate
swaps that were disallowed under hedge accounting policies following the refinancing of long-term borrowings in
2011. Other financial items in 2012 also consisted of a net currency gain of USD 22.8 million and other net
financial expenses of USD (3.4) million that were in line with 2011.
Income tax expense
Income tax expense for the year ended 31 December 2012 was USD (31.2) million compared to USD (32.2) million
for the year ended 31 December 2011, a decrease of USD 1.0 million, or 3.2%. The decrease was primarily due to
reduced profit before taxation. The Groups effective tax rate was 21.1% in 2012 compared to 21.0% in 2011.
Income tax expenses are mainly paid in Norway, while withholding tax expenses are mainly paid in Angola. There
is no withholding tax in Brazil.
Profit/(loss) for the year
Profit from continuing operations for the year ended 31 December 2012 was USD 116.9 million compared to profit
of USD 121.3 million for the year ended 31 December 2011, a decrease of USD 4.4 million. The decrease was
primarily attributable to the factors noted above.
11.6 Explanation of NGAAP income statement line items
Operating income. Operating income primarily consists of revenue generated under the Groups contracts.
Operating income includes lump sum fees for mobilisation and demobilisation recognised over the contract period
and reimbursed salary and personnel expenses for crews on Drilling Units with management agreements. There is
no difference between revenue recognition in the Group's IFRS Financial Statements and the NGAAP Financial
Statements.
Gain on sale of assets. Gain on sale of assets primarily consists of gains on disposals of well services equipment.
115

Personnel expenses. Personnel expenses primarily consist of salaries and wages, including bonuses, and
employers national insurance contributions, pension expenses, other benefits and hired personnel (for the Groups
operators).
Depreciation and write-offs. Depreciation and write-offs primarily consists of depreciation of property, plant and
equipment, amortisation of goodwill and other intangible-assets and impairment of non-current assets.
When the market value of the assets increases above the book value, previous write-downs will be reversed
according to the original depreciation plan.
Depreciation and write-offs consist of change in provisions for bad debt related to trade receivables, as well as loss
on bad debt during the year.
Bad debts. Bad debts primarily consist of incurred losses on trade receivables and change in provisions for bad
debt related to trade receivables.
Other operating expenses. Other operating expenses consists primarily of administrative expenses, hired
services and subcontractors (including consultants and subcontractors for specific projects), hired well service
equipment, inspection and repair and maintenance.
Income from associates. Income from associates consists of the Groups share of profit from investments in
associated companies. The share of profit is measured using the equity method and comes mainly from the Deep
Sea Metro group and the Ross Holding AS group. Income from associates is classified as share of profit from joint
ventures in the IFRS Financial Statements as an operating item.
Other net financial items. Other net financial items consists primarily of interest income, other financial income,
interest expense to related parties, interest expenses and other financial expenses. Other financial income includes
gains on disposals of subsidiaries that are classified as other gains and losses under IFRS.
Tax on ordinary result. Income tax (expense) income consists primarily of (i) income tax at domestic tax rates
applicable to profits in countries where the Group operates, (ii) change in deferred tax and (iii) withholding tax on
border crossing gross income generated in Angola.
11.6.1 Year ended 31 December 2011 compared to the year ended 31 December 2010
The table below is extracted from the Groups NGAAP Financial Statements for the years ended 31 December 2011
and 2010.
Year ended
31 December
In NOK million
2011
(audited)
2010
(audited)
Operating income ...................................................................................................................... 5,924.9 4,724.9
Gain on sale of assets ................................................................................................................
15.0 26.0
Total operating income ..........................................................................................................
5,939.9 4,750.9
Personnel expenses ................................................................................................................... (2,614.5) (2,544.8)
Depreciation and write-offs ........................................................................................................ (822.1) (538.3)
Bad debts ................................................................................................................................ (15.3) (673.6)
Other operating expenses ..........................................................................................................
(1,382.0) (999.5)
Total operating expenses .......................................................................................................
(4,833.8) (4756.2)
Operating profit/(loss) .......................................................................................................... 1,106.1 (5.3)
Income from associates ............................................................................................................. (41.6) 25.7
Interest income ........................................................................................................................ 20.4 38.5
Other financial income ............................................................................................................... 609.4 602.9
Interest expenses to related parties ............................................................................................ (1.4) -
Interest expenses ..................................................................................................................... (311.2) (185.1)
Other financial expenses ............................................................................................................
(547.8) (201.2)
116

Year ended
31 December
In NOK million
2011
(audited)
2010
(audited)
Net Financial items ................................................................................................................
(272.3) 280.8
Ordinary Profit/(loss) before tax ........................................................................................... 833.8 275.5
Tax on ordinary result ...............................................................................................................
180.6 (29.8)
Net Profit/(loss) for the year .................................................................................................
653.1 305.3
Minority share of profit for the year ............................................................................................. 69.8 59.7
Majority share of profit for the year ............................................................................................. 583.4 245.6
Operating income
Operating income for the year ended 31 December 2011 was NOK 5,924.9 million compared to NOK 4,724.9
million for the year ended 31 December 2010, an increase of NOK 1,200.0 million, or 25.4%. The increase was
primarily attributable to reduced revenue for the Mobile Offshore Drilling Units business in 2010 when Deepsea
Atlantic was docked for most of the year following a contractual dispute with Statoil and subsequent replacement of
a BOP and other modifications. The increase also reflected an increase in activity for Deepsea Stavanger in 2011,
which was in operation for five months in 2011 (Deepsea Stavanger was in operation in Angola from September
2010 to April 2011 and, following mobilisation and docking at the shipyard for client modifications, in Tanzania
from November 2011, compared to three months in 2010, as it commenced operations in Tanzania on 16
September 2010).
Gain on sale of assets
Gain on sale of assets for the year ended 31 December 2011 was NOK 15.0 million compared to NOK 26.0 million
for the year ended 31 December 2010, a decrease of NOK 11 million, or 42.3%. The decrease was primarily
attributable to decreases in Rental Equipment damage and losses by clients, and the corresponding decrease in
payments for lost or damaged Rental Equipment to the Well Services business.
Personnel expenses
Personnel expenses for the year ended 31 December 2011 were NOK (2,614.5) million compared to NOK (2,544.8)
million for the year ended 31 December 2010, an increase of NOK 69.7 million, or 2.7%. The increase was
primarily attributable to increased staffing due to increased activity in the Mobile Offshore Drilling Units business,
following the mobilisation of Deepsea Stavanger in 2011, construction of Deepsea Metro I and Deepsea Metro II
and the full year of operations for Deepsea Atlantic, which was docked for most of 2010. This was partly offset by
the reduced activity level in the Platform Drilling business area in 2011 compared to 2010, due to the expiration of
platform drilling contracts on four platforms, which reduced personnel expenses.
Depreciation and write-offs
Depreciation and write-offs for the year ended 31 December 2011 were NOK (822.1) million compared to NOK
(538.3) million for the year ended 31 December 2010, an increase of NOK 283.8 million, or 52.7%. The increase
was primarily attributable to the delivery of Deepsea Stavanger during the second half of 2010 and investments in
the Mobile Offshore Drilling Units business, where depreciations were accounted for a full year from 2011.
Bad debts
Bad debts for the year ended 31 December 2011 were NOK (15.3) million compared to NOK (673.6) million for the
year ended 31 December 2010, a decrease of NOK 658.3 million, or 97.7%. The decrease was primarily
attributable to an extraordinary write-off in 2010 of a receivable recognised in relation to the docking of Deepsea
Atlantic in 2010 following a contractual dispute with Statoil.
Other operating expenses for the year ended 31 December 2011 were NOK (1,382.0) million compared to NOK
(999.5) million for the financial year ended 31 December 2010, an increase of NOK 382.4 million, or 38.3%. The
increase was primarily attributable to increased operating expenses due to the full year of operation for Deepsea
Atlantic in 2011 after the docking period in 2010 and the start-up of operations of Deepsea Stavanger in 2011 in
connection with the new contract with BP in Angola.
117

Operating profit/loss
The Group recognised an operating profit for the year ended 31 December 2011 of NOK 1,106.1 million compared
to an operating loss of NOK (5.3) million for the year ended 31 December 2010. The increase was primarily
attributable to the factors noted above.
Net financial items
Net financial items for the year ended 31 December 2011 were NOK (272.3) million compared to NOK 280.8 million
for the year ended 31 December 2010, a decrease of NOK 553.1 million. The decrease was primarily attributable to
a decrease in share of profit from associates of NOK 67.3 million, increased interest expense of NOK 126.1 million
and currency translation effects caused by changes in the NOK/USD exchange rate as long-term borrowings
denominated in USD were translated into NOK for preparation of the NGAAP Financial Statements.
Taxation on ordinary result
Taxation on ordinary result for the year ended 31 December 2011 was NOK 180.6 million compared to NOK (29.8)
million for the year ended 31 December 2010, an increase of NOK 210.4 million. This increase is primarily
explained by the tax effect on the bad debt recognition in 2010 explained above under Bad debts.
Net Profit/(Loss) for the year
Net profit for the year ended 31 December 2011 was NOK 653.1 million compared to NOK 305.3 million for the
year ended 31 December 2010, an increase of NOK 347.8 million. The increase was primarily attributable to the
factors noted above.
11.7 Liquidity and capital resources
11.7.1 Sources and uses of cash
The Groups principal sources of liquidity are cash flows from operations and borrowings under its bank facilities.
See Section 11.8.1 Material borrowings. The Group primarily uses cash for investments in drilling units, joint
ventures (including via shareholder loan) and well services equipment and to otherwise fund its operations as well
as to service its long-term debt obligations and pay dividends.
The primary objective of the Groups capital management policy is to ensure that the Group maintains capital ratios
and adequate liquidity within such parameters that would enable the Group to take advantage of investment
opportunities and generally support the business. The Group manages its capital structure so that it is sufficiently
robust to withstand prolonged adverse conditions in financial markets and ensure that the Group is positioned to
comply with covenants under the terms of its interest-bearing debt. The Group continually evaluates its cash
position, available financing, working capital requirements and expected capital expenditures and makes
adjustments to its capital structure in order to maintain an optimal structure adapted to current economic
conditions.
The Group defines net working capital as the difference between non-interest bearing current assets and non-
interest bearing current liabilities. Net working capital mainly consists of trade receivables, other receivables, trade
payables, current income tax, social security, value added tax (VAT) and other taxes and other current liabilities.
The Group's policy is to have working capital equivalent to two months of operating expenses. As of 30 June 2013,
net working capital was USD 73.5 million.
11.7.2 Cash flows
IFRS Financials
The following table summarises the Groups historical cash flows under IFRS, and is extracted from the Groups
Interim Financial Statements and the Groups IFRS Financial Statements, for each of the financial periods
presented:

118

Six months ended
30 June
Year ended
31 December
In USD million
2013
(unaudited)
2012
(unaudited)
2012
(audited)
2011
(audited)
Net cash from/(used in) operating activities ............................................................. 115.9 145.4 267.2 197.6
Net cash from/(used in) investing activities .............................................................. 4.4 (237.6) (305.9) (213.0)
Net cash from/(used in) financing activities .............................................................. (78.0) (49.7) (61.0) 66.0
Net cash and cash equivalents at end of period ......................................................... 245.2 161.8 200.6 303.1
11.7.3 Cash flows from/(used in) operating activities
Six months ended 30 June 2013 compared to the six months ended 30 June 2012
Net cash inflow from operating activities for the six months ended 30 June 2013 was USD 115.9 million compared
to USD 145.4 million for the six months ended 30 June 2012, a decrease of USD 29.5 million, or 20.3%. The
decrease was primarily related to adjustment of gain on sale of shares and gain on sale of tangible assets due to
the disposal of the mooring business. Cash generated from operations is adjusted for gain on sale of shares and
gain on sale of tangible fixed assets, as the gross cash inflow from sale of shares and sale of property, plant and
equipment are reported as cash flows from investing activities in the cash flow statement. Adjustment of gain on
sale of shares and gain on sale of tangible fixed assets was USD 21.3 million for the six months ended 30 June
2013, compared to USD 1.2 million for the six months ended 30 June 2012. In addition, cash outflows from
changes in working capital for the six months ended 30 June 2013 was USD 5.3 million compared to a cash inflow
from changes in working capital for the six months ended 30 June 2012 of USD 5.3 million. The cash inflow from
changes in working capital in the six months ended 30 June 2012 was primarily related to cash inflow from a
decrease of trade receivables of USD 43.9 million, which offset cash outflow from changes in trade payables and
other accruals. The decrease in trade receivables in the six months ended 30 June 2012 was mainly due to delayed
payments when a fee discussion with a client from 2011 was resolved in 2012. During the six months ended 30
June 2013, cash inflow from decreased trade receivables was USD 14.4 million and cash inflow from increased
trade payables was USD 2.5 million. These inflows were offset by cash outflows for increased spare parts of USD
1.3 million and a change in other accruals of USD 20.9 million.
Year ended 31 December 2012 compared to the year ended 31 December 2011
Net cash inflow from operating activities for the year ended 31 December 2012 was USD 267.2 million compared to
USD 197.6 million for the year ended 31 December 2011, an increase of USD 69.6 million or 35.3%. The increase,
which occurred despite a decrease in EBIT, was primarily attributable to increased cash inflow from changes in
working capital in 2012 compared to 2011. In 2012, trade receivables decreased resulting in a cash inflow related
to trade receivables of USD 8.4 million compared to a cash outflow of USD 39.4 million in 2011. Trade receivables
in 2011 increased as a result of strong revenue growth, which was primarily attributable to Deepsea Atlantic
coming back into operation. In addition, a large client delayed payments in 2011 due to fee discussions, which
were resolved in 2012. This contributed to the decrease in trade receivables in 2012 compared to 2011, although
this decrease was partly offset by the growth in trade receivables due to growth in revenue. Trade payables
experienced a small increase in 2012. Cash outflow from other accruals in 2012 was USD (5.2) million compared to
USD (35) million in 2011 which was primarily due to a decrease in accrued expenses in 2011. Income taxes paid in
2012 were USD 14.5 million compared to USD 19.2 million in 2011. The decrease was mainly related to utilisation
of a tax loss carried forward from the bad debt write-off in 2010 related to Deepsea Atlantic resulting in lower
income taxes payable for 2012.
11.7.4 Cash flows from/(used in) investing activities
Net cash inflow from investing activities for the six months ended 30 June 2013 was USD 4.4 million compared to a
net cash outflow of USD 237.6 million for the six months ended 30 June 2012, an increase of USD 242.0 million.
The increase was primarily attributable to reduced purchase of property, plant and equipment in the six months
ended 30 June 2013 compared to the six months ended 30 June 2012 and increased proceeds from sale of
property, plant and equipment in 2013 compared to 2012. The Group paid USD 94 million in instalments under the
construction contract for Deepsea Aberdeen in 2012, while the remaining yard instalments are due in 2014 upon
delivery of the drilling unit. The increase in proceeds from sale of property, plant and equipment are primarily due
to the sale of the mooring business. In addition, the Group issued a shareholder loan to Deep Sea Metro in 2012 in
the amount of USD 78.4 million, while the loan issued to Deep Sea Metro in 2013 was USD 12 million. In 2012 and
119

2013, portions of the loan to Deep Sea Metro were converted to equity. As of 30 June 2013, the outstanding
balance of the loan was USD 65 million.
Net cash outflow from investing activities for the year ended 31 December 2012 was USD (305.9) million compared
to USD (213.0) million for the year ended 31 December 2011, an increase of USD 92.9 million, or 43.7%. The
Groups key investment activities in 2012 were purchases of property, plant and equipment of USD 210.9 million in
connection with Deepsea Aberdeen and Well Services Rental Equipment and a shareholder loan to Deep Sea Metro
of USD 80.0 million. See Section 8.5.1.3 Key contracts Shareholders agreement and shareholder loan
agreement regarding Deep Sea Metro. In 2011, the Group's key investment activities included purchase of
property, plant and equipment in relation to modifications and upgrades of existing Drilling Units, additional
investments in Rental Equipment and other equipment and investment in the joint venture Deep Sea Metro. The
Group received a cash contribution from the disposal of the well management and consulting business in 2011,
which partially offset the cash outflow for investing activities in 2011.
11.7.5 Cash flows from/(used in) financing activities
Net cash outflow from financing activities for the six months ended 30 June 2013 was USD 78.0 million compared
to USD 49.7 million for the six months ended 30 June 2012, an increase of USD 28.3 million. The increase was
primarily attributable to refinancing of loan facilities following the acquisition of non-controlling interests,
acquisition of non-controlling interests and dividends paid in 2013. In January 2013, the Group acquired all of its
minority shares for a total of USD 64.3 million. For the purpose of completing the Group's acquisition of the
minority shares in January 2013, the Group entered into a short-term loan facility agreement of USD 80 million
with DNB Bank ASA on 24 January 2013, and repaid the facility on 20 February 2013 with proceeds from a new
loan agreement of USD 270 million. In addition, the Group prepaid two loan facilities related to Deepsea Bergen
and paid scheduled instalments on other existing facilities. Total dividends paid in the six months ended 30 June
2013 totalled USD 14.8 million, while no dividends were paid in the six months ended 30 June 2012.
Net cash outflow from financing activities for the year ended 31 December 2012 was USD (61.0) million compared
to a net cash inflow of USD 66.0 million for the year ended 31 December 2011. The Groups net cash outflow from
financing activities for 2012 primarily reflected the payment of instalments of USD 99.9 million, which were only
partially offset by an inflow of USD 49.4 million in relation to additional drawdowns from the USD 132.5 million
facility agreement for Odfjell Rig Ltd. Of the USD 99.9 million paid in instalments, USD 75 million were made under
the USD 950 million facility described below, in Section 11.8.1 Material borrowings. The remaining instalments
were related to previous loan facilities for Deepsea Bergen, which were repaid in full in February 2013 following the
acquisition of non-controlling interests in Deepsea Bergen. Financing activities resulted in a net cash inflow in 2011
due to a significant refinancing with the establishment of the USD 300 million facility for Odfjell Drilling Services
Ltd. and the USD 950 million facility for Odfjell Invest Ltd., as described below in Section 11.8.1 Material
borrowings. In addition, the Group paid total dividends of USD 10.5 million in 2012 compared with dividends of
USD 23.7 million in 2011.
11.7.6 NGAAP Financials
The following table summarises the Groups historical cash flows under NGAAP, and is extracted from the Groups
NGAAP Financial Statements for each of the financial periods presented:
Year ended
31 December
In NOK million
2011
(audited)
2010
(audited)
Net cash from/(used in) operating activities .............................................................................. 698.7 134.6
Net cash from/(used in) investment activities ............................................................................ (957.5) (3,025.4)
Net cash from/(used in) financing activities ............................................................................... 475.9 1,567.0
Net cash and cash equivalents for the year ............................................................................... 217.1 (1,323.8)
120

11.7.7 Cash flows from/(used in) operating activities
Net cash inflow from operating activities for the year ended 31 December 2011 was NOK 698.7 million compared to
NOK 134.6 million for the year ended 31 December 2010, an increase of NOK 564.1 million. The increase in net
cash inflow from operating activities was primarily attributable to a significant increase in profit before tax in 2011
compared to 2010. The increase in cash flows from operating activities was partly offset by an increase in net
working capital. Net working capital increased by NOK 584.2 million in 2011, which mainly consisted of an increase
in trade receivables and other factors following an increase in operating revenue from 2010 to 2011. Trade and
other receivables increased by NOK 260.6 million in 2011, primarily due to the prepaid mobilisation fee received
from BP related to the commencement of operations on Deepsea Stavanger.
11.7.8 Cash flows from/(used in) investing activities
Net cash outflow for investing activities for the year ended 31 December 2011 was NOK (957.5) million compared
to an outflow of NOK (3,025.4) million for the year ended 31 December 2010, a decrease of NOK 2,067.9 million,
or 68.3%. The Groups key investment activities in 2011 were a NOK 624.4 million investment in shares in relation
to investment in Deep Sea Metro and a NOK 589.0 million investment in tangible fixed assets in relation to Drilling
Units upgrades and Well Services Rental Equipment. These were partially offset by the receipt of NOK 210.0 million
from the disposal of the well management and consultancy business area. In 2010, the Group had higher
investments in tangible fixed assets, amounting to NOK 2,516.2 million, in connection with the delivery of Deepsea
Stavanger. The Groups other significant investing activities in 2010 were a NOK 535.9 million investment in Deep
Sea Metro.
11.7.9 Cash flows from/(used in) financing activities
Net cash inflow from financing activities for the year ended 31 December 2011 was NOK 475.9 million compared to
NOK 1,567.0 million for the year ended 31 December 2010, a decrease of NOK 1,091.1 million, or 69.6%. The
change in the Groups net cash inflow from financing activities in 2011 and 2010 was primarily due to net changes
in long-term liabilities of NOK 656.6 million in 2011 and NOK 1,679.5 million in 2010, in each case due to
refinancing of the Groups bank loans in the respective years.
11.8 Borrowings, loans receivable and contractual obligations
11.8.1 Material borrowings
Facility
Total
Facility
Utilised
Facility
Unutilised
Facility
Interest
Rate
Maturity
Date
(In USD million)
Odfjell Drilling Services Ltd. USD 300 million
Senior Secured Credit Facility Agreement
1
.............. 300 300 - 3.8%
3

9 November
2015
Odfjell Invest Ltd. USD 950 million Senior
Secured Credit Facility Agreement ......................... 950 950 - 4.1%
4

9 November
2016
Odfjell Rig II Ltd. USD 270 million Senior
Secured Term Loan Facility Agreement .................. 270 270 - 3.8%
5

31 August
2018
7

Odfjell Rig III Ltd. USD 530 million Senior
Secured Term Loan Facility Agreement ..................
530 -
2
530
4.0%
6
May 2021
8

Total.................................................................
2,050 1,520 530

1 The facility is composed of a USD 200 million senior secured term loan credit facility and a USD 100 million revolving credit facility.
2 The facility amount will be available to Odfjell Rig III Ltd. for drawing in one single drawing on the date on which Deepsea Aberdeen is delivered
(subject to delivery taking place no later than 15 November 2014 or such later date as all of the lenders may agree).
3 Interest rate is total including LIBOR, margin and swaps as at 30 June 2013 and includes interest rate hedging of 47% of the outstanding
amount. Average hedging is 40% for the remainder of the tenor.
6 Interest rate is total (applying LIBOR as at 30 June 2013) and includes interest rate hedging of 50% of the outstanding amount (combination of
swap and CIRR option). Average hedging is 47% for the remainder of the tenor.
7 The facility matures 60 days after the expiry of Deepsea Bergens Statoil charter or any other charter the lenders may approve, however no later
than 31 August 2018.
8 The facility matures seven years from the utilisation date, however no later than 31 July 2021, and the export credit facilities mature 10 years
from the utilisation date, however no later than 31 July 2024.
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Odfjell Drilling Services Ltd. USD 300 million facility
Odfjell Drilling Services Ltd. is the borrower under a USD 300 million syndicated credit facility agreement dated 4
November 2011. The facility is composed of a USD 200 million senior secured term loan credit facility and a USD
100 million senior secured revolving credit facility. The term loan facility was fully drawn by Odfjell Drilling Services
Ltd. in one drawing on 9 November 2011. Drawings under the revolving credit facility are available on a revolving
basis up to one month prior to the final maturity date of 9 November 2015. As of 30 June 2013, the revolving
credit facility was fully drawn.
Repayment of the term loan facility is by six consecutive semi-annual instalments from 9 May 2013 with repayment
in full of both facilities on the final maturity date of 9 November 2015.
Interest is payable at a rate per annum of LIBOR plus 3.25%.
The facility amount shall be repayable in full or in part if certain events occur, including: a change of control of the
Company and/or Odfjell Offshore Ltd., or if any company or assets worth over certain significant thresholds of
Odfjell Drilling Services Ltd. or its subsidiaries are sold (or insurance proceeds of a material amount are received)
and the proceeds are not reinvested in similar activities/assets/companies in Odfjell Drilling Services Ltd. or its
subsidiaries within the same calendar year.
The Company, and certain of Odfjell Drilling Services Ltd.s subsidiaries, are guarantors under the facility
agreement. Further, all of the shares in Odfjell Offshore Ltd., Odfjell Drilling Services Ltd., Odfjell Operations Ltd.,
Odfjell Partners Invest Ltd., Odfjell Drilling AS, Odfjell Drilling Technology Ltd., Odfjell Rental Services AS, Odfjell
Casing Services AS, Odfjell Well Services Europe AS, Odfjell Well Services Ltd. and Odfjell Drilling Technology AS
have been pledged in favour of the lenders. The loan is also secured by first priority assignment of all intra-group
receivables owed to Odfjell Drilling Services Ltd. and its subsidiaries.
The facility agreement contains financial covenants including a minimum liquidity requirement, minimum equity
ratio, a maximum adjusted leverage ratio and further restrictions on, inter alia, financial indebtedness, capital
expenditures and financial support. The facility agreement allows the Company to distribute dividends in an
amount up to 50% of its net income (adjusted for any write downs of rigs and after taxes paid) in its previous
financial year. The facility agreement also provides for mandatory prepayment if Helene Odfjell (and her
descendants) cease to own at least 50.1% of the shares in the Company. The facility agreement otherwise contains
undertakings and covenants which Odfjell Drilling Services Ltd. considers to be customary for similar types of bank
financings, including, but not limited to, undertakings related to reporting and information and certain restrictions
on corporate actions and change of business. Further, the facility agreement also contains default and cross-default
provisions, all applicable to the Group. However, the cross-default provision is only applicable to the default of any
member of the Group (excluding Deep Sea Metro Ltd.) on indebtedness of more than USD 5 million.
Odfjell Invest Ltd. USD 950 million facility
Odfjell Invest Ltd. is the borrower under a USD 950 million syndicated credit facility agreement dated 4 November
2011.
Principal is payable in quarterly instalments of USD 25 million over five years and in a balloon repayment of USD
475 million together with all other sums due and outstanding on the final maturity date of 9 November 2016.
Interest is payable at the rate per annum of LIBOR plus 2.75%.
The facility amount shall be repayable in full or in part if certain events occur, including, but not limited to, certain
change of control situations in the Group, or if any of Deepsea Stavanger and Deepsea Atlantic are sold or totally
lost.
All of the shares and substantially all of the assets of Odfjell Invest Ltd. and its subsidiaries have been pledged in
favour of the lenders, including mortgages over Deepsea Stavanger and Deepsea Atlantic. Also, the Company and
certain of its subsidiaries have guaranteed the obligors obligations under the finance documents.
The facility agreement contains financial covenants including a minimum liquidity requirement, a minimum equity
ratio, a maximum leverage ratio and current ratio. The facility agreement allows the Company to distribute
dividends in an amount up to 50% of its net income (adjusted for any write downs of rigs and after taxes paid) in
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its previous financial year. The facility agreement also provides for mandatory prepayment if Helene Odfjell (and
her descendants) cease to own at least 50.1% of the shares in the Company.
The facility agreement also contains undertakings and covenants, and terms and conditions which Odfjell Invest
Ltd. considers to be customary for similar types of bank financings, including, but not limited to, undertakings
related to reporting and information, certain restrictions on corporate actions and change of business and
covenants relating to the operation and maintenance of Deepsea Stavanger and Deepsea Atlantic. The facility
agreement contains default and cross-default provisions, all applicable to Odfjell Invest Ltd and its subsidiaries,
and in some cases the Group. The cross-default provision is, however, only applicable to the Group in relation to a
default on indebtedness of more than USD 5 million.
Odfjell Rig II Ltd. USD 270 million senior secured term loan facility
Odfjell Rig II Ltd. is the borrower under a USD 270 million senior secured term loan facility dated 15 February
2013. The facility was made available to Odfjell Rig II Ltd. for the purposes of (i) financing the acquisition of
Deepsea Bergen from another subsidiary of Odfjell Drilling and (ii) refinancing of existing credit facilities related to
the ownership of Deepsea Bergen.
The facility matures 60 days after the expiry of the Groups contract with Statoil or any other similar contract for
the use of Deepsea Bergen acceptable to the lenders, but in any case no later than 31 August 2018.
The rate of interest per annum is LIBOR plus 3.30%. The facility amount is repayable in full or in part if certain
events occur, including, but not limited to, certain change of control situations in the Group or if Deepsea Bergen is
sold or totally lost.
All of the shares in and substantially all of the assets of Odfjell Rig II Ltd. have been pledged in favour of the
lenders, including a mortgage over Deepsea Bergen. Also, the Company and Odfjell Offshore Ltd. have guaranteed
the obligors' obligations under the finance documents.
The facility agreement contains financial covenants including a minimum liquidity requirement, a minimum equity
ratio, a current ratio and a maximum leverage ratio. Distribution of dividends by the Company are limited to a
maximum of 50% of net income (adjusted for any write downs of Drilling Units and after taxes paid) for each
calendar year. The facility agreement also provides for mandatory prepayment if Helene Odfjell (and her
descendants) cease to own at least 50.1% of the shares in the Company.
The facility agreement otherwise contains undertakings and covenants, and terms and conditions which Odfjell Rig
II Ltd. considers to be customary for similar types of bank financings, including, but not limited to, undertakings
related to reporting and information, certain restrictions on corporate actions and change of business and
covenants relating to the operation and maintenance of Deepsea Bergen. Further, the facility agreement also
contains default and cross-default provisions, all applicable to the Group. However, the cross-default provision is
only applicable to the default of any member of the Group (excluding Deep Sea Metro, unless any member of the
Group contributes at least USD 5 million in response to such default) on indebtedness of more than USD 5 million.
Odfjell Rig III Ltd. USD 530 million senior secured term loan facilities
Odfjell Rig III Ltd. is the borrower under a USD 530 million senior secured term facility agreement with a syndicate
of banks (including national export credit agencies) for the purpose of financing the acquisition of Deepsea
Aberdeen, currently being constructed by DSME and scheduled to be delivered in May 2014. The facilities comprise
a seven year commercial facility initially of USD 130 million, a 10 year export credit facility initially of USD 200
million and a 10 year export credit facility initially of USD 200 million.
Each facility will be available to Odfjell Rig III Ltd. for drawing on the date on which Deepsea Aberdeen is delivered
to Odfjell Rig III Ltd. (subject to delivery taking place no later than 15 November 2014 or such later date as all of
the lenders may agree). The facilities must be drawn in US dollars, except for certain facilities which may be drawn
in NOK or US dollars at the borrowers option.

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The interest rate per annum for the commercial facility and one of the export credit facilities is LIBOR plus a margin
of 3.40%. The rate of interest for the other export credit facility is the percentage rate per annum which, at the
option of Odfjell Rig III Ltd., is either:
(i) a fixed rate of 2.43% (where USD has been selected) or 2.89% (where NOK has been selected); or
(ii) a floating rate of LIBOR plus a margin from time to time as set out in one or more separate offer letters
from the lender;
in each case in addition to a guarantee commission payable to the export credit guarantee provider.
The facilities shall be prepaid in full or in part if certain events occur, including, but not limited to, a change of
control of the Company or if Deepsea Aberdeen is sold or totally lost. Additionally, if by the date falling 90 days
prior to the commercial facility's maturity date, the commercial facility has not been extended or otherwise
refinanced on terms acceptable to the export credit lenders, then the export credit lenders may terminate the
export credit facilities on the same date as the commercial facility.
As security for the facilities, and as a condition precedent to utilisation of the facilities upon delivery of Deepsea
Aberdeen, substantially all of the shares in and assets of Odfjell Rig III Ltd. and Odfjell Drilling Shetland Limited
will be pledged in favour of the lenders and hedging banks, including a mortgage of Deepsea Aberdeen. Also, the
Company and Odfjell Offshore Ltd. have guaranteed the obligors' obligations under the finance documents, and one
of the USD 200 million export credit facilities has been guaranteed by the Norwegian Garanti-Instituttet for
Eksportkreditt (for a guarantee fee).
The agreement contains financial covenants including a minimum liquidity requirement, a minimum equity ratio,
current ratio and a maximum leverage ratio. Distribution of dividends by the Company is limited to a maximum of
50% of net income (adjusted for any write downs of Drilling Units and after taxes paid) for each calendar year. The
facility agreement also provides for mandatory prepayment if Helene Odfjell (and her descendants) cease to own at
least 50.1% of the shares in the Company.
The facility agreement contains undertakings and covenants, and terms and conditions which Odfjell Rig III Ltd.
considers to be customary for similar types of bank financings, including, but not limited to, undertakings related to
reporting and information, certain restrictions on corporate actions and change of business and covenants relating
to the operation and maintenance of Deepsea Aberdeen. Further, the Facility Agreement also contains default and
cross-default provisions, all applicable to Odfjell Rig III Ltd., including the Group.
11.8.2 Deep Sea Metro material borrowings
Golden Close Maritime Corp. Ltd. USD 460 million bond loan
Golden Close, a wholly-owned subsidiary of Deep Sea Metro, issued a bond with Norsk Tillitsmann ASA as trustee
for the bondholders in the maximum aggregate amount of USD 460 million. The agreement is dated 3 December
2010. The purpose of the bond was to finance the remaining instalments in connection with the construction and
delivery of Deepsea Metro I.
The bonds shall be repaid in full at 9 December 2015 (unless redeemed earlier). Golden Close may redeem the
bonds, in whole but not in part, at a price depending on the date of redemption, currently being equivalent to
106% of the par value (plus accrued interest), reducing to 104% in December 2013 and further to 102% in
December 2014. Bondholders have a put option which is exercisable if any person other than the joint venture
partners or an international drilling operator with an investment grade rating becomes a 50% owner of Deep Sea
Metro. The bonds must be redeemed before maturity if Deepsea Metro I is sold or lost or if Deep Sea Metro is no
longer the 100% parent of Golden Close.
The interest payable on the bonds is 11% per annum, payable as semi-annual coupons.
The bonds are secured by a pledge over all the shares of Golden Close and security over substantially all of Golden
Closes assets, including a mortgage over Deepsea Metro I, an assignment of the drillship management agreement
and assignments of any insurances, drilling contracts and revenue deriving from the vessel. Further, Golden Closes
subsidiaries which are relevant to Deepsea Metro I have guaranteed the issuers obligations under the bond
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agreement, and the bonds have further been secured by pledges over substantially all the assets of Golden Closes
subsidiaries relevant to Deepsea Metro I, including a pledge over the shares of relevant subsidiaries and their bank
accounts, and assignments of revenue and any rights under the drilling unit management agreement for Deepsea
Metro I.
The main restrictive covenant is that Golden Close is obliged to accumulate its excess earnings, after providing for
a working capital buffer. When the amount of accumulated excess earnings exceeds a certain threshold, Golden
Close must redeem the bonds with such excess earnings, at 100% of par value (plus accrued interest on the
redeemed amount); hence, Golden Close may not declare or make any dividend payments to Deep Sea Metro. As
of 30 June 2013, Golden Close has fully funded the working capital buffer; any surplus cash that Golden Close
generates will therefore be accumulated as excess earnings, to be used in the manner described above. Golden
Close redeemed USD 33.3 million of the bonds in June 2013.
The bonds also include terms and conditions which the Company considers to be customary for similar types of
financings, including, but not limited to, events of default, cross-defaults, covenants relating to the ownership and
condition of Deepsea Metro I, a prohibition on distributions or dividend payments and restrictions on financial
indebtedness. Through a covenant agreement, any relevant subsidiary of Golden Close is bound by the same
restrictions as Golden Close.
Chloe Marine Corporation Ltd. USD 400 million term loan facility
Chloe Marine entered into a USD 400 million senior term loan facility agreement with, amongst others, DVB Bank
America N.V. as arranger and agent, and ABN AMRO Bank N.V. as arranger. The agreement is dated 15 November
2011, and the purpose of the loan was to fund part of the purchase price for Deepsea Metro II.
The loan is divided into two tranches, USD 207 million (Tranche A) and USD 193 million (Tranche B). Tranche A is
guaranteed by GIEK (the Norwegian Guarantee Institute for Export Credits). The loan ranks ahead in priority of the
USD 150 million bond issued with Norsk Tillitsmann ASA as trustee, but is subject to an intercreditor agreement
which regulates the relationship between the lenders under the loan and under the bond.
The loan shall be repaid in (i) 10 consecutive semi-annual repayment instalments each in the minimum amount of
USD 16,666,666, the first due and payable on 21 May 2012 (six months after drawdown was made), and (ii) a
balloon payment in the amount of USD 233,333,333 (less any payments in excess of the minimum semi-annual
instalments) falling due on 23 November 2016.
The rate of interest on the loan is the aggregate of (i) mandatory costs (if any), (ii) LIBOR and (iii) the applicable
margin, which for Tranche A is 3.50% per annum (including guarantee premium to GIEK), and for Tranche B is
3.25% per annum.
Chloe Marine has a right to prepay the loan, in whole or in part, by a minimum amount of USD 5 million. Chloe
Marine is obliged to prepay the loan if certain events occur, such as a total loss of Deepsea Metro II or if its market
value falls below a certain percentage of the loan.
As security for the loan, all of the shares of Chloe Marine have been pledged in favour of the lenders. Further,
Chloe Marine has pledged substantially all its assets, including a mortgage over Deepsea Metro II, assignments of
its earnings and insurances and its shares (or equivalent ownership rights) in relevant subsidiaries. Relevant
subsidiaries of Chloe Marine have also guaranteed its obligations under the loan, and have further pledged
substantially all of their assets, including any shares in relevant subsidiaries, as well as rights to revenue,
insurance proceeds and bank accounts. All security granted and guarantees given rank first in priority ahead of the
USD 150 million bond loan entered into with Norsk Tillitsmann ASA, as trustee for the bondholders, described
below.
Chloe Marine is subject to a number of financial covenants under the loan, including a minimum liquidity
requirement of USD 20 million. In addition, Chloe Marine has covenanted to maintain liquidity amounting to six
months interest payment under the USD 150 million bond at all times. Further, Chloe Marine has covenanted to
maintain a leverage ratio, an interest coverage ratio, a debt service coverage ratio and meet a minimum working
capital requirement. There are further restrictions on the payment of dividends to Deep Sea Metro and on the
incurrence of further financial indebtedness by Chloe Marine and its subsidiaries.
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The loan agreement also contains covenants which the Company considers customary for similar types of bank
financings, relating to reporting and information, covenants relating to the operation and maintenance of Deepsea
Metro II and restrictions on certain corporate dispositions. Further, the loan agreement contains provisions relating
to events of default, including a cross-default with the USD 150 million bond loan (described below), which the
Company deems to be customary for similar types of bank financings.
Chloe Marine Corporation Ltd. USD 150 million bond loan
Chloe Marine has issued a bond loan amounting to USD 150 million under a bond agreement entered into with
Norsk Tillitsmann ASA, as trustee for the bondholders, dated 16 November 2011.
The net proceeds from the issuance of the bonds were paid out in one tranche and used to pay the delivery
instalment of Deepsea Metro II, as well as preparation and mobilisation costs, and for general corporate purposes.
The bonds rank second in priority after the obligations under the USD 400 million senior credit facility entered into
with DVB Bank America N.V., but otherwise pari passu with other unsecured obligations of Chloe Marine. An
intercreditor agreement has been entered into to coordinate the relations between the lenders under the two
finance arrangements and the borrowers and guarantors.
The interest payable on the bonds is a fixed rate of 12% per annum. The interest is payable semi-annually in
arrears on 17 May and 17 November.
The maturity date of the bonds is 28 December 2016. The bond agreement contains call options, wherein Chloe
Marine may repay all or part of the bonds earlier than the maturity date at a value falling from 108% to 103% of
par value (plus accrued interest) depending on the date of repayment. There is also a put option if any person
other than the joint venture partners or an investment grade company operating in the oil and gas industry
becomes an owner of 50% or more of Deep Sea Metro and a mandatory redemption in the event Deepsea Metro II
is sold, lost or otherwise disposed of.
As security for the bonds, all of the shares in Chloe Marine have been pledged in favour of the bondholders.
Further, substantially all of the assets of Chloe Marine have been pledged, including a mortgage over Deepsea
Metro II, a pledge over rights under charters and its shares (or equivalent ownership rights) in relevant
subsidiaries. Relevant subsidiaries of Chloe Marine have guaranteed the obligations of the obligors, and have
further pledged substantially all of their assets, including any shares in relevant subsidiaries, as well as rights to
revenue, insurance proceeds and accounts. All security granted and guarantees given rank second in priority after
the USD 400 million senior credit facility entered into with DVB Bank America N.V., described above.
The bond agreement contains covenants which the Company considers to be customary for similar types of
financings, including covenants prohibiting Chloe Marine from paying dividends to its shareholders (other than
certain exceptional distributions) or providing financial support, covenants relating to reporting and information,
continuation of business, financial indebtedness restrictions and covenants relating to the operation of Deepsea
Metro II. It also includes provisions which the Company considers to be customary relating to events of default and
change of control.
11.8.3 Contractual obligations
The following table presents the maturity profile of the Groups loan facilities as at 30 June 2013. Please see note
12 to the Financial Statements for the year ended 31 December 2012 for further information on the repayment
schedule for the Groups loan facilities, including interest payments. The Group expects to finance the repayment of
its loan facilities from cash generated from the Groups operations and additional refinancing:

126

Instalments due

Outstan-
ding as at
30 June
2013 2013 2014 2015 2016 2017 2018
There-
after
Odfjell Drilling Services
Ltd. USD 300 million
Senior Secured Credit
Facility Agreement ................................................................................................ 283.3 16.7 33.3 233.3 - - - -
Odfjell Invest Ltd.
USD 950 million Senior
Secured Credit Facility
Agreement ........................................................................................................... 825.0 50.0 100.0 100.0 575.0 - - -
Odfjell Rig II Ltd. USD
270 million Senior
Secured Term Loan
Facility Agreement ................................................................................................ 260.0 20.0 40.0 40.0 52.0 56.0 52.0 -
Odfjell Rig III Ltd.
USD 530 million Senior
Secured Term Loan
Facility Agreement
1
............................................................................................... 0.0 - 22.0 45.0 46.0 50.0 52.0 315.0

1 This is available to Odfjell Rig III Ltd. on the date of delivery of Deepsea Aberdeen, subject to delivery no later than November 2014. The
maturity profile shown above for this borrowing facility is based on delivery of Deepsea Aberdeen in May 2014.
11.8.4 Major historical capital expenditures and investments
The Groups main capital expenditures and investments are new build Drilling Units, modification and upgrades of
existing drilling units and investments in well services equipment.
The following table sets out the Groups major capital expenditures for the six months ended 30 June 2013 and the
years ended 31 December 2012, 2011 and 2010. The Groups major capital expenditures and investments are set
out in USD million for all periods except the year ended 31 December 2010 in which they are set out in NOK
million.

Six months
ended
30 June
Year ended
31 December

2013
(USD million)
2012
(USD million)
2011
(USD million)
2010
(NOK million)
Drilling Units .................................................................................. 17 134 63 2,279
Well Services Rental Equipment
1
....................................................... 22 68 52 212
Other.............................................................................................
2 8 9 26
Total.............................................................................................
41 210 124 2,516

1 The rig mooring business contributed approximately USD 11 million, USD 13 million and NOK 37 million in the years ended 31 December 2012,
2011 and 2010, respectively, to Well Services capital expenditure. The average age of the Rental Equipment is between four and five years.
In the six months ended 30 June 2013, capital expenditure on the Drilling Units included construction in progress
of USD 9 million for Deepsea Aberdeen and USD 8 million in investments on the other Drilling Units. In the same
period, capital expenditure on Rental Equipment was USD 22 million and included replacement of Rental Equipment
in addition to new investments, of which USD 3 million was attributable to Deep Sea Mooring.
In the year ended 31 December 2012, capital expenditures on Drilling Units included USD 109 million paid in
instalments for Deepsea Aberdeen. The Groups other capital expenditures related to Drilling Units in 2012 were
related to upgrades and modifications on existing Drilling Units. Capital expenditures related to Drilling Units in the
year ended 31 December 2011 were primarily related to modifications and upgrades of existing Drilling Units. In
the year ended 31 December 2010, capital expenditures on Drilling Units amounted to NOK 2,279 million, and were
related to the delivery of Deepsea Stavanger and the purchase of a new BOP for Deepsea Atlantic.
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Capital expenditures for well services equipment amounted to USD 68 million in the year ended 31 December
2012, USD 52 million in the year ended 31 December 2011 and NOK 212 million in the year ended 31 December
2010, of which USD 11 million, USD 13 million and NOK 37 million, respectively, were attributable to Deep Sea
Mooring. Capital expenditures in well services equipment included replacement of scrapped equipment, in addition
to new investments following the increased growth in the well services business. The Group estimates that
approximately USD 20 25 million in 2012 (or 10 12% of revenues of the Well Services segment) was related to
maintenance capital expenditures.
Other capital expenditure in the periods under review was mainly related to office equipment, software, machinery
and workshop facilities. For a discussion of investments in joint ventures, please see Section 11.2.6 Investments
in joint ventures and disposals.
There have been no other material investments since 30 June 2013.
11.8.5 Future investments
11.8.5.1 Future capital commitments
As of 30 June 2013, the Group had total committed capital expenditures of USD 637.1 million, composed of USD
626.3 million of new building commitments and USD 10.8 million of commitments in respect of rental, casing and
mooring commitments. For a discussion of capital commitments to joint ventures, please see Section 11.2.6
Investments in joint ventures and disposals.
The USD 626.3 million of new building commitments relate to the contract the Group has signed with DSME to
build a new semi-submersible drilling unit Deepsea Aberdeen for use in the UKs West of Shetland region under a
contract with BP. This commitment will be financed by the USD 530 million loan facility with the remainder funded
from cash from the Group. For further discussion of this commitment, please see Section 8.5.1.3 Key contracts.
This is an ongoing investment and the Drilling Unit is scheduled for delivery in May 2014 and is scheduled to
commence operations for BP during the fourth quarter of 2014. The commitments related to the new building
programme are summarised in the table below and are not deducted with the mobilisation fee of USD 35 million to
be paid by BP:
In USD million
As of
30 June
2013
Due in year 1 .................................................................................................................................................... 596.3
Due in year 2 .................................................................................................................................................... 30.1
Due in year 3 ....................................................................................................................................................
-
Value of new building commitments ...............................................................................................................
626.3
Capital expenditure other than new buildings contracted for at the end of the reporting period but not yet incurred
is as follows:
In USD million
As of
30 June
2013
Rental, casing and mooring equipment, due in year 1 .............................................................................................
10.8
Total................................................................................................................................................................
10.8
11.8.5.2 Future operating lease commitments - Group company as lessee
The Group leases various offices under non-cancellable operating lease arrangements. The lease terms are
between one and 10 years, and the majority of the lease arrangements are renewable at the end of the lease
period at market rates. The lease agreements for the Groups offices in Bergen and Stavanger, which are the
largest offices of the Group in terms of space and number of employees, consist of:
Lease agreement between Kokstad Invest Holding AS (controlled by Helene Odfjell and related
parties) and Odfjell Drilling AS dated 15 October 2012 regarding lease of offices and a workshop at
Hammaren 29 in Tananger, Norway. The annual lease is NOK 1.0 million (exclusive of VAT). The lease
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agreement replaced a former lease agreement between Kokstad Invest AS and Odfjell Drilling AS and
is on the same terms and conditions as that agreement.
parties) and Odfjell Drilling AS dated 15 October 2012 regarding lease of offices at Hammaren 21 in
Tananger, Norway. The annual lease is NOK 5.3 million (exclusive of VAT). The lease agreement
replaced a former lease agreement between Kokstad Invest AS and Odfjell Drilling AS and is on the
same terms and conditions as that agreement.
parties) and Odfjell Drilling AS dated 15 October 2012 regarding lease of offices, a workshop and a
building site at Hammaren 19 in Tananger, Norway. The annual lease is NOK 4.6 million (exclusive of
VAT). The lease agreement replaced a former lease agreement between Kokstad Invest AS and
Odfjell Drilling AS and is on the same terms and conditions as that agreement.
Lease agreement between Kokstad Invest AS and Odfjell Drilling AS dated 15 November 2012
regarding lease of offices at Sandslimarka 61/63 in Bergen, Norway. The annual lease is NOK
10,354,002 (exclusive of VAT). The lease agreement replaced a former lease agreement between
Kokstad Invest AS and Odfjell Drilling AS.
Lease agreement between Sandslimarka 185 AS and Odfjell Drilling AS regarding lease of offices at
Sandslimarka 185 in Bergen, Norway. The annual lease is NOK 6.1 million (exclusive of VAT).
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
In USD million
As of
31 December
2012
No later than 1 year ........................................................................................................................................... 4.5
Later than 1 year and no later than 5 years ........................................................................................................... 12.6
Later than 5 years ..............................................................................................................................................
4.7
Total................................................................................................................................................................
21.8
11.8.5.3 Off-balance sheet arrangements
The Group does not have any off-balance sheet arrangements.
11.9 Quantitative and qualitative disclosures about market risk
Risk management is carried out on a Group level. The Group identifies, evaluates and hedges financial risks in
close co-operation with the Groups operational units. The interim Board of Directors of the Company has
established written principles for risk management of foreign exchange risk, interest rate risk and use of derivative
financial instruments.
11.9.1 Market risk
Market risk is the risk of change in market prices and demand, hereunder changes in currency exchange rates and
interest levels.
11.9.2 Foreign exchange risk
The consolidated subsidiaries reporting and functional currency are USD, NOK and EUR.
The Group operates internationally and is exposed to foreign exchange risk arising from various currency
exposures, primarily with respect to USD and NOK. Foreign exchange risk arises when future commercial
transactions or recognised assets or liabilities are denominated in a currency that is not the entitys functional
currency. The Group is exposed to risks due to fluctuations in exchange rates, especially as charter contracts are
normally in USD while most of the operating expenses are in local currency.

129

If the USD is weakened by 10% against other relevant currencies, on the balance sheet date, we can expect the
following effect on profit before tax in USD million:
In USD million
2012 2011
Current receivables ................................................................................................................... (27.2) 11.2
Cash ........................................................................................................................................ (20.0) 6.5
Current liabilities .......................................................................................................................
21.3 (1.8)
Net effect on profit before tax ................................................................................................
(25.9) 16.0
11.10 Interest rate risk
The Groups exposure to the risk of changes in market interest rates relates primarily to the Groups long-term
debt obligations at floating interest rates. The Group evaluates the share of interest rate hedging based on
assessment of the Groups total interest rate risk and currently has a combination of fixed and floating interest
rates in order to limit exposure.
The Group had 11 interest rate swap agreements at 31 December 2012 and 13 interest rate swap agreements at
30 June 2013. Market inputs have been used to determine the fair value of the swap agreements at the end of the
year. The fair value of the interest swap agreements is confirmed by the financial institution with which the
company has entered into the agreements.
During the year ended 31 December 2012, a gain on interest rate swaps was recognised at USD 1.6 million in the
income statement, as compared to a loss on interest rate swaps of USD 26.2 million in 2011. In addition, a loss of
USD 1.7 million related to interest rate swaps designated as cash flow hedges was recognised in the statement of
other comprehensive income in 2012, compared to a loss of USD 0.1 million on interest rate swaps under cash flow
hedges in 2011. In 2012, the loss of USD (1.7) million was classified as a component of the equity as of 31
December 2012 relating to interest rate swaps qualified for hedge accounting.
The Group monitors its interest rate exposure on a dynamic basis. The Group calculates the impact on profit and
loss of a defined interest rate shift.
The result of the calculation on sensitivities returns the following expected values:
If interest rates were increased by one percentage point (e.g. from 4.0% to 5.0%), the effect would be
an increase in borrowing costs of approx. USD 8.5 million for 2012, compared to USD 8.4 million in
2011, including interest rate swaps.
11.11 Critical accounting policies and estimates
Estimates and judgements are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. These estimates are based on the actual
underlying business, its present and forecasted profitability over time, and expectations about external factors such
as interest rates, foreign exchange rates and other factors which are outside the Groups control. The resulting
estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year are addressed below.
11.11.1 Revenue
The Groups revenues are derived from day rate based drilling contracts, management drilling contracts and other
service contracts. Day rate based drilling contracts may include lump sum fees for mobilisation and demobilisation.
Both day rate based and lump sum fee revenues are recognised rateably over the contract period when services
are rendered.
130

11.11.2 Income tax
The Group is subject to income tax in many jurisdictions. Various tax systems have required some use of
judgement for certain countries in determining income tax for all countries taken together in the IFRS and NGAAP
Financial Statements. The final tax liability for some transactions and calculations will be uncertain.
The Group recognises tax liabilities associated with future decisions in tax cases/disputes, based on estimates of
the likelihood that additional income tax will fall due.
Should the final outcome of these cases vary from the amount of the original provision, this variance will affect the
stated tax expense and provision for deferred tax in the period when the final outcome is determined.
The parent company recognises tax liabilities when these are incurred. In other words, the tax expense is related
to the accounting profit/loss before tax. The tax expense comprises tax payable and the change in net deferred
tax. Reference is made to note 21 relating to disclosed information related to a dispute with Norwegian Tax
Authorities, and hence the classification of paid tax as long-term receivable.
Withholding tax is the tax withheld on border crossing gross income, generated in Angola. Withholding tax is
presented as tax expense in the income statement. There is no withholding tax in Brazil.
11.11.3 Impairment of non-financial assets
Assets that have an indefinite useful life, i.e. goodwill, are not subject to amortisation and are tested annually for
impairment. Assets that are subject to amortisation or depreciation, i.e. mobile offshore drilling units, are reviewed
for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the assets carrying amount exceeds its
recoverable amount.
The recoverable amount is the higher of an assets fair value less costs to sell and value in use. For the purposes of
assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows
(CGUs). Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the
impairment at each reporting date.
If available, estimated fair value of an asset is obtained externally. In addition, the Group has financial models
which calculate and determine the value in use through a combination of actual and expected cash-flow generation
discounted to present value. The expected future cash-flow generation and models are based on assumptions and
estimates.
The discount factor applied in the cash flow budgets is a pre-tax weighted average cost of capital. Beyond the
period covered by the business plan, a growth factor which varies between 0% and 5% is applied, with an
expectation that gross margins will not weaken substantially over time.
11.12 Significant changes
There have been no significant changes in the financial or trading position of the Group since the date of the
Interim Financial Statements, which have been included in this Prospectus.
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12 BOARD OF DIRECTORS, MANAGEMENT, EMPLOYEES AND CORPORATE GOVERNANCE
12.1 Board of Directors
12.1.1 Overview of the Board of Directors
The Board of Directors is responsible for the overall management of the Company and may exercise all of the
powers of the Company not reserved to the Companys shareholders by its bye-laws (the Bye-Laws) or Bermuda
law. The Bye-Laws provide that the Companys Board of Directors shall consist of not less than five Directors or
such number in excess thereof as the shareholders of the Company may determine. The Directors are elected by
the shareholders at the annual general meeting or any special general meeting called for that purpose, unless
there is a casual vacancy, and the shareholders of the Company may authorise the Board of Directors to fill any
vacancy in their number left unfilled at a general meeting of the shareholders. If there is a vacancy of the Board of
Directors occurring as a result of the death, disability, disqualification or resignation of any Director or as a result
of an increase in the size of the Board of Directors, the Board of Directors has the power to appoint a Director to fill
the vacancy.
As of the date of this Prospectus, the Company has an interim Board of Directors composed of five Directors, who
will serve as Directors only up to the first day of Listing (the Interim Directors). The names and positions of the
Interim Directors are set out in the table below. Carl-Erik Haavaldsen, Helene Odfjell, Kirk L. Davis and Bengt Lie
Hansen will continue to serve as Directors and, will together with Henry H. Hamilton III as a new Director, form the
new Board of Directors from the first day of Listing (the New Board of Directors). The New Board of Directors
will thus consist of five Directors. The five Directors have been elected for a term which will expire at the annual
general meeting in 2015.
The New Board of Directors will, as of the first day of Listing, be in compliance with the independence requirements
of the Norwegian Code of Practice for Corporate Governance dated 23 October 2012 (the Corporate Governance
Code), meaning that (i) the majority of the shareholder-elected members of the Board of Directors should be
independent of the Companys executive management and material business contacts, (ii) at least two of the
shareholder-elected members of the Board of Directors should be independent of the Companys main shareholder,
and (iii) no members of the Companys executive management should serve on the Board of Directors.
All Directors, as at the first day of Listing, will be independent of the Companys significant business relations and
large shareholders (shareholders holding more than 10% of the Shares in the Company), except for Helene Odfjell.
All of the Directors are independent of the Management. Management is not represented on the interim Board of
Directors or on the New Board of Directors.
The Companys registered office address at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda, serves
as the business address for the members of the Board of Directors in relation to their directorships of the
Company.
To the extent the Stabilisation Manager, on behalf of the Managers, redelivers any of the Shares borrowed
pursuant to the Lending Option to the Selling Shareholder at the end of the stabilisation period, Odfjell Partners
Ltd. has a right to require the Selling Shareholder to sell 50% of any redelivered Shares. Other than this, none of
the Interim Directors or the members of the New Board of Directors hold any options or other rights to acquire
Shares as of the date of this Prospectus.
12.1.2 The interim Board of Directors
The names, positions, current term of office and shareholding in the Company of the Interim Directors as of the
date of this Prospectus are set out in the table below. Odfjell Partners Ltd., controlled by Helene Odfjell, controls
140,000,000 Shares. BCB Paragon Trust Limited, as trustee of the Larine Trust, of which Marianne Odfjell is a
beneficiary, controls 60,000,000 Shares.

132

Name Position Served since Term expires Shares
Helene Odfjell
1
..................................................................... Chairman January 2010 AGM 2015 140,000,000
Marianne Odfjell
1
................................................................. Director November 2010 Day before Listing 60,000,000
Kirk L. Davis ........................................................................ Director December 2007 AGM 2015 -
Carl-Erik Haavaldsen ............................................................ Director December 2005 AGM 2015 -
Bengt Lie Hansen ................................................................. Director November 2010 AGM 2015 -

1 Helene Odfjell and Marianne Odfjell are sisters.
12.1.3 Brief biographies of the Interim Directors
Set out below are brief biographies of the Interim Directors, including their relevant management expertise and
experience, an indication of any significant principal activities performed by them outside the Company and names
of companies and partnerships of which a member of the Board of Directors is or has been a member of the
administrative, management or supervisory bodies or partner in the previous five years (not including directorships
and management positions in subsidiaries of the Company).
Helene Odfjell, Chairman
Helene Odfjell is Chairman of the interim Board of Directors. She has a Master of Business Administration from the
Norwegian School of Economics (NHH), a Master of Business Administration from London Business School and is a
Chartered Financial Analyst. Mrs. Odfjell has many years of experience in business and management and holds
many board and management positions in the affiliates of the Company.
Current directorships and management positions: ......................... ODFJELL PARTNERS LTD. (DIRECTOR), GRNCO AS
(DIRECTOR), KOKSTAD INVEST HOLDING AS (CHAIRMAN),
KOKSTAD EIENDOM AS (CHAIRMAN), KOKSTAD
NRINGSPARK AS (CHAIRMAN), KNAUS1 AS (CHAIRMAN),
PLSSTOVA AS (CHAIRMAN).
Previous directorships and management positions in the last five
years:...................................................................................... ODFJELL DRILLING HOLDING LTD. (DIRECTOR)
Marianne Odfjell, Director
Marianne Odfjell has a Master of Business Administration from Imperial College Business School and has served on
the Board of Directors of the Company since 2010.
Current directorships and management positions: ......................... ODFJELL CAPITAL LTD (DIRECTOR), ASK INVEST AS
(CHAIRMAN)
years:...................................................................................... ODFJELL CAPITAL (BERMUDA) LTD (DIRECTOR).
Kirk L. Davis, Director
Kirk L. Davis has a degree in accounting from Mt. Allison University, and is a Chartered Accountant of Bermuda and
a Chartered Professional Accountant of Ontario. He is currently the President and a Director of Pin High Limited, a
company providing private client financial services. Mr. Davis has extensive experience from previous and current
board positions.
Current directorships and management positions: ......................... OPUS FUND SERVICES (BERMUDA) LIMITED (DIRECTOR),
OPUS FUND SERVICES (CAYMAN) LIMITED (DIRECTOR),
OPUS FUND SERVICES LIMITED (DIRECTOR), MID ATLANTIC
GLOBAL OPPORTUNITIES MANAGEMENT LTD. (DIRECTOR),
CCFD OFFSHORE HOLDINGS LTD. (DIRECTOR), CGE ALPHA
LTD. (DIRECTOR), CGE ALPHA OFFSHORE HOLDINGS LTD.
(DIRECTOR), CGEF OFFSHORE HOLDINGS LTD. (DIRECTOR),
CITADEL GLOBAL COMMODITIES FUND LTD. (DIRECTOR),
CITADEL GLOBAL EQUITIES ALPHA SELECT FUND LTD.
(DIRECTOR), CITADEL GLOBAL EQUITIES FUND LTD.
(DIRECTOR), CITADEL GLOBAL EQUITIES MASTER FUND
133

LTD. (DIRECTOR), CITADEL GLOBAL FIXED INCOME FUND
LTD. (DIRECTOR), CITADEL GLOBAL FIXED INCOME MASTER
FUND LTD. (DIRECTOR), CITADEL KENSINGTON GLOBAL
STRATEGIES FUND LTD. (DIRECTOR), EQUINOX
INTERNATIONAL FUND, LTD. (DIRECTOR), GEAD OFFSHORE
HOLDINGS LTD. (DIRECTOR), GFID OFFSHORE HOLDINGS
LTD. (DIRECTOR), MID ATLANTIC FUNDS SPC (DIRECTOR),
KGSF OFFSHORE HOLDINGS LTD (DIRECTOR), KNIGHTHEAD
OFFSHORE FUND, LTD. (DIRECTOR), KUROTO FUND
INTERNATIONAL, LTD. (DIRECTOR), CASTLE HARBOUR
HOLDINGS LTD. (DIRECTOR) CASTLE HARBOUR SECURITIES
LIMITED (DIRECTOR), CARRASON HOLDINGS LIMITED
(DIRECTOR), ODFJELL CAPITAL (BERMUDA) LIMITED
(DIRECTOR), ODFJELL PARTNERS LTD. (DIRECTOR),
SILGEST HOLDINGS LIMITED (DIRECTOR), PIN HIGH
LIMITED (DIRECTOR), ASEO INTERNATIONAL LTD.
(DIRECTOR), JO TANKERS (BERMUDA) LIMITED
(DIRECTOR), PALMARES HOLDINGS LIMITED (DIRECTOR),
SEABIRD PRIVATE TRUSTEE LIMITED (DIRECTOR),
HIBISCUS PRIVATE TRUSTEE LIMITED (DIRECTOR), OSG
PRIVATE TRUSTEE LIMITED (DIRECTOR).
years:...................................................................................... CAPITAL G TRUST LIMITED (DIRECTOR), OFFSHORE RIG
INVEST LTD. (DIRECTOR), CCF OFFSHORE HOLDINGS LTD.
(DIRECTOR), CITADEL CREDIT FUND I LTD. (DIRECTOR),
CITADEL CREDIT MASTER FUND LTD. (DIRECTOR),
TACTICAL TRADING HK HOLDINGS LTD. (DIRECTOR),
KENSINGTON FINANCIAL INVESTMENTS LTD. (DIRECTOR),
LIQUID GROUP OF COMPANIES (THE) (DIRECTOR),
SARGASSO SUPPLIES LTD. (DIRECTOR), MACHINA TRADING
LTD. (DIRECTOR), ANCHOR SECONDARY 2 LTD (DIRECTOR),
DATA HOLDINGS LIMITED (DIRECTOR), GATSBY CAPITAL
MANAGEMENT LIMITED (DIRECTOR), GILS INVESTMENTS
LIMITED (DIRECTOR), GLICS INVESTMENTS LIMITED
(DIRECTOR), HUNTLY PRIVATE TRUSTEE LIMITED
(DIRECTOR), MARAN PRIVATE TRUSTEE LIMITED
(DIRECTOR), CITADEL CONVERTIBLE MASTER FUND LTD.
(DIRECTOR), PHILOSMITH OFFSHORE PARTNERS LTD.
(DIRECTOR), ODFJELL DRILLING HOLDING LTD (DIRECTOR).
Carl-Erik Haavaldsen, Director
Carl-Erik Haavaldsen has a Master of Business Administration from the Norwegian School of Economics (NHH) and
a Master of Business Administration from UCLA (University of California, Los Angeles). Mr. Haavaldsen has held
executive positions in companies within the commercial banking, investment banking and shipping industries. He
has served as CEO for an Oslo securities firm as well as for a tanker shipping company previously listed on the Oslo
Stock Exchange. Mr. Haavaldsen has further extensive experience from previous and current board positions and is
an experienced business advisor. He also currently serves as investment advisor for Benor Tanker Ltd and Cenor
Ltd, two investment companies.
Current directorships and management positions: ......................... TRANSPETROL HOLDING LTD. (CO-CHAIRMAN),
TRANSPETROL TM AS (CHAIRMAN), IMS INSTRUMENTAL
MARINE SERVICES (CHAIRMAN), INSTRUMENTAL MARINE
SERVICES NORWAY AS (DIRECTOR), NEDRE BAKKLANDET
NRING AS (CHAIRMAN).
years:...................................................................................... ODFJELL DRILLING HOLDING LTD. (DIRECTOR), TROLL FISH
AS (DIRECTOR).
134

Bengt Lie Hansen, Director
Bengt Lie Hansen has a Master of Business Administration from the Norwegian School of Economics (NHH) and a
Master of Law from the University in Oslo (UiO). Mr. Lie Hansen has 38 years of experience in the oil, gas and
offshore industry. He has been head of division in the Ministry of Petroleum and Energy, Vice President of Deminex
Norway, Senior Vice President of Norsk Hydro, in charge of Finance, Commercial, Natural Gas and the Ormen
Lange project. He has also served as President of Statoil Russia. He is currently a non-equity partner in the
Norwegian law firm Selmer.
Current directorships and management positions: ......................... TGS NOPEC GEOPHYSICAL COMPANY ASA (DIRECTOR), RN
NORDIC OIL AS (CHAIRMAN), VERIPOS, INC (DIRECTOR),
CAPRICORN NORGE AS (DIRECTOR).
years:...................................................................................... STATOIL RUSSIA (PRESIDENT)
12.1.4 Remuneration of the interim Board of Directors
The remuneration to the Interim Directors for 2012 was a total of USD 228,483
10
. The table below sets out the
total remuneration paid to the Interim Directors for 2012.
Name and position Remuneration in 2012
1

Helene Odfjell (Chairman) ..................................................................................... USD 56,691
Marianne Odfjell (Director) .................................................................................... USD 42,948
Kirk L. Davis (Director) ......................................................................................... USD 42,948
Carl-Erik Haavaldsen (Director) ............................................................................. USD 42,948
Bengt Lie Hansen (Director) .................................................................................. USD 42,948

1 Based on a currency exchange rate of USD/NOK 5.821.
12.1.5 The New Board of Directors
Other than as stated, none of the members of the New Board of Directors hold any Shares. Set out below are brief
biographies of the members of the New Board of Directors, including their relevant management expertise and
experience, an indication of any significant principal activities performed by them outside the Company and names
of companies and partnerships of which a member of the Board of Directors is or has been a member of the
Carl-Erik Haavaldsen, Chairman
See information in Section 12.1.3 Brief biographies of the Interim Directors, above.
Helene Odfjell, Director
Kirk L. Davis, Director
Bengt Lie Hansen, Director
Henry H. Hamilton III, Director
Henry H. Hamilton III is currently Chairman of TGS-NOPEC Geophysical Company ASA (TGS). He served as CEO of
TGS from 1995 to June 2009. Mr. Hamilton began his career as a geophysicist with Shell Offshore (1981 1987)
before he moved to Schlumberger (1987 1995), where he ultimately held the position of Vice President and

10
Based on a currency exchange rate of USD/NOK 5.821.
135

General Manager for all seismic product lines in North and South America. He joined TGS as its CEO in 1995 and
remained in the position following the 1998 merger with NOPEC International that led to the initial public listing for
TGS. Mr. Hamilton served on the board of directors for the International Association of Geophysical Contractors
(IAGC) from 1993 to 2011 and joined the board of the Society of Exploration Geophysics (SEG) Foundation at the
end of 2010. He currently serves as chairman of the board of Defy Ventures (a non-profit organisation) and as a
director for the University of North Carolina Arts & Sciences Foundation (non-profit organisation). He was first
elected as a Director of TGS in 1998 and its Chairman in 2009. He served as a director of Odfjell Offshore Ltd., a
subsidiary of the Company, from April 2011 to September 2011.
Current directorships and management positions: ......................... TGS-NOPEC GEOPHYSICAL COMPANY ASA (TGS)
(CHAIRMAN), SOCIETY OF EXPLORATION GEOPHYSICS
(SEG) FOUNDATION (DIRECTOR), DEFY VENTURES (NON-
PROFIT ORGANISATION, CHAIRMAN), UNC ARTS &
SCIENCES FOUNDATION (NON-PROFIT ORGANISATION,
DIRECTOR).
years:...................................................................................... INTERNATIONAL ASSOCIATION OF GEOPHYSICAL
CONTRACTORS (IAGC) (DIRECTOR), TGS-NOPEC
GEOPHYSICAL COMPANY ASA (CEO).
12.2 Management
12.2.1 Overview
The Companys senior management team consists of 10 individuals. As of the date of this Prospectus, no member
of the Management holds any Shares
11
or options or other rights to acquire Shares. All members of Management
are eligible to and may participate in the Retail Offering. The management team is employed by Odfjell Drilling AS
which is performing management services for the Group pursuant to an agreement with the Company.
On 31 December 2010, Simen Lieungh (the President and CEO of Odfjell Drilling) acquired 6,478,527 shares in
Odfjell Drilling Holding Ltd., the previous holding company of the Group, for a total purchase price of NOK
40,000,000. In accordance with a resolution of the Board of Directors of Odfjell Drilling Holding Ltd. dated 9 June
2013, Odfjell Drilling Holding Ltd. resolved to acquire all the shares of Simen Lieungh in Odfjell Drilling Holding Ltd.
for a total purchase price of NOK 46,334,498. The total number of shares in Odfjell Drilling Holding Ltd. at the time
of the acquisition was 1,383,165,605. The acquisition completed on 14 June 2013. The purpose of the acquisition
was to facilitate a restructuring of the shareholding structure of the Company, whereby Odfjell Drilling Holding Ltd.
was placed into a members voluntary liquidation, as a result of which all of the shares in the Company were
transferred to the shareholders of Odfjell Drilling Holding Ltd. Simen Lieungh intends to apply for, and will be
allocated, Shares in the Institutional Offering at the Offer Price for a total amount of NOK 40,000,000, which is
expected to be financed through a loan from Odfjell Partners Ltd., the controlling shareholder of the Group.
The loan agreement between Simen Lieungh and Odfjell Partners Ltd. will set out certain provisions including: (i) a
restriction on the creation of security interests over the Shares purchased by Simen Lieungh; (ii) until 31 March
2018, Simen Lieungh have the right to sell the Shares to Odfjell Partners Ltd. at market value provided that both
parties shall mutually agree to such sale and purchase; (iii) after 31 March 2018, Simen Lieungh shall have the
right to sell the Shares to Odfjell Partners Ltd. at market value; (iv) if Simen Lieungh leaves or has to leave Odfjell
Drilling before 31 March 2018, Odfjell Partners Ltd. shall have the right to purchase all the Shares at cost (i.e.,
Simen Lieunghs purchase price for the Shares); and (v) Odfjell Partners Ltd. shall have the right of first refusal to
buy the Shares from Simen Lieungh. Please see Section 18.14.4 Simen Lieungh for the lock-up undertaking
applicable to Simen Lieungh.

11
Kurt Meinert Fjell and Simen Lieungh each hold one (1) share, out of 89,995 shares, in Odfjell Drilling Philippines Ltd due to local
legal requirements. The shares do not carry any right to dividends/distributions or other benefits.
136

The names of the members of Management as of the date of this Prospectus, and their respective positions, are
presented in the table below:
Name Current position within the Group
Employed with
the Group since
Simen Lieungh ................................... President and Chief Executive Officer October 2010
Atle Sb ......................................... Executive Vice President and Chief Financial Officer September 1993
Tommy Johnsen ................................. Executive Vice President Mobile Offshore Drilling Units May 2006 + 1994-2004
Per Lund ........................................... Executive Vice President Well Services April 2013
Ole Fredrik Maier ............................... Executive Vice President Platform Drilling March 2002
Kurt Meinert Fjell ............................... Executive Vice President Drilling Technology July 2002
Jone Torstensen ................................. Executive Vice President and Chief of Staff January 2012
Janike A. Myre ................................... Senior Vice President QHSE February 2002
Bengt Alvar Olsen .............................. Senior Vice President HR and Organisation November 1979
Gisle Johanson ................................... Senior Vice President Communications March 2012
Odfjell Drilling AS registered office address at Sandslimarka 63, N-5254 Sandsli, Norway serves as the business
address for the members of the management team.
The following chart sets out the Managements organisational structure:

12.2.2 Brief biographies of the members of Management
Set out below are brief biographies of the members of Management, including their relevant management expertise
and experience, an indication of any significant principal activities performed by them outside the Company and
names of companies and partnerships of which a member of the Management is or has been a member of the
Simen Lieungh President and Chief Executive Officer
Simen Lieungh joined Odfjell Drilling as President and Chief Executive Officer in 2010. Mr Lieungh has extensive
experience in the oil and gas services industry, having joined Aker Solutions in 1988 and served as its President &
CEO from January 2008 until June 2010. He has more than 20 years of experience in working with large field
development projects in all phases of development, from conceptual studies to completion and delivery of complete
installations. Prior to joining Aker Solutions, Mr. Lieungh was a research scientist with the Norwegian Defence
Research Establishment. Mr. Lieungh is a graduate of the Norwegian University of Science and Technology and
holds a Master of Science in Mechanical Engineering.
CHIEF of STAFF
Jone Torstensen
Exec. Vice President
Simen Lieungh
President & CEO
ODFJELL
WELL SERVICES
Per Lund
ODFJELL DRILLING
TECHNOLOGY
Kurt Meinert Fjell
MOBILE OFFSHORE
DRILLING UNITS
Tommy Johnsen
CORPORATE FINANCE
Atle Sb
Exec. Vice President & CFO
HUMAN RESOURCES
& ORGANISATION
Bengt A. Olsen
Sr. Vice President
QHSE
Janike A. Myre
Sr. Vice President
COMMUNICATIONS
Gisle Johanson
Sr. Vice President
PLATFORM DRILLING
Ole Fredrik Maier
137

Current directorships and management positions: ......................... DEEP SEA METRO LTD. (DIRECTOR), CHLOE MARINE
CORPORATION LTD. (DIRECTOR), GOLDEN CLOSE MARITIME
CORP. LTD. (DIRECTOR), DEEP SEA METRO HOLLAND B.V.
(DIRECTOR), DEEP SEA METRO HOLLAND IV B.V.
(DIRECTOR), GOLDEN CLOSE II LTD. (DIRECTOR), DEEP SEA
METRO COOPERATIEF (DIRECTOR), ODFJELL GALVO B.V.
(DIRECTOR), NEMIS INVEST AS (CHAIRMAN AND CEO),
METIER AS (DIRECTOR).
years:...................................................................................... LEONHARD NILSEN & SNNER AS (DIRECTOR), AKER
SOLUTIONS ASA (CEO), LNS AS (DIRECTOR), METIER O&G
AS (CHAIRMAN).
Atle Sb Executive Vice President and Chief Financial Officer
Atle Sb holds the position of Executive Vice President and Chief Financial Officer and has been employed by the
Group since 1993. Mr. Sb has a Master of Business Administration from the Norwegian School of Economics
(NHH) and has also taken the first level of the Norwegian Law Study. He has previously held leading positions with
Fred. Olsen Offshore, Geco and Nevi Corporate and holds many board and management positions in the affiliates of
Odfjell Drilling.
Current directorships and management positions: ......................... DEEP SEA METRO HOLLAND III BV (DIRECTOR), ODFJELL
GALVO II B.V. (DIRECTOR), DEEP SEA METRO I
COOPERATIEF (DIRECTOR).
years:...................................................................................... DEEP SEA METRO LTD. (DIRECTOR), CHLOE MARINE
CORPORATION LTD. (DIRECTOR), GOLDEN CLOSE MARITIME
CORP. LTD. (DIRECTOR), ODFJELL GALVO B.V.
(DIRECTOR).
Tommy Johnsen Executive Vice President Mobile Offshore Drilling Units
Tommy Johnsen holds the position of Executive Vice President and heads the Mobile Offshore Drilling Units
segment. He has 16 years experience in drilling and oilfield services. Mr. Johnsen was regional manager for Odfjell
Drilling in the Middle East for the period 2006 to 2011, Executive Vice President Odfjell Well Services from 2011 to
2013 and the CEO for Malm Orstad between 2004 and 2006. Mr. Johnsen holds many board and management
positions in the affiliates of Odfjell Drilling.
Current directorships and management positions: ......................... EMNO AS (CHAIRMAN, CEO), ROSS OFFSHORE AS
(DIRECTOR), ROSS HOLDING AS (DIRECTOR), PSW GROUP
AS (DIRECTOR), PSW PROPERTY AS (DIRECTOR), PSW
CONSULTANT AS (DIRECTOR).
years:...................................................................................... NONE.
Per Lund Executive Vice President Well Services
Per Lund holds the position of Executive Vice President and heads the Well Services segment. He has a Master of
Marine Technology from the Norwegian University of Science and Technology. Mr. Lund has 16 years of experience
in the oil and gas industry and has held various managerial positions in several oilfield companies before joining
Odfjell Drilling in April 2013, including the CEO of Oceaneering NCA AS from 2011 to 2013.
Current directorships and management positions: ......................... WELLCEM AS (DIRECTOR). PLUND INVEST AS (CHAIRMAN).
years:...................................................................................... OCEANEERING NCA AS (CEO), SUBSEA P&A AS (CEO).
Ole Fredrik Maier Executive Vice President Platform Drilling
Ole Fredrik Maier holds the position of Executive Vice President and heads the Platform Drilling business area. He
has a Bachelor in engineering and finance/administration from Vestfold University. He held various positions in the
138

drilling offshore industry before he joined Odfjell Drilling in 2002. He has been regional manager for the UK since
2012 and holds many board and management positions in the affiliates of Odfjell Drilling.
Current directorships and management positions: ......................... G7 GRUPPEN AS (DIRECTOR)
years:...................................................................................... NONE.
Kurt Meinert Fjell Executive Vice President Drilling Technology
Kurt Meinert Fjell holds the position of Executive Vice President and heads the Technology business area. He has a
Bachelor in mechanical engineering from Bergen University College, and is a Project Management Professional from
Oslo University College. Mr. Fjell has more than 15 years of experience in the offshore drilling industry, and has
been with Odfjell Drilling since 2002.
Current directorships and management positions: ......................... NONE.
years:...................................................................................... NONE.
Jone Torstensen Executive Vice President and Chief of Staff
Jone Torstensen holds the position of Executive Vice President Chief of Staff and has degrees in business
economics/administration from the University of Stavanger and the University of Bergen. He held various
management positions in finance, project management and business development over 18 years at Aker Kvrner
and Aker Solutions before he joined Odfjell Drilling in 2012.
Current directorships and management positions: ......................... IMS INTERNATIONAL LTD. (DIRECTOR).
years:...................................................................................... NONE.
Janike A. Myre Senior Vice President QHSE
Janike Amundsen Myre holds the position of Senior Vice President QHSE and is a business graduate of the
Norwegian Business School (BI), with a Master of Business Administration from the same institution. Mrs. Myre has
more than 23 years of experience and has held leading positions in Gulf, Chevron, Sonat Offshore and Transocean.
Mrs. Myre has been with Odfjell Drilling since 2002 and holds other board and management positions in the
affiliates of Odfjell Drilling.
Current directorships and management positions: ......................... PSW GROUP AS (DIRECTOR), PSW PROPERTY AS
(DIRECTOR), PSW CONSULTANTS AS (DIRECTOR).
years:...................................................................................... NONE.
Bengt Alvar Olsen Senior Vice President HR & Organisation
Bengt Alvar Olsen holds the position as Senior Vice President HR & Organisation and has a degree in personnel
administration and marketing management from the Norwegian School of Economics (NHH). He has more than 35
years of experience from the Norwegian Navy and in the offshore market. Mr. Olsen has been with Odfjell Drilling
since 1979 and holds many board and management positions in the affiliates of Odfjell Drilling.
Current directorships and management positions: ......................... KOKSTAD INVEST HOLDING AS (DIRECTOR), KOKSTAD
EIENDOM AS (DIRECTOR), KOKSTAD NRINGSPARK AS
(DIRECTOR), PLSSTOVA AS (DIRECTOR), KNAUS1 AS
(DIRECTOR).
years:...................................................................................... KOKSTAD INVEST HOLDING AS (CEO), SANDSLIMARKA 61-
63 AS (DIRECTOR AND CEO), SANDSLIMARKA 185 AS
(DIRECTOR AND CEO).
139

Gisle Johanson Senior Vice President Communications
Gisle Johanson holds the position as Senior Vice President Communications and has a Master in business economics
from the Norwegian School of Economics (NHH). Mr. Johanson has previously been working in the Ministry of
Petroleum and Energy and in financial media. He has held various communication positions in Saga Petroleum,
Hydro and Statoil before he joined Odfjell Drilling in 2012.
Current directorships and management positions: ......................... NONE.
years:...................................................................................... NONE.
12.2.3 Remuneration and benefits
The remuneration paid to the members of the current Management in 2012 was USD 3,736,000. The table below
sets out the remuneration of the Management in 2012.
Name Salary Other remuneration Pensions costs
President and CEO ............................................................... USD 1,075,000 USD 34,000 USD 11,000
Executive Vice President and CFO .......................................... USD 519,000 USD 21,000 USD 18,000
Other members of management ............................................ USD 2,141,000 USD 135,000 USD 176,000
12.2.4 Bonus programme
12.2.4.1 Executive variable pay corporate management
The incentive payment awarded to the corporate management depends on their achievement of individual targets
and are subject to discretionary review by the Executive Vice Presidents or the CEO. Score achievement is linked to
Odfjell Drilling's general objectives and performance, such as:
EBIT and EBITDA performance relative to budget;
QHSE performance and improvement over the previous year;
Compliance with Odfjell Drilling's core values, including safeguarding the environment;
Risk management and system implementation; and
Active development and optimisation of resources within own area of responsibility.
Each incentive agreement has a duration of one calendar year, but are by the end of December each year
considered for extension of one year at a time by the CEO.
The determination of the total incentive pay is based on the approved financial statements for the preceding
financial year. 50% of the incentive pay is paid together with the first monthly salary payment following the
approval of the financial statements, while the remaining 50% is paid in connection with the payroll in April in the
following year. With effect from the financial year 2014, Odfjell Drilling will match an additional bonus equal to the
50% deferred amount, of which 50% of such amount is payable in accordance with the principles determined for
payment of the deferred amount and 50% of such amount is linked to the development of the Share price.
Incentive pay is capped at the fixed annual salary of the relevant employee, excluding any other benefits. Incentive
pay is not included in the calculation of pension savings, insurance or other benefits from Odfjell Drilling to the
employees. Incentive pay includes holiday pay and is thus not included in the basis for holiday pay the following
year.
12.2.4.2 Performance bonus scheme
Odfjell Drilling has established a performance bonus scheme for management and personnel holding key positions
in Odfjell Drilling. For managers with an operating responsibility, the bonus payment has three separate
components, based on the following criteria:
HSE-bonus related to measured parameters.
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The units or departments results relative to budget, corrected for extraordinary purchases,
allocations or depreciations.
Odfjell Drillings total results relative to budget, corrected for extraordinary purchases, allocations or
depreciations.
For other management and key personnel as defined by the CEO, the bonus will depend on Odfjell Drillings total
results relative to budget, corrected for extraordinary purchases, allocations or depreciations.
The bonus is limited to a maximum of three times the gross monthly salary of the relevant employee. The bonuses
are paid within four weeks after the approval of the financial statements of Odfjell Drilling.
Bonus payments are not included in the calculation for pension savings, insurance or other benefits from Odfjell
Drilling to the employees. Bonus payments include holiday pay and are thus not included in the basis for holiday
pay the following year.
12.3 Benefits upon termination
No employee, including any member of Management, has entered into employment agreements which provide for
any special benefits upon termination of employment, except for Simen Lieungh, who is entitled to 12 months
base salary as severance pay if his employment is terminated by Odfjell Drilling.
No member of the interim Board of Directors or the New Board of Directors has or will have service contracts with
the Company or any of its subsidiaries providing for benefits upon termination of employment.
12.4 Pension and retirement benefits
For the year ended 31 December 2012, the costs of pensions for members of Management were USD 205,000. The
Company has no pension or retirement benefits for its Directors (neither the Interim Directors or the new
Directors).
In 2010, the Board of Directors approved a pension agreement between Odfjell Drilling AS and Abraham Odfjell,
former owner, chairman and board member, whereby Abraham Odfjell is entitled to lifelong pension payments of
NOK 3 million per year (to be adjusted for the Norwegian Consumer Price Index annually). The pension obligation
also includes Mr. Odfjells spouse, which means that the obligation to pay pension will continue to exist throughout
the lifetime of the surviving spouse.
For more information regarding pension and retirement benefits, see note 13 to the Financial Statements for the
year ended 31 December 2012, included in Appendix B hereto.
12.5 Loans and guarantees
In 2008, Odfjell Drilling loaned NOK 1,400,000 to Tommy Johnsen for the purchase of a house in Dubai in
connection with Tommy Johnsen serving as regional manager for Odfjell Drilling in the Middle East. As of 30 June
2013, the outstanding balance of the loan is NOK 1,334,000.
Other than this, the Company has not granted any loans, guarantees or other commitments to any of its Directors
or to any member of Management.
12.6 Audit committee
The Board of Directors has elected an audit committee amongst the members of the Board of Directors. The audit
committee comprises Bengt Lie Hansen (chairman) and Helene Odfjell. The primary purposes of the audit
committee are to:
assist the Board of Directors in discharging its duties relating to the safeguarding of assets; the operation
of adequate system and internal controls; control processes and the preparation of accurate financial
reporting and statements in compliance with all applicable legal requirements, corporate governance and
accounting standards; and
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provide support to the Board of Directors on the risk profile and risk management of the Company.
The audit committee reports and makes recommendations to the Board of Directors, but the Board of Directors
retains responsibility for implementing such recommendations.
12.7 Conflicts of interests etc.
Carl-Erik Haavaldsen (Director) was a director of Troll Fish AS, a cod fish farming company, from 2007 to 2011, a
company which was declared bankrupt in 2011. Other than this, none of the Interim Directors or member of the
New Board of Directors or Management has during the last five years preceding the date of this Prospectus:
any convictions in relation to indictable offences or convictions in relation to fraudulent offences;
received any official public incrimination and/or sanctions by any statutory or regulatory authorities
(including designated professional bodies) or ever been disqualified by a court from acting as a member of
the administrative, management or supervisory bodies of a company or from acting in the management or
conduct of the affairs of any company; or
been declared bankrupt or been associated with any bankruptcy, receivership or liquidation in his/her
capacity as a founder, director or senior manager of a company or partner of a limited partnership.
Helene Odfjell indirectly controls Odfjell Partners Ltd., and Marianne Odfjell is a beneficiary of the Larine Trust.
Further, Helene Odfjell and Marianne Odfjell are sisters. To the Companys knowledge, there are currently no other
actual or potential conflicts of interest between the private interests or other duties of any of the members of the
Management, the Interim Directors and the New Board of Directors and their duties towards the Company,
including any family relationships between such persons.
12.8 Corporate governance
The Company has adopted and implemented a corporate governance regime which complies with the Corporate
Governance Code, with the following exceptions:
Deviation from section 2 Business: In accordance with common practice for Bermuda incorporated companies,
the Companys objects as set out in the memorandum of association are wider and more extensive than
recommended in the Corporate Governance Code.
Deviation from section 3 Equity and dividends: Pursuant to Bermuda law and common practice for Bermuda
incorporated companies, the Board of Directors has wide powers to issue any authorised but unissued shares on
such terms and conditions as it may decide, and any shares or class of shares may be issued with preferred,
deferred or other special rights or such restrictions, whether with regard to dividend, voting, return on capital, or
otherwise as the Company may, by resolution of the shareholders, prescribe. However, such issuance of shares by
the Company from the authorised, but unissued, share capital is subject to prior approval given by resolution of the
general meeting of shareholders. On 19 August 2013, the Companys shareholders resolved that the Board of
Directors may issue any authorised but unissued shares of the Company in connection with financing of ongoing
and new newbuild projects, refinancing of the Companys credit facilities and/or working capital purposes on terms
and conditions as the Board of Directors may in its sole determination approve. The authorisation is not limited to a
specified period as recommended in the Corporate Governance Code.
Deviation from section 5 Freely negotiable shares: The Shares are freely negotiable and the Company's
constitutional documents do not impose any transfer restrictions on the Shares other than as set out below. The
Bye-Laws include a right for the Board of Directors to decline to register the transfer of any interest in any Share in
the register of members, or decline to direct any registrar, appointed by the Company, to register the transfer
where such transfer would result in 50% or more of the Shares or votes being held, controlled or owned directly or
indirectly by individuals or legal persons resident for tax purposes in Norway or connected to a Norwegian business
activity. The purpose of this provision is to avoid that the Company is deemed a Controlled Foreign Company as
such term is defined under the Norwegian tax rules. The fact that Odfjell Partners Ltd., which is a Bermuda
incorporated company, will own more than 50% of the Shares at the time of Listing should mean that this provision
not will impact on the free trading of the Shares.
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Deviation from section 6 General Meetings: The Chairman of the Board of Directors will, in principle, chair the
Companys general meetings. This is mainly due to the fact that the Bye-Laws of the Company provide, as is
common under Bermuda law, that the Chairman of the Board of Directors shall, as a general rule, chair the general
meetings.
Deviation from section 7 Nomination committee: The members of the Companys nomination committee will be
elected, and the code of conduct for the nomination committee will be approved, at the first annual general
meeting following the Listing. At least one member of the nomination committee will be independent of the
Companys largest shareholder. The nomination committee will be elected at the first annual general meeting
following the Listing as it may be more appropriate to do so when the shareholder structure of the Company has
been changed following the Offering.
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13 THE SELLING SHAREHOLDER
The Selling Shareholder is BCB Paragon Trust Limited, as trustee of the Larine Trust. Marianne Odfjell, who is an
Interim Director, is a beneficiary of the trust. The registered address of the Selling Shareholder is 19 Par-La-Ville
Road, Hamilton, HM 11, Bermuda. As of the date of this Prospectus, the Selling Shareholder holds 60,000,000
Shares in the Company, corresponding to 30% of the issued and outstanding Shares.
Following completion of the Offering, the Selling Shareholder will not hold any Shares, assuming (i) the Offering is
fully subscribed (ii) the Additional Shares are allotted and (iii) the Over-Allotment Option is exercised in full. To the
extent the Stabilisation Manager, on behalf of the Managers, redelivers any of the Shares borrowed pursuant to the
Lending Option to the Selling Shareholder at the end of the stabilisation period, the Selling Shareholder has the
right to require Odfjell Partners Ltd. to purchase 50% of such redelivered Shares from the Selling Shareholder and
Odfjell Partners Ltd. has a corresponding right to require the Selling Shareholder to sell 50% of any redelivered
Shares. See Section 18.8.3 "Redelivered Shares.
Based on the above assumptions, the Selling Shareholder will not hold any Shares following the Offering. However,
the Selling Shareholder and its Affiliates (as defined in the Purchase Agreement) have pursuant to the Purchase
Agreement undertaken not to (i) sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase
or otherwise dispose of or agree to dispose of, directly or indirectly, any Shares or any securities convertible into or
exercisable or exchangeable for Shares, or warrants or other rights to purchase Shares, (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership
of Shares or any securities convertible into or exercisable or exchangeable for Shares, or warrants or other rights
to purchase Shares, whether any such transaction is to be settled by delivery of Shares or such other securities, in
cash or otherwise, or (iii) publicly announce an intention to effect any transaction specified in clause (i) or (ii), for a
period of nine months after the date of the Purchase Agreement (expected to be 27 September 2013), without the
prior written consent of the Joint Bookrunners, except for sales to the Managers pursuant to the Purchase
Agreement and sales to Odfjell Partners Ltd. pursuant to a put and call option agreement between the Selling
Shareholder and Odfjell Partners Ltd. and the exercise of the put option and/or call option thereunder in connection
with any redelivery of Shares pursuant to the Purchase Agreement.
144

14 RELATED PARTY TRANSACTIONS
14.1 Introduction
In the period covered by the Financial Statements herein, the Company has been owned 100% by Odfjell Drilling
Holding Ltd. Odfjell Drilling Holding Ltd. was controlled by Odfjell Partners Ltd., which owned 69.67% of the Shares
in this company. The remaining shares have been controlled by the Larine Trust, Elin Odfjell and Simen Lieungh.
On 11 July 2013, the Shares were distributed from Odfjell Drilling Holding Ltd. on a pro rata basis to the
shareholders of Odfjell Drilling Holding Ltd. so that the shareholders of Odfjell Drilling Holding Ltd. became the
direct shareholders of the Company from such date and Odfjell Drilling Holding Ltd. went into a members
voluntary winding up.
Below is a summary of the Groups related party transaction for the periods covered by the historical financial
information included in this Prospectus as Appendix B and C and up to the date of this Prospectus. For further
information on related party transactions for the Group for the years ended 31 December 2012 and 2011 please
refer to note 24 of the Financial Statements for the year ended 31 December 2012 included in Appendix B to this
Prospectus.
All related party transactions have been concluded at arms length principles.
14.2 Transactions carried out with related parties in the years ended 31 December 2012, 2011 and
2010
The below table gives an overview of the related party transactions carried out with related parties in the years
ended 31 December 2012, 2011 and 2010.

Year ended
31 December
In USD thousands
2012
(IFRS)
(audited)
2011
(IFRS)
(audited)
2010
(NGAAP)
(unaudited)
Sales of services
Entities controlled by Odfjell Partners Ltd. (management services) .............................. ...................... 26 289 268
Associates ............................................................................................................
93,191 24,400 48,576
Total...................................................................................................................
93,217 24,689 48,844

Operating expenses
Associates ............................................................................................................
14,068 7,567 2,007
Total...................................................................................................................
14,068 7,567 2,007
Leases

Entities controlled by Odfjell Partners Ltd. (office rent) ..............................................
1,909 4,696 3,755
Total...................................................................................................................
1,909 4,696 3,755
Interest expenses
Odfjell Partners Ltd. .............................................................................................. - 258 120
Interest income
Deep Sea Metro .................................................................................................... 5,198 - 1,126
Year-end balances arising from purchase of services
Current receivables from related parties ..................................................................
14,285 58,098 2,841
Total...................................................................................................................
14,285 58,098 2,841
Current liabilities to related parties .......................................................................... 349 - -
Current liabilities to parent company .......................................................................
6,286 - -
Total...................................................................................................................
6,635 - -
145

Year ended
31 December
In USD thousands
2012
(IFRS)
(audited)
2011
(IFRS)
(audited)
2010
(NGAAP)
(unaudited)
Non-current liability under related party agreement ..................................................
- 7,255 5,246
Total...................................................................................................................
- 7,255 5,246
Non-current receivable under relatedparty agreement ............................................. 52,069 - -
Non-current receivable Odfjell Capital (Bermuda) Ltd ................................................
15,902 15,464 14,008
Total...................................................................................................................
67,970 15,464 14,008

Commitments
No later than 1 year .............................................................................................. 1,911 4,432 4,708
Later than 1 year and no later than 5 years .............................................................. 7,543 17,630 18,832
Later than 5 years .................................................................................................
4,715 15,040 20,695
Total...................................................................................................................
14,169 37,103 44,234
14.3 Transactions carried out with related parties in the six month periods ended 30 June 2013
and 2012
The below table gives an overview of the related party transactions carried out with related parties in the six month
periods ended 30 June 2013 and 2012.

Six months ended 30 June
In USD thousands
2013
(IFRS)
(unaudited)
2012
(IFRS)
(unaudited)
Sales of services
Entities controlled by Odfjell Partners Ltd. (management services) .............................. ...................... - -
Associates ...................................................................................................................................
42,713 36,780
Total....................................................................................................................................
42,713 36,780
Leases
Entities controlled by Odfjell Partners Ltd. (office rent) ...............................................................
1,081 1,903
Total....................................................................................................................................
1,081 1,903
Interest income
Associates .............................................................................................................................
3,234 1,040
Total....................................................................................................................................
3,234 1,040
14.4 Transactions carried out with related parties in the period following 30 June 2013
In the period following 30 June 2013, the Group has not entered into any new related party agreements. The
related party agreements the Group was a party to during the six months ended 30 June 2013 have continued to
be in effect in the period following 30 June 2013. As a result, related party transactions have been carried out
under these related party agreements in the same manner as in the six months ended 30 June 2013.
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15 CORPORATE INFORMATION AND DESCRIPTION OF SHARE CAPITAL
The following is a summary of certain corporate information and material information relating to the Shares and
share capital of the Company and certain other shareholder matters, including summaries of certain provisions of
the Companys memorandum of association, Bye-Laws and applicable Norwegian and Bermuda law in effect as of
the date of this Prospectus, including the Bermuda Companies Act. The summary does not purport to be complete
and is qualified in its entirety by the Companys memorandum of association, Bye-Laws and applicable law.
15.1 Corporate information
Odfjell Drilling Ltd was incorporated on 16 November 2005 as an exempted company limited by shares under the
laws of Bermuda and in accordance with the Bermuda Companies Act. The Companys registration number is
37607. The Companys registered office is at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda.
Telephone: + 1 (441) 400 8900. The Companys website is www.odfjelldrilling.com.
15.2 Legal structure
Odfjell Drilling Ltd, the parent company of the Group, is a holding company. The operations of the Group are
carried out by the Groups operating subsidiaries. Odfjell Drilling Ltd has two directly wholly-owned subsidiaries,
Odfjell Offshore Ltd. (holding company for the Drilling Units) and Odfjell Drilling Services Ltd. (holding company for
the Groups MODU Management business area and the Drilling & Technology and Well Services segments), both
incorporated in Bermuda.
Odfjell Offshore Ltd. has the following four directly wholly-owned subsidiaries: Odfjell Rig Ltd (parent company of
various subsidiaries), incorporated in Bermuda; Odfjell Invest Ltd. (parent company of the rig owning companies of
Deepsea Atlantic and Deepsea Stavanger), incorporated in Bermuda; Odfjell Rig II Ltd. (rig owning company of
Deepsea Bergen), incorporated in Bermuda; and Odfjell Rig III Ltd. (party to the Construction Contract with
DSME), incorporated in Bermuda. In addition, Odfjell Offshore Ltd. holds a 40% ownership interest in Deep Sea
Metro (parent company of the rig owning companies for Deepsea Metro I and Deepsea Metro II).
Odfjell Drilling Services Ltd. has the following five directly wholly-owned subsidiaries: Odfjell Drilling AS (employer
of the majority of the land-based Norwegian employees and manager for the Drilling Units), incorporated in
Norway; Odfjell Operations Ltd. (parent company of various subsidiaries), incorporated in Bermuda; Odfjell
Partners Invest Ltd. (owner of service and rental equipment and parent company of the Groups main subsidiaries
owning equipment and providing well services), incorporated in Bermuda; Odfjell Drilling Technology Ltd. (parent
company of the main engineering companies in the Group), incorporated in Bermuda; and Odfjell Drilling
Cooperatief U.A. (parent company of subsidiaries providing well services and related activities), incorporated in the
Netherlands. In addition, Odfjell Drilling Services Ltd. holds a 50% ownership interest in Ross Offshore Holding AS
and a 50% ownership interest in PSW Group AS, both through Odfjell Drilling Technology Ltd. Odfjell Drilling
Services Ltd. further holds a 50% ownership interest in Odfjell Galvo B.V., through a subsidiary of Odfjell Drilling
Cooperatief U.A.

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The following chart shows the subsidiaries of the Company and the condensed legal structure of Odfjell Drilling:

15.3 Authorised and issued share capital
At the date of this Prospectus, the Companys authorised share capital is USD 2,300,000 consisting of 230,000,000
shares with a par value of USD 0.01 each, of which 200,000,000 Shares have been issued. The Board of Directors,
subject to prior approval given by resolution of the Companys shareholders in accordance with the Bye-Laws, may
issue any authorised but unissued shares of the Company. On 19 August 2013, the Companys shareholders
resolved that the Board of Directors may issue any authorised but unissued shares of the Company in connection
with financing of ongoing and new newbuild projects, refinancing of the Companys credit facilities and/or working
capital purposes on terms and conditions as the Board of Directors may in its sole determination approve.
The Shares have been created under the Bermuda Companies Act and are registered in the VPS under ISIN
BMG671801022.
15.4 Share capital history
The table below shows the development in the Companys authorised share capital for the period from
incorporation to the date hereof:
Date Type of change
Change in
authorised
share capital
(USD)
New authorised
share capital
(USD)
No. of authorised
shares
Par value per
share (USD)
16 November
2005
Authorised on
incorporation
12,000 12,000 12,000 1
14 July 2010 Subdivision of shares - 12,000 1,200,000,000 0.00001
14 July 2010 Increase of authorised
share capital
6,000 18,000 1,800,000,000 0.00001
5 July 2013 Consolidation and
increase of authorised
share capital
2,282,000 2,300,000 230,000,000 0.01

Odfjell Drilling Ltd.
Share = 100% when not specified
Odf jell Of f shore Ltd.
Odf jell Drilling
Services Ltd.
Odfjell Invest Ltd.
Deep Sea Metro Ltd.
Odfjell Rig Ltd.
Odfjell Rig III Ltd.
Odfjell Rig II Ltd.
Odfjell Drilling
AS
Odfjell
Operations Ltd
Odfjell
Partners Invest Ltd
Odfjell
Drilling Technology Ltd.
Odfjell
Drilling Cooperatief U.A
1% 99% 40%
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The table below shows the development in the Companys issued share capital for the period from incorporation to
the date hereof:
Date Type of change
Change in
issued share
capital (USD)
New issued share
capital (USD)
No. of issued
shares
Par value per
share (USD)
16 November
2005
Incorporation 12,000 12,000 12,000 1
14 July 2010 Subdivision of shares - 12,000 1,200,000,000 0.00001
14 July 2010 Share issue 1,766.87078 13,766.87078 1,376,687,078 0.00001
5 July 2013 Consolidation and bonus
issue
1,986,233.12922 2,000,000 200,000,000 0.01
15.5 Admission to trading
On 12 September 2013, the Company applied for admission to trading of its Shares on the Oslo Stock Exchange. It
is expected that the board of directors of the Oslo Stock Exchange approves the Listing application of the Company
on 25 September 2013, subject to certain conditions being met. See Section 18.12 Conditions for completion of
The Company currently expects commencement of trading in the Shares on the Oslo Stock Exchange on an if
sold basis, on or around 30 September 2013, and on an unconditional basis on or around 3 October 2013. The
Company has not applied for admission to trading of the Shares on any other stock exchange or regulated market.
15.6 VPS registration of the Shares
The VPS maintains a branch register in addition to the principal share register of the Company maintained at the
registered office of the Company in Bermuda pursuant to the provisions of the Bermuda Companies Act. Bermuda
law permits the transfer of shares listed or admitted to trading on the Oslo Stock Exchange to be effected in
accordance with the rules of the Oslo Stock Exchange (provided that it remains an Appointed Stock Exchange).
Accordingly, the title to the Shares, including the Offer Shares, will be evidenced and transferred without a written
instrument by the VPS in accordance with the Bye-Laws, provided that they are listed or admitted to trading on the
Oslo Stock Exchange. The Shares (and not only the beneficial interests in the Shares) are registered in the VPS.
15.7 Ownership structure
As of the date of this Prospectus, the Company has the following two shareholders, holding in aggregate 100% of
the issued and outstanding Shares:
Shareholders Number of Shares Percent
Odfjell Partners Ltd. ............................................................. 140,000,000 70
BCB Paragon Trust Limited, as trustee of the Larine Trust ......... 60,000,000 30
Total ................................................................................. 200,000,000 100
There are no differences in voting rights between the shareholders.
Shareholders owning 5% or more of the Shares have an interest in the Companys share capital which is notifiable
pursuant to the Norwegian Securities Trading Act. See Section 16.7 Disclosure obligations for a description of the
disclosure obligations under the Norwegian Securities Trading Act. The table above shows the ownership
percentage held by such notifiable shareholders.
Following the completion of the Offering, Odfjell Partners Ltd. will control a majority of the Shares, while BCB
Paragon Trust Limited, as trustee of the Larine Trust (the Selling Shareholder) will not hold any shares, assuming
(i) the Offering is fully subscribed (ii) the Additional Shares are allotted and (iii) the Over-Allotment Option is
exercised in full. See Section 13 The Selling Shareholder. The Bye-Laws include certain provisions intended to
ensure that such control is not abused. For example, section 47.2 in the Bye-Laws provides that the affairs of the
Company shall not be conducted in a manner oppressive or prejudicial to the interests of some part of the
shareholders. In the event the affairs of the Company are conducted in such a manner, any shareholder may make
an application to the Supreme Court of Bermuda pursuant to the Bermuda Companies Act.
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The Company is not aware of any arrangements the operation of which may at a subsequent date result in a
change of control of the Company.
15.8 Share repurchase and treasury shares
Pursuant to the Bye-Laws, the Company may purchase its own shares for cancellation or acquire them as treasury
shares on such terms and in such manner as may be authorised by the Board of Directors, subject to the Bermuda
Companies Act. The Board of Directors may exercise all the powers of the Company to purchase its own Shares.
Neither the Company nor any of its subsidiaries holds any Shares at the date of this Prospectus.
15.9 Other financial instruments
Neither the Company nor any of its subsidiaries has issued any options, warrants, convertible loans or other
instruments that would entitle a holder of any such instrument to subscribe for any shares in the Company or its
subsidiaries.
15.10 Shareholder rights
The Company has one class of shares in issue, and all shares in that class have equal rights to all such other
shares in that class as set out in the Bye-Laws.
15.11 The memorandum of association, Bye-Laws and Bermuda Law
The Bye-Laws are set out in Appendix A to this Prospectus. Below is a summary of provisions of the Bye-Laws and
certain aspects of applicable Bermuda law. The Bye-Laws do not place more stringent conditions for the change of
rights of holders than those required by the Bermuda Companies Act, see Section 15.11.5 Voting rights.
15.11.1 Objective of the Company
The objects of the Companys business, as set out in paragraph 6 of its memorandum of association, are wide, and
include carrying on any trade or business which can, in the opinion of the Board of Directors, be advantageously
carried on by the Company. The Company can therefore, subject to the Board of Directors opinion, undertake
activities without restriction on its capacity.
15.11.2 Board of Directors
The Bye-Laws provide that the Company shall be managed by the Board of Directors subject to the Bermuda
Companies Act and the Bye-Laws. Generally, the Board of Directors may exercise the powers of the Company,
except to the extent the Bermuda Companies Act or the Bye-Laws reserve such power to the shareholders.
The Board of Directors shall consist of not less than five Directors or such number in excess thereof as the
shareholders may determine.
Directors are elected by the shareholders, except in the case of a casual vacancy, at the annual general meeting or
at any special general meeting called for that purpose, for such term of office as the shareholders determine, or, in
the absence of such determination, until the next annual general meeting or until their successors are elected or
appointed or their office is otherwise vacated. If there is a vacancy of the Board of Directors occurring as a result of
the death, disability, disqualification or resignation of any Director or as a result of an increase in the size of the
Board of Directors, the Board of Directors has the power to appoint a Director to fill the vacancy.
A Director may resign by providing notice in writing to the Company of such resignation. A Director may be
removed at any general meeting convened and held in accordance with the Bye-Laws, provided that the notice of
any such meeting convened for the purpose of removing a Director contains a statement of the intention to remove
the Director and must be served on the Director not less than 14 days before the meeting. The Director shall be
entitled to attend the meeting and be heard on the motion for such Director's removal. The office of a Director of
the Company shall be vacated if he or she (i) is removed from office pursuant to the Bye-Laws or is prohibited from
being a Director by law; (ii) is or becomes bankrupt, or makes any arrangement or composition with his creditors
generally; (iii) is or becomes of unsound mind or dies, or (iv) resigns his office by notice to the Company.
A Director may hold any office or act for the Company in any capacity (except as auditor). Provided a Director
discloses a direct or indirect interest in any contract or arrangement with the Company as required by Bermuda
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law, such Director is entitled to vote in respect of any such contract or arrangement in which he or she is
interested unless he or she is disqualified from voting by the chairman of the relevant Board meeting.
15.11.3 Share rights
The holders of Shares have no pre-emptive, redemption, conversion or sinking fund rights. The holders of Shares
are entitled to one vote per Share on all matters submitted to a vote of the holders of Shares. Unless a different
majority is required by law or by the Bye-Laws, resolutions to be approved by the holders of Shares require
approval by a simple majority of votes cast at a meeting at which a quorum is present.
In the event of the liquidation, dissolution or winding up of the Company, the holders of Shares are entitled to
share equally and rateably in its assets, if any, remaining after the payment of all of the Companys debts and
liabilities, subject to any liquidation preference on any issued and outstanding preference shares.
15.11.4 Variation of share rights
Subject to the Bermuda Companies Act, all or any of the special rights for the time being attached to any class of
Shares for the time being issued may from time to time (whether or not the Company is being wound up) be
altered or abrogated with the consent in writing of the holders of not less than 75% of the issued Shares of that
class or with the sanction of a resolution passed by a majority of the votes cast at a separate general meeting of
the holders of such Shares voting in person or by proxy. To any such separate general meeting, all the provisions
of the Bye-Laws as to general meetings of the Company shall apply, but so that the necessary quorum is two or
more persons holding or representing by proxy at least one third of the issued Shares of the relevant class, that
every holder of Shares of the relevant class shall be entitled on a poll to one vote for every such Share held by him
and that any holder of Shares of the relevant class present in person or by proxy may demand a poll; provided,
however, that if the Company or a class of shareholders shall have only one shareholder, one shareholder present
in person or by proxy shall constitute the necessary quorum. The Bye-Laws specify that the creation or issue of
Shares ranking equally with existing Shares will not, unless expressly provided by the terms of issue of existing
Shares, vary the rights attached to existing Shares.
15.11.5 Voting rights
At any general meeting, every holder of Shares present in person and every person holding a valid proxy shall
have one vote on a show of hands. On a poll, every such holder of Shares present in person or by proxy shall have
one vote for every Share held.
Except where a greater majority is required by the Bermuda Companies Act or the Bye-Laws, any question
proposed for the consideration of the shareholders at a general meeting shall be decided by the affirmative votes of
a majority of the votes cast in accordance with the provisions of the Bye-Laws and in case of an equality of votes
the chairman of such meeting shall not be entitled to a second or deciding vote and the resolution shall fail.
15.11.6 Amendment of the memorandum of association and the Bye-Laws
The Bye-Laws provide that the memorandum of association of the Company may not be altered or amended,
unless it shall have been approved by a resolution by the Board of Directors and by a resolution passed with simple
majority at a general meeting of shareholders. The Bye-Laws further provide that no bye-law shall be rescinded,
altered or amended, and no new bye-law shall be made, unless it shall have been approved by a resolution of the
Board of Directors and by a resolution of the affirmative vote of not less than two-thirds of the Shares and votes
represented at a general meeting of shareholders.
Under Bermuda law, the holders of an aggregate of not less than 20% in par value of the Companys issued share
capital or any class thereof have the right to apply to the Supreme Court of Bermuda for an annulment of any
amendment of the memorandum of association adopted by shareholders at any general meeting, other than an
amendment which alters or reduces a companys share capital as provided in the Bermuda Companies Act. Where
such an application is made, the amendment becomes effective only to the extent that it is confirmed by the
Supreme Court of Bermuda. An application for an annulment of an amendment of the memorandum of association
must be made within 21 days after the date on which the resolution altering the Companys memorandum of
association is passed and may be made on behalf of persons entitled to make the application or by one or more of
their number as they may appoint in writing for the purpose. No application may be made by shareholders voting
in favour of the amendment.
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15.11.7 General Meetings of shareholders
The annual general meeting of the Company shall be held once in every year at such time and place as the
Chairman (if any) or any two Directors or any Director and the Secretary of the Company or the Board of Directors
shall appoint. The Chairman (if any) or any two Directors or any Director and the Secretary of the Company or the
Board of Directors may whenever they think fit convene special general meetings of the Company. The Board of
Directors shall also convene a special general meeting of the Company at the request of shareholders holding not
less than one-twentieth of such of the paid-up share capital of the Company which carries the right to vote at a
general meeting of the Company at the date of the request.
At least 21 days notice of an annual general meeting shall be given to each shareholder entitled to attend and vote
thereat, stating the date, place and time at which the meeting is to be held, that the election of directors will take
place thereat and, as far as practicable, the other business to be conducted at the meeting. At least 21 days notice
of a special general meeting shall be given to each shareholder entitled to attend and vote thereat, stating the
date, place and time and the general nature of the business to be considered at the meeting. This notice
requirement is subject to the ability to hold such meetings on shorter notice if such notice is agreed: (i) in the case
of an annual general meeting by all of the shareholders entitled to attend and vote at such meeting; or (ii) in the
case of a special general meeting by a majority in number of the shareholders entitled to attend and vote at the
meeting holding not less than 95% in nominal value of the shares entitled to attend and vote at such meeting.
The accidental omission to give notice of a general meeting to, or the non-receipt of a notice of a general meeting
by, any person entitled to receive notice shall not invalidate the proceedings at that meeting.
Shareholders may participate in any general meeting by means of such telephonic, electronic or other
communication facilities or means as permits all persons participating in the meeting to communicate with each
other simultaneously and instantaneously, and participation in such meeting shall constitute presence in person at
such meeting. The Board may fix any date as the record date for determining the shareholders entitled to receive
notice of and to vote at any general meeting. The date for determining the shareholders entitled to vote at any
general meeting may not be more than five days before the date fixed for the meeting. Except as otherwise
provided in the Bye-Laws, the quorum at any general meeting of the Company shall be constituted by two or more
persons, present in person and representing in person or by proxy, in excess of one-third of the total issued voting
shares throughout the meeting.
15.11.8 Dividend rights
Under Bermuda law, a company may not declare or pay dividends if there are reasonable grounds for believing
that: (i) the company is, or would after the payment be, unable to pay its liabilities as they become due; or (ii)
that the realisable value of its assets would thereby be less than its liabilities. Under the Companys Bye-Laws,
each of the Shares are entitled to dividends, as and when dividends are declared by the Board of Directors, subject
to any preferred dividend right of the holders of any preference shares. Any dividend payable in respect of a share
which has remained unclaimed for 7 years from the date when it became due for payment, shall if the Board of
Directors so resolves, be forfeited and cease to remain owing by the Company.
15.11.9 Transfer of Shares
The Bye-Laws provide that the Board of Directors may decline to register the transfer of any interest in any Share
in the register of members or decline to direct any registrar, appointed by the Company, to register the transfer
where such transfer would result in 50% or more of the shares or votes in the Company being held, controlled or
owned directly or indirectly by individuals or legal persons resident for tax purposes in Norway or connected to a
Norwegian business activity, in order to avoid the Company being deemed a Controlled Foreign Company as such
term is defined under the Norwegian tax rules.
Subject to the above, but notwithstanding anything else to the contrary in the Bye-Laws, shares that are listed or
admitted to trading on an Appointed Stock Exchange may be transferred in accordance with the rules and
regulations of such exchange. All transfers of uncertificated shares shall be made in accordance with and be
subject to the facilities and requirements of the transfer of title to shares in that class by means of the VPS or any
other relevant system concerned and, subject thereto, in accordance with any arrangements made by the Board of
Directors in accordance with the Bye-Laws. The Board of Directors shall refuse any transfer unless the registration
of such transfer satisfies all applicable consents, authorisations and permissions of any governmental body or
agency in Bermuda. The Board of Directors may also refuse to recognise an instrument of transfer of a share
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unless it is accompanied by the relevant share certificate (if one has been issued) and such other evidence of the
transferor's right to make the transfer as the Board of Directors shall reasonably require. Subject to these
restrictions, a holder of Shares may transfer the title to all or any of his Shares by completing an instrument of
transfer in the common form or in any other form as the Board of Directors may approve. The instrument of
transfer must be signed by the transferor and transferee, although in the case of a fully paid share the Board of
Directors may accept the instrument signed only by the transferor. Shares may be transferred without a written
instrument if transferred by an appointed agent or otherwise in accordance with the Bermuda Companies Act.
In accordance with Bermuda law, share certificates are only issued in the names of companies, partnerships or
individuals. In the case of a shareholder acting in a special capacity (for example as a trustee), certificates may, at
the request of the shareholder, record the capacity in which the shareholder is acting. Notwithstanding such
recording of any special capacity, the Company is not bound to investigate or see to the execution of any such
trust. The Company will take no notice of any trust applicable to any of the Shares, whether or not the Company
has been notified of such trust.
See Section 2.8 Risks related to the Companys incorporation in Bermuda for a summary of the provisions in the
Bye-Laws that contain provisions that could make it more difficult for a third party to acquire the Company without
the consent of the Board of Directors.
15.11.10 Amalgamations and mergers
The amalgamation or merger of a Bermuda company with another company or corporation (other than certain
affiliated companies) requires the amalgamation or merger agreement to be approved by the companys board of
directors and by its shareholders. Unless the bye-laws provide otherwise, the approval of 75% of the shareholders
voting at such meeting is required to approve the amalgamation or merger agreement, and the quorum for such
meeting must be two persons holding or representing more than one-third of the issued shares of the company. On
the date hereof the Companys Bye-Laws does not deviate from these requirements.
15.11.11 Appraisal rights and other shareholder suits
Under Bermuda law, in the event of an amalgamation or merger of a Bermuda company with another company or
corporation, a shareholder of the Bermuda company who is not satisfied that fair value has been offered for such
shareholders shares may, within one month of notice of the general meeting, apply to the Bermuda Supreme
Court to appraise the fair value of those shares.
Class actions and derivative actions are generally not available to shareholders under Bermuda law. The Bermuda
courts, however, would ordinarily be expected to permit a shareholder to commence an action in the name of a
company to remedy a wrong to the company where the act complained of is alleged to be beyond the corporate
power of the company or is illegal or would result in the violation of the Companys memorandum of association or
Bye-Laws. Furthermore, consideration would be given by a Bermuda court to acts that are alleged to constitute a
fraud against the minority shareholders or, for instance, where an act requires the approval of a greater
percentage of the companys shareholders than that which actually approved it.
When the affairs of a company are being conducted in a manner which is oppressive or prejudicial to the interests
of some part of the shareholders, one or more shareholders may apply to the Supreme Court of Bermuda, which
may make such order as it sees fit, including an order regulating the conduct of the companys affairs in the future
or ordering the purchase of the shares of any shareholders by other shareholders or by the company.
15.11.12 Capitalisation of profits and reserves
Pursuant to the Bye-Laws, the Board of Directors may (i) capitalise any part of the amount of the Companys share
premium or other reserve accounts or any amount credited to the Companys profit and loss account or otherwise
available for distribution by applying such sum in paying up unissued shares to be allotted as fully paid bonus
shares pro-rata (except in connection with the conversion of shares) to the shareholders; or (ii) capitalise any sum
standing to the credit of a reserve account or sums otherwise available for dividend or distribution by paying up in
full, partly paid or nil paid shares of those shareholders who would have been entitled to such sums if they were
distributed by way of dividend or distribution.
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15.11.13 Untraced shareholders
The Bye-Laws provide that the Board of Directors may forfeit any dividend or other monies payable in respect of
any shares which remain unclaimed for seven years from the date when such monies became due for payment. In
addition, the Company shall be entitled to cease sending dividend warrants and checks by post or otherwise to a
shareholder if such instruments have been returned undelivered to, or left uncashed by, such shareholder on at
least two consecutive occasions or, following one such occasion, reasonable enquires have failed to establish the
shareholder's new address. This entitlement ceases if the shareholder claims a dividend or cashes a dividend check
or a warrant.
15.11.14 Access to books and records and dissemination of information
Members of the general public have the right to inspect the public documents of a company available at the office
of the Registrar of Companies in Bermuda. These documents include the Companys memorandum of association
(including its objects and powers) and certain alterations to the companys memorandum of association. The
members of the Company have the additional right to inspect the Bye-Laws of the Company, and the Companys
audited financial statements, which must be presented to the annual general meeting. Minutes of general meetings
of the Company are also open for inspection by the members of the Company and directors of the Company
without charge for not less than two hours during business hours each day subject to such reasonable restrictions
as the Company may impose.
Except when the register of members is closed under the provisions of the Bermuda Companies Act, the register of
members of a company shall during business hours (subject to such reasonable restrictions as the company may
impose so that not less than two hours in each day be allowed for inspection) be open for inspection by members
of the general public without charge. A company may on giving notice by advertisement in an appointed newspaper
close the register of members for any time or times not exceeding in the whole thirty days in a year. A company is
required to maintain its register of members in Bermuda, however, a company the shares of which are listed on an
Appointed Stock Exchange or have been offered to the public pursuant to a prospectus filed in accordance with the
Bermuda Companies Act, or which is subject to the rules or regulations of a competent regulatory authority, may
keep in any place outside Bermuda, one or more branch registers after giving written notice to the Bermuda
Registrar of Companies of the place where each such register is to be kept. Any branch register of members
established by the aforementioned is subject to the same rights of inspection as the register of members of the
company in Bermuda. Any member of the public may require a copy of the register of members or any part thereof
which must be provided within 14 days of a request on payment of the appropriate fee prescribed in the Bermuda
Companies Act.
A company is required to keep a register of directors and officers at its registered office and such register must
during business hours (subject to such reasonable restrictions as the company may impose, so that not less than
two hours in each day be allowed for inspection) be open for inspection by members of the public without charge.
Any member of the public may require a copy of the register of directors and officers, or any part of it, on payment
of the appropriate fee prescribed in the Bermuda Companies Act.
Where a company, the shares of which are listed on an Appointed Stock Exchange, sends its summarised financial
statements to its members pursuant to section 87A of the Bermuda Companies Act, a copy of the full financial
statements (as well as the summarised financial statements) must be made available for inspection by the public at
the companys registered office. Bermuda law does not, however, provide a general right for shareholders to
inspect or obtain copies of any other corporate records.
15.11.15 Winding-up
A company may be wound up by the Bermuda court on application presented by the company itself, its creditors
(including contingent or prospective creditors) or its contributories. The Bermuda court has authority to order
winding up in a number of specified circumstances including where it is, in the opinion of the Bermuda court, just
and equitable to do so.
A company may be wound up voluntarily when the members so resolve in general meeting, or, in the case of a
limited duration company, when the period fixed for the duration of the company by its memorandum expires, or
the event occurs on the occurrence of which the memorandum provides that the company is to be dissolved. In the
case of a voluntary winding up, the company shall, from the commencement of the winding up, cease to carry on
its business, except so far as may be required for the beneficial winding up thereof.
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Where, on a voluntary winding up, a majority of directors make a statutory declaration of solvency, the winding up
will be deemed a members' voluntary winding up. In any case where such declaration has not been made, the
winding up will be deemed a creditors' voluntary winding up.
In the case of a members voluntary winding up of a company, the company in general meeting must appoint one
or more liquidators within the period prescribed by the Bermuda Companies Act for the purpose of winding up the
affairs of the company and distributing its assets. If the liquidator is at any time of the opinion that the company
will not be able to pay its debts in full in the period stated in the directors declaration of solvency, he is obliged to
summon a meeting of creditors and lay before the meeting a statement of the assets and liabilities of the company.
As soon as the affairs of the company are fully wound up via a members' voluntary winding up, the liquidator must
make up an account of the winding up, showing how the winding up has been conducted and the property of the
company has been disposed of, and thereupon call a general meeting of the company for the purposes of laying
before it the account, and giving any explanation thereof. This final general meeting shall be called by
advertisement in an appointed newspaper, published at least one month before the meeting. Within one week after
the meeting the liquidator shall notify the Registrar of Companies in Bermuda that the company has been dissolved
and the Registrar shall record that fact in accordance with the Bermuda Companies Act.
In the case of a creditors voluntary winding up of a company, the company must call a meeting of the creditors of
the company to be summoned for the day, or the next day following the day, on which the meeting of the
members at which the resolution for voluntary winding up is to be proposed is held. Notice of such meeting of
creditors must be sent at the same time as notice is sent to members. In addition, the company must cause a
notice to appear in an appointed newspaper on at least two occasions.
The creditors and the members at their respective meetings may nominate a person to be liquidator for the
purposes of winding up the affairs of the company and distributing the assets of the company, provided that if the
creditors and the members nominate different persons, the person nominated by the creditors shall be the
liquidator. If no person is nominated by the creditors, the person (if any) nominated by the members shall be
liquidator. The creditors at the creditors meeting may also appoint a committee of inspection consisting of not
more than five persons.
If a creditors' voluntary winding up continues for more than one year, the liquidator is required to summon a
general meeting of the company and a meeting of the creditors at the end of each year and must lay before such
meetings an account of his acts and dealings and of the conduct of the winding up during the preceding year.
As soon as the affairs of the company are fully wound up via a creditors' voluntary winding up, the liquidator must
make up an account of the winding up, showing how the winding up has been conducted and the property of the
company has been disposed of, and thereupon call a general meeting of the company and a meeting of the
creditors for the purposes of laying the account before the meetings, and giving any explanation thereof. Each such
meeting shall be called by advertisement in an appointed newspaper, published at least one month before the
meeting. Within one week after the date of the meetings, or if the meetings are not held on the same date, after
the date of the later meeting, the liquidator is required to send to the Registrar of Companies in Bermuda a copy of
the account and make a return to him in accordance with the Bermuda Companies Act. The company will be
deemed to be dissolved on the expiration of three months from the registration by the Registrar of Companies in
Bermuda of the account and the return. However, a Bermuda court may, on the application of the liquidator or of
some other person who appears to the court to be interested, make an order deferring the date at which the
dissolution of the company is to take effect for such time as the court thinks fit.
15.11.16 Indemnification of Directors and officers
Section 98 of the Bermuda Companies Act provides generally that a Bermuda company may indemnify its
directors, officers and auditors against any liability which by virtue of any rule of law would otherwise be imposed
on them in respect of any negligence, default, breach of duty or breach of trust, except in cases where such
liability arises from fraud or dishonesty of which such director, officer or auditor may be guilty in relation to the
company. Section 98 further provides that a Bermuda company may indemnify its directors, officers and auditors
against any liability incurred by them in defending any proceedings, whether civil or criminal, in which judgment is
awarded in their favour or in which they are acquitted or granted relief by the Supreme Court of Bermuda pursuant
to section 281 of the Bermuda Companies Act.
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The Company has adopted provisions in the Bye-Laws that provide that the Company shall indemnify its officers
and directors in respect of their actions and omissions, except in respect of their fraud or dishonesty. Section 98A
of the Bermuda Companies Act permits the Company to purchase and maintain insurance for the benefit of any
officer or director in respect of any loss or liability attaching to him in respect of any negligence, default, breach of
duty or breach of trust, whether or not the Company may otherwise indemnify such officer or director. The
Company is expected to purchase and maintain a directors and officers liability policy for such a purpose.
15.11.17 Compulsory purchase of shares
Pursuant to the Bye-Laws, if a member holds more than 90% of the Shares and an equivalent of the votes which
may be cast at a general meeting of the Company (a Majority Shareholder), each of the other members may
require that the Majority Shareholder purchases all of its, his or her respective Shares by written notice to the
Company and the Majority Shareholder. In the absence of an amicable agreement on the price payable by the
Majority Shareholder for the relevant shares, the price shall be fixed at fair market value by a reputable and
independent financial institution, auditor or accountancy firm (the Appraiser). In the event the parties are unable
to agree on the identity of the Appraiser, the price shall be fixed at fair market value by arbitration conducted
under the Bermuda International Conciliation and Arbitration Act 1993. In the absence of an amicable agreement
on the selection of the arbitrator, the Supreme Court of Bermuda shall select the arbitrator.
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16 SECURITIES TRADING IN NORWAY
16.1 Introduction
The Oslo Stock Exchange was established in 1819 and is the principal market in which shares, bonds and other
financial instruments are traded in Norway. As of 31 December 2012, the total capitalisation of companies listed on
the Oslo Stock Exchange amounted to approximately NOK 1,567 billion. Shareholdings of non-Norwegian investors
as a percentage of total market capitalisation on 31 December 2012 amounted to approximately 44.9%.
The Oslo Stock Exchange has entered into a strategic cooperation with the London Stock Exchange group with
regards to, inter alia, trading systems for equities, fixed income and derivatives.
16.2 Trading and settlement
Official trading on the Oslo Stock Exchange takes place between 09:00 hours (CET) and 16.20 hours (CET) each
trading day, with pre-trade period between 08:15 hours (CET) and 09:00 hours (CET), closing auction from 16:20
hours (CET) to 16:25 hours (CET) and a post-trade period from 16:25 hours (CET) to 17:30 hours (CET). Reporting
of after exchange trades can be done until 17:30 hours (CET).
The settlement period for trading on the Oslo Stock Exchange is three trading days (T+3).
Oslo Clearing ASA, a wholly-owned subsidiary of Oslo Brs VPS Holding ASA, has a license from the Norwegian FSA
to act as a central clearing service, and has from 18 June 2010 offered clearing and counterparty services for
equity trading on the Oslo Stock Exchange. Oslo Brs VPS Holding ASA has agreed to sell Oslo Clearing ASA to
Swiss SIX group, and such sale is expected to complete in the second quarter of 2014.
Investment services in Norway may only be provided by Norwegian investment firms holding a license under the
Norwegian Securities Trading Act, branches of investment firms from an EEA member state or investment firms
from outside the EEA that have been licensed to operate in Norway. Investment firms in an EEA member state may
also provide cross-border investment services into Norway.
It is possible for investment firms to undertake market-making activities in shares listed in Norway if they have a
license to this effect under the Norwegian Securities Trading Act, or in the case of investment firms in an EEA
member state, a license to carry out market-making activities in their home jurisdiction. Such market-making
activities will be governed by the regulations of the Norwegian Securities Trading Act relating to brokers trading for
their own account. However, market-making activities do not as such require notification to the Norwegian FSA or
the Oslo Stock Exchange except for the general obligation of investment firms being members of the Oslo Stock
Exchange to report all trades in stock exchange listed securities.
16.3 Information, control and surveillance
Under Norwegian law, the Oslo Stock Exchange is required to perform a number of surveillance and control
functions. The Surveillance and Corporate Control unit of the Oslo Stock Exchange monitors all market activity on a
continuous basis. Market surveillance systems are largely automated, promptly warning department personnel of
abnormal market developments.
The Norwegian FSA controls the issuance of securities in both the equity and bond markets in Norway and
evaluates whether the issuance documentation contains the required information and whether it would otherwise
be unlawful to carry out the issuance.
Under Norwegian law, a company that is listed on a Norwegian regulated market, or has applied for listing on such
market, must promptly release any inside information directly concerning the company (i.e. precise information
about financial instruments, the issuer thereof or other matters which are likely to have a significant effect on the
price of the relevant financial instruments or related financial instruments, and which are not publicly available or
commonly known in the market). A company may, however, delay the release of such information in order not to
prejudice its legitimate interests, provided that it is able to ensure the confidentiality of the information and that
the delayed release would not be likely to mislead the public. The Oslo Stock Exchange may levy fines on
companies violating these requirements.
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16.4 The VPS and transfer of Shares
Accordingly, the title to the Shares will be evidenced and transferred without a written instrument by the VPS in
accordance with the Bye-Laws, provided that they are listed or admitted to trading on the Oslo Stock Exchange.
The VPS is the Norwegian paperless centralised securities register. It is a computerised bookkeeping system in
which the ownership of, and all transactions relating to, shares traded on the Oslo Stock Exchange must be
recorded. The VPS is wholly-owned by Oslo Brs VPS Holding ASA.
All transactions relating to securities registered with the VPS are made through computerised book entries. No
physical share certificates are, or may be, issued. The VPS confirms each entry by sending a transcript to the
registered owner irrespective of any beneficial ownership. To give effect to such entries, the individual shareholder
must establish a share account with an account agent. Norwegian banks, Norges Bank (that is, Norways central
bank), authorised securities brokers in Norway and Norwegian branches of credit institutions established within the
EEA are allowed to act as account agents.
The entry of a transaction in the VPS is prima facie evidence under Norwegian law in determining the legal rights of
parties as against the issuing company or any third party claiming an interest in the given security. A transferee or
assignee of shares may not exercise the rights of a shareholder with respect to such shares unless such transferee
or assignee has registered such shareholding or has reported and shown evidence of such share acquisition, and
the acquisition is not prevented by law, the relevant companys bye-laws or otherwise.
The VPS is liable for any loss suffered as a result of faulty registration or an amendment to, or deletion of, rights in
respect of registered securities unless the error is caused by matters outside the VPS control which the VPS could
not reasonably be expected to avoid or overcome the consequences of. Damages payable by the VPS may,
however, be reduced in the event of contributory negligence by the aggrieved party.
The VPS must provide information to the Norwegian FSA on an ongoing basis, as well as any information that the
Norwegian FSA requests. Further, Norwegian tax authorities may require certain information from the VPS
regarding any individuals holdings of securities, including information about dividends and interest payments.
16.5 Shareholder register
The Shares are registered in the VPS. Shareholders may register their Shares in the VPS in the name of a nominee
(bank or other nominee) approved by the Norwegian FSA. An approved and registered nominee has a duty to
provide information on demand about beneficial shareholders to the company and to the Norwegian authorities. In
case of registration by nominees, the registration in the VPS must show that the registered owner is a nominee. A
registered nominee has the right to receive dividends and other distributions, but may not vote in general meetings
on behalf of the beneficial shareholders.
16.6 Foreign investment in shares listed in Norway
Foreign investors may trade shares listed on the Oslo Stock Exchange through any broker that is a member of the
Oslo Stock Exchange, whether Norwegian or foreign.
16.7 Disclosure obligations
If a persons, entitys or consolidated groups proportion of the total issued shares and/or rights to shares in a
company listed on a regulated market in Norway (with Norway as its home state, which will be the case for the
Company) reaches, exceeds or falls below the respective thresholds of 5%, 10%, 15%, 20%, 25%, 1/3, 50%, 2/3
or 90% of the share capital or the voting rights of that company, the person, entity or group in question has an
obligation under the Norwegian Securities Trading Act to notify the Oslo Stock Exchange and the issuer
immediately. The same applies if the disclosure thresholds are passed due to other circumstances, such as a
change in the companys share capital.
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16.8 Insider trading
According to Norwegian law, subscription for, purchase, sale or exchange of financial instruments that are listed, or
subject to the application for listing, on a Norwegian regulated market, or incitement to such dispositions, must not
be undertaken by anyone who has inside information, as defined in Section 3-2 of the Norwegian Securities Trading
Act. The same applies to the entry into, purchase, sale or exchange of options or futures/forward contracts or
equivalent rights whose value is connected to such financial instruments or incitement to such dispositions.
16.9 Mandatory offer requirement
The Norwegian Securities Trading Act requires any person, entity or consolidated group that becomes the owner of
shares representing more than one-third of the voting rights of a company listed on a Norwegian regulated market
(with the exception of certain foreign companies not including the Company) to, within four weeks, make an
unconditional general offer for the purchase of the remaining shares in that company. A mandatory offer obligation
may also be triggered where a party acquires the right to become the owner of shares that, together with the
partys own shareholding, represent more than one-third of the voting rights in the company and the Oslo Stock
Exchange decides that this is regarded as an effective acquisition of the shares in question.
The mandatory offer obligation ceases to apply if the person, entity or consolidated group sells the portion of the
shares that exceeds the relevant threshold within four weeks of the date on which the mandatory offer obligation
was triggered.
When a mandatory offer obligation is triggered, the person subject to the obligation is required to immediately
notify the Oslo Stock Exchange and the company in question accordingly. The notification is required to state
whether an offer will be made to acquire the remaining shares in the company or whether a sale will take place. As
a rule, a notification to the effect that an offer will be made cannot be retracted. The offer and the offer document
required are subject to approval by the Oslo Stock Exchange before the offer is submitted to the shareholders or
made public.
The offer price per share must be at least as high as the highest price paid or agreed by the offeror for the shares
in the six-month period prior to the date the threshold was exceeded. If the acquirer acquires or agrees to acquire
additional shares at a higher price prior to the expiration of the mandatory offer period, the acquirer is obliged to
restate its offer at such higher price. A mandatory offer must be in cash or contain a cash alternative at least
equivalent to any other consideration offered.
In case of failure to make a mandatory offer or to sell the portion of the shares that exceeds the relevant threshold
within four weeks, the Oslo Stock Exchange may force the acquirer to sell the shares exceeding the threshold by
public auction. Moreover, a shareholder who fails to make an offer may not, as long as the mandatory offer
obligation remains in force, exercise rights in the company, such as voting in a general meeting, without the
consent of a majority of the remaining shareholders. The shareholder may, however, exercise his/her/its rights to
dividends and pre-emption rights in the event of a share capital increase. If the shareholder neglects his/her/its
duty to make a mandatory offer, the Oslo Stock Exchange may impose a cumulative daily fine that runs until the
circumstance has been rectified.
Any person, entity or consolidated group that owns shares representing more than one-third of the votes in a
company listed on a Norwegian regulated market (with the exception of certain foreign companies not including the
Company) is obliged to make an offer to purchase the remaining shares of the company (repeated offer obligation)
if the person, entity or consolidated group through acquisition becomes the owner of shares representing 40%, or
more of the votes in the company. The same applies correspondingly if the person, entity or consolidated group
through acquisition becomes the owner of shares representing 50% or more of the votes in the company. The
mandatory offer obligation ceases to apply if the person, entity or consolidated group sells the portion of the shares
which exceeds the relevant threshold within four weeks of the date on which the mandatory offer obligation was
triggered.
Any person, entity or consolidated group that has passed any of the above mentioned thresholds in such a way as
not to trigger the mandatory bid obligation, and has therefore not previously made an offer for the remaining
shares in the company in accordance with the mandatory offer rules is, as a main rule, obliged to make a
mandatory offer in the event of a subsequent acquisition of shares in the company.
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Odfjell Partners Ltd. will be exempted from the requirement to make a mandatory offer for the remaining shares in
the Company upon further purchases of Shares as Odfjell Partners Ltd. will, upon consummation of the Offering,
hold a percentage of the shares and votes in the Company in excess of all mandatory offer thresholds, as long as it
at any time does not reduce its holding to below any such threshold.
16.10 Compulsory acquisition
An acquiring party is under Bermuda law generally able to compulsorily acquire the common shares of minority
holders in the following ways:
By a procedure under the Bermuda Companies Act known as a scheme of arrangement. A scheme of
arrangement can be effected by obtaining the agreement of the company and of holders of common
shares, representing in the aggregate a majority in number and at least 75% in value of the common
shareholders present and voting at a court ordered meeting held to consider the scheme of arrangement.
The Bermuda Supreme Court must then sanction the scheme of arrangement. If a scheme of arrangement
receives all necessary agreements and sanctions, then upon the filing of the court order with the Bermuda
Registrar of Companies, all holders of common shares will be obligated to sell their shares under the
terms of the scheme of arrangement.
If the acquiring party is a company acquiring pursuant to a tender offer 90% of the shares or class of
shares that are not already owned by, or held by a nominee for or on behalf of that acquiring party, or
any of its subsidiaries (the offeror). If within four months after the making of an offer for all the shares or
class of shares not owned by, or by a nominee for, the offeror, or any of its subsidiaries, an offeror
receives the approval of the holders of 90% or more of all the shares to which the offer relates, the offeror
may, at any time within two months beginning with the date on which the approval was obtained, require
by notice any non-tendering shareholder to transfer its shares to the offeror on the same terms as the
original offer. In those circumstances, non-tendering shareholders will be compelled to sell their shares
unless the Bermuda Supreme Court (on application made within a one-month period from the date of the
offerors notice of its intention to acquire such shares) orders otherwise.
Where the acquiring party or parties hold not less than 95% of the shares or a class of shares of the
company, the acquiring party may, pursuant to a notice given to the remaining shareholders or class of
shareholders, acquire the shares of such remaining shareholders or class of shareholders. When such
notice is given, the acquiring party is entitled and bound to acquire the shares of the remaining
shareholders on the terms set out in the notice, unless a remaining shareholder, within one month of
receiving such notice, applies to the Bermuda Supreme Court for an appraisal of the value of their shares.
This provision only applies where the acquiring party offers the same terms to all holders of shares whose
shares are being acquired.
16.11 Foreign exchange controls
There are currently no foreign exchange control restrictions in Norway that would potentially restrict the payment
of dividends to a shareholder outside Norway, and there are currently no restrictions that would affect the right of
shareholders of a company that has its shares registered with the VPS who are not residents in Norway to dispose
of their shares and receive the proceeds from a disposal outside Norway. There is no maximum transferable
amount either to or from Norway, although transferring banks are required to submit reports on foreign currency
exchange transactions into and out of Norway into a central data register maintained by the Norwegian customs
and excise authorities. The Norwegian police, tax authorities, customs and excise authorities, the National
Insurance Administration and the Norwegian FSA have electronic access to the data in this register.
The Bermuda Monetary Authority has given its consent for the issue and free transferability of the Shares to and
between residents and non-residents of Bermuda for exchange control purposes provided that the Shares are listed
on the Oslo Stock Exchange. Approvals or permissions given by the Bermuda Monetary Authority do not constitute
a guarantee by the Bermuda Monetary Authority as to the Companys performance or its creditworthiness.
Accordingly, in giving such consent or permissions, the Bermuda Monetary Authority shall not be liable for the
financial soundness, performance or default of the Companys business or for the correctness of any opinions or
statements expressed in this Prospectus. Certain issues and transfers of Shares involving persons deemed resident
in Bermuda for exchange control purposes require the specific consent of the Bermuda Monetary Authority.
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The Company has been designated by the Bermuda Monetary Authority as a non-resident for Bermuda exchange
control purposes. This designation allows the Company to engage in transactions in currencies other than the
Bermuda dollar, and there are no restrictions on the Companys ability to transfer funds (other than funds
denominated in Bermuda dollars) in and out of Bermuda or to pay dividends to non-residents who are holders of
Shares.
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17 TAXATION
Set out below is a summary of certain Bermuda, Norwegian and United States tax matters related to an investment
in the Company. The summary regarding Bermuda, Norwegian and United States taxation are based on the laws in
force in Bermuda, Norway and the United States as of the date of this Prospectus, which may be subject to any
changes in law occurring after such date. Such changes could possibly be made on a retroactive basis.
The following summary does not purport to be a comprehensive description of all the tax considerations that may
be relevant to a decision to purchase, own or dispose of the shares. Shareholders who wish to clarify their own tax
situation should consult and rely upon their own tax advisors. Shareholders resident in jurisdictions other than
Norway and shareholders who cease to be resident in Norway for tax purposes (due to domestic tax law or tax
treaty) should consult with and rely upon their own tax advisors with respect to the tax position in their country of
residence and the tax consequences related to ceasing to be resident in Norway for tax purposes.
Please note that for the purpose of the summary below, a reference to a Norwegian or Non-Norwegian shareholder
refers to the tax residency rather than the nationality of the shareholder.
17.1 Bermuda taxation
At the present time, there is no Bermuda income or profits tax, withholding tax, capital gains tax, capital transfer
tax, estate duty or inheritance tax payable by the Company or by its shareholders in respect of the Shares. The
Company has obtained an assurance from the Minister of Finance of Bermuda under the Exempted Undertakings
Tax Protection Act 1966 that, in the event that any legislation is enacted in Bermuda imposing any tax computed
on profits or income, or computed on any capital asset, gain or appreciation or any tax in the nature of estate duty
or inheritance tax, such tax shall not, until 31 March 2035, be applicable to the Company or to any of the
Companys operations or to its shares, debentures or other obligations except insofar as such tax applies to
persons ordinarily resident in Bermuda or is payable by the Company in respect of real property owned or leased
by the Company in Bermuda.
17.2 Norwegian taxation
17.2.1 Taxation of dividends
Norwegian Personal Shareholders
Dividends received by shareholders who are individuals resident in Norway for tax purposes (Norwegian
Personal Shareholders) are taxable as ordinary income in Norway for such shareholders at a flat rate of 28% to
the extent the dividend exceeds a tax-free allowance.
The allowance is calculated on a share-by-share basis. The allowance for each share is equal to the cost price of
the share multiplied by a risk free interest rate based on the effective rate after tax of interest on treasury bills
(Norwegian: statskasseveksler) with three months maturity. The allowance is calculated for each calendar year,
and is allocated solely to Norwegian Personal Shareholders holding shares at the expiration of the relevant calendar
year. Norwegian Personal Shareholders who transfer shares will thus not be entitled to deduct any calculated
allowance related to the year of transfer. Any part of the calculated allowance one year exceeding the dividend
distributed on the share (excess allowance) may be carried forward and set off against future dividends received
on, or gains upon realisation, of the same share. Any excess allowance will also be included in the basis for
calculating the allowance the following years.
Norwegian Corporate Shareholders
Dividends distributed by companies resident in Bermuda for tax purposes, including dividends from the Company,
received by Norwegian shareholders who are limited liability companies (and certain similar entities) resident in
Norway for tax purposes (Norwegian Corporate Shareholders), are taxable as ordinary income in Norway for
such shareholders at a flat rate of 28%.
Non-Norwegian Shareholders
As a general rule, dividends received by Non-Norwegian shareholders from shares in Non-Norwegian companies
are not subject to Norwegian taxation unless the Non-Norwegian shareholder holds the shares in connection with
the conduct of a trade or business in Norway.
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17.2.2 Taxation of capital gains on realisation of shares
Norwegian personal shareholders
Sale, redemption or other disposal of shares is considered a realisation for Norwegian tax purposes. A capital gain
or loss generated by a Norwegian Personal Shareholder through a disposal of shares is taxable or tax deductible in
Norway. Such capital gain or loss is included in or deducted from the Norwegian Personal Shareholders ordinary
income in the year of disposal. Ordinary income is taxable at a rate of 28%.
The gain is subject to tax and the loss is tax deductible irrespective of the duration of the ownership and the
number of shares disposed of.
The taxable gain/deductible loss is calculated per share as the difference between the consideration for the share
and the Norwegian Personal Shareholders cost price of the share, including costs incurred in relation to the
acquisition or realisation of the share. From this capital gain, Norwegian Personal Shareholders are entitled to
deduct a calculated allowance provided that such allowance has not already been used to reduce taxable dividend
income. Please refer to Section 17.2.1 Taxation of dividendsNorwegian Personal Shareholders above for a
description of the calculation of the allowance. The allowance may only be deducted in order to reduce a taxable
gain, and cannot increase or produce a deductible loss, i.e. any unused allowance exceeding the capital gain upon
the realisation of a share will be annulled.
If the Norwegian Personal Shareholder owns shares acquired at different points in time, the shares that were
acquired first will be regarded as the first to be disposed of, on a first-in first-out basis.
Norwegian Corporate Shareholders
A capital gain or loss derived by a Norwegian Corporate Shareholder from a disposal of shares in the Company is
taxable or tax deductible in Norway. Such capital gain or loss is included in or deducted from the basis for
computation of ordinary income in the year of disposal. Ordinary income is taxable at a rate of 28%. The gain is
subject to tax and the loss is tax deductible irrespective of the duration of the ownership and the number of shares
disposed of.
If the Norwegian Corporate Shareholder owns shares acquired at different points in time, the shares that were
acquired first will be regarded as the first to be disposed of, on a first-in first-out basis.
Non-Norwegian Shareholders
As a general rule, capital gains generated by Non-Norwegian Shareholders are not taxable in Norway unless the
Non-Norwegian Shareholder holds the shares in connection with the conduct of a trade or business in Norway.
17.2.3 Controlled Foreign Corporation (CFC) taxation
Norwegian shareholders in the Company will be subject to Norwegian taxation according to the Norwegian
Controlled Foreign Corporations regulations (Norwegian CFC-regulations) if Norwegian shareholders directly or
indirectly own or control (hereinafter together referred to as Control) the shares of the Company.
Norwegian shareholders will be considered to Control the Company if:
Norwegian shareholders Control 50% or more of the shares in the Company at the beginning of and at
the end of a tax year; or
If Norwegian shareholders Controlled the Company the previous tax year, the Company will also be
considered Controlled by Norwegian shareholders in the following tax year unless Norwegian resident
shareholders Control less than 50% of the shares at both the beginning and the end of the following tax
year; or
Norwegian shareholders Control more than 60% of the shares in the Company at the end of a tax year.
If less than 40% of the shares are Controlled by Norwegian shareholders at the end of a tax year, the Company
will not be considered Controlled by Norwegian shareholders for Norwegian tax purposes.
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Under the Norwegian CFC-regulations Norwegian shareholders are subject to Norwegian taxation on their
proportionate part of the taxable net income generated by the Company, calculated according to Norwegian tax
regulations, regardless of whether or not any dividends are distributed from the Company.
17.2.4 Net wealth tax
The value of shares is included in the basis for the computation of net wealth tax imposed on Norwegian Personal
Shareholders. Currently, the marginal net wealth tax rate is 1.1% of the value assessed. The value for assessment
purposes for listed shares is equal to the listed value as of 1 January in the year of assessment.
Norwegian Corporate Shareholders are not subject to net wealth tax.
Non-Norwegian Shareholders are generally not subject to Norwegian net wealth tax. Non-Norwegian personal
shareholders can, however, be taxable if the shareholding is effectively connected to the conduct of trade or
business in Norway.
17.2.5 VAT and transfer taxes
No VAT, stamp or similar duties are currently imposed in Norway on the transfer or issuance of shares.
17.2.6 Inheritance tax
When shares are transferred either through inheritance or as a gift, such transfer may give rise to inheritance or
gift tax in Norway if the decedent, at the time of death, or the donor, at the time of the gift, is a resident or citizen
of Norway, or if the shares are effectively connected with a business carried out through a permanent
establishment in Norway. However, in the case of inheritance tax, if the decedent was a citizen but not a resident
of Norway, Norwegian inheritance tax will not be levied if inheritance tax or a similar tax is levied by the decedents
country of residence.
Inheritance tax will be applicable to gifts if the donor is a citizen of Norway at the time the gift was given.
However, for taxes paid in the donors country of residence a credit will be given in the Norwegian gift taxes.
The basis for the computation of inheritance or gift tax is the market value of the shares at the time the transfer
takes place. The rate is progressive from 0% to 15%. For inheritance and gifts from parents to children, the
maximum rate is 10%.
17.3 Certain U.S. federal income tax considerations
TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR 230, HOLDERS ARE HEREBY
NOTIFIED THAT: (A) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES IN THIS PROSPECTUS IS NOT
INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON, BY HOLDERS FOR THE
PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON HOLDERS UNDER THE INTERNAL
REVENUE CODE; (B) SUCH DISCUSSION IS INCLUDED HEREIN BY THE COMPANY IN CONNECTION WITH
THE PROMOTION OR MARKETING (WITHIN THE MEANING OF CIRCULAR 230) BY THE COMPANY OF THE
TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) HOLDERS SHOULD SEEK ADVICE BASED ON
THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISER.
The following is a summary of certain U.S. federal income tax consequences of the acquisition, ownership and
disposition of Offer Shares by a U.S. Holder (as defined below). This summary deals only with initial purchasers of
Offer Shares that are U.S. Holders that will hold the Offer Shares as capital assets. The discussion does not cover
all aspects of U.S. federal income taxation that may be relevant to, or the actual tax effect that any of the matters
described herein will have on, the acquisition, ownership or disposition of Offer Shares by particular investors, and
does not address state, local, foreign or other tax laws. This summary also does not address tax considerations
applicable to investors that own (directly or indirectly) 10 per cent or more of the voting shares of the Company,
nor does this summary discuss all of the tax considerations that may be relevant to certain types of investors
subject to special treatment under the U.S. federal income tax laws (such as financial institutions, insurance
companies, investors liable for the alternative minimum tax, individual retirement accounts and other tax-deferred
accounts, tax-exempt organisations, dealers in securities or currencies, investors subject to tax on net investment
income, investors that will hold the Offer Shares as part of straddles, hedging transactions or conversion
transactions for U.S. federal income tax purposes or investors whose functional currency is not the U.S. dollar).
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As used herein, the term U.S. Holder means a beneficial owner of Offer Shares that is, for U.S. federal income
tax purposes, (i) an individual citizen or resident of the United States, (ii) a corporation created or organised under
the laws of the United States or any State thereof, (iii) an estate the income of which is subject to U.S. federal
income tax without regard to its source or (iv) a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more U.S. persons have the authority to control all
substantial decisions of the trust, or the trust has validly elected to be treated as a domestic trust for U.S. federal
income tax purposes.
The U.S. federal income tax treatment of a partner in an entity treated as a partnership for U.S. federal income tax
purposes that holds Offer Shares will depend on the status of the partner and the activities of the partnership.
Prospective purchasers that are entities treated as partnerships for U.S. federal income tax purposes should
consult their tax advisers concerning the U.S. federal income tax consequences to their partners of the acquisition,
ownership and disposition of Offer Shares by the partnership.
The summary assumes that the Company is not a passive foreign investment company (a PFIC) for U.S. federal
income tax purposes, which the Company believes to be the case. The Companys possible status as a PFIC must
be determined annually and therefore may be subject to change. If the Company were to be a PFIC in any year,
materially adverse consequences could result for U.S. Holders.
This summary is based on the tax laws of the United States, including the Internal Revenue Code of 1986, as
amended, its legislative history, existing and proposed regulations thereunder, published rulings and court
decisions, all as of the date hereof and all subject to change at any time, possibly with retroactive effect.
THE SUMMARY OF U.S. FEDERAL INCOME TAX CONSEQUENCES SET OUT BELOW IS FOR GENERAL
INFORMATION ONLY. ALL PROSPECTIVE PURCHASERS SHOULD CONSULT THEIR TAX ADVISERS AS TO
THE PARTICULAR TAX CONSEQUENCES TO THEM OF OWNING THE OFFER SHARES, INCLUDING THEIR
ELIGIBILITY FOR THE BENEFITS OF THE TREATY, THE APPLICABILITY AND EFFECT OF STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND POSSIBLE CHANGES IN TAX LAW.
Dividends
General. Distributions paid by the Company out of current or accumulated earnings and profits (as determined for
U.S. federal income tax purposes) will generally be taxable to a U.S. Holder as foreign source dividend income, and
will not be eligible for the dividends received deduction allowed to corporations. Distributions in excess of current
and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of the U.S.
Holders basis in the Offer Shares and thereafter as capital gain. However, the Company does not maintain
calculations of its earnings and profits in accordance with U.S. federal income tax accounting principles. U.S.
Holders should therefore assume that any distribution by the Company with respect to Offer Shares will constitute
ordinary dividend income. U.S. Holders should consult their own tax advisers with respect to the appropriate U.S.
federal income tax treatment of any distribution received from the Company.
Prospective purchasers should consult their tax advisers concerning the applicability of the foreign tax credit and
source of income rules to dividends on the Offer Shares.
Foreign Currency Dividends. Dividends paid in Norwegian Kroners will be included in income in a U.S. dollar
amount calculated by reference to the exchange rate in effect on the day the dividends are received by the U.S.
Holder, regardless of whether the Norwegian Kroners are converted into U.S. dollars at that time. If dividends
received in Norwegian Kroners are converted into U.S. dollars on the day they are received, the U.S. Holder
generally will not be required to recognise foreign currency gain or loss in respect of the dividend income.
Sale or other Disposition
Upon a sale or other disposition of Offer Shares, a U.S. Holder generally will recognise capital gain or loss for U.S.
federal income tax purposes equal to the difference, if any, between the amount realised on the sale or other
disposition and the U.S. Holders adjusted tax basis in the Offer Shares. This capital gain or loss will be long-term
capital gain or loss if the U.S. Holders holding period in the Offer Shares exceeds one year. Any gain or loss will
generally be U.S. source.
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A U.S. Holders tax basis in an Offer Share will generally be its U.S. dollar cost. The U.S. dollar cost of an Offer
Share purchased with foreign currency will generally be the U.S. dollar value of the purchase price on the date of
purchase, or the settlement date for the purchase, in the case of Offer Shares traded on an established securities
market, within the meaning of the applicable Treasury Regulations, that are purchased by a cash basis U.S. Holder
(or an accrual basis U.S. Holder that so elects). Such an election by an accrual basis U.S. Holder must be applied
consistently from year to year and cannot be revoked without the consent of the IRS. The amount realised on a
sale or other disposition of Offer Shares for an amount in foreign currency will be the U.S. dollar value of this
amount on the date of sale or disposition. On the settlement date, the U.S. Holder will recognise U.S. source
foreign currency gain or loss (taxable as ordinary income or loss) equal to the difference (if any) between the U.S.
dollar value of the amount received based on the exchange rates in effect on the date of sale or other disposition
and the settlement date. However, in the case of Offer Shares traded on an established securities market that are
sold by a cash basis U.S. Holder (or an accrual basis U.S. Holder that so elects), the amount realised will be based
on the exchange rate in effect on the settlement date for the sale, and no exchange gain or loss will be recognised
at that time.
Disposition of Foreign Currency
Foreign currency received on the sale or other disposition of an Offer Share will have a tax basis equal to its U.S.
dollar value on the settlement date. Foreign currency that is purchased will generally have a tax basis equal to the
U.S. dollar value of the foreign currency on the date of purchase. Any gain or loss recognised on a sale or other
disposition of a foreign currency (including its use to purchase Offer Shares or upon exchange for U.S. dollars) will
be U.S. source ordinary income or loss.
Passive Foreign Investment Company Considerations
A foreign corporation will be a PFIC in any taxable year in which, after taking into account the income and assets of
the corporation and certain subsidiaries pursuant to applicable look-through rules, either (i) at least 75 per cent
of its gross income is passive income or (ii) at least 50 per cent of the average value of its assets is attributable
to assets which produce passive income or are held for the production of passive income. Based on the Companys
assets and income as reflected on the Companys audited financial statements, the Company does not believe that
it will be a PFIC for its current taxable year, and the Company does not anticipate becoming a PFIC in the
foreseeable future; however the Companys possible status as a PFIC must be determined annually and therefore
may be subject to change. If the Company were to be treated as a PFIC, U.S. Holders of Offer Shares would be
required (i) to pay a special U.S. addition to tax on certain distributions and gains on sale and (ii) to pay tax on any
gain from the sale of Offer Shares at ordinary income (rather than capital gains) rates in addition to paying the
special addition to tax on this gain. Prospective purchasers should consult their tax advisers regarding the potential
application of the PFIC regime.
Backup Withholding and Information Reporting
Payments of dividends and other proceeds with respect to Offer Shares, by a U.S. paying agent or other U.S.
intermediary will be reported to the IRS and to the U.S. Holder as may be required under applicable regulations.
Backup withholding may apply to these payments if the U.S. Holder fails to provide an accurate taxpayer
identification number or certification of exempt status or fails to report all interest and dividends required to be
shown on its U.S. federal income tax returns. Certain U.S. Holders are not subject to backup withholding. U.S.
Holders should consult their tax advisers as to their qualification for exemption from backup withholding and the
procedure for obtaining an exemption.
Foreign Financial Asset Reporting
Legislation enacted in 2010 imposes reporting requirements on the holding of certain foreign financial assets,
including equity of foreign entities, if the aggregate value of all of these assets exceeds $50,000 at the end of the
taxable year or $75,000 at any time during the taxable year. The thresholds are higher for individuals living
outside of the United States and married couples filing jointly. The Offer Shares are expected to constitute foreign
financial assets subject to these requirements unless the Offer Shares are held in an account at a financial
institution (in which case the account may be reportable if maintained by a foreign financial institution). U.S.
Holders should consult their tax advisors regarding the application of this legislation.
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18 TERMS OF THE OFFERING
18.1 Overview of the Offering
The Offering consists of up to 56,000,000 Sale Shares, all of which are existing, validly issued and fully paid-up
registered Shares with a par value of USD 0.01, offered by the Selling Shareholder. The Sale Shares represent, and
will upon completion of the Offering represent, up to 28% of the Shares in issue in the Company. In addition, the
Joint Bookrunners may elect to over-allot up to 4,000,000 Additional Shares, equalling up to approximately 7% of
the number of Sale Shares (representing up to 2% of the Shares in issue in the Company). The Selling Shareholder
has granted DNB Markets, on behalf of the Managers, an Over-Allotment Option to purchase a corresponding
number of Additional Shares to cover any such over-allotments. Assuming the Over-Allotment Option is exercised
in full, the Offering will amount to up to 60,000,000 Shares, representing up to 30% of the Shares.
The Offering consists of:
An Institutional Offering, in which Offer Shares are being offered (a) to investors in Norway, (b)
investors outside Norway and the United States, subject to applicable exemptions from the prospectus
requirements, and (c) in the United States to QIBs, as defined in, and in reliance on Rule 144A of the
U.S. Securities Act. The Institutional Offering is subject to a lower limit per application of NOK
2,500,000.
A Retail Offering, in which Offer Shares are being offered to the public in Norway subject to a lower limit
per application of an amount of NOK 10,500 and an upper limit per application of NOK 2,499,999 for
each investor. Investors in the Retail Offering will receive a discount of NOK 1,000 on their aggregate
amount payable for the Offer Shares allocated to such investors. Investors who intend to place an order
in excess of NOK 2,499,999 must do so in the Institutional Offering. Multiple applications by one
applicant in the Retail Offering will be treated as one application with respect to the maximum
application limit and the discount.
All offers and sales outside the United States will be made in compliance with Regulation S.
This Prospectus does not constitute an offer of, or an invitation to purchase, the Offer Shares in any jurisdiction in
which such offer or sale would be unlawful. For further details, see Important information and Section 19 Selling
and transfer restrictions.
The Bookbuilding Period for the Institutional Offering is expected to take place from 16 September 2013 at 09:00
hours (CET) to 27 September 2013 at 15:00 hours (CET). The Application Period for the Retail Offering will take
place from 16 September 2013 at 09:00 hours (CET) to 27 September 2013 at 12:00 hours (CET). The Company,
in consultation with the Selling Shareholder and the Joint Bookrunners, reserves the right to shorten or extend the
Bookbuilding Period and Application Period at any time. Any shortening of the Bookbuilding Period and/or the
Application Period will be announced through the Oslo Stock Exchanges information system on or before 09:00
hours (CET) on the prevailing expiration date of the Bookbuilding Period, provided however that in no event will the
Bookbuilding Period and/or Application period be shortened to expire prior to 12:00 hours (CET) on 23 September
2013. Any extension of the Bookbuilding Period and/or the Application Period will be announced through the Oslo
Stock Exchanges information system on or before 09:00 hours (CET) on the first business day following the then
prevailing expiration date of the Bookbuilding Period. An extension of the Bookbuilding Period and/or the
Application Period can be made one or several times provided, however that in no event will the Bookbuilding
Period and/or Application Period be extended beyond 15:00 hours (CET) on 11 October 2013. In the event of a
shortening or an extension of the Bookbuilding Period and/or the Application Period, the allocation date, the
payment due dates and the dates of delivery of Offer Shares will be changed accordingly, but the date of Listing
and commencement of trading on the Oslo Stock Exchange may not necessarily be changed.
The Selling Shareholder has, together with the Company and the Joint Bookrunners, set an Indicative Price Range
for the Offering from NOK 37 to NOK 48 per Offer Share. Assuming that the Offer Price is set at the mid-point of
this range and all Offer Shares are sold in the Offering, the aggregate gross amount of the Offering will be
approximately NOK 2,550 million. The Selling Shareholder will, in consultation with the Company and the Joint
Bookrunners, determine the number of Offer Shares and the Offer Price on the basis of the bookbuilding process in
the Institutional Offering and the number of applications received in the Retail Offering. The bookbuilding process,
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which will form the basis for the final determination of the number of Offer Shares and the Offer Price, will be
conducted only in connection with the Institutional Offering. The Indicative Price Range may be amended during
the Bookbuilding Period. Any such amendments to the Indicative Price Range will be announced through the
information system of the Oslo Stock Exchange.
The Company expects that it will, on or about 27 September 2013, together with the Selling Shareholder, enter
into a purchase agreement (the Purchase Agreement) with the Joint Bookrunners (as representatives of the
Managers) with respect to the Offering of the Offer Shares. On the terms and subject to the conditions set forth in
the Purchase Agreement and provided that the Offering has not been terminated prior thereto, the Selling
Shareholder is expected to agree to sell and the Managers are expected to agree severally and not jointly, to
procure purchasers for, or failing which, to purchase the Sale Shares being sold by the Selling Shareholder in the
Offering. The purchase commitments of each of the Managers will be determined in conjunction with determination
of the final Offer Price and number of Offer Shares to be sold in the Offering, which is expected to take place on 27
September 2013.
In addition, the Selling Shareholder has granted the Stabilisation Manager (DNB Markets), on behalf of the
Managers, the Over-Allotment Option to purchase up to 4,000,000 Additional Shares, equalling up to
approximately 7% of the final number of Sale Shares (representing up to 2% of the Shares in issue in the
Company) at the Offer Price, exercisable, in whole or in part, within a 30-day period commencing at the time at
which if sold trading in the Shares commences on the Oslo Stock Exchange, expected to be on 30 September
2013. The Over-Allotment Option is granted to cover over-allotments, if any, made in connection with the Offering
on the terms and subject to the conditions described in this Prospectus. In order to permit delivery in respect of
over-allotments made, if any, the Selling Shareholder will, pursuant to the Purchase Agreement, grant to the
Stabilisation Manager an option (the Lending Option) to require the Selling Shareholder to lend to the
Stabilisation Manager, on behalf of the Managers, up to a number of Shares equal to the number of Additional
Shares. See Section 18.8 Over-allotment and stabilisation activities below for further details.
The Selling Shareholder and the Company will make certain representations and warranties, and will agree to
certain undertakings, in the Purchase Agreement. The Company and the Selling Shareholder will undertake, subject
to certain conditions and limitations, to indemnify the Managers against certain liabilities in connection with the
Offering, including liabilities under applicable securities laws. Subject to certain exceptions, the Selling
Shareholders aggregate payments pursuant to the indemnity in respect of any breach of the representations,
warranties and other statements of the Selling Shareholder in the Purchase Agreement shall not exceed the
product of the Offer Price (less the discount offered to investors in the Retail Offering) and the number of Shares
sold by the Selling Shareholder.
In connection with the Purchase Agreement, Odfjell Partners Ltd., the Selling Shareholder, the Company and Simen
Lieungh (the President and CEO of Odfjell Drilling) will give an undertaking that will restrict their ability to issue,
sell or transfer Shares for nine months after the date of the Purchase Agreement. For more information about
these restrictions, please see Section 18.14 Lock-up below.
The Purchase Agreement is expected to provide that the Managers may terminate the Purchase Agreement (and
thus the Managers obligation to purchase the Offer Shares) if prior to 07:30 hours (CET) on first day of trading on
an if sold basis (expected to take place on or about 30 September 2013 as described below) (i) there has been
any material adverse change or any development involving a prospective material adverse change in the business,
properties, management, financial condition, results of operations or prospects of the Group, which would, in the
judgment of the Joint Bookrunners acting in good faith, make it impracticable or inadvisable to proceed with the
Offering on the terms and in the manner contemplated in the Prospectus; (ii) there has been any breach of, or any
event rendering untrue, inaccurate or misleading in any respect, any of the representations and warranties by the
Company or the Selling Shareholder contained in the Purchase Agreement or any failure to perform any of the
Companys or the Selling Shareholders undertakings or agreements in the Purchase Agreement; (iii) any of the
conditions precedent to the Managers obligations under the Purchase Agreement has not been satisfied or waived
by the Joint Bookrunners; or (iv) it shall come to the notice of the Joint Bookrunners that any statement of fact
contained in the Prospectus is or has become untrue, incorrect or misleading in any respect and which is
considered by the Joint Bookrunners acting in good faith to be material in the context of the Offering, or any
matter has arisen, which would, if the Offering were made at that time, constitute a material omission from the
Prospectus.
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In addition, the Purchase Agreement is expected to provide that the Managers may terminate the Purchase
Agreement (and thus the Managers obligation to purchase the Offer Shares) if prior to 18:00 hours (CET) on 2
October 2013 one of the following events (each a force majeure event) occurs:
(i) a suspension or material limitation of trading in securities generally on the Oslo Stock Exchange, the New York
Stock Exchange or the London Stock Exchange; (ii) a general moratorium on commercial banking activities
declared by the federal, state or local regulatory authorities of Norway, the United States, the United Kingdom or
any other member state of the European Union or a material disruption in commercial banking or securities
settlement or clearance services in Bermuda, Norway, the United States, the United Kingdom or any other member
state of the European Union; (iii) an outbreak or escalation of hostilities or acts of terrorism involving Bermuda,
Norway, the United States, the United Kingdom or any other member state of the European Union or a declaration
by Bermuda, Norway, the United States, the United Kingdom or any other member state of the European Union of
a national emergency or war; or (iv) any other calamity or crisis or any material adverse change in financial,
political or economic conditions in Bermuda, Norway, the United States, the United Kingdom or any other member
state of the European Union, if the effect of any such event specified in clauses (i) through (iv) makes it impossible
or inadvisable, in the judgment of the Joint Bookrunners acting in good faith, taking into account general market
conditions as a result of such events and the interests of investors in the Shares, to proceed with the Offering or
the delivery of the Offer Shares on the terms and in the manner contemplated in this Prospectus.
Further, the Purchase Agreement may terminate if prior to 18:00 hours (CET) on 2 October 2013, a Manager (or
Managers) defaults in its obligation to purchase the number of Sale Shares it has agreed to purchase under the
Purchase Agreement, and the aggregate number of such Sale Shares exceeds 10% of the total number of Sale
Shares which all Managers are obligated to purchase under the Purchase Agreement and neither the non-defaulting
Managers nor the Selling Shareholder have made arrangements for the purchase or subscription by another party
or other parties of such Sale Shares.
Unless the Purchase Agreement has been terminated, delivery of the Offer Shares to investors being allocated
Offer Shares in the Offering is expected to take place on or about 2 October 2013 for the Retail Offering subject to
due payment for allocated Offer Shares having been received from investors, and 3 October 2013 for the
Institutional Offering (on a delivery versus payment basis).
The Offer Shares allocated in the Offering are expected to be traded on the Oslo Stock Exchange on a
conditional if sold basis from and including 30 September 2013 to and including 2 October 2013.
Trades during this period will, in accordance with the ordinary settlement cycle for trades over the Oslo
Stock Exchange, be settled on T+3 (T being the trade date). Accordingly, any trade made on 30
September 2013 will be settled on 3 October 2013. Should any of the termination events described
above occur in the period from commencement of conditional trading (expected to take place on 30
September 2013) to commencement of unconditional trading in the Shares (expected to take place on
3 October 2013 as described below), or such earlier time when it has become impossible to stop the
transfer of Offer Shares through VPS, and the Purchase Agreement is terminated, no trades that have
occurred in the Shares will be settled, and investors will have no right to compensation for any loss
suffered as a result of such cancellation.
Depending on the policy of their respective bank or investment firm, investors wanting to trade their allocated
Offer Shares through an internet account prior to commencement of unconditional trading in the Shares, expected
to take place on 3 October 2013, may be prevented from such trading. Investors wanting to trade their allocated
Offer Shares through an internet account prior to commencement of unconditional trading are therefore urged to
confirm the possibility of such trading with their own account operator.
Completion of the Offering is conditional upon, among other conditions, the Company satisfying the listing
conditions and being listed on the Oslo Stock Exchange, see Section 18.12 Conditions for completion of the
Offering Listing and trading of the Offer Shares below.

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18.2 Timetable
The timetable set out below provides certain indicative key dates for the Offering (subject to shortening or
extension):
Bookbuilding Period commences .................................................................. 16 September 2013 at 09:00 hours (CET)
Bookbuilding Period ends ............................................................................ 27 September 2013 at 15:00 hours (CET)
Application Period commences ..................................................................... 16 September 2013 at 09:00 hours (CET)
Application Period ends ............................................................................... 27 September 2013 at 12:00 hours (CET)
Allocation of the Offer Shares ...................................................................... On or about 27 September 2013
Publication of the results of the Offering........................................................ On or about 30 September 2013
Issuance of allocation notes......................................................................... On or about 30 September 2013
Listing and commencement of conditional trading in the Shares ....................... On or about 30 September 2013
Accounts from which payment will be debited in the Retail Offering to be
sufficiently funded ...................................................................................... On or about 1 October 2013
Payment date in the Retail Offering .............................................................. On or about 2 October 2013
Delivery of the Offer Shares in the Retail Offering .......................................... On or about 2 October 2013
Payment date in the Institutional Offering ..................................................... On or about 3 October 2013
Delivery of the Offer Shares in the Institutional Offering ................................. On or about 3 October 2013
Commencement of unconditional trading in the Shares ................................... On or about 3 October 2013
Please note that the Company, together with the Selling Shareholder and the Joint Bookrunners, reserves the right
to shorten or extend the Bookbuilding Period and the Application Period. In such event, the dates presented above
are expected to change accordingly.
18.3 The Institutional Offering
18.3.1 Determination of the number of Offer Shares and the Offer Price
The Selling Shareholder has, together with the Company and the Joint Bookrunners, set an Indicative Price Range
for the Offering from NOK 37 to NOK 48 per Offer Share. The Selling Shareholder will, in consultation with the
Company and the Joint Bookrunners, determine the number of Offer Shares and the Offer Price on the basis of the
applications received and not withdrawn in the Institutional Offering during the Bookbuilding Period and the
number of applications received in the Retail Offering. The Offer Price will be determined on or about 27 September
2013. The Offer Price may be set within, below or above the Indicative Price Range. Investors applications for
Offer Shares in the Institutional Offering will, after the end of the Bookbuilding Period, be irrevocable and binding
regardless of whether the Offer Price is set within, above or below the Indicative Price Range. The final Offer Price
is expected to be announced by the Company through the Oslo Stock Exchanges information system on or about
30 September 2013 under the ticker code ODL.
18.3.2 Bookbuilding Period
The Bookbuilding Period for the Institutional Offering will last from 16 September 2013 at 09:00 hours (CET) to 27
September 2013 at 15:00 hours (CET), unless shortened or extended. The Company, in consultation with the
Selling Shareholder and the Joint Bookrunners, may shorten or extend the Bookbuilding Period at any time, and
extension may be made on one or several occasions. The Bookbuilding Period may in no event be shortened to
expire prior to 12:00 hours (CET) on 23 September 2013 or extended beyond 15:00 hours (CET) on 11 October
2013. In the event of a shortening or an extension of the Bookbuilding Period, the allocation date, the payment
due date and the date of delivery of Offer Shares will be changed accordingly.
18.3.3 Minimum application
The Institutional Offering is subject to a minimum application of NOK 2,500,000 per application. Investors in
Norway who intend to place an application for less than NOK 2,500,000 must do so in the Retail Offering.
18.3.4 Application procedure
Applications for Offer Shares in the Institutional Offering must be made during the Bookbuilding Period by
informing one of the Managers shown below of the number of Offer Shares that the investor wishes to order, and
the price per share that the investor is offering to pay for such Offer Shares.

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ABG Sundal Collier DNB Markets Goldman Sachs International
Munkedamsveien 45 D Dronning Eufemias gate 30 Peterborough Court, 133 Fleet Street
P.O. Box 1444 Vika P.O. Box 1600 Sentrum London EC4A 2BB
N-0115 OSLO N-0021 OSLO United Kingdom
Norway Norway

Haakon VIIs gate 5 Stortingsgaten 6 Filipstad Brygge 1
P.O. Box 1833 Vika P.O. Box 1170 Sentrum P.O. Box 1441 Vika
N-0123 OSLO N-0161 OSLO N-0115 OSLO
Norway Norway Norway
All applications in the Institutional Offering will be treated in the same manner regardless of which Manager the
applicant chooses to place the application with. Any orally placed application in the Institutional Offering will be
binding upon the investor and subject to the same terms and conditions as a written application. The Managers
may, at any time and in their sole discretion, require the investor to confirm any orally placed application in
writing. Applications made may be withdrawn or amended by the investor at any time up to the end of the
Bookbuilding Period. At the close of the Bookbuilding Period, all applications in the Institutional Offering that have
not been withdrawn or amended are irrevocable and binding upon the investor.
18.3.5 Allocation, payment for and delivery of Offer Shares
The Managers expect to issue notifications of allocation of Offer Shares in the Institutional Offering on or about 30
September 2013, by issuing contract notes to the applicants by mail or otherwise.
Payment by applicants in the Institutional Offering will take place against delivery of Offer Shares. Delivery and
payment for Offer Shares is expected to take place on or about 3 October 2013 (the Institutional Closing
Date).
For late payment, interest will accrue on the amount due at a rate equal to the prevailing interest rate under the
Norwegian Act on Overdue Payment of 17 December 1976, no. 100, which, at the date of this Prospectus, is 9.50%
per annum. Should payment not be made when due, the Offer Shares allocated will not be delivered to the
applicants, and the Managers reserve the right, at the risk and cost of the applicant, to cancel the application and
to re-allot or otherwise dispose of the allocated Offer Shares on such terms and in such manner as the Managers
may decide (and the applicant will not be entitled to any profit therefrom). The original applicant remains liable for
payment for the Offer Shares allocated to the applicant, together with any interest, cost, charges and expenses
accrued, or the Managers may enforce payment of any such amount outstanding.
18.4 The Retail Offering
18.4.1 Offer Price
The price for the Offer Shares offered in the Retail Offering will be the same as in the Institutional Offering, see
Section 18.3.1 Determination of the number of Offer Shares and the Offer Price. However, investors in the Retail
Offering will receive a discount of NOK 1,000 on their aggregate amount payable for the Offer Shares allocated to
such investors. Multiple applications by one applicant in the Retail Offering will be treated as one application with
respect to the discount.
Each applicant in the Retail Offering will be permitted, but not required, to indicate when ordering through the VPS
online application system or on the application form to be used to apply for Offer Shares in the Retail Offering,
attached to this Prospectus as Appendix D and Appendix E (the Retail Application Form), that the applicant
does not wish to be allocated Offer Shares should the Offer Price be set higher than the highest price in the
Indicative Price Range. If the applicant does so, the applicant will not be allocated any Offer Shares in the event
that the Offer Price is set higher than the highest price in the Indicative Price Range. If the applicant does not
expressly stipulate such reservation when ordering through the VPS online application system or on the Retail
Application Form, the application will be binding regardless of whether the Offer Price is set within or above (or
below) the Indicative Price Range, as long as the Offer Price has been determined on the basis of orders placed
during the bookbuilding process described above.
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18.4.2 Application Period
The Application Period during which applications for Offer Shares in the Retail Offering will be accepted will last
from 16 September 2013 at 09:00 hours (CET) to 27 September 2013 at 12:00 hours (CET), unless shortened or
extended. The Company, in consultation with the Selling Shareholder and the Joint Bookrunners, may shorten or
extend the Application Period at any time, and extension may be made on one or several occasions. The
Application Period may in no event be shortened to expire prior to 12:00 hours (CET) on 23 September 2013 or
extended beyond 15:00 hours (CET) on 11 October 2013. In the event of a shortening or an extension of the
Application Period, the allocation date, the payment due date and the date of delivery of Offer Shares will be
changed accordingly.
18.4.3 Minimum and maximum application
The Retail Offering is subject to a minimum application amount of NOK 10,500 and a maximum application amount
of NOK 2,499,999 for each applicant.
Multiple applications are allowed. One or multiple applications from the same applicant in the Retail Offering with a
total application amount in excess of NOK 2,499,999 will be adjusted downwards to an application amount of NOK
2,499,999. If two or more identical application forms are received from the same investor in the same offering, the
application form will only be counted once unless otherwise explicitly stated on one of the application forms. In the
case of multiple applications through the online application system or applications made both on a physical
application form and through the online application system, all applications will be counted. Investors who intend
to place an order in excess of NOK 2,499,999 must do so in the Institutional Offering.
18.4.4 Application procedures and application offices
Norwegian applicants in the Retail Offering who are residents of Norway with a Norwegian personal identification
number are recommended to apply for Offer Shares through the VPS online application system by following the link
to such online application system on the following web pages: www.abgsc.no, www.dnb.no/emisjoner,
www.arcticsec.no or www.swedbank.no. Applicants in the Retail Offering not having access to the VPS online
application system must apply using the Retail Application Form attached to this Prospectus as Appendix D
Application Form for the Retail Offering in English or as Appendix E Application Form for the Retail Offering in
Norwegian. Retail Application Forms, together with this Prospectus, can be obtained from the Company, the
Companys web page www.odfjelldrilling.com, the Managers web pages listed above,
www.danskebank.no/emisjoner or the application offices set out below. Applications made through the VPS online
application system must be duly registered during the Application Period.
The application offices for physical applications in the Retail Offering are:
ABG Sundal Collier DNB Markets
Munkedamsveien 45 E, Vika Atrium Dronning Eufemias gate 30
P.O. Box 1444 Vika P.O. Box 1600 Sentrum
N-0115 OSLO N-0021 OSLO
Norway Norway
Tel: +47 22 01 60 00 Tel: +47 23 26 81 01
Fax: +47 22 01 60 62 Fax: +47 22 48 29 80
Web: www.abgsc.no Web: www.dnb.no/emisjoner

Haakon VIIs gate 5 Stortingsgaten 6 Filipstad Brygge 1
P.O. Box 1833 Vika P.O. Box 1170 Sentrum P.O. Box 1441 Vika
N-0123 OSLO N-0161 OSLO N-0115 OSLO
Norway Norway Norway
Tel: +47 21 01 30 40 Tel: +47 85 40 90 00 Tel: +47 23 23 80 00
Fax: +47 21 01 31 36 Fax +47 85 40 79 92 Fax: +47 23 23 80 11
Web: www.arcticsec.no Web: www.danskebank.no/emisjoner Web: www.swedbank.no
All applications in the Retail Offering will be treated in the same manner regardless of which of the above Managers
the applications are placed with. Further, all applications in the Retail Offering will be treated in the same manner
regardless of whether they are submitted by delivery of a Retail Application Form or through the VPS online
application system.
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Retail Application Forms that are incomplete or incorrectly completed, electronically or physically, or that are
received after the expiry of the Application Period, may be disregarded without further notice to the applicant.
Properly completed Retail Application Forms must be received by one of the application offices listed above or
registered electronically through the VPS application system by 12:00 hours (CET) on 27 September 2013, unless
the Application Period is being shortened or extended. None of the Company, the Selling Shareholder or any of the
Managers may be held responsible for postal delays, unavailable fax lines, internet lines or servers or other
logistical or technical matters that may result in applications not being received in time or at all by any application
office.
Subject to Section 18.4.1 Offer Price above, all applications made in the Retail Offering will be irrevocable and
binding upon receipt of a duly completed Retail Application Form, or in the case of applications through the VPS
online application system, upon registration of the application, irrespective of any extension of the Application
Period, and cannot be withdrawn, cancelled or modified by the applicant after having been received by the
application office, or in the case of applications through the VPS online application system, upon registration of the
application.
18.4.5 Allocation, payment and delivery of Offer Shares
DNB Markets, acting as settlement agent for the Retail Offering, expects to issue notifications of allocation of Offer
Shares in the Retail Offering on or about 30 September 2013, by issuing allocation notes to the applicants by mail
or otherwise. Any applicant wishing to know the precise number of Offer Shares allocated to it, may contact one of
the application offices listed above on or about 30 September 2013 during business hours. Applicants who have
access to investor services through an institution that operates the applicants account with the VPS for the
registration of holdings of securities (VPS account) should be able to see how many Offer Shares they have
been allocated from on or about 30 September 2013.
In registering an application through the VPS online application system or completing a Retail Application Form,
each applicant in the Retail Offering will authorise DNB Markets (on behalf of the Managers) to debit the applicants
Norwegian bank account for the total amount due for the Offer Shares allocated to the applicant. The applicants
bank account number must be stipulated on the VPS online application or on the Retail Application Form. Accounts
will be debited on or about 2 October 2013 (the Payment Date), and there must be sufficient funds in the stated
bank account from and including 1 October 2013. Applicants who do not have a Norwegian bank account must
ensure that payment for the allocated Offer Shares is made on or before the Payment Date (2 October 2013).
Further details and instructions will be set out in the allocation notes to the applicant to be issued on or about 30
September 2013, or can be obtained by contacting DNB Markets at + 47 23 26 81 01.
Should any applicant have insufficient funds on his or her account, or should payment be delayed for any reason,
or if it is not possible to debit the account, interest will accrue on the amount due at a rate equal to the prevailing
interest rate under the Norwegian Act on Interest on Overdue Payments of 17 December 1976, No. 100, which at
the date of this Prospectus is 9.50% per annum. DNB Markets (on behalf of the Managers) reserves the right (but
has no obligation) to make up to three debit attempts through 8 October 2013 if there are insufficient funds on the
account on the Payment Date. Should payment not be made when due, the Offer Shares allocated will not be
delivered to the applicant, and the Managers reserve the right, at the risk and cost of the applicant, to cancel at
any time thereafter the application and to re-allot or otherwise dispose of the allocated Offer Shares, on such terms
and in such manner as the Managers may decide (and that the applicant will not be entitled to any profit
therefrom). The original applicant will remain liable for payment of the Offer Price for the Offer Shares allocated to
the applicant, together with any interest, costs, charges and expenses accrued, and the Selling Shareholder and/or
the Managers may enforce payment of any such amount outstanding.
Subject to timely payment by the applicant, delivery of the Offer Shares allocated in the Retail Offering is expected
to take place on or about 2 October 2013.
18.5 Mechanism of allocation
It has been provisionally assumed that approximately 90% of the Offering will be allocated in the Institutional
Offering and that approximately 10% of the Offering will be allocated in the Retail Offering. The final determination
of the number of Offer Shares allocated to the Institutional Offering and the Retail Offering will only be decided,
however, by the Company and the Joint Bookrunners following the completion of the bookbuilding process for the
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Institutional Offering, based on the level of orders or applications received from each of the categories of investors.
The Company and the Joint Bookrunners reserve the right to deviate from the provisionally assumed allocation
between tranches without further notice and at their sole discretion.
No Offer Shares have been reserved for any specific national market.
In the Institutional Offering, the Company together with the Joint Bookrunners will determine the allocation of
Offer Shares. An important aspect of the allocation principles is the desire to create an appropriate long-term
shareholder structure for the Company. The allocation principles will, in accordance with normal practice for
institutional placements, include factors such as premarketing and management road-show participation and
feedback, timeliness of the order, price level, relative order size, sector knowledge, investment history, perceived
investor quality and investment horizon. The Company and the Joint Bookrunners further reserve the right, at their
sole discretion, to take into account the creditworthiness of any applicant. The Company and the Joint Bookrunners
may also set a maximum allocation, or decide to make no allocation to any applicant.
In the Retail Offering, no allocations will be made for a number of Offer Shares representing an aggregate value of
less than NOK 10,500 per applicant, however, all allocations will be rounded down to the nearest number of whole
Offer Shares and the payable amount will hence be adjusted accordingly. One or multiple orders from the same
applicant in the Retail Offering with a total application amount in excess of NOK 2,499,999 will be adjusted
downwards to an application amount of NOK 2,499,999. In the Retail Offering, allocation will be made solely on a
pro rata basis using the VPS automated simulation procedures. The Company and the Joint Bookrunners reserve
the right to limit the total number of applicants to whom Offer Shares are allocated if the Company and the Joint
Bookrunners deem this to be necessary in order to keep the number of shareholders in the Company at an
appropriate level and such limitation does not have the effect that any conditions for the Listing regarding the
number of shareholders will not be satisfied. If the Company and the Joint Bookrunners should decide to limit the
total number of applicants to whom Offer Shares are allocated, the applicants to whom Offer Shares are allocated
will be determined on a random basis by using the VPS automated simulation procedures and/or other random
allocation mechanism.
18.6 VPS account
To participate in the Offering, each applicant must have a VPS account. The VPS account number must be stated
when registering an application through the VPS online application system or on the Retail Application Form for the
Retail Offering. VPS accounts can be established with authorised VPS registrars, which can be Norwegian banks,
authorised investment firms in Norway and Norwegian branches of credit institutions established within the EEA.
However, investors may use nominee VPS accounts registered in the name of a nominee. The nominee must be
authorised by the Norwegian Ministry of Finance. Establishment of VPS accounts requires verification of
identification by the relevant VPS registrar in accordance with the Norwegian anti-money laundering legislation
(see Section 18.7 Mandatory anti-money laundering procedures below).
18.7 Mandatory anti-money laundering procedures
The Offering is subject to applicable anti-money laundering legislation, including the Norwegian Money Laundering
Act of 6 March 2009 No. 11 and the Norwegian Money Laundering Regulations of 13 March 2009 No. 302
(collectively, the Anti-Money Laundering Legislation).
Applicants who are not registered as existing customers of any of the Managers must verify their identity to the
Manager in which the order is placed in accordance with the requirements of the Anti-Money Laundering
Legislation, unless an exemption is available. Applicants who have designated an existing Norwegian bank account
and an existing VPS account on the Retail Application Form are exempted, unless verification of identity is
requested by any of the Managers. Applicants who have not completed the required verification of identity prior to
the expiry of the Application Period may not be allocated Offer Shares.
18.8 Over-allotment and stabilisation activities
18.8.1 Over-allotment of Additional Shares
In connection with the Offering, the Joint Bookrunners may elect to over-allot up to 4,000,000 Additional Shares,
equalling up to approximately 7% of the number of Sale Shares (representing up to 2% of the Shares in issue in
the Company) and, in order to permit the delivery in respect of over-allotments made, the Stabilisation Manager
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may, pursuant to the Lending Option, require the Selling Shareholder to lend to the Stabilisation Manager, on
behalf of the Managers, up to a number of Shares equal to the number of Additional Shares. Further, pursuant to
the Over-Allotment Option, the Selling Shareholder has granted the Stabilisation Manager, on behalf of the
Managers, an option to purchase up to 4,000,000 Additional Shares, equalling up to approximately 7% of the
number of Sale Shares (representing up to 2% of the Shares in issue in the Company) at a price equal to the final
Offer Price in the Offering, as may be necessary to cover over-allotments, if any, made in connection with the
Offering. To the extent that the Managers have over-allotted Shares in the Offering, the Managers have created a
short position in the Shares. The Stabilisation Manager may close out this short position by buying Shares in the
open market through stabilisation activities and/or by exercising the Over-Allotment Option.
A stock exchange notice will be made on 30 September 2013 announcing whether the Managers have over-allotted
Shares in connection with the Offering. Any exercise of the Over-Allotment Option will be promptly announced by
the Stabilisation Manager through the information system of the Oslo Stock Exchange.
18.8.2 Price stabilisation
The Stabilisation Manager (DNB Markets) may, upon exercise of the Lending Option, effect transactions with a view
to supporting the market price of the Shares at a level higher than what might otherwise prevail, through buying
Shares in the open market at prices equal to or lower than the Offering Price. There is no obligation on the
Stabilisation Manager to conduct stabilisation activities and there is no assurance that stabilisation activities will be
undertaken. Such stabilising activities, if commenced, may be discontinued at any time, and will be brought to an
end at the latest 30 calendar days after first day of Listing. It should be noted that stabilisation activities might
result in market prices that are higher than would otherwise prevail.
Any stabilisation activities will be conducted in accordance with Section 3-12 of the Norwegian Securities Trading
Act and the EC Commission Regulation 2273/2003 regarding buy-back programmes and stabilisation of financial
instruments.
The Selling Shareholder and the Joint Bookrunners have agreed that 100% of the net profit, if any, resulting from
stabilisation activities conducted by the Stabilisation Manager, on behalf of the Managers, will be for the account of
the Selling Shareholder.
Within one week after the expiry of the 30 calendar day period of price stabilisation, the Stabilisation Manager will
publish information as to whether or not price stabilisation activities were undertaken. If stabilisation activities
were undertaken, the statement will also include information about: (i) the total amount of Shares sold and
purchased; (ii) the dates on which the stabilisation period began and ended; (iii) the price range between which
stabilisation was carried out, as well as the highest, lowest and average price paid during the stabilisation period;
and (iv) the date at which stabilisation activities last occurred.
18.8.3 Redelivered Shares
To the extent the Stabilisation Manager, on behalf of the Managers, redelivers any of the Shares borrowed
pursuant to the Lending Option to the Selling Shareholder at the end of the stabilisation period, the Selling
Shareholder has the right to require Odfjell Partners Ltd. to purchase 50% of such redelivered Shares from the
Selling Shareholder at a price equal to the average price paid by the Stabilisation Manager for such redelivered
shares. The put option may be exercised by the Selling Shareholder within 18:00 hours (CET) at the fifth trading
day at the Oslo Stock Exchange after expiry of the stabilisation period. Odfjell Partners Ltd. has a corresponding
right to require the Selling Shareholder to sell 50% of any redelivered Shares, exercisable by Odfjell Partners Ltd.
within the same time period, and at the same price, as for the Selling Shareholders put option.
18.9 Publication of information in respect of the Offering
In addition to press releases which will be posted on the Companys website, the Company will use the Oslo Stock
Exchanges information system to publish information relating to the Offering, such as amendments to the
Bookbuilding Period and Application Period (if any), final Offer Price, number of Offer Shares and total amount of
the Offering, allotment percentages, and first day of trading.
The final determination of the Offer Price, the number of Offer Shares and the total amount of the Offering is
expected to be published on or about 30 September 2013.
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18.10 The rights conferred by the Offer Shares
The Offer Shares are issued in accordance with Bermuda law. The Offer Shares will in all respects rank pari passu
with all other Shares in issue, and will be eligible for any dividend that the Company may declare on the Shares
after the delivery of the Offer Shares through registration in the VPS (expected on or around 3 October 2013). For
a description of rights attached to the Shares, see Section 15 Corporate information and description of share
capital.
18.11 VPS Registration
Accordingly, the title to the Shares will be evidenced and transferred without a written instrument by the VPS in
accordance with the Bye-Laws, provided that they are listed or admitted to trading on the Oslo Stock Exchange.
The Offer Shares are registered in book-entry form with the VPS and have ISIN BMG671801022. The Companys
registrar with the VPS is DNB Bank ASA, Registrar Department, 0021 Oslo, Norway.
18.12 Conditions for completion of the Offering Listing and trading of the Offer Shares
On 12 September 2013, the Company applied for Listing of its Shares on the Oslo Stock Exchange. It is expected
that the board of directors of the Oslo Stock Exchange will approve the Listing application of the Company on 25
September 2013, conditional upon the Company obtaining a minimum of 500 shareholders, each holding Shares
with a value of more than NOK 10,000, and there being a minimum free float of the Shares of 25%. The Company
expects that these conditions will be fulfilled through the Offering.
Completion of the Offering on the terms set forth in this Prospectus is expressly conditioned upon the board of
directors of the Oslo Stock Exchange approving the application for Listing of the Shares in its meeting to be held on
25 September 2013, on conditions acceptable to the Company and that any such conditions are satisfied by the
Company. The Offering will be cancelled in the event that the conditions are not satisfied. There can be no
assurance that the board of directors of the Oslo Stock Exchange will give such approval or that the Company will
satisfy these conditions.
Completion of the Offering on the terms set forth in this Prospectus is otherwise only conditional on (i) the Selling
Shareholder, in consultation with the Company and the Joint Bookrunners, having approved the Offer Price and the
allocation of the Offer Shares to eligible investors following the bookbuilding process, (ii) the Company, the Selling
Shareholder and the Joint Bookrunners (as representatives of the Managers) having entered into the Purchase
Agreement and satisfaction of the conditions for the closing of the Purchase Agreement, and (iii) the Purchase
Agreement not having been terminated (see Section 18.1 Overview of the Offering). There can be no assurance
that these conditions will be satisfied.
Assuming that the conditions are satisfied, the first day of trading on an if sold basis of the Shares, including the
Offer Shares, on the Oslo Stock Exchange is expected to be on or about 30 September 2013. The Shares are
expected to trade under the ticker code ODL.
Applicants in the Retail Offering selling Offer Shares prior to delivery must ensure that payment for such Offer
Shares is made on or prior to the Payment Date, by ensuring that the stated bank account is sufficiently funded on
1 October 2013. Applicants in the Institutional Offering selling Offer Shares prior to delivery must ensure that
payment for such Offer Shares is made on or prior to Institutional Closing Date. Accordingly, an applicant who
wishes to sell his Offer Shares, following confirmed allocation of Offer Shares, but before delivery must ensure that
payment is made in order for such Offer Shares to be delivered in time to the applicant.
Prior to the Listing and the Offering, the Shares are not listed on any stock exchange or authorised market place,
and no application has been filed for listing on any other stock exchanges or regulated market places other than
the Oslo Stock Exchange.
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18.13 Expenses of the Offering and the Listing
The Company will pay to the Managers a combined subscription and management fee of 2% of the Offer Price (less
discounts in the Retail Offering) mulitiplied by the aggregate number of Offer Shares allocated in the Offering. In
addition, the Company may, at its sole discretion, pay to the Managers an additional discretionary fee of up to
0.50% of the total proceeds of the Offering, which will be determined no later than 30 days following the allocation
of the Offer Shares, although in no event prior to the Oslo banking day following payment of the gross proceeds to
the Selling Shareholder from the sale of the Offer Shares.
The total costs and expenses of, and incidental to, the Listing and the Offering are estimated to amount to NOK 89
million (excluding VAT) if all Offer Shares are sold by the Selling Shareholder and the Company decides to pay the
discretionary fee in full (based on a price of NOK 42.50 per Share which is the mid-point of the Indicative Price
Range).
18.14 Lock-up
18.14.1 The Company
Pursuant to the Purchase Agreement, neither the Company, its subsidiaries nor their respective Affiliates (as
defined in the Purchase Agreement) will (i) issue, sell, offer to sell, contract or agree to sell, hypothecate, pledge,
grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, any Shares or
any securities convertible into or exercisable or exchangeable for Shares, or warrants or other rights to purchase
Shares, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of Shares or any securities convertible into or exercisable or exchangeable
for Shares, or warrants or other rights to purchase Shares, whether any such transaction is to be settled by
delivery of Shares or such other securities, in cash or otherwise, or (iii) publicly announce an intention to effect any
transaction specified in clause (i) or (ii), for a period of nine months after the date of the Purchase Agreement
(expected to be 27 September 2013), without the prior written consent of the Joint Bookrunners, except for grants
of Shares and employee share options for Shares and issuances of Shares upon such grants of Shares or upon
exercise of such options pursuant to any Company employee incentive programme.
18.14.2 Odfjell Partners Ltd.
Pursuant to the Purchase Agreement, Odfjell Partners Ltd. will undertake that, without the prior written consent of
the Joint Bookrunners, they will not, during a period ending nine months after the first time of sale relating to the
Offering: (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or
otherwise dispose of or agree to dispose of, directly or indirectly any Shares or any securities convertible into or
exercisable or exchangeable for Shares, or warrants or other rights to purchase Shares, (ii) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership
of Shares or any securities convertible into or exercisable or exchangeable for Shares, or warrants or other rights
to purchase Shares, whether any such transaction is to be settled by delivery of Shares or such other securities, in
cash or otherwise, or (iii) publicly announce an intention to effect any transaction specified in clause (i) or (ii).
18.14.3 The Selling Shareholder
Please see Section 13 The Selling Shareholder for the lock-up undertaking applicable to the Selling Shareholder.
18.14.4 Simen Lieungh
Simen Lieungh (the President and CEO of Odfjell Drilling) will also sign a lock-up undertaking in connection with the
Purchase Agreement and will undertake that, without the prior written consent of the Joint Bookrunners, he will
not, during a period ending nine months after the first time of sale relating to the Offering: (i) sell, offer to sell,
contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to
dispose of, directly or indirectly any Shares or any securities convertible into or exercisable or exchangeable for
Shares, or warrants or other rights to purchase Shares, (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of ownership of Shares or any
securities convertible into or exercisable or exchangeable for Shares, or warrants or other rights to purchase
Shares, whether any such transaction is to be settled by delivery of Shares or such other securities, in cash or
otherwise, or (iii) publicly announce an intention to effect any transaction specified in clause (i) or (ii). The lock-up
undertaking shall apply to any Shares that he owns (directly or indirectly) as of the date of the lock-up undertaking
or that he may subsequently acquire or own (directly or indirectly) after the date of the lock-up agreement.
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18.15 Interest of natural and legal persons involved in the Offering
The Managers or their affiliates have provided from time to time, and may provide in the future, investment and
commercial banking services to the Company and its affiliates in the ordinary course of business, for which they
may have received and may continue to receive customary fees and commissions. The Managers do not intend to
disclose the extent of any such investments or transactions otherwise than in accordance with any legal or
regulatory obligation to do so.
Beyond the abovementioned, the Company is not aware of any interest of any natural or legal persons involved in
the Offering.
18.16 Participation of major existing shareholders and members of the Companys Management,
supervisory and administrative bodies in the Offering
The Company is not aware of whether any major shareholders of the Company or members of the Companys
Management, supervisory or administrative bodies intend to apply for Offer Shares in the Offering, or whether any
person intends to apply for more than 5% of the Offer Shares.
Simen Lieungh intends to apply for, and will be allocated, Shares in the Institutional Offering at the Offer Price for
a total amount of NOK 40,000,000, which is expected to be financed through a loan from Odfjell Partners Ltd., the
controlling shareholder of the Group. For further description regarding the loan, please see Section 12.2.1
Overview.
18.17 Governing law and jurisdiction
This Prospectus, the Retail Application Form and the terms and conditions of the Offering shall be governed by and
construed in accordance with Norwegian law. Any dispute arising out of, or in connection with, this Prospectus, the
Retail Application Form or the Offering shall be subject to the exclusive jurisdiction of the courts of Norway, with
the Oslo District Court as the legal venue.
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19 SELLING AND TRANSFER RESTRICTIONS
19.1 General
As a consequence of the following restrictions, prospective investors are advised to consult legal counsel prior to
making any offer, resale, pledge or other transfer of the Shares offered hereby.
Other than in Norway, the Company is not taking any action to permit a public offering of the Shares in any
jurisdiction. Receipt of this Prospectus will not constitute an offer in those jurisdictions in which it would be illegal
to make an offer and, in those circumstances, this Prospectus is for information only and should not be copied or
redistributed. Except as otherwise disclosed in this Prospectus, if an investor receives a copy of this Prospectus in
any jurisdiction other than Norway, the investor may not treat this Prospectus as constituting an invitation or offer
to it, nor should the investor in any event deal in the Shares, unless, in the relevant jurisdiction, such an invitation
or offer could lawfully be made to that investor, or the Shares could lawfully be dealt in without contravention of
any unfulfilled registration or other legal requirements. Accordingly, if an investor receives a copy of this
Prospectus, the investor should not distribute or send the same, or transfer Shares, to any person or in or into any
jurisdiction where to do so would or might contravene local securities laws or regulations.
19.2 Selling restrictions
19.2.1 United States
The Offer Shares have not been and will not be registered under the U.S. Securities Act, and may not be offered or
sold except: (i) within the United States to QIBs in reliance on Rule 144A; or (ii) to certain persons in offshore
transactions compliance with Regulation S under the U.S. Securities Act, and in accordance with any applicable
securities laws of any state or territory of the United States or any other jurisdiction. Accordingly, each Manager
has represented and agreed that it has not offered or sold, and will not offer or sell, any of the Offer Shares as part
of its allocation at any time other than to QIBs in the United States in accordance with Rule 144A or outside of the
United States in compliance with Rule 903 of Regulation S. Transfer of the Offer Shares will be restricted and each
purchaser of the Offer Shares in the United States will be required to make certain acknowledgements,
representations and agreements, as described under Section 19.3.1 United States.
Any offer or sale in the United States will be made by affiliates of the Managers who are broker-dealers registered
under the U.S. Exchange Act. In addition, until 40 days after the commencement of the Offering, an offer or sale of
Offer Shares within the United States by a dealer, whether or not participating in the Offering, may violate the
registration requirements of the U.S. Securities Act if such offer or sale is made otherwise than in accordance with
Rule 144A of the U.S. Securities Act and in connection with any applicable state securities laws.
19.2.2 United Kingdom
Each Manager has represented, warranted and agreed that:
a) it has only communicated or caused to be communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in investment activity (within the meaning of
Section 21 of the Financial Services and Markets Act 2000 (the FSMA)) received by it in connection
with the issue or sale of any Offer Shares in circumstances in which Section 21(1) of the FSMA does not
apply to the Company; and
b) it has complied and will comply with all applicable provisions of the FSMA with respect to everything
done by it in relation to the Offer Shares in, from or otherwise involving the United Kingdom.
19.2.3 European Economic Area
In relation to each Relevant Member State, with effect from and including the Relevant Implementation Date, an
offer to the public of any Offer Shares which are the subject of the offering contemplated by this Prospectus may
not be made in that Relevant Member State, other than the offering in Norway as described in this Prospectus,
once the Prospectus has been approved by the competent authority in Norway and published in accordance with
the EU Prospectus Directive (as implemented in Norway), except that an offer to the public in that Relevant
Member State of any Offer Shares may be made at any time with effect from and including the Relevant
Implementation Date under the following exemptions under the EU Prospectus Directive, if they have been
implemented in that Relevant Member State:
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a) to legal entities which are qualified investors as defined in the EU Prospectus Directive;
b) to fewer than 100, or, if the Relevant Member State has implemented the relevant provisions of the
2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in
the EU Prospectus Directive), as permitted under the EU Prospectus Directive, subject to obtaining the
prior consent of the Joint Bookrunners for any such offer, or
c) in any other circumstances falling within Article 3(2) of the EU Prospectus Directive;
provided that no such offer of Offer Shares shall require the Company, the Selling Shareholder or any Manager to
publish a prospectus pursuant to Article 3 of the EU Prospectus Directive or supplement a prospectus pursuant to
Article 16 of the EU Prospectus Directive.
For the purposes of this provision, the expression an offer to the public in relation to any Offer Shares in any
Relevant Member State means the communication in any form and by any means of sufficient information on the
terms of the offer and any Securities to be offered so as to enable an investor to decide to purchase any Offer
Shares, as the same may be varied in that Member State by any measure implementing the EU Prospectus
Directive in that Member State the expression EU Prospectus Directive means Directive 2003/71/EC (and
amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant
Member State), and includes any relevant implementing measure in each Relevant Member State and the
expression 2010 PD Amending Directive means Directive 2010/73/EU.
This EEA selling restriction is in addition to any other selling restrictions set out in this Prospectus.
19.2.4 Switzerland
The Offer Shares may not be publicly offered in Switzerland and will not be listed on the Swiss Exchange (SIX) or
on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without
regard to the disclosure standards for issuance prospectuses under article 652a or article 1156 of the Swiss Code
of Obligations or the disclosure standards for listing prospectuses under article 27 ff of the SIX Listing Rules or the
listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any
other offering or marketing material relating to the Offer Shares or the Offering may be publicly distributed or
otherwise made publicly available in Switzerland. Neither this document nor any other offering or marketing
material relating to the Offering, the Company or our Shares have been or will be filed with or approved by any
Swiss regulatory authority. In particular, this document will not be filed with, and the Offering will not be
supervised by, the Swiss Financial Market Supervisory Authority FINMA, and the Offering has not been and will not
be authorized under the Swiss Federal Act on Collective Investment Schemes (CISA). The investor protection
afforded to acquirors of interests in collective investment schemes under the CISA does not extend to acquirors of
shares.
19.2.5 Canada
This Prospectus is not, and under no circumstance is to be construed as, a prospectus, an advertisement or a
public offering of the Offer Shares in Canada or any province or territory thereof. Any offer or sale of the Offer
Shares in Canada will be made only pursuant to an exemption from the requirements to file a prospectus with the
relevant Canadian securities regulators and only by a dealer properly registered under applicable provincial
securities laws or, alternatively, pursuant to an exemption from the dealer registration requirement in the relevant
province or territory of Canada in which such offer or sale is made.
19.2.6 Hong Kong
The Offer Shares may not be offered or sold in Hong Kong by means of any document other than (i) in
circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap.
32) of Hong Kong, or (ii) to professional investors within the meaning of the Securities and Futures Ordinance
(Cap. 571) of Hong Kong and any rules made thereunder, or (iii) in other circumstances which do not result in the
document being a prospectus within the meaning of the Companies Ordinance (Cap. 32) of Hong Kong , and no
advertisement, invitation or document relating to the Offer Shares may be issued or may be in the possession of
any person for the purposes of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the
contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under
the securities laws of Hong Kong) other than with respect to Offer Shares which are or are intended to be disposed
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of only to persons outside Hong Kong or only to professional investors within the meaning of the Securities and
Futures Ordinance (Cap. 571) of Hong Kong and any rules made thereunder.
19.2.7 Singapore
This Prospectus has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly,
this Prospectus and any other document or material in connection with the offer or sale, or invitation for
subscription or purchase, of the Offer Shares may not be circulated or distributed, nor may they be offered or sold,
or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in
Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter
289 of Singapore (the SFA), (ii) to a relevant person, or any person pursuant to Section 275(1A), and in
accordance with the conditions, specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in
accordance with the conditions of, any other applicable provision of the SFA.
19.2.8 Additional jurisdictions
The Offer Shares may not be offered, sold, resold, transferred or delivered, directly or indirectly, in or into, Japan,
Australia or any other jurisdiction in which it would not be permissible to offer the Offer Shares.
In jurisdictions outside the United States and the EEA where the Offering would be permissible, the Offer Shares
will only be offered pursuant to applicable exceptions from prospectus requirements in such jurisdictions.
19.3 Transfer restrictions
19.3.1 United States
The Offer Shares have not been and will not be registered under the U.S. Securities Act and may not be offered or
sold within the United States except pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the U.S. Securities Act and applicable state securities laws. Terms defined in Rule
144A or Regulation S shall have the same meaning when used in this section.
Each purchaser of the Offer Shares outside the United States pursuant to Regulation S will be deemed to have
acknowledged, represented and agreed that it has received a copy of this Prospectus and such other information as
it deems necessary to make an informed decision and that:
The purchaser is authorised to consummate the purchase of the Offer Shares in compliance with all
applicable laws and regulations.
The purchaser acknowledges that the Offer Shares have not been and will not be registered under the
U.S. Securities Act, or with any securities regulatory authority or any state of the United States, and are
subject to significant restrictions on transfer.
The purchaser is, and the person, if any, for whose account or benefit the purchaser is acquiring the
Offer Shares was located outside the United States at the time the buy order for the Offer Shares was
originated and continues to be located outside the United States and has not purchased the Offer Shares
for the benefit of any person in the United States or entered into any arrangement for the transfer of the
Offer Shares to any person in the United States.
The purchaser is not an affiliate of the Company or a person acting on behalf of such affiliate, and is not
in the business of buying and selling securities or, if it is in such business, it did not acquire the Offer
Shares from the Company or an affiliate thereof in the initial distribution of such Shares.
The purchaser is aware of the restrictions on the offer and sale of the Offer Shares pursuant to
Regulation S described in this Prospectus.
The Offer Shares have not been offered to it by means of any directed selling efforts as defined in
Regulation S.
The Company shall not recognise any offer, sale, pledge or other transfer of the Offer Shares made other
than in compliance with the above restrictions.
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The purchaser acknowledges that the Company, the Selling Shareholder, the Managers and their
respective advisers will rely upon the truth and accuracy of the foregoing acknowledgements,
representations and agreements.
Each purchaser of the Offer Shares within the United States pursuant to Rule 144A will be deemed to have
acknowledged, represented and agreed that it has received a copy of this Prospectus and such other information as
it deems necessary to make an informed investment decision and that:
The purchaser is authorised to consummate the purchase of the Offer Shares in compliance with all
applicable laws and regulations.
The purchaser acknowledges that the Offer Shares have not been and will not be registered under the
U.S. Securities Act or with any securities regulatory authority of any state of the United States and are
subject to significant restrictions to transfer.
The purchaser (i) is a QIB (as defined in Rule 144A), (ii) is aware that the sale to it is being made in
reliance on Rule 144A and (iii) is acquiring such Offer Shares for its own account or for the account of a
QIB, in each case for investment and not with a view to any resale or distribution to the Offer Shares, as
the case
The purchaser is aware that the Offer Shares are being offered in the United States in a transaction not
involving any public offering in the United States within the meaning of the U.S. Securities Act.
If, in the future, the purchaser decides to offer, resell, pledge or otherwise transfer such Offer Shares, as
the case may be, such Shares may be offered, sold, pledged or otherwise transferred only (i) to a person
whom the beneficial owner and/or any person acting on its behalf reasonably believes is a QIB in a
transaction meeting the requirements of Rule 144A, (ii) in accordance with Regulation S, (iii) in
accordance with Rule 144 (if available), (iv) pursuant to any other exemption from the registration
requirements of the U.S. Securities Act, subject to the receipt by the Company of an opinion of counsel
or such other evidence that the Company may reasonably require that such sale or transfer is in
compliance with the U.S. Securities Act or (v) pursuant to an effective registration statement under the
U.S. Securities Act, in each case in accordance with any applicable securities laws of any state or
territory of the United States or any other jurisdiction.
The purchaser is not an affiliate of the Company or a person acting on behalf of such affiliate, and is not
in the business of buying and selling securities or, if it is in such business, it did not acquire the Offer
Shares from the Company or an affiliate thereof in the initial distribution of such Shares.
The Offer Shares are restricted securities within the meaning of Rule 144(a) (3) and no representation
is made as to the availability of the exemption provided by Rule 144 for resales of any Offer Shares, as
the case may be.
The Company shall not recognise any offer, sale pledge or other transfer of the Offer Shares made other
than in compliance with the above-stated restrictions.
The purchaser acknowledges that the Company, the Selling Shareholder, the Managers and their
respective advisers will rely upon the truth and accuracy of the foregoing acknowledgements,
representations and agreements.
19.3.2 European Economic Area
Each person in a Relevant Member State (other than, in the case of paragraph (a), persons receiving offers
contemplated in this Prospectus in Norway) who receives any communication in respect of, or who acquires any
Offer Shares under, the offers contemplated in this Prospectus will be deemed to have represented, warranted and
agreed to and with each Manager and the Company that:
(a) it is a qualified investor as defined in the EU Prospectus Directive; and
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(b) in the case of any Offer Shares acquired by it as a financial intermediary, as that term is used in Article
3(2) of the EU Prospectus Directive, (i) the Offer Shares acquired by it in the offer have not been acquired
on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant
Member State other than qualified investors, as that term is defined in the Prospectus Directive, or in
circumstances in which the prior consent of the Managers has been given to the offer or resale; or (ii)
where Offer Shares have been acquired by it on behalf of persons in any Relevant Member State other
than qualified investors, the offer of those Shares to it is not treated under the EU Prospectus Directive as
having been made to such persons.
For the purposes of this representation, the expression an offer in relation to any Offer Shares in any Relevant
Member State means the communication in any form and by any means of sufficient information on the terms of
the offer and any Offer Shares to be offered so as to enable an investor to decide to purchase or subscribe for the
Offer Shares, as the same may be varied in that Relevant Member State by any measure implementing the EU
Prospectus Directive in that Relevant Member State and the expression EU Prospectus Directive means Directive
2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in
the Relevant Member State), and includes any relevant implementing measure in each Relevant Member State and
the expression 2010 PD Amending Directive means Directive 2010/73/EU.
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20 ADDITIONAL INFORMATION
20.1 Auditor and advisors
The Companys independent auditor is PricewaterhouseCoopers AS, Dronning Eufemias gate 8, N-0191 Oslo,
Norway. PricewaterhouseCoopers AS and its auditors are members of Den Norske Revisorforening (The Norwegian
Institute of Public Accountants).
ABG Sundal Collier (Munkedamsveien 45 E, Vika Atrium, P.O. Box 1444 Vika, N-0115 Oslo, Norway), DNB Markets,
part of DNB Bank ASA (Dronning Eufemias gate 30, P.O. Box 1600 Sentrum, N-0021 Oslo, Norway) and Goldman
Sachs International (Peterborough Court, 133 Fleet Street London EC4A 2BB, United Kingdom) are acting as Joint
Global Coordinators and Joint Bookrunners for the Offering. Arctic Securities (Haakon VIIs gate 5, P.O. Box 1833
Vika, N-0123 Oslo, Norway), Danske Bank Markets (Stortingsgaten 6, P.O. Box 1170 Sentrum, N-0161 Oslo,
Norway) and Swedbank First Securities (Filipstad Brygge 1, P.O. Box 1441 Vika, N-0115 Oslo, Norway) are acting
as Co-Lead Managers for the Offering.
Certain legal matters in connection with the Offering will be passed upon by Advokatfirmaet Thommessen AS
(Haakon VIIs gate 10, N-0161 Oslo, Norway) acting as Norwegian legal counsel to the Company, by Linklaters LLP
(One Silk Street, London EC2Y 8HQ, United Kingdom), acting as international counsel to the Company and by
Conyers Dill & Pearman Limited (Clarendon House, 2 Church Street, Hamilton HM11, Bermuda) acting as special
Bermuda legal counsel to the Company.
Advokatfirmaet BA-HR DA (Tjuvholmen all 16, N-0117 Oslo, Norway) is acting as Norwegian legal counsel to the
Joint Bookrunners, and Cleary Gottlieb Steen Hamilton LLP (City Place House, 55 Basinghall Street, London, EC2V
5EH, United Kingdom) acting as international counsel to the Joint Bookrunners.
Advokatfirmaet Wiersholm AS (Ruselkkveien 26, N-0251 Oslo, Norway) is acting as Norwegian legal counsel to
the Selling Shareholder.
20.2 Documents on display
Copies of the following documents will be available for inspection at the Companys offices at Clarendon House, 2
Church Street, Hamilton HM11, Bermuda, during normal business hours from Monday to Friday each week (except
public holidays) for a period of twelve months from the date of this Prospectus:
The Companys Memorandum of Association and Bye-Laws;
The Groups audited consolidated financial statements and the Companys subsidiaries audited financial
statements as of and for the years ended 31 December 2012, 2011 and 2010, and the Groups
unaudited consolidated financial information as of and for the three and six months periods ended 30
June 2013 and 2012; and
This Prospectus.
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21 NORWEGIAN SUMMARY (NORSK SAMMENDRAG)
Sammendrag bestr av informasjon som skal gis i form av Elementer. Elementene er nummerert i punktene A
E (A.1 E.7) nedenfor. Dette sammendraget inneholder alle Elementer som skal vre inkludert i et sammendrag
for denne type verdipapir og utsteder. Som flge av at enkelte Elementer ikke m beskrives, kan det vre huller i
nummereringen av Elementene. Selv om man kan vre plagt innta et Element i sammendraget p grunn av
typen verdipapir og utsteder, er det mulig at det ikke kan gis relevant informasjon knyttet til Elementet. I s fall er
det inntatt en kort beskrivelse av Elementet i sammendraget sammen med benevnelsen ikke aktuelt.
I dette norske sammendraget skal definerte ord og uttrykk (angitt med stor forbokstav) som er oversatt til norsk
forsts i samsvar med tilsvarende engelsksprklige ord eller uttrykk slik disse er definert i det engelsksprklige
Prospektet. Noen eksempler p slike engelsksprklige motstykker til definerte ord og uttrykk som er oversatt til
norsk er som flger: Med Prospektet forsts Prospectus, med Konsernet forsts Group eller Odfjell
Drilling, med Selskapet forsts Company, med Tilbudet forsts Offering, med Aksjene forsts Shares,
med Salgsaksjene forsts Sale Shares, med Tilbudsaksjene forsts Offer Shares og med Tilleggsaksjene
forsts Additional Shares.
Avsnitt A Introduksjon og Advarsel
A.1 Advarsel Dette sammendraget br leses som en innledning til Prospektet;
enhver beslutning om investere i verdipapirene br baseres p
investorens vurdering av Prospektet i sin helhet;
dersom et krav knyttet til informasjonen i prospektet fremsettes for en
domstol, kan sakskende investor, i henhold til nasjonal lovgivning i sitt
Medlemsland, bli plagt dekke kostnadene med oversette Prospektet
fr rettsforhandlingene igangsettes; og
sivilrettslig ansvar kan kun pdras for de personer som har satt opp
sammendraget, herunder oversatt dette, men kun dersom
sammendraget er misvisende, ikke korrekt eller usammenhengende nr
det leses i sammenheng med andre deler av Prospektet eller dersom
sammendraget, nr det leses sammen med andre deler av Prospektet,
ikke gir nkkelinformasjon som investorene behver nr de vurderer om
de skal investere i slike verdipapirer.

Avsnitt B - Utsteder
B.1 Juridisk og
forretningsnavn
B.2 Hjemstat og rettslig
organisering, lovgivning
og stiftelsesland
Odfjell Drilling Ltd ble stiftet 16. november 2005 som et aksjeselskap
med begrenset ansvar under Bermudas lover og i henhold til Bermuda
Companies Act.
B.3 Eksisterende virksomhet,
hovedaktiviteter og
markeder

Odfjell Drilling er en integrert leverandr av tjenester innenfor boring,
ingenirvirksomhet og brnntjenester med mer enn 40 rs erfaring, med
fokus p krevende offshore- og dypvannsmarkeder. Konsernet har i dag
rundt 3 100 ansatte i mer enn 20 land over hele verden. Odfjell Drilling
driver virksomhet gjennom tre ulike segmenter: Mobile Offshore Drilling
Units (MODU), Well Services og Drilling & Technology. Odfjell Drillings
kunder er hovedsakelig store olje- og gasselskaper.
(i) Mobile Offshore Drilling Units (MODU)
I MODU segmentet opererer Konsernet boreenheter som er eiet
av bde Konsernet og tredjeparter. Odfjell Drilling eier p
nvrende tidspunkt tre halvt nedsenkbare borerigger til bruk i
krevende omrder; Deepsea Atlantic, Deepsea Stavanger og
185

Deepsea Bergen. Deepsea Atlantic og Deepsea Stavanger ble
levert i henholdsvis 2009 og 2010 og er begge sjettegenerasjons
halvt nedsenkbare borerigger til bruk p ultradypt vann. Deepsea
Bergen er en tredjegenerasjons halvt nedsenkbar borerigg bygget
i 1983 og er siden kontinuerlig oppgradert for imtekomme
endringer i regulatoriske krav og kundenes ettersprsel. Videre
har Konsernet, gjennom et joint-venture, Deep Sea Metro, en
eierinteresse p 40 % i to sjettegenerasjons boreskip til bruk p
ultradypt vann, Deepsea Metro I og Deepsea Metro II, som ble
levert i 2011. Konsernet chartrer sine borerigger gjennom en
kombinasjon av kontrakter med mellomlang og lang varighet
med store olje- og gasselskaper, herunder Statoil, BP, BG og
Petrobras.
Konsernet har en halvt nedsenkbar borerigg til bruk i krevende
omrder og p ultradypt vann under bygging, hvor forventet
levering fra DSME er i mai 2014. Riggen vil bli kalt Deepsea
Aberdeen og vil vre p kontrakt med BP Exploration i en
syvrsperiode, hvor forventet operativ oppstart er i fjerde kvartal
2014. I tillegg har Konsernet en 50 % eierinteresse i Odfjell
Galvo B.V., et joint venture selskap stiftet sammen med Galvo
Oil og Gas Holding B.V. Odfjell Galvo B.V. eier 20 % av aksjene i
tre nederlandske special purpose selskaper og hver av disse har
inngtt byggekontrakt for byggingen av et boreskip, hovedsakelig
i Estaleiro Jurong Aracruz i Brasil. Boreskipene forventes bli
levert i perioden fra juli 2016 til desember 2018.
MODU segmentet tilbyr ogs managementtjenester til andre eiere
av halvt nedsenkbare rigger, boreskip og oppjekkbare rigger,
hovedsakelig operasjonelt management, forvaltning av
regulatoriske krav, markedsfring, kontraktsforhandlinger og
klientrelasjoner, forberedelser til drift og mobilisering. Odfjell
Drilling er for tiden ansvarlig for forvaltningen av flgende
offshore mobile boreenheter som eies av tredjeparter eller av
Konsernet og tredjeparter i fellesskap: (i) Deepsea Metro I og
Deepsea Metro II og (ii) Island Innovator. I tillegg skal Odfjell
Galvo Perfuraes Ltda, som er et datterselskap av Odfjell
Galvo B.V., yte managementtjenester til Petrobras i forbindelse
med de femten r lange riggkontraktene p de tre boreskipene
som skal leveres under det brasilianske joint venture selskapet
nevnt overfor.
(ii) Well Services
Well Services segmentet tilbyr casing and tubular running
services (bde automatiske og konvensjonelle), i tillegg til
boreverkty og tubular rental services, bde for letebrnner og
for produksjonsforml. Konsernet tilbyr tjenester i mer enn 20
land og til mer enn 50 borerigger. Odfjell Drilling har mer enn 30
rs erfaring innenfor det globale brnntjenestemarkedet og
Selskapet er av den oppfatning at det er en av de ledende
aktrene innenfor fjernstyrt hndteringsutstyr for casing and
tubular running services. Nr det gjelder virksomheten knyttet til
utleie av boreverkty, har Konsernet en velutviklet
leverandrbase og kan tilby en stor beholdning av moderne
boreverkty- og utstyr av hy kvalitet, som har blitt produsert og
sertifisert i henhold til gjeldende bransjestandarder. Selskapet tar
sikte p vre en totalleverandr for boreaktrer og operatrer
186

og har ogs kapasitet til designe skreddersydd utstyr. Well
Services segmentet betjener for tiden rundt 50 kunder, hvorav
10 av disse representerer vesentlige volumer.
(iii) Drilling & Technology
Drilling & Technology segmentet er delt i to forretningsomrder:
Platform Drilling (plattform boring) og Technology (teknologi).
Hovedtjenesten som forretningsomrdet Platform Drilling tilbyr
er produksjonsboring og ferdigstilling av brnner med kundenes
rigger. Andre tjenester som tilbys er slot recovery, plug and
abandonment, work-overs og vedlikeholdsarbeid. Konsernet
har mer enn 35 rs erfaring innenfor boreoperasjoner p
plattformer, og har vrt en av de ledende leverandrene av
plattformboretjenester i Nordsjen siden 1980-tallet, med fokus
p high-end markedet for plattformboretjenester.
Forretningsomrdet Technology tilbyr ingenirtjenester innen alt
fra design og ingenirarbeid til byggetilsyn, prosjektledelse og
operasjonell bistand til nybyggingsprosjekter,
klassesertifiseringer og verftsopphold. Forretningsomrdet
Technology utfrer mindre og mellomstore frittstende
prosjekter, herunder ingenir-, innkjps-, bygge- og
installasjonsprosjekter. Forretningsomrdet Technology har en
vellykket merittliste nr det gjelder MODU nybyggingsprosjekter
og verftsopphold, som strekker seg over 40 r.
Forretningsomrdet har ogs en sterk posisjon i
Nordsjmarkedet. Forretningsomrdet Technology har til sammen
rundt 400 ansatte og 90 kontraktrer. Forretningskontorene er
lokalisert nr dets viktigste kunder i Norge, Storbritannia og
Filippinene.
B.4a Vesentlige aktuelle trender
som pvirker utsteder og
industrien som utsteder
opererer i
Vekst og ettersprsel innenfor offshore olje- og gasserviceindustrien
pvirkes av flgende hovedfaktorer:
(i) Pris og ettersprsel etter olje og gass: Lete- og
produksjonskostnader for olje og gass (E&P spending) er
hovedfaktoren hva gjelder ettersprsel i olje- og
gasserviceindustrien. E&P spending er direkte knyttet til
inntjeningen til olje- og gasselskapene, som igjen er avhengig av
gjennomsnittlige olje- og gasspriser. Fluktuasjon i oljeprisen kan
derfor redusere olje- og gasselskapenes mulighet til budsjettere
midler til kt E&P spending. Mens markedsforventningene til en
mulig nedgang i oljeprisene vil g utover E&P spending og drift,
vil ultra dypvannsprosjekter, som er store prosjekter hvor det er
lenger ledetid og langsiktig fremtidsperspektiv, vre mindre
pvirket av kortsiktige endringer i oljeprisen.
(ii) Reserveerstatning: Den fremtidige produksjonskapasiteten til
olje- og gassindustrien beror p olje- og gasselskapenes evne til
opprettholde en brekraftig reserveerstatningsgrad gjennom
leting og utvikling av nye reservoarer eller ved utbedring av
oljeutvinningsteknikker. Forelpig er olje- og gasselskapene s
vidt i stand til fullt ut erstatte hydrokarbonene de produserer,
og IEA rapporterer at pviste oljereserver globalt sett (en
indikasjon p potensial for ny produksjon p kort eller
mellomlang sikt) kte svakt med 1 523 milliarder fat, eller 3,6 %,
i slutten av 2011, sammenlignet med ret fr (IEA, World Energy
187

Outlook 2012, 12 November 2012).
(iii) kt trykk p E&P spending: Olje og gasselskapene ker bde sin
totale E&P spending og sin andel av E&P spending p
offshoredrift. Den strste veksten av E&P spending de siste rene
har vrt innenfor dypvannsleting og produksjon, hvilket delvis
er drevet av mangel p nye, store funn p land og grunt vann.
Fremtidige oppstrminvesteringer vil ha kt fokus p offshore nr
leting og utvikling fortsetter rette seg mot mer krevende og
dypere farvann.
(iv) Boreteknologi og innovasjon: Nylige fremskritt innenfor
offshoreteknologi har forbedret olje- og gasselskapenes evne til
utvikle reservoarer p dypere vann og i mer krevende og
avsidesliggende havomrder. En ny generasjon av borerigger,
med mulighet til bore brnner opp til 40 000 fot, i vanndybder
opp til 12 000 fot, er etablert, og som flge av dette har nye
typer undersjiske konstruksjonsfartyer og
produksjonsfasiliteter blitt utviklet.
(v) Det generelle politiske og konomiske miljet: Endringer i det
politisk, konomiske og regulatoriske miljet i forskjellige
regioner pvirker den globale ettersprselen etter
oljeservicetjenester. De politiske og regulatoriske regimene i de
enkelte land har ogs en betydelig innvirking p nivet av olje-
og gassutvinningsdrift innenfor sitt landomrde. Endringer av
skatteregler kan ogs endre lnnsomheten til enkelte prosjekter
og sledes ogs E&P spending.
(vi) kt fokus p helse, milj, sikkerhet og kvalitet: P grunn av de
potensielle alvorlige konsekvensene av en ulykke innenfor olje-
og gassindustrien, har bransjen utviklet hye standarder for
begrense risiko knyttet til helse, milj, sikkerhet og kvalitet. Det
har blitt kt fokus p dette omrdet etter Macondo-hendelsen i
2010, og olje- og gasselskapene vil i kt grad kun kontrahere
med selskaper som har rutiner og know-how for styre slik risiko
p en adekvat mte. Denne trenden har kt terskelen for
komme inn p markedet.
Konsernet har opplevd generelt gode markedsforhold og driftsforhold
gjennom frste halvdel av 2013. Konsernet er av den oppfatning at den
nvrende ordrereserven (backlog) gir en relativ hy grad av finansiell
forutberegnlighet for de neste par rene. Konsernet venter at
fremtidsutsiktene for de tre forretningssegmentene er positive.
MODU-segmentet har sterke fremtidsutsikter i et mellomlangt til langt
perspektiv i boremarkedet. Deepsea Aberdeen, hvor forventet oppstart
av drift er i fjerde kvartal av 2014, og potensielle og gradvis kende
investeringsmuligheter er forventet drive Konsernets vekst. Til tross
for at Deep Sea Metro joint-venturet s langt har gtt med underskudd
som flge av relativt hye finansieringskostnader i dette joint venturet
og lav finansiell utnyttelse for Deepsea Metro II, forventer Konsernet at
joint venturet skal bidra positivt i fremtiden p bakgrunn av Deepsea
Metro Is kontraktsforlengelse p hyere dagrater kombinert med en mer
normalisert finansiell utnyttelse for Deepsea Metro II. Konsernet
forventer ogs en sterk vekst innenfor segmentet Well Services i de
kommende rene i trd med de siste rene. Innenfor segmentet Drilling
188

& Technology forventer Konsernet en beskjeden vekst for
forretningsomrdet Platform Drilling basert p den eksisterende
ordrereserven (backlog) og vekst i forretningsomrdet Technology som
flge av forventet hy aktivitet i boreindustrien i de kommende rene.
Konsernets managementavtale for Dalian Developer ble oppsagt av
Dalian Deepwater Developer Ltd p 4. september 2013 etter en 30-
dagers stillstand periode som flge av Dalian Deepwater Developer Ltds
oppsigelse av byggekontrakten for boreskipet.
B.5 Beskrivelsen av Konsernet Odfjell Drilling Ltd, som er morselskapet i Konsernet, er et
holdingselskap. Konsernets virksomhet drives gjennom Konsernets
operasjonelle datterselskaper. Odfjell Drilling Ltd har to heleide
datterselskap, Odfjell Offshore Ltd. (holdingselskap for Boreenhetene)
og Odfjell Drilling Services Ltd. (holdingselskap for Konsernets
forretningsomrde MODU Management og segmentene Well Services og
Drilling & Technology ), begge stiftet p Bermuda.
B.6 Personer som har
interesser i utsteders
kapital og stemmeretter
Aksjonrer som eier mer enn 5 % av Aksjene har en interesse i
Selskapets aksjekapital som er meldepliktig i henhold til
Verdipapirhandelloven. Tabellen nedenfor viser eierinteressene til disse
meldepliktige aksjeeierne.
Aksjonrer Antall aksjer Prosent
Odfjell Partners Ltd. ............................................................. 140 000 000 70
BCB Paragon Trust Limited, som forvalter av Larine Trust ......... 60 000 000 30
Totalt ................................................................................ 200 000 000 100
Det er ingen forskjeller i stemmeretter mellom aksjeeierne. Etter
gjennomfringen av Tilbudet vil Odfjell Partners Ltd. kontrollere
majoriteten av Aksjene.
Selskapet kjenner ikke til noen arrangementer som p et senere
tidspunkt vil fre til kontrollskifte i Selskapet.
B.7 Utvalgt historisk finansiell
nkkelinformasjon
Den flgende utvalgte finansielle informasjonen er hentet fra Konsernets
reviderte rsregnskaper (inkludert notene til disse) per og for
regnskapsrene 2012, 2011 and 2010 (the Financial Statements), i
tillegg til urevidert konsolidert delrsinformasjon per og for tre- og
seksmnedersperiodene avsluttet 30. juni 2013 og 2012 (the Interim
Financial Statements).
rsregnskapene for regnskapsret som utlp 31. desember 2012, med
sammenligningstall for ret som utlp 31. desember 2011, har blitt
utarbeidet i henhold til IFRS, som vedtatt av EU, mens regnskapene for
rene som utlp 31. desember 2011 og 2010 har blitt utarbeidet i
henhold til NGAAP. Delrsregnskapene, sammen med relevant
informasjon i den finansielle gjennomgangen, har blitt utarbeidet i
henhold til IAS 34.
Den utvalgte finansielle informasjonen som presenteres her br leses i
sammenheng med kapittel 11 Operating and financial review og
Financial Statements og Interim Financial Statements (inntatt som
Vedlegg B og Vedlegg C til Prospektet).

189

Per og for
tremnedersperioden
avsluttet 30. juni
Per og for
seksmnedersperioden
avsluttet 30. juni
Per og for ret
avsluttet
31. desember
(I millioner USD)
2013
(IFRS)
(urevidert)
2012
(IFRS)
(urevidert)
2013
(IFRS)
(urevidert)
2012
(IFRS)
(urevidert)
2012
(IFRS)
(revidert)
2011
(IFRS)
(revidert)
Konsolidert resultatregnskap
Driftsinntekter .................................................... 289,0 259,3 585,2 525,2 1 093,8 1 056,7
EBITDA .............................................................. 113,3 80,8 201,9 161,2 331,0 382,4
Driftsresultat (EBIT) ............................................ 77,2 44,9 128,2 88,9 183,7 237,4
Gevinst/(tap) i perioden ....................................... (9,2) 13,0 12,3 45,6 116,9 121,3

Konsolidert balanse
Totale langsiktige eiendeler .................................. - - 2 231,1 2 307,8 2 323,4 2 158,4
Totale kortsiktige eiendeler .................................. - - 509,1 414,4 480,9 582,2
Totale eiendeler .................................................. - - 2 740,2 2 722,2 2 804,4 2 740,6
Total egenkapital ................................................ - - 1 083,6 1 079,9 1 154,3 1 032,8
Total langsiktig gjeld ........................................... - - 1 285,3 1 327,3 1 233,7 1 410,6
Total kortsiktig gjeld ............................................ - - 371,3 315,0 416,4 297,2
Total gjeld .......................................................... - - 1 656,7 1 642,3 1 650,1 1 707,8
Total egenkapital og gjeld .................................... - - 2 740,2 2 722,2 2 804,4 2 740,6

Konsolidert kontantstrmsoppstilling
Netto kontanter fra operasjonelle aktiviteter ........... 61,1 62,6 115,9 145,4 267,2 197,6
Netto kontanter brukt til investeringsaktiviteter ...... 23,2 (155,0) 4,4 (237,6) (305,9) (213,0)
Netto kontanter brukt til
finansieringsaktiviteter ........................................ (60,2) (49,7) (78,0) (49,7) (61,0) 66,0
Netto endring i kontanter og
kontantekvivalenter ............................................. 24,0 (142,1) 42,3 (141,9) (99,7) 50,6
Kontanter og kontaktekvivalenter ved
periodens utlp ................................................... 245,2 161,8 245,2 161,8 200,6 303,1

Per og for ret
avsluttet 31. desember
(I millioner NOK)
2011
(NGAAP)
(revidert)
2010
(NGAAP)
(revidert)
Konsolidert resultatregnskap
Totale driftsinntekter .................................................................................................................... 5 939,9 4 750,9
Totale driftsutgifter ..................................................................................................................... 4 833,8 4 756,2
Driftsresulat/tap .......................................................................................................................... 1 106,1 (5,3)
Netto resultat for ret ................................................................................................................... 653,1 305,3

Konsolidert balanse
Totale anleggsmidler .................................................................................................................... 12 653,5 12 144,4
Totale omlpsmidler ..................................................................................................................... 3 736,0 3 159,1
Totale eiendeler ........................................................................................................................... 16 389,5 15 303,4
Total egenkapital ......................................................................................................................... 6 416,7 5 944,7
Total langsiktig gjeld .................................................................................................................... 8 866,3 8 033,8
Total kortsiktig gjeld ..................................................................................................................... 1 106,6 1 325,0
Total gjeld ................................................................................................................................... 9 972,9 9 358,7
Total egenkapital og gjeld ............................................................................................................. 16 389,5 15 303,4

Konsolidert kontantstrmoppstilling
Netto kontanter generert fra operasjonelle aktiviteter ....................................................................... 698,7 134,6
Netto kontanter brukt til investeringsaktiviteter ............................................................................... (957,5) (3 025,4)
Netto kontanter brukt til finansielle aktiviteter ................................................................................. 475,9 1 567,0
Netto endring i kontanter og kontantekvivalenter ............................................................................. 217,1 (1 323,8)
Kontanter og kontantekvivalenter per 31.12 .................................................................................... 1 822,4 1 605,3
190

B.8 Utvalgt pro forma
finansiell
nkkelinformasjon
Ikke aktuelt. Det finnes ingen pro forma finansiell informasjon.
B.9 Resultatprognose eller
estimat
Ikke aktuelt. Det er ikke utarbeidet noen resultatprognose eller estimat.
B.10 Forbehold i
revisjonsrapporten
Ikke aktuelt. Det er ingen forbehold i revisjonsrapportene.
B.11 Utilstrekkelig
arbeidskapital
Ikke aktuelt. Selskapet er av den oppfatning at arbeidskapitalen som er
tilgjengelig for Konsernet er tilstrekkelig for Konsernets nvrende
behov, for en periode som dekker minst 12 mneder fra datoen for dette
Prospektet.

Punkt C - Verdipapirene
C.1 Type og klasse verdipapir
tatt opp til notering og
identifikasjonsnummer
Selskapet har n aksjeklasse utstedt, og samtlige aksjer i denne klassen
har like rettigheter som alle andre aksjer i samme klasse i henhold
Selskapets Vedtekter (Bye-Laws). Aksjene har blitt utstedt i henhold til
Bermuda Companies Act og er registrert i VPS under ISIN
BMG671801022.
C.2 Valuta p utstedelse Aksjene er utstedt i USD, men vil bli notert og handlet i NOK p Oslo
Brs.
C.3 Antall aksjer utstedt og
plydende verdi
Per datoen for dette Prospektet er Selskapets autoriserte aksjekapital
USD 2 300 000 bestende av 230 000 000 aksjer, hver plydende USD
0,01, hvorav 200 000 000 Aksjer er utstedt.
C.4 Rettigheter knyttet til
verdipapirene
I henhold til Vedtektene har eierne av Aksjene ingen forkjpsrett,
innlsningsrett, konverteringsrett eller skalte sinking fund rettigheter.
Eierne av Aksjene er berettiget til stemme en gang per Aksje i alle
saker som skal forelegges aksjeeierne for avstemning.
I henhold til Bermuda rett har et selskap ikke adgang til fastsette eller
utbetale utbytte dersom det er rimelig grunn til tro at: (i) selskapet er,
eller etter utbetalingen av utbyttet vil vre, ute av stand til gjre opp
sine forpliktelser etter hvert som de forfaller; eller (ii) den realiserbare
verdien av selskapets eiendeler deretter ville blitt mindre enn dets
forpliktelser. I henhold til Selskapets Vedtekter har hver Aksje rett til
utbytte p det tidspunkt utbytte fastsettes av Styret, likevel slik at
eventuell fortrinnsrett til utbytte til eiere av preferanseaksjer gr foran.
C.5 Begrensninger i
verdipapirenes
omsettelighet
I henhold til Selskapets Vedtekter kan styret nekte registrere
overfring av enhver interesse i enhver Aksje i aksjeeierboken, eller
nekte instruere enhver registerfrer oppnevnt av Selskapet til
registrere en overfring, der en slik overfring vil resultere i at 50 %
eller flere av Aksjene eller stemmene i Selskapet, innehas, kontrolleres
eller eies direkte eller indirekte av fysiske eller rettslige personer, som
skatterettslig anses bosatt i Norge eller tilknyttet norsk
nringsvirksomhet, for unng at Selskapet blir ansett vre et
kontrollert utenlandske foretak slik dette begrepet er definert i norske
skatteregler.
Med forbehold om ovennevnte, men uavhengig av avvikende
bestemmelser i Vedtektene, kan aksjer som er notert eller tatt opp til
handel p en angitt brs overfres i henhold til reglene og forskriftene til
191

en slik brs. Alle overdragelser av usertifiserte aksjer m gjres i
henhold til, og vre underlagt, adgangen og kravene til overdragelse av
eierskap til aksjer i den klassen i henhold til VPS eller ethvert annet
relevant system og i henhold til enhver ordning satt opp av Styret i
henhold til Vedtektene. Styret skal nekte en overdragelse med mindre
registreringen av slik overdragelse oppfyller alle gjeldende krav til
samtykker, autorisasjoner og tillatelser fra enhver myndighet eller
ethvert organ p Bermuda. Styret kan ogs nekte anerkjenne en
overdragelsesmetode av en aksje med mindre det relevante
aksjebeviset (hvis utstedt) samt slikt annet bevis for overdragers rett til
gjennomfre overdragelsen som Styret med rimelighet kan kreve er
vedlagt.
Vennligst ogs se punkt 19 Selling and transfer restrictions.
C.6 Opptak til notering Den 12. september 2013 skte Selskapet om notering av Aksjene p
Oslo Brs. Det er forventet at styret i Oslo Brs godkjenner
noteringssknaden til Selskapet den 25. september 2013, betinget av at
enkelte vilkr oppfylles. Se punkt 18.12 Conditions for completion of
P nvrende tidspunkt forventer Selskapet oppstart av handel i
Aksjene p Oslo Brs p hvis solgt basis, p eller rundt 30. september
2013 og p vanlig basis p eller rundt 3. oktober 2013. Selskapet har
ikke skt om notering av Aksjene p noen annen brs eller regulert
market.
C.7 Utbyttepolitikk Selskapet tar sikte p sikre at aksjeeiernes avkastning reflekterer
Selskapets verdiskapning, og at denne vil best av bde utbytte og en
positiv utvikling i aksjekursen. Selskapet sikter mot en langsiktig rlig
utbytteutbetaling som representerer omtrent 30 40 % av dets
konsoliderte nettoresultat. Ettersom Selskapet er i en fase som
involverer betydelige investeringer, er det ikke planlagt utbytte for
regnskapsret som avsluttes 31. desember 2013. Selskapet har hy
fokus p verdiskapning og vil ha en utbyttepolitikk som ivaretar
interessene til Selskapet og dets aksjeeiere.
Ved beslutningen om det skal vedtas og utbetales et rlig utbytte, vil
Styret ta i betraktning markedsutsiktene, ordrereserve (backlog),
kontantstrm, investeringsplaner og finansieringsbehov samtidig som
tilstrekkelig finansiell fleksibilitet skal opprettholdes. Styret kan revidere
utbyttepolitikken over tid. Forslag om i ethvert r betale utbytte er
underlagt: (i) de begrensninger som flger av vilkrene i enkelte av
Konsernets ln, og (ii) at det er tilstrekkelig fri egenkapital.

Punkt D - Risiko
D.1 Vesentlige risiki knyttet til
Selskapet eller dets
bransje
Risiko knyttet til bransjen som Konsernet opererer i
(i) Konsernets virksomhet beror p aktivitetsnivet innenfor olje- og
gassleting samt identifikasjon og utvikling av olje- og
gassreservoarer og produksjon i offshoreomrder i hele verden,
srlig i krevende og ultradype farvann. Srlig pvirker olje- og
gasspriser, og markedets forventinger til potensielle endringer i
disse prisene, aktivitetsnivet til olje- og gasselskapenes lete- og
produksjonsdrift i vesentlig grad. Som flge av de betydelige
investeringer som gjres i leting og, ofte i produksjonen som
utfres av Konsernets kunder p eller fr tidspunktet de
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kontraherer tjenester som ytes av MODU segmentet og
forretningsomrdet Platform Drilling, er disse virksomhetene
typisk pvirket av langsiktige E&P spending beslutninger basert
p langsiktige pristrender, mens forretningsomrdet Technology
og Well Services segmentet er mer utsatt for beslutninger knyttet
til E&P spending som kundene tar som flge av kortsiktig
fluktuasjon i olje- og gassprisene. Enhver nedgang i
ettersprselen etter noen av tjenestene til Konsernets segmenter
kan ha en betydelig negativ innvirkning p Konsernets
virksomhet, driftsresultater, kontantstrm og finansielle stilling.
(ii) Usikkerhet knyttet til globale konomiske forhold og utvikling kan
redusere ettersprselen etter Konsernets Boreenheter og
tjenester, eller resultere i forsinkelser eller kanselleringer av
kontrakter. Enhver nedgang i ettersprselen forrsaket av slik
usikkerhet kan ha en betydelig negativ innvirkning p Konsernets
driftsresultater, kontantstrm og finansielle stilling.
(iii) Overproduksjon av boreenheter eller utleieutstyr kan fre til en
reduksjon av dagratene for MODU segmentet og prisene for Well
Services segmentet. Perioder med overskudd av tilgang p
boreenheter intensiverer konkurransen i bransjen, og kan
resultere i at boreenheter er inaktive i lange perioder av gangen.
Overskudd p tilgang av boreenheter kan vre forrsaket av at
det tas i bruk nye og oppgraderte enheter eller av at
konkurrenter flytter boreenheter til de regionene hvor Konsernets
Boreenheter opererer. For stor tilgang p utstyret Konsernet leier
ut til klienter (Utleieutstyr), som tilbys av Well Services
segmentet, kan fre til at dette segmentet opplever reduserte
priser og / eller kundebestillinger for sitt Utleieutstyr. Enhver av
disse hendelsene kan f vesentlig betydning for Konsernets
driftsresultater.
(iv) Olje- og gasservicebransjen Konsernet opererer i er svrt
konkurranseutsatt og fragmentert, og omfatter bde sm og
store aktrer som konkurrerer med Konsernet. Konsernets
virksomhet kan bli vesentlig negativt pvirket dersom dagens
konkurrenter eller nye deltakere i markedet introdusere nye
produkter eller tjenester med egenskaper som ligner p, eller er
bedre enn, Konsernets produkter og tjenester, eller utvider sin
virksomhet til tjenesteomrder Konsernet opererer innenfor.
Konkurransepress eller andre faktorer som resulterer i betydelig
priskonkurranse kan, srlig i industrielle nedgangstider, ha en
betydelig negativ innvirkning p Konsernets virksomhet,
driftsresultater, kontantstrm og finansielle tilstand.
(v) Konsernets virksomhet er underlagt en rekke operasjonelle farer
som ogs kan utsette Konsernet for eiendoms-, miljmessige- og
andre skadeserstatningskrav fra tredjeparter dersom de
materialiserer seg. Konsernets forsikringer og kontraktsmessige
rett til erstatning vil ikke ndvendigvis dekke tap i tilstrekkelig
grad, og Konsernet har ikke forsikringsdekning eller
skadeslsholdelser for enhver risiko. Inntrer en betydelig ulykke
eller annen alvorlig hendelse som ikke er fullt ut dekket av
Konsernets forsikring eller skadeslsholdelser fra en kunde som
kan hndheves eller inndrives, kan dette medfre betydelige tap
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for Konsernet.
(vi) Konsernets segmenter opererer i ulike jurisdiksjoner, hvilket
utsetter Konsernet for den risiko som ligger i internasjonale
virksomheter og som kan vre utenfor Konsernets kontroll, slik
som krig, naturkatastrofer, politisk uro, offentlige helsetrusler og
inkonsekvent bruk av utenlandske lover og forskrifter. Noen av
disse risikofaktorene kan forstyrre Konsernets drift og dermed ha
en betydelig negativ innvirkning p Konsernets virksomhet,
driftsresultater, kontantstrm og finansielle stilling. Videre
opererer Konsernet i mange utviklingsland, hvilket medfrer
risiko forbundet med svindel, bestikkelser, korrupsjon og
internasjonale sanksjonsregimer. Unnlatelse av overholde slike
lover kan resultere i vesentlige bter og straffer og kan skade
Konsernets omdmme.
Risiko knyttet til Konsernet
(i) Konsernets ordrereserve (backlog) vil kanskje ikke kunne
realiseres p grunn av en rekke rsaker, herunder kundenes
handlinger eller Konsernets manglende evne til oppfylle sine
forpliktelser i henhold til sine kontrakter. Konsernets
ordrereserve (backlog) representerer den kontraktsfestede
fremtidige inntekten under kontrakter for Boreenhetene og
tjenester som tilbys av MODU-segmentet og forretningsomrdet
Platform Drilling. Konsernet presenterer ordrereserver (backlog)
bde inklusiv og eksklusiv eventuelle prisede opsjonsperioder
som kan utves av kundene beregnet for reflektere den
nominelle verdien av kontrakten, som nrmere beskrevet i punkt
11.2.3 "Backlog". Ordrereserven (backlog) gir ikke en presis
angivelse av den perioden Konsernet er kontraktsrettslig
berettiget til motta slike inntekter, og det er ingen garanti for
at slike inntekter faktisk blir realisert i de forventede periodene,
eller i det hele tatt. Dersom Konsernet ikke er i stand til
realisere ordrereserver (backlog) vil dette kunne ha en betydelig
negativ innvirkning p Konsernets driftsresultater, kontantstrm
og finansielle stilling.
(ii) Konsernets fremtidige resultater avhenger av Konsernets evne til
fornye og forlenge eksisterende kontrakter og vinne nye
kontrakter. Konsernets evne til fornye eller forlenge
eksisterende kontrakter eller inng nye kontrakter vil i stor grad
avhenge av de gjeldende markedsforholdene. Dersom Konsernet
ikke er i stand til signere nye kontrakter med oppstart
umiddelbart etter opphr av nvrende kontrakter, eller nr det
gjelder MODU-segmentet eller forretningsomrdet Platform
Drilling, dersom nye kontrakter er inngtt til dagrater eller priser
som er vesentlig lavere enn eksisterende dagrater eller priser,
eller p vilkr som ellers er mindre gunstige sammenlignet med
eksisterende avtalevilkr, eller som pdrar Konsernet kostnader
forbundet med mobilisering eller demobilisering som ikke fullt ut
kan kreves dekket, vil Konsernets virksomhet, driftsresultat,
kontantstrm og finansielle tilstand kunne pvirkes negativt.
Risiko knyttet til driften
(i) Konsernet, srlig MODU-segmentet og forretningsomrdet
Platform Drilling, er utsatt for risiko forbundet med
kundesammensetning. Dersom noen av Konsernets viktigste
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kunder ikke klarer kompensere Konsernet, sier opp sine
kontrakter, ikke fornyer sine eksisterende kontrakter eller nekter
tildele Konsernet nye kontrakter, og Konsernet ikke er i stand
til inng kontrakter med nye kunder p sammenlignbare
dagrater, vil dette kunne ha en betydelig negativ innvirkning p
Konsernets driftsresultater.
(ii) Konsernets drifts- og vedlikeholdskostnader vil ikke ndvendigvis
fluktuere i samme forhold som endringer i driftsinntekter. I en
situasjon der en boreenhet str foran lengre inaktive perioder, vil
kostnadsreduksjoner ikke ndvendigvis vre umiddelbare
ettersom noe av mannskapet kan bli plagt forberede
boreenhetene for den inaktive perioden. Det er sledes ikke
sikkert at Konsernet vil lykkes med redusere sine
driftskostnader under forhold hvor inntektene ogs blir redusert.
I den grad endringer i Konsernets drifts- og
vedlikeholdskostnader ikke str i forhold til endringer i
driftsinntektene, kan det ha en betydelig negativ innvirkning p
Konsernets virksomhet, driftsresultater, kontantstrm og
finansielle stilling.
(iii) Konsernets byggeprosjekter knyttet til nybygg av boreenheter er
eksponert for risiko tilknyttet forsinkelser, kvalitetsproblemer,
skader p personell, utstyr og milj eller kostnadsoverskridelser
som naturlig knytter seg til alle store byggeprosjekter p grunn
av mange faktorer. Konsernet leverer ogs rdgivings- og
prosjektadministrasjonstjenester til andre nybyggingsprosjekter
hvor Konsernet bde har eller ikke har en eierinteresse.
Betydelige kostnadsoverskridelser eller forsinkelser av prosjekter
kan resultere i tapte inntekter, potensielle bter/krav fra kunden
eller i at kunden kansellerer. Dersom noen av disse
risikofaktorene skulle materialisere seg vil dette kunne ha en
betydelig negativ innvirkning p Konsernets driftsresultat,
kontantstrm og finansielle stilling.
(iv) Konsernet utver en del av sin virksomhet gjennom
felleskontrollerte selskaper (joint-venture selskaper), og er derfor
utsatt for risiko og usikkerhet forbundet med delta i joint-
venture selskaper. Ulike synspunkter blant joint-venture partnere
kan resultere i forsinkede beslutninger eller i at man ikke enes
om viktige saker. Dersom en joint-venture partner selger aksjene
sine i joint-venture selskapet, kan dette medfre et kontrollskifte
under obligasjonslnene som finansierer joint-venture selskapet,
med mindre Konsernet erverver aksjene. Dersom Konsernets
partnere ikke oppfyller sine kontraktsforpliktelser, kan det
respektive joint-venture selskapet vre ute av stand til utfre
og levere sine kontraktfestede tjenester p en adekvat mte,
hvilket vil kreve at Konsernet foretar ytterligere investeringer
eller utfrer tilleggstjenester. Konsernet vil kunne bli ansvarlig for
bde sine egne og partnerens forpliktelser, hvilket kan resultere i
redusert fortjeneste eller, i noen tilfeller, betydelige tap p
prosjektet. Disse faktorene kan ha en betydelig negativ
innvirkning p driften av joint-venture selskapet, og igjen,
Konsernets virksomhet og omdmme.
(v) Drift og utvikling av Konsernets virksomhet er avhengig av at
Konsernet beholder nkkelpersonell og Konsernets evne til
195

rekruttere, beholde og utvikle dyktige medarbeidere til sin
virksomhet. Mangel p kvalifisert personell, eller Konsernets
manglende evne til finne og beholde kvalifisert personell, vil
kunne ha en betydelig negativ innvirkning p Konsernets
virksomhet.
(vi) Et tap i en stor skattetvist knyttet til Konsernets operasjonelle
struktur eller Konsernets skattebetalinger kan blant annet
resultere i hyere skattesats p Konsernets inntekter, som kan
ha en betydelig negativ innvirkning p Konsernets inntekter og
kontantstrm. Konsernets skattebetalinger kan fra tid til annen
bli underlagt gjennomgang eller bokettersyn fra
skattemyndighetene i jurisdiksjonene hvor Konsernet opererer.
Konsernet er for tiden underlagt et bokettersyn vedrrende
Deepsea Atlantic (som kan ha en negativ innvirkning p
likviditeten med rundt USD 50 millioner) og en skattetvist
vedrrende Deepsea Bergen (hvor Konsernets tap p USD 62,8
millioner (allerede kostnadsfrt per 30. juni 2013) vil bli endelig
dersom tingrettens dom stadfestes i forbindelse med anken).
Risiko knyttet til konsernstrukturen
(i) Konsernet driver i dag sin virksomhet gjennom, og de fleste av
Konsernets eiendeler er eiet av, Konsernets datterselskaper.
Sledes er det kontantene Konsernet mottar fra sine
datterselskaper som er hovedkilden til midler Konsernet trenger
til oppfylle sine forpliktelser. Manglende evne til overfre
penger fra Konsernets datterselskaper eller felleskontrollerte
selskaper kan bety at Konsernet ikke kan foreta de ndvendige
overfringer fra sine datterselskaper eller felleskontrollerte
selskaper til oppfylle sine forpliktelser eller betale utbytte til
sine aksjeeiere. Dersom Konsernet eller noen av Konsernets
datterselskaper misligholder betalingsforpliktelser under noen av
sine gjeldsinstrumenter vil det ha en betydelig negativ
innvirkning p Konsernets virksomhet, driftsresultat,
kontantstrm og finansielle stilling.
D.3 Vesentlige risiki knyttet til
verdipapirene
Risiko knyttet til Aksjene
(i) Etter gjennomfringen av Tilbudet er det forventet at Odfjell
Partners Ltd. vil fortsette vre den strste aksjonren i
Konsernet, og flgelig fortsette ha et flertall av aksjeeiernes
stemmer. Det er dermed forventet at Odfjell Partners Ltd. vil
kunne ha stor innflytelse p utfallet av saker som legges frem for
avstemning blant Selskapets aksjeeiere, herunder valg av
medlemmer til Styret. Det er ingen garanti for at de
kommersielle mlene for Odfjell Partners Ltd. og Selskapet alltid
vil fortsette vre overensstemmende, eller at denne
eierkonsentrasjonen alltid vil fortsette vre i de vrige
aksjeeiernes beste interesse. Selv om det er forventet at Odfjell
Partners Ltd. vil fortsette vre den strste aksjeeieren i
Selskapet etter Tilbudet, kan det ikke gis noen garanti for at det
vil fortsette p permanent basis. Dersom Odfjell Partners Ltd.
ikke skulle fortsette vre en stor aksjeeier i Selskapet, eller
dersom dets kommersielle ml ikke skulle vre i Konsernets
beste interesse, kan dette f en betydelig negativ innvirkning p
markedsverdien av Aksjene.
(ii) Etter gjennomfringen av Tilbudet vil det vre en begrenset fri
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flyt av Aksjene. Den begrensede frie flyten kan ha en negativ
innvirkning p likviditeten i Aksjene og kan resultere i et lavt
omsetningsvolum for Aksjene, hvilket kan ha en negativ
innvirning p den rdende markedsprisen for Aksjene.
Risiko knyttet til at Selskapet er stiftet p Bermuda
(i) Selskapets vedtekter inneholder bestemmelser som kan gjre det
vanskeligere for en tredjepart kjpe Selskapet uten samtykke
fra Selskapets Styre. Disse bestemmelsene kan gjre det
vanskeligere for en tredjepart kjpe Selskapet, selv om mange
av aksjonrene anser tredjepartens tilbud som fordelaktig.

Punkt E - Tilbudet
E.1 Nettoproveny og estimerte
kostnader
Den Selgende Aksjonren vil motta provenyet av Tilbudet.
De totale kostnadene og utgiftene til Noteringen og Tilbudet er ansltt til
NOK 89 millioner (ekskludert moms) dersom alle Tilbudsaksjene blir
solgt av Selgende Aksjonr og Selskapet beslutter betale det
diskresjonre honoraret fullt ut (beregnet av en pris per aksje p NOK
42,50 - som utgjr midtverdien i det Indikative Prisintervallet).
Kostnadene skal dekkes av Selskapet.
E.2a Bakgrunnen for tilbudet og
bruk av provenyet
(i) For legge til rette for en brekraftig eierstruktur som sttter
Selskapets langsiktige strategi, ved tilby Selgende Aksjonr en
mulighet til selge alle sine Aksjer.
(ii) For styrke Selskapets finansieringskilder, og dermed ke dets
strategiske fleksibilitet for fremtidige vekstmuligheter.
(iii) For styrke Selskapets evne til tiltrekke seg talenter ved
heve profilen til Konsernet og dets merkevare.
Det estimerte nettoprovenyet av Tilbudet er NOK 2 461 millioner.
Selgende Aksjonr vil motta provenyet av Tilbudet. Selskapet vil ikke
motta noe av provenyet av Tilbudet.
E.3 Vilkr for tilbudet Tilbudet bestr av inntil 56 000 000 Salgsaksjer, som alle er
eksisterende, gyldig utstedte og fullt innbetalte registrerte Aksjer med
en plydende verdi p USD 0,01, og som tilbys av den Selgende
Aksjonren. Salgsaksjene representerer, og vil ved gjennomfring av
Tilbudet representere, inntil 28 % av de utstedte Aksjene i Selskapet.
I tillegg kan Joint Bookrunners velge overtildele inntil 4 000 000
Tilleggsaksjer, tilsvarende inntil ca 7 % av antall Salgsaksjer (som
representerer opp til 2 % av de utstedte Aksjene i Selskapet). Selgende
Aksjonr har tildelt DNB Markets, p vegne av Tilretteleggerne, en
opsjon til kjpe et tilsvarende antall Tilleggsaksjer for dekke
eventuelle overallokeringer (Overtildelingsopsjonen). Forutsatt at
opsjonen er utnyttet i sin helhet, vil Tilbudet omfatte inntil 60 000 000
Aksjer, tilsvarende inntil 30 % av Aksjene.
Tilbudet bestr av:
Et Institusjonelt Tilbud, hvor Tilbudsaksjer tilbys til (a)
investorer i Norge, (b) investorer utenfor Norge og USA, i
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henhold til gjeldende unntak fra prospektkrav, og (c) i USA til
QIBs, som definert i, og i henhold til Rule 144A i US Securities
Act. Det Institusjonelle Tilbudet er underlagt en nedre grense
per bestilling p NOK 2 500 000.
Et Offentlige Tilbud, hvor Tilbudsaksjer tilbys til allmennheten i
Norge med en nedre grense per bestilling p et belp
tilsvarende NOK 10 500 og en vre grense per bestilling p
NOK 2 499 999 for hver investor. Investorer i det Offentlige
Tilbudet vil f en rabatt p NOK 1 000 p den samlede
kjpesummen for Tilbudsaksjene tildelt slike investorer.
Investorer som nsker legge inn en bestilling som overstiger
NOK 2 499 999 m gjre det i det Institusjonelle Tilbudet. Flere
bestillinger fra n bestiller i det Offentlige Tilbudet vil bli
behandlet som n bestilling hva gjelder maksimal
bestillingsgrense og rabatten.
Ethvert tilbud eller salg utenfor USA vil bli gjort i overensstemmelse
med Regulation S.
Bookbuildingperioden for det Institusjonelle Tilbudet er forventet lpe
fra kl 09:00 norsk tid 16. september 2013 til kl 15:00 norsk tid 27.
september 2013. Bestillingsperioden for det Offentlige Tilbudet vil lpe
fra kl 09:00 norsk tid 16. september 2013 til kl 12:00 norsk tid 27.
september 2013. Selskapet, i samrd med Selgende Aksjonr og Joint
Bookrunners, forbeholder seg retten til nr som helst forkorte eller
forlenge Bookbuildingperioden og Tegningsperioden.
Tilretteleggerne forventer gi beskjed om tildeling av Tilbudsaksjer i det
Institusjonelle Tilbudet p eller rundt 30. september 2013, gjennom
utstedelse av sluttseddel til bestillerne via post eller p annen mte.
DNB Markets, som opptrer som oppgjrsagent for det Offentlige
Tilbudet, forventer gi beskjed om tildeling av Tilbudsaksjer i det
Offentlige Tilbudet p eller rundt 30. september 2013, ved utstedelse av
allokeringsbrev til bestillerne via post eller p annen mte.
Betaling fra bestillerne i det Institusjonelle Tilbudet vil finne sted mot
levering av Tilbudsaksjer. Levering og betaling av Tilbudsaksjene i det
Institusjonelle Tilbudet er forventet finne sted p eller rundt 3. oktober
2013.
Fristen for betaling i det Offentlig Tilbudet er p eller rundt 2. oktober
2013. Forutsatt rettidig betaling av bestilleren, er levering av
Tilbudsaksjene tildelt i det Offentlige Tilbudet forventet finne sted p
eller rundt 2. oktober 2013.
E.4 Vesentlige og
motstridende interesser
Tilretteleggerne eller deres nrstende har fra tid til annen ytet, og vil i
fremtiden yte, investeringstjenester og kommersielle banktjenester til
Selskapet og dets nrstende som ledd i ordinr virksomhet. For slike
tjenester kan de ha mottatt og vil kunne fortsette motta vanlige
honorarer og provisjoner. Tilretteleggerne har ikke til hensikt
fremlegge omfanget av slike investeringer eller transaksjoner med
mindre de er juridisk eller regulatorisk forpliktet til dette.
Den Selgende Aksjonren vil motta provenyet av Tilbudet.
Utover det ovennevnte er Selskapet ikke kjent med noen interesse noen
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fysiske eller juridiske personer involvert i Tilbudet har.
E.5 Selgende aksjonr og
bindingsavtaler
Selgende Aksjonr er BCB Paragon Trust Limited, som forvalter av
Larine Trust. Marianne Odfjell er en begunstiget av trusten. Per dato for
dette Prospektet eier Selgende Aksjonr 60 000 000 Aksjer i Selskapet,
tilsvarende 30 % av de utstedte og utestende Aksjene.
Forutsatt at (i) Tilbudet blir fulltegnet, (ii) Tilleggsaksjene blir tildelt og
(iii) Overtildelingsopsjonen blir utvd i sin helhet, vil Selgende Aksjonr
ikke eie Aksjer etter gjennomfringen av Tilbudet. Dersom
Stabiliserende Tilrettelegger, p vegne av Tilretteleggerne, i henhold til
Lneopsjonen leverer tilbake noen av de lnte Aksjene til Selgende
Aksjonr ved utlpet av stabiliseringsperioden, har Selgende Aksjonr
rett til kreve at Odfjell Partners Ltd. kjper 50 % av de tilbakeleverte
Aksjer fra Selgende Aksjonr, og Odfjell Partners Ltd. har en
tilsvarende rett til kreve at Selgende Aksjonr selger 50 % av de
tilbakeleverte Aksjer.
I forbindelse med Kjpsavtalen vil Odfjell Partners Ltd., Selgende
Aksjonr, Selskapet og Simen Lieungh (President og CEO i Konsernet)
pta seg en forpliktelse som vil begrense deres mulighet til utstede,
selge eller overfre Aksjer i en periode p ni mneder etter datoen for
Kjpsavtalen. For mer informasjon om disse begrensningene, se punkt
18.14 "Lock-up".
E.6 Utvanning som flge av
Tilbudet
Ikke aktuelt. Ingen nye aksjer vil bli utstedt i Tilbudet.
E.7 Estimerte kostnader som
vil kreves fra investorene
Ikke aktuelt. Kostnadene relatert til Tilbudet vil bli dekket av Selskapet.

199

22 DEFINITIONS AND GLOSSARY
2010 PD Amending Directive ............... Directive 2010/73/EU amending the EU Prospectus Directive.
Additional Shares ............................... Up to 4,000,000 additional Shares sold pursuant to the over-allotment by the
Stabilisation Manager, equalling up to approximately 7% of the number of Sale
Shares (representing up to 2% of the Shares in issue in the Company).
ABG Sundal Collier ............................. ABG Sundal Collier Norge ASA.
Anti-Money Laundering Legislation ....... The Norwegian Money Laundering Act no. 11 of 6 March 2009 and the Norwegian
Money Laundering Regulations no. 302 of 13 March 2009, collectively.
Application Period .............................. The application period for the Retail Offering which will take place from 09:00
hours (CET) on 16 September 2013 to 12:00 hours (CET) on 27 September 2013,
unless shortened or extended.
Appointed Stock Exchange .................. An appointed stock exchange in accordance with the provisions of the Bermuda
Companies Act.
Arctic Securities ................................. Arctic Securities ASA.
backlog ............................................. Please refer to the definition in Section 11.2.3 Backlog.
Bermuda Companies Act ..................... The Companies Act 1981, as amended of Bermuda.
BG ................................................... BG International Ltd.
Board of Directors .............................. The Board of Directors of the Company.
boe .................................................. Barrel of oil equivalent.
Bookbuilding Period ............................ The book-building period for the Institutional Offering, which is expected to run
from 09:00 hours (CET) on 16 September 2013 to 15:00 hours (CET) on 27
September 2013, unless shortened or extended.
BOP ................................................. Blow Out Preventer.
BRL .................................................. Brazilian Real, the lawful currency of Brazil.
Bye-Laws .......................................... The Companys bye-laws.
CAGR ............................................... Compound annual growth rate.
Capex ............................................... Capital expenditures.
CET .................................................. Central European Time.
Chloe Marine ..................................... Chloe Marine Corporation Ltd.
CISA ................................................ Swiss Federal Act on Collective Investment Schemes.
Co-Lead Managers ............................. Arctic Securities, Danske Bank Markets and Swedbank First Securities, collectively.
Company .......................................... Odfjell Drilling Ltd.
Construction Contract ......................... The contracts for the construction of Deepsea Aberdeen (Hull no 3033).
Corporate Governance Code ................ The Norwegian Code of Practice for Corporate Governance, dated 23 October
2012.
CRTi ................................................. New generation, fully mechanical, Casing Running Tool.
Deep Sea Metro ................................. Deep Sea Metro Ltd.
debt/equity ....................................... Interest bearing debt (excluding pension liabilities) divided by equity.
deepwater ......................................... Water depths of 3,000 to 7,500 feet.
DNB Markets ..................................... DNB Bank ASA, DNB Markets.
DP ................................................... Dynamic positioning.
Drillships .......................................... Deepsea Metro I and Deepsea Metro II.
Drilling Units ..................................... The mobile drilling units Deepsea Bergen, Deepsea Atlantic, Deepsea Stavanger,
Deepsea Aberdeen, Deepsea Metro I and Deepsea Metro II.
DSME ............................................... Daewoo Shipbuilding & Marine Engineering Co., Ltd.
E&P .................................................. Exploration and production.
EBIT ................................................. Earnings before interest and tax.
EBITDA ............................................. Earnings before interest, tax, depreciation and amortisation.
EEA .................................................. The European Economic Area.
equity ratio ....................................... Total equity divided by total assets.
EUR.................................................. The lawful common currency of the EU member states who have adopted the Euro
as their sole national currency.
EU Prospectus Directive ...................... Directive 2003/71/EC of the European Parliament and of the Council of 4
200

November 2003, and amendments thereto, including the 2010 PD Amending
Directive to the extent implemented in the Relevant Member State.
fifth generation rigs ............................ Rigs built in the late 1990s and early 2000s, designed to operate in water depths
from 7,500 feet to 10,000 feet.
Financial Information .......................... The Financial Statements and the Interim Financial Statements.
Financial Statements .......................... The Companys audited consolidated financial statements as of and for the years
ended 31 December 2012, 2011 and 2010.
FSMA................................................ UK Financial Services and Markets Act 2000.
GBP.................................................. Great British Pounds, the lawful currency of the United Kingdom.
Golden Close ..................................... Golden Close Maritime Corp. Ltd.
Group ............................................... Odfjell Drilling and its consolidated subsidiaries.
HSE ................................................. Health, safety and environment.
IAS .................................................. International Accounting Standard.
IEA .................................................. International Energy Agency.
IFRS ................................................. International Financial Reporting Standards as adopted by the European Union.
IFRS Financial Statements .................. The Companys audited consolidated financial statements as of and for the year
ended 31 December 2012, with comparable figures for the year ended 31
December 2011, prepared in accordance with IFRS.
Indicative Price Range ........................ The indicative price range in the Offering of NOK 37 to NOK 48 per Offer Share.
Institutional Closing date .................... Delivery and payment for the Offer Shares by the applicants in the Institutional
Offering is expected to take place on or about 3 October 2013.
interest bearing debt .......................... Non-current borrowings and current portion of non-current borrowings.
interest coverage ............................... EBITDA divided by interest expenses.
Interim Directors ............................... The Directors whom will serve as members of the Board of Directors up to the first
day of the Listing.
Interim Financial Statements ............... The Companys unaudited consolidated financial statements as of and for the three
and six month periods ended 30 June 2013 and 2012.
IT .................................................... Information technology.
Joint Bookrunners .............................. ABG Sundal Collier, DNB Markets and Goldman Sachs International, collectively.
Lending Option .................................. A lending option granted to the Stabilisation Manager by the Selling Shareholder,
pursuant to which the Stabilisation Manager may require the Selling Shareholders
to lend to the Stabilisation Manager, on behalf of the Managers, up to a number of
Shares equal to the number of Additional Shares.
Listing .............................................. The listing of the Shares on the Oslo Stock Exchange.
LTM EBITDA ...................................... The EBITDA for the latest 12 months.
Management ..................................... The senior management team of the Group.
Managers .......................................... The Joint Bookrunners and the Co-Lead Managers, collectively.
Metro Exploration ............................... Metro Exploration Holding Corp.
NCS ................................................. Norwegian Continental Shelf.
net working capital ............................. Non-interest bearing current assets less non-interest bearing current liabilities.
net interest bearing debt .................... Non-current borrowings and current potion of non-current borrowings less cash.
New Board of Directors ....................... The five Directors which will form the new Board of Directors from the first day of
Listing.
NGAAP Financial Statements ............... The Companys audited consolidated financial statements as of and for the years
ended 31 December 2011 and 2010, prepared in accordance with NGAAP.
NOK ................................................. Norwegian Kroner, the lawful currency of Norway.
Norwegian FSA .................................. The Norwegian Financial Supervisory Authority (Nw. Finanstilsynet).
Norwegian Securities Trading Act ......... The Norwegian Securities Trading Act of 28 June 2007, no. 75 (Nw
verdipapirhandelloven).
Odfjell Drilling ................................... The Company and its consolidated subsidiaries.
Offering ............................................ The global offering including the Institutional Offering and the Retail Offering
taken together.
Offer Price ......................................... The final offering price for the Offer Shares in the Offering. The Offer Price may be
set above or below the Indicative Price Range.
201

Offer Shares ...................................... The Additional Shares together with the Sale Shares the Shares offered pursuant
to the Offering.
OPEC ................................................ The Organization of Petroleum Exporting Countries.
Order ............................................... The UK Financial Services and Markets Act 2000 (Financial Promotion) Order 2005,
as amended.
Oslo Stock Exchange .......................... Oslo Brs ASA, or, as the context may require, Oslo Brs, a Norwegian regulated
stock exchange operated by Oslo Brs ASA.
Over-Allotment Option ........................ Option granted by the Selling Shareholder to the Stabilisation Manager, on behalf
of the Managers, to purchase up to 4,000,000 Additional Shares (together with
the Sale Shares, the Offer Shares), equalling up to approximately 7% of the
number of Sale Shares (representing up to 2% of the Shares in issue in the
Company), exercisable within a 30-day period commencing at the time at which if
sold trading in the Shares commences on the Oslo Stock Exchange, expected to
be on 30 September 2013, to cover over-allotments, if any, in connection with the
Offering.
Payment Date.................................... The payment date for the Offer Shares under the Retail Offering, expected to be
on 2 October 2013.
PP&E Property, plant and equipment.
Purchase Agreement .......................... The purchase agreement expected to be entered into by the Company, the Selling
Shareholder and the Joint Bookrunners (as representatives of the Managers) on or
about 27 September 2013 with respect to the Offering of the Offer Shares.
Prospectus ........................................ This Prospectus, dated 13 September 2013.
QIBs................................................. Qualified institutional buyers as defined in Rule 144A.
QHSE ............................................... Quality, Health, Safety and Environment.
Regulation S ...................................... Regulation S under the U.S. Securities Act.
Relevant Member State ...................... Each Member State of the European Economic Area which has implemented the
EU Prospectus Directive.
Relevant Persons ............................... Persons in the UK that are (i) investment professionals falling within Article 19(5)
of the Order or (ii) high net worth entities, and other persons to whom the
Prospectus may lawfully be communicated, falling within Article 49(2)(a) to (d) of
the Order.
Rental Equipment .............................. The Groups casing, running and rental equipment.
Restricted Shares ............................... Offer Shares purchased in the Offering inside the US.
Rig or Rigs ........................................ Each of, or collectively, Deepsea Atlantic, Deepsea Stavanger, Deepsea Bergen
and Deepsea Aberdeen.
Rule 144A ......................................... Rule 144A under the U.S. Securities Act.
Sale Shares ....................................... Up to 56,000,000 common shares of the Company offered pursuant to the Offer.
SFA .................................................. The Securities and Futures Act, Chapter 289 of Singapore.
Share(s) ........................................... Shares in the share capital of the Company, each with a par value of USD 0.01, or
any one of them.
SIX .................................................. Swiss Exchange.
sixth generation rigs .......................... Rigs built from 2005, designed to operate in water depths of 10,000 feet.
SPS .................................................. Special periodic survey.
Stabilisation Manager ......................... DNB Markets.
third generation rigs ........................... Rigs built from 1982 to 1986, designed to operate in water depths up to 2,500
feet.
UK ................................................... The United Kingdom.
UKCS ............................................... UK Continental Shelf.
ultra-deepwater ................................. Water depths of 7,500 feet or more.
U.S. or United States .......................... The United States of America.
U.S. Exchange Act ............................. The U.S. Securities Exchange Act of 1934, as amended.
U.S. Securities Act ............................. The U.S. Securities Act of 1933, as amended.
USD ................................................. United States Dollars, the lawful currency in the United States.
VPS .................................................. The Norwegian Central Securities Depository (Nw Verdipapirsentralen).
VPS account ...................................... An account with VPS for the registration of holdings of securities.
202

working capital .................................. Non-interest bearing current assets plus non-interest bearing current liabilities.

Appendix A
Bye-Laws of Odfjell Drilling Ltd

A1

BYE-LAWS
OF
ODFJELL DRILLING LTD

A2

TABLE OF CONTENTS

1. DEFINITIONS
2. POWER TO ISSUE SHARES
3. POWER OF THE COMPANY TO PURCHASE ITS SHARES
4. RIGHTS ATTACHING TO SHARES
5. CALLS ON SHARES
6. FORFEITURE OF SHARES
7. DEPOSITARY INTEREST
8. SHARE CERTIFICATES
9. FRACTIONAL SHARES
10. REGISTER OF MEMBERS
11. REGISTERED HOLDER ABSOLUTE OWNER
12. TRANSFER OF REGISTERED SHARES
13. TRANSMISSION OF REGISTERED SHARES
14. COMPULSORY PURCHASE OF SHARES
15. POWER TO ALTER CAPITAL
16. VARIATION OF RIGHTS ATTACHING TO SHARES
17. DIVIDENDS
18. POWER TO SET ASIDE PROFITS
19. METHOD OF PAYMENT
20. CAPITALISATION
21. ANNUAL GENERAL MEETINGS
22. SPECIAL GENERAL MEETINGS
23. REQUISITIONED GENERAL MEETINGS
24. NOTICE
25. GIVING NOTICE AND ACCESS
26. POSTPONEMENT OR CANCELLATION OF GENERAL MEETING
27. ELECTRONIC PARTICIPATION AND SECURITY IN MEETINGS
28. QUORUM AT GENERAL MEETINGS
29. CHAIRMAN TO PRESIDE AT GENERAL MEETINGS
30. VOTING ON RESOLUTIONS
31. POWER TO DEMAND A VOTE ON A POLL
32. VOTING BY JOINT HOLDERS OF SHARES
A3
Odfjell Drilling Ltd Page 1

33. INSTRUMENT OF PROXY
34. REPRESENTATION OF CORPORATE MEMBER
35. ADJOURNMENT OF GENERAL MEETING
36. WRITTEN RESOLUTIONS
37. DIRECTORS AND THE AUDITORS ATTENDANCE AT GENERAL MEETINGS
38. MOTION FOR INQUIRY
39. ELECTION OF DIRECTORS
40. NUMBER OF DIRECTORS
41. TERM OF OFFICE OF DIRECTORS
42. ALTERNATE DIRECTORS
43. REMOVAL OF DIRECTORS
44. VACANCY IN THE OFFICE OF DIRECTOR
45. REMUNERATION OF DIRECTORS
46. DEFECT IN APPOINTMENT
47. DIRECTORS TO MANAGE BUSINESS
48. POWERS OF THE BOARD OF DIRECTORS
49. REGISTER OF DIRECTORS AND OFFICERS
50. APPOINTMENT OF OFFICERS
51. APPOINTMENT OF SECRETARY
52. DUTIES OF OFFICERS
53. REMUNERATION OF OFFICERS
54. CONFLICTS OF INTEREST
55. RELATED PARTY TRANSACTIONS
56. INDEMNIFICATION AND EXCULPATION OF DIRECTORS AND OFFICERS
57. BOARD MEETINGS
58. NOTICE OF BOARD MEETINGS
59. ELECTRONIC PARTICIPATION IN MEETINGS
60. QUORUM AT BOARD MEETINGS
61. BOARD TO CONTINUE IN THE EVENT OF VACANCY
62. CHAIRMAN TO PRESIDE
63. WRITTEN RESOLUTIONS
A4

64. VALIDITY OF PRIOR ACTS OF THE BOARD
65. MINUTES
66. PLACE WHERE CORPORATE RECORDS KEPT
67. FORM AND USE OF SEAL
68. RECORDS OF ACCOUNT
69. FINANCIAL YEAR END
70. ANNUAL AUDIT
71. APPOINTMENT OF AUDITOR
72. REMUNERATION OF AUDITOR
73. DUTIES OF AUDITOR
74. ACCESS TO RECORDS
75. FINANCIAL STATEMENTS
76. DISTRIBUTION OF AUDITORS REPORT
77. VACANCY IN THE OFFICE OF AUDITOR
78. WINDING-UP
79. CHANGES TO BYE-LAWS
80. CHANGES TO THE MEMORANDUM OF ASSOCIATION
81. DISCONTINUANCE
A5

INTERPRETATION

1. Definitions

1.1 In these Bye-laws, the following words and expressions shall, where not inconsistent
wi th the context, have the fol l owing meanings, respecti vel y:
Act the Companies Act 1981 as amended from time to
time;
Al ternate Director an al ternate director appointed in accordance wi th
these Bye-l aws;
Auditor includes an individual or partnership;
Board the board of directors appoi nted or elected
pursuant to these Bye-laws and acting by
resol uti on in accordance wi th the Act and these
Bye-l aws or the directors present at a meeti ng of
directors at which there is a quorum;
Chairman the Director of the Company appointed by the
Board in accordance with these Bye-laws to
perform any or all of the duties of the chairman of
the Company;
Company the company for whi ch these Bye-l aws are
approved and confirmed;
Director a director of the Company and shall include an
Al ternate Director;
Member the person regi stered in the Register of Members as
the holder of shares in the Company and, when
two or more persons are so regi stered as joint
holders of shares, means the person whose name
stands first in the Register of Members as one of
such joint holders or all of such persons, as the
context so requires;
noti ce wri tten noti ce as further provi ded i n these Bye-
laws unless otherwise specifically stated;
Officer any person appointed by the Board to hold an
office in the Company;
A6

Register of Directors and Officers the register of directors and offi cers referred to in
these Bye-l aws;
Register of Members the regi ster of members referred to in these Bye-
laws;
Resident Representative any person appointed to act as resident
representative and includes any deputy or assi stant
resident representative;
Secretary the person appointed to perform any or all of the
duties of secretary of the Company and incl udes
any deputy or assistant secretary and any person
appoi nted by the Board to perform any of the
duti es of the Secretary; and
Treasury Share a share of the Company that was or is treated as
having been acquired and held by the Company
and has been hel d continuousl y by the Company
since it was so acquired and has not been cancelled.
1.2 In these Bye-l aws, where not inconsi stent wi th the context:
(a) words denoti ng the plural number include the singular number and vi ce versa;
(b) words denoti ng the mascul i ne gender i ncl ude the feminine and neuter genders;
(c) words importing persons include companies, associations or bodies of persons
whether corporate or not;
(d) the words:
(i) may shall be construed as permissive; and
(ii) shall shall be construed as imperative; and
(e) unless otherwise provi ded herein, words or expressi ons defined in the Act shal l
bear the same meaning in these Bye-l aws.
1.3 In these Bye-l aws expressi ons referring to writi ng or i ts cognates shal l , unless the
contrary intenti on appears, include facsi mile, printing, l i thography, photography,
electronic mail and other modes of representing words in visi ble form.
1.4 Headings used in these Bye-laws are for convenience onl y and are not to be used or
relied upon in the construction hereof.
A7

SHARES

2. Power to Issue Shares

2.1 Subject to these Bye-laws, and wi thout prejudice to any special ri ghts previously
conferred on the hol ders of any existing shares or class of shares, the Board shall, subject
to prior approval given by resolution of the Members, have the power to issue any
uni ssued shares on such terms and condi ti ons as i t may determine and any shares or
class of shares may be issued with such preferred, deferred or other special rights or
such restrictions, whether in regard to dividend, voting, return of capital, or otherwi se
as the Company may by resolution of the Members prescribe.
2.2 Subject to the Act, any preference shares may be i ssued or converted into shares that (at
a determinable date or at the option of the Company or the holder) are li able to be
redeemed on such terms and in such manner as may be determined by the Board (before
the i ssue or conversi on).
3. Power of the Company to Purchase its Shares

3.1 The Company may purchase its own shares for cancel l ati on or acquire them as Treasury
Shares in accordance wi th the Act on such terms as the Board shall think fi t.

3.2 The Board may exerci se al l the powers of the Company to purchase or acqui re all or any
part of its own shares in accordance wi th the Act.

4. Rights Attaching to Shares

4.1 Subject to any resolution of the Members to the contrary (and wi thout prejudice to any
speci al ri ghts conferred thereby on the hol ders of any other shares or cl ass of shares), the
share capital shall be divided into shares of a si ngle class the holders of which shall,
subject to these Bye-laws:

(a) be enti tled to one vote per share;
(b) be entitled to such di vidends as the Board may from time to time declare;
(c) in the event of a winding-up or dissolution of the Company, whether voluntary
or involuntary or for the purpose of a reorgani sation or otherwise or upon any
distribution of capital, be entitled to the surplus assets of the Company; and
(d) generally be entitled to enjoy all of the rights attaching to shares.
4.2 All the rights attaching to a Treasury Share shall be suspended and shall not be
exerci sed by the Company while i t hol ds such Treasury Share and, except where
required by the Act and any other applicable laws and regulations, all Treasury Shares
A8

shall be excl uded from the cal culati on of any percentage or fraction of the share capi tal,
or shares, of the Company.
5. Calls on Shares

5.1 The Board may make such cal l s as i t thinks fit upon the Members i n respect of any
moneys (whether in respect of nomi nal value or premium) unpaid on the shares allotted
to or held by such Members (and not made payable at fi xed times by the terms and
conditions of issue) and, if a call is not paid on or before the day appointed for payment
thereof, the Member may at the discreti on of the Board be l i able to pay the Company
i nterest on the amount of such call at such rate as the Board may determi ne, from the
date when such call was payable up to the actual date of payment. The Board may
differentiate between the holders as to the amount of calls to be paid and the ti mes of
payment of such call s.
5.2 Any amount which by the terms of allotment of a share becomes payable upon issue or
at any fixed date, whether on account of the nominal value of the share or by way of
premi um, shal l for al l the purposes of these Bye-l aws be deemed to be an amount on
whi ch a call has been dul y made and payable on the date on whi ch, by the terms of
issue, the same becomes payable, and in case of non-payment all the relevant provisions
of these Bye-laws as to payment of interest, costs and expenses, forfeiture or otherwise
shall apply as if such amount had become payable by virtue of a duly made and noti fied
cal l .
5.3 The joint holders of a share shall be jointly and severally liable to pay all calls and any
interest, costs and expenses in respect thereof.
5.4 The Company may accept from any Member the whole or a part of the amount
remaining unpai d on any shares hel d by him, al though no part of that amount has been
called up or become payable.
6. Forfeiture of Shares

6.1 If any Member fails to pay, on the day appointed for payment thereof, any call in respect
of any share al l otted to or hel d by such Member, the Board may, at any time thereafter
during such ti me as the call remains unpaid, direct the Secretary to forward such
Member a notice in writing in the form, or as near thereto as circumstances admit, of the
fol l owing:
Notice of Li ability to Forfei ture for Non-Payment of Call
[ ] (the "Company")
You have fai led to pay the call of [amount of call] made on the [ ] day of [
], 20[ ], in respect of the [number] share(s) [number in fi gures] standing in
your name in the Regi ster of Members of the Company, on the [ ] day of [
A9

], 20[ ], the day appointed for payment of such call. You are hereby
notified that unless you pay such call together with interest thereon at the
rate of [ ] per annum computed from the said [ ] day of [ ], 20[ ] at the
registered offi ce of the Company the share(s) will be liable to be forfeited.
Dated this [ ] day of [ ], 20 [ ]

[Si gnature of Secretary] By Order of the Board
6.2 If the requirements of such notice are not complied with, any such share may at any time
thereafter before the payment of such cal l and the i nterest due in respect thereof be
forfeited by a resolution of the Board to that effect, and such share shall thereupon
become the property of the Company and may be disposed of as the Board shal l
determine. Without limiting the generality of the foregoing, the disposal may take place
by sale, repurchase, redemption or any other method of disposal permitted by and
consistent with these Bye-laws and the Act.
6.3 A Member whose share or shares have been so forfeited shall, notwithstanding such
forfei ture, be l i able to pay to the Company al l call s owing on such share or shares at the
time of the forfeiture, together with all interest due thereon and any costs and expenses
incurred by the Company in connection therewith.
6.4 The Board may accept the surrender of any shares which it is in a position to forfeit on
such terms and conditions as may be agreed. Subject to those terms and conditions, a
surrendered share shall be treated as if it had been forfeited.
7. Depositary Interest
The Directors shall, subject to the Act, any other applicable laws and regulations, the facilities
and requirements of the system mai ntained by Verdi papirsentralen ASA or any relevant system
concerned and these Bye-l aws, have the power to i mpl ement and/or approve any arrangements
they may, in their absolute discretion, deem fi t in relation to (without li mitation) the evidencing
of title to and the transfer of depository or similar interests in shares in the capital of the
Company in the form of depositary interests or si milar interests, instruments or securities. The
Directors may from time to time take such actions and do such things as they may, in their
absolute discretion, think fit in relation to the operation of any such arrangements incl uding,
without li mitati on, treating holders of any depository or similar interests relating to shares as if
they were the hol ders di rectl y thereof for the purposes of compli ance wi th any obligations
i mposed under these Bye-l aws on Members.
A10

8. Share Certificates

8.1 No share certificates shall be issued by the Company unless, in respect of a cl ass of
shares, the Board has either for all or for some holders of such shares (who may be
determined in such manner as the Board thinks fi t) determined that the hol der of such
shares may be enti tled to share certi fi cates. In the case of a share hel d jointl y by several
persons, delivery of a certificate to one of several joint holders shall be sufficient delivery
to all.
8.2 Subject to being enti tled to a share certificate under the provisions of Bye-law 8.1, the
Company shall be under no obli gati on to complete and del iver a share certifi cate unless
specifically called upon to do so by the person to whom the shares have been allotted.
8.3 If any share certificate shall be proved to the satisfaction of the Board to have been worn
out, lost, mislaid, or destroyed the Board may cause a new certificate to be issued and
request an indemnity for the lost certificate if it sees fit.
8.4 Notwithstanding any provisions of these Bye-laws:
(a) the Board shall, subject always to the Act and any other applicable laws and
regul ati ons and the faci lities and requirements of the relevant system concerned,
have power to implement any arrangements it may, in its absolute di screti on,
think fit in relation to the evidencing of title to and transfer of uncertificated
shares by means of the system maintained by Verdi papirsentralen ASA or any
other relevant system, and to the extent such arrangements are so i mplemented,
no provision of these Bye-laws shall apply or have effect to the extent that it is in
any respect i nconsi stent wi th the hol di ng or transfer of shares i n uncerti fi cated
form; and
(b) unless otherwi se determi ned by the Board and as permi tted by the Act and any
other applicable laws and regulations, no person shall be enti tled to receive a
certificate in respect of any share for so long as the ti tle to that share is evidenced
otherwise than by a certificate and for so long as transfers of that share may be
made otherwise than by a written instrument.
9. Fractional Shares

The Company may issue its shares in fracti onal denominati ons and deal with such fractions to
the same extent as i ts whole shares and shares in fracti onal denominati ons shal l have in
proporti on to the respective fracti ons represented thereby all of the rights of whole shares
incl uding (but without limiting the generality of the foregoing) the right to vote, to receive
di vi dends and di stributions and to parti ci pate in a winding-up.
A11

REGISTRATION OF SHARES

10. Register of Members

10.1 The Board shall cause to be kept in one or more books a Register of Members and shal l
enter therei n the parti culars required by the Act. Subject to the provi si ons of the Act, the
Company may keep one or more branch regi sters in any pl ace in or outside of Bermuda,
and the Board may make, amend and revoke any such regulations as it may think fit
respecti ng the keepi ng of such branch regi sters. The Board may authori se any share on
the Regi ster of Members to be i ncl uded in a branch regi ster or any share regi stered on a
branch register to be registered on another branch register, provided that at all times the
Register of Members is maintained in accordance with the Act.
10.2 The Register of Members shall be open to inspection without charge at the registered
office of the Company on every business day, subject to such reasonable restrictions as
the Board may impose, so that not less than two hours in each business day be allowed
for inspection. The Register of Members may, after notice has been given in accordance
with the Act, be closed for any time or times not exceeding in the whole thirty days in
each year.
11. Registered Holder Absolute Owner

The Company shall be entitled to treat the regi stered holder of any share as the absolute owner
thereof and accordingly shall not be bound to recognise any equitable claim or other claim to, or
interest in, such share on the part of any other person.
12. Transfer of Registered Shares

12.1 Subject to the Act and to such of the restrictions contained in these Bye-Laws as may be
appl i cable, any Member may transfer al l or any of hi s shares by an i nstrument of
transfer in the usual common form or in any other form whi ch the Board may approve.
No such instrument shall be required on the redempti on of a share or on the purchase
by the Company of a share. All transfers of uncertificated shares shall be made in
accordance with and be subject to the facili ties and requirements of the transfer of title to
shares in that class by means of the system maintained by Verdipapirsentralen ASA or
any other relevant system concerned and, subject thereto, i n accordance wi th any
arrangements made by the Board pursuant to Bye-Law 8.
12.2 The instrument of transfer of a share shall be signed by or on behalf of the transferor and
transferee, provided that, in the case of a fully paid share, the Board may accept the
i nstrument si gned by or on behalf of the transferor al one. The transferor shal l be
deemed to remain the hol der of such share until the same has been registered as havi ng
been transferred to the transferee in the Register of Members.
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12.3 The Board may refuse to recogni se any instrument of transfer unless i t is accompanied
by the certifi cate i n respect of the shares (if one has been i ssued) to which i t rel ates and
by such other evidence as the Board may reasonably require to prove the ri ght of the
transferor to make the transfer.
12.4 The joi nt hol ders of any share may transfer such share to one or more of such joi nt
holders, and the surviving holder or holders of any share previously held by them
jointly with a deceased Member may transfer any such share to the executors or
admini strators of such deceased Member.
12.5 The Board may decli ne to register a transfer of any share in the Regi ster of Members, or
if required, refuse to direct any registrar appointed by the Company the transfer of any
interest in a share where such transfer would result in 50% or more of the issued and
outstanding shares or votes being hel d, controlled or owned directl y or i ndirectl y by
individuals or legal persons resident for tax purposes in Norway or, alternatively, such
shares or votes being effectively connected to a Norwegian business activity, in order to
avoid the Company being deemed a Controlled Foreign Company pursuant to
Norwegi an tax rules.
12.6 The Board shall refuse to register a transfer unless all applicable consents, authorisations
and permissi ons of any governmental body or agency in Bermuda have been obtained.
If the Board refuses to register a transfer of any share the Secretary shall , within three
months after the date on which the transfer was lodged with the Company, send to the
transferor and transferee notice of the refusal.
12.7 Shares may be transferred wi thout a wri tten instrument i f transferred by an appoi nted
agent or otherwise in accordance with the Act.
12.8 Subject to Bye-law 12.5, but notwithstanding anything el se contrary in these Bye-laws,
shares that are listed or admitted to trading on an appointed stock exchange may be
transferred in accordance wi th the rules and regul ati ons of such exchange.
13. Transmission of Registered Shares

13.1 In the case of the death of a Member, the survivor or survivors where the deceased
Member was a joi nt hol der, and the legal personal representati ves of the deceased
Member where the deceased Member was a sole holder, shall be the only persons
recogni sed by the Company as havi ng any ti tle to the deceased Member's i nterest in the
shares. Nothi ng herein contained shal l release the estate of a deceased joint hol der from
any li ability in respect of any share which had been jointly held by such deceased
Member with other persons. Subject to the Act, for the purpose of this Bye-law, legal
personal representati ve means the executor or admi nistrator of a deceased Member or
such other person as the Board may, in its absolute discretion, deci de as being properly
authorised to deal wi th the shares of a deceased Member.
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13.2 Any person becomi ng enti tled to a share i n consequence of the death or bankruptcy of
any Member may be registered as a Member upon such evidence as the Board may
deem suffi cient or may el ect to nomi nate some person to be regi stered as a transferee of
such share, and in such case the person becomi ng entitled shall execute in favour of such
nominee an instrument of transfer in writing in the form, or as near thereto as
circumstances admi t, of the followi ng:
Transfer by a Person Becoming Entitled on Death/Bankruptcy of a Member
[ ] (the "Company")
I/We, having become enti tled in consequence of the [death/bankruptcy] of [name
and address of deceased/bankrupt Member] to [number] share(s) standing in the
Regi ster of Members of the Company i n the name of the sai d [name of
deceased/bankrupt Member] instead of being regi stered mysel f/oursel ves, elect
to have [name of transferee] (the "Transferee") registered as a transferee of such
share(s) and I/we do hereby accordi ngl y transfer the sai d share(s) to the
Transferee to hold the same unto the Transferee, his or her executors,
admini strators and assigns, subject to the conditions on which the same were
hel d at the ti me of the executi on hereof; and the Transferee does hereby agree to
take the said share(s) subject to the same conditions.

DATED this [ ] day of [ ], 20 [ ]

Si gned by: In the presence of:

Transferor Witness

Transferee Witness
13.3 On the presentation of the foregoing materi als to the Board, accompanied by such
evi dence as the Board may require to prove the title of the transferor, the transferee shall
be registered as a Member. Notwithstanding the foregoing, the Board shall, in any case,
have the same ri ght to decl ine or suspend registration as it would have had in the case of
a transfer of the share by that Member before such Member's death or bankruptcy, as the
case may be.
13.4 Where two or more persons are registered as joint holders of a share or shares, then in
the event of the death of any joint holder or holders the remaining joint holder or
holders shall be absolutely entitled to such share or shares and the Company shal l
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recogni se no cl ai m i n respect of the estate of any joi nt hol der except i n the case of the l ast
survivor of such joint holders.
14. Compulsory Purchase of Shares

14.1 If a Member hol ds more than ni ne tenths of the shares i n the Company and an
equivalent of the votes which may be cast at a general meeting of the Company (a
Majority Shareholder ), each of the other Members (each a Selling Shareholder ) may
require that the Majority Sharehol der purchases all of its, his or her respective shares in
the Company by written notice to the Company and the Majority Shareholder.
14.2 In the absence of an ami cable agreement on the pri ce payable by the Majori ty
Shareholder for the relevant shares pursuant to a notice under Bye-law 14.1, the price
shall be fi xed at fair market value by a reputable and independent financial insti tution,
audi tor or accountancy firm (the Apprai ser ). In the event the parties are unable to
agree on the i denti ty of the Apprai ser, the pri ce shall be fi xed at fair market val ue by
arbi tration conducted under the Bermuda International Conciliation and Arbitration Act
1993. The parties agree that there shall be a single arbitrator who shall be an accountant
or specialist in the field of valuation (the Arbitrator ). In the absence of an amicable
agreement on the selection of the Arbitrator, the Supreme Court of Bermuda shall select
the Arbitrator. The price fixed pursuant to this Bye-law 14.2 shall be binding for all
purchase requests by the Members of the Company pursuant to Bye-law 14.1 for a
peri od of three months from the date the price i s fi xed.
ALTERATION OF SHARE CAPITAL

15. Power to Alter Capital

15.1 The Company may if authori sed by resol uti on of the Members i ncrease, di vi de,
consoli date, subdi vi de, change the currency denominati on of, dimini sh or otherwi se
al ter or reduce i ts share capi tal in any manner permi tted by the Act.
15.2 Where, on any al teration or reduction of share capital, fractions of shares or some other
difficulty would arise, the Board may deal with or resolve the same in such manner as it
thinks fi t.
16. Variation of Rights Attaching to Shares

If, at any time, the share capital is di vided into different cl asses of shares, the ri ghts attached to
any cl ass (unless otherwi se provi ded by the terms of i ssue of the shares of that cl ass) may,
whether or not the Company i s being wound-up, be varied wi th the consent in wri ting of the
holders of three-fourths of the issued shares of that class or with the sanction of a resoluti on
passed by a majori ty of the votes cast at a separate general meeting of the holders of the shares
of the class at which meeting the necessary quorum shall be two persons at least holding or
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representing by proxy one-third of the i ssued shares of the cl ass. The ri ghts conferred upon the
holders of the shares of any class issued with preferred or other ri ghts shall not, unless
otherwise expressl y provi ded by the terms of i ssue of the shares of that cl ass, be deemed to be
varied by the creation or issue of further shares ranking pari passu therewith.
DIVIDENDS AND CAPITALISATION

17. Dividends

17.1 The Board may, subject to these Bye-l aws and i n accordance wi th the Act, decl are a
di vi dend to be pai d to the Members, in proporti on to the number of shares hel d by
them, and such di vi dend may be pai d i n cash or wholl y or partl y i n specie in which case
the Board may fix the value for distri buti on in specie of any assets. No unpaid dividend
shall bear interest as against the Company.
17.2 The Board may fix any date as the record date for determining the Members entitled to
recei ve any di vi dend.
17.3 The Company may pay di vi dends in proporti on to the amount pai d up on each share
where a larger amount is paid up on some shares than on others.
17.4 The Board may declare and make such other distributions (i n cash or in specie) to the
Members as may be l awful l y made out of the assets of the Company. No unpai d
distribution shall bear interest as against the Company.
18. Power to Set Aside Profits

The Board may, before declaring a divi dend, set aside out of the surplus or profits of the
Company, such amount as i t thinks proper as a reserve to be used to meet conti ngencies or for
equal i si ng di vi dends or for any other purpose.
19. Method of Payment

19.1 Any dividend, interest, or other moneys payable in cash in respect of the shares may be
pai d through the system mai ntained by Verdi papi rsentralen ASA or any other relevant
system, or by cheque or draft sent through the post di rected to the Member at such
Member's address in the Register of Members, or to such person and to such address as
the holder may in writing direct.
19.2 In the case of joint holders of shares, any dividend, interest or other moneys payable in
cash in respect of shares may be pai d by cheque or draft sent through the post di rected
to the address of the holder first named in the Register of Members, or to such person
and to such address as the joint holders may in writing direct. If two or more persons
are regi stered as joint hol ders of any shares any one of them can gi ve an effectual recei pt
for any di vi dend pai d i n respect of such shares.
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19.3 The Board may deduct from the dividends or distributions payable to any Member all
moneys due from such Member to the Company on account of call s or otherwise.
19.4 Any di vi dend and or other moneys payable in respect of a share which has remai ned
unclaimed for 7 years from the date when it became due for payment shall, if the Board
so resolves, be forfei ted and cease to remain owing by the Company. The payment of
any unclaimed divi dend or other moneys payabl e in respect of a share may (but need
not) be paid by the Company into an account separate from the Company's own
account. Such payment shall not constitute the Company a trustee in respect thereof.
19.5 The Company shall be entitled to cease sending dividend cheques and warrants by post
or otherwise to a Member if those instruments have been returned undelivered to, or left
uncashed by, that Member on at least two consecutive occasions, or, following one such
occasion, reasonable enquiries have failed to establish the Member's new address. The
entitlement conferred on the Company by this Bye-law 19.5 in respect of any Member
shall cease if the Member claims a divi dend or cashes a di vidend cheque or warrant.
20. Capitalisation

20.1 The Board may capi tal i se any amount for the ti me being standing to the credi t of any of
the Company's share premi um or other reserve accounts or to the credi t of the profi t and
loss account or otherwise available for distribution by applying such amount in paying
up uni ssued shares to be all otted as ful l y pai d bonus shares pro rata to the Members
(except in connecti on wi th the conversi on of shares of one cl ass to shares of another
class).
20.2 The Board may capitalise any amount for the time being standing to the credit of a
reserve account or amounts otherwi se avai lable for di vi dend or di stribution by appl ying
such amounts in paying up in full, partly or nil paid shares of those Members who
would have been entitled to such amounts if they were distributed by way of divi dend
or distribution.
MEETINGS OF MEMBERS

21. Annual General Meetings

The annual general meeting of the Company shall be held in each year (other than the year of
incorporation) at such time and place as the Chairman or any two Directors or any Director and
the Secretary or the Board shall appoint.
22. Special General Meetings

The Chairman or any two Directors or any Director and the Secretary or the Board may convene
a special general meeting whenever in their judgment such a meeting is necessary.
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23. Requisitioned General Meetings

The Board shall, on the requisition of Members holding at the date of the deposit of the
requisition not less than one-twentieth of such of the paid-up share capital of the Company as at
the date of the deposit carries the ri ght to vote at general meetings, forthwith proceed to
convene a special general meeting and the provisions of the Act shall apply.
24. Notice

24.1 At least 21 days' noti ce of an annual general meeti ng shall be gi ven to each Member
entitled to attend and vote thereat, stating the date, place and time at which the meeting
is to be held, that the election of Directors will take place thereat, and as far as
practi cable, the other busi ness to be conducted at the meeting.
24.2 At least 21 days' noti ce of a special general meeting shall be given to each Member
entitled to attend and vote thereat, stating the date, time, place and the general nature of
the business to be considered at the meeting.
24.3 Subject to Bye-law 24.5, the Board may fix any date as the record date for determining
the Members entitled to receive notice of and to vote at any general meeting.
24.4 A general meeting shal l, notwi thstanding that it i s cal led on shorter noti ce than that
speci fied in these Bye-l aws, be deemed to have been properl y cal led i f i t is so agreed by
(i ) all the Members enti tl ed to attend and vote thereat i n the case of an annual general
meeti ng; and (i i) by a majori ty in number of the Members having the ri ght to attend and
vote at the meeting, being a majori ty together holding not less than 95% in nominal
val ue of the shares gi ving a right to attend and vote thereat in the case of a special
general meeting.
24.5 The accidental omission to give notice of a general meeting to, or the non-receipt of a
notice of a general meeting by, any person entitled to receive noti ce shall not invali date
the proceedings at that meeting.
24.6 Notwithstanding any other provisions of these Bye-laws, in relation to any general
meeting, or any cl ass meeting of the Members or any adjourned meeting or any poll
taken at a meeting or adjourned meeting of which notice is given, the Board may specify
i n the noti ce of the meeti ng or adjourned meeti ng or i n any document sent to the
Members by or on behal f of the Board in relation to the meeti ng, a time and date (a
Record Date ) which is not more than fi ve (5) days before the date fi xed for the meeting
(the Meeti ng Date ) and notwi thstanding any provi si on in these Bye-l aws to the
contrary, in such case:
(a) each person entered in the Regi ster of Members at the Record Date as a Member,
or a Member of the relevant class (a Record Date Holder ) shall be entitled to
attend and vote at the relevant meeting and to exercise all of the ri ghts and
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privileges of a Member or a Member of the relevant class, as applicable, in
rel ati on to that meeti ng i n respect of the shares, or the shares of the relevant
class, regi stered in such Members name in the Register of Members (i ncluding,
for the avoidance of doubt, a branch register) at the Record Date;
(b) as regards any shares, or shares of the relevant class, which are registered in the
name of a Record Date Hol der at the Record Date but are not so regi stered at the
meeting date (the Relevant Shares ), each holder of any Relevant Shares at the
meeting date shall be deemed to have irrevocably appointed that Record Date
Hol der as hi s proxy for the purpose of attendi ng and voting in respect of those
Relevant Shares at the relevant meeting (wi th power to appoint, or to authori se
the appointment of, some other person as proxy), in such manner as the Record
Date Holder in his absolute discretion may determine;
(c) accordingly, except through hi s proxy pursuant to this Bye-law 24.6, a holder of
Relevant Shares at the meeti ng date who i s not a Record Date Hol der, shall not
be entitled to attend or to vote at the relevant meeti ng, or to exerci se any of the
ri ghts or pri vi leges of a Member or a Member of the relevant cl ass, i n respect of
the Relevant Shares at that meeting; and
(d) the entry of the name of a person i n the Regi ster of Members as a Record Date
Holder shall be sufficient evidence of his appointment as proxy in respect of any
Relevant Shares for the purposes of this Bye-law 24.6, but all the provisions of
these Bye-l aws rel ating to executi on and deposi t of an instrument appointing a
proxy or any ancillary matter (including the Boards powers and discretions
relevant to such matter) shall appl y to any instrument appointing any person
other than the Record Date Holder as proxy in respect of any Relevant Shares.
25. Giving Notice and Access

25.1 A noti ce may be given by the Company to a Member:
(a) by delivering it to such Member in person; or
(b) by sending it by letter mail or courier to such Member's address in the Register of
Members; or
(c) by transmitting it by electronic means (including facsimile and electronic mail,
but not telephone) in accordance wi th such directi ons as may be gi ven by such
Member to the Company for such purpose; or
(d) by del i vering it in accordance wi th the provisi ons of the Act pertaining to
deli very of electronic records by publication on a website.
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25.2 Any notice required to be given to a Member shall, with respect to any shares held
joi ntl y by two or more persons, be gi ven to whi chever of such persons i s named first i n
the Regi ster of Members and notice so gi ven shal l be suffi cient notice to al l the hol ders
of such shares.
25.3 Any noti ce del i vered in accordance wi th Bye-law 25.1(a), 25.1(b) or 25.1(c) shall be
deemed to have been served at the ti me when the same woul d be del i vered i n the
ordinary course of transmi ssi on and, in proving such servi ce, i t shal l be sufficient to
prove that the notice was properl y addressed and prepai d, if posted or sent by courier,
and the time when it was posted, deli vered to the courier, or transmitted by electronic
means. Any notice delivered in accordance with Bye-law 25.1(d) shall be deemed to
have been deli vered at the ti me when the requirements of the Act in that regard have
been met.
26. Postponement or Cancellation of General Meeting

The Secretary may, and on the instructi on of the Chairman or the chai rman of such meeting the
Secretary shall, postpone or cancel any general meeting called in accordance with these Bye-
laws (other than a meeting requisitioned under these Bye-laws) provided that notice of
postponement or cancellati on i s gi ven to each Member before the ti me for such meeti ng. Fresh
notice of the date, time and pl ace for the postponed or cancelled meeting shall be given to each
Member in accordance with these Bye-laws.
27. Electronic Participation and Security in Meetings

25.1 Members may participate in any general meeting by such telephonic, electronic or other
communication facilities or means as permit all persons participating in the meeting to
communicate with each other simultaneously and instantaneously, and participation in
such a meeting shall constitute presence in person at such meeting.
25.2 The Board may, and at any general meeting, the chairman of such meeting may, make
any arrangement and impose any requirement or restriction it or he considers
appropriate to ensure the security of a general meeting including, without limitation,
requi rements for evi dence of i dentity to be produced by those attending the meeting, the
searching of their personal property and the restriction of items that may be taken into
the meeting place. The Board and, at any general meeting, the chai rman of such meeting
are entitled to refuse entry to a person who refuses to comply with any such
arrangements, requirements or restri cti ons.
28. Quorum at General Meetings

28.1 At any general meeting two or more persons present in person and representing in
person or by proxy in excess of one-third of the total i ssued voting shares i n the
Company throughout the meeting shall form a quorum for the transaction of business,
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provided that if the Company shall at any time have only one Member, one Member
present in person or by proxy shall form a quorum for the transaction of business at any
general meeting held during such time.
28.2 If wi thin half an hour from the ti me appointed for the meeting a quorum is not present,
then, in the case of a meeti ng convened on a requi si ti on, the meeting shal l be deemed
cancelled and, in any other case, the meeting shall stand adjourned to the same day one
week l ater, at the same ti me and place or to such other day, ti me or pl ace as the
Secretary may determi ne. Unless the meeting i s adjourned to a specifi c date, ti me and
place announced at the meeting being adjourned, fresh notice of the date, place and time
for the resumpti on of the adjourned meeting shal l be gi ven to each Member enti tled to
attend and vote thereat in accordance with these Bye-laws.
29. Chairman to Preside at General Meetings

Unless otherwise agreed by a majori ty of those attending and entitled to vote thereat, the
Chairman shall act as chairman at all general meetings at which such person is present. If the
Chairman is absent, a chairman shall be appointed or elected by those present at the meeting
and entitled to vote.
30. Voting on Resolutions

30.1 Subject to the Act and these Bye-l aws, any questi on proposed for the consi derati on of
the Members at any general meeting shall be deci ded by the affirmative votes of a
majori ty of the votes cast in accordance wi th these Bye-l aws and in the case of an
equality of votes the resolution shall fail.
30.2 No Member shall be entitled to vote at a general meeting unless such Member has paid
all the calls on all shares held by such Member.
30.3 At any general meeting a resolution put to the vote of the meeting shall, in the first
instance, be voted upon by a show of hands and, subject to any ri ghts or restrictions for
the time being lawfully attached to any class of shares and subject to these Bye-laws,
every Member present in person and every person holding a valid proxy at such
meeting shall be enti tled to one vote and shall cast such vote by raising his hand.
30.4 In the event that a Member parti ci pates i n a general meeti ng by telephone, electronic or
other communi cati on facilities or means, the chairman of the meeting shall direct the
manner in which such Member may cast his vote on a show of hands.
30.5 At any general meeting if an amendment is proposed to any resolution under
consi derati on and the chairman of the meeti ng rules on whether or not the proposed
amendment is out of order, the proceedings on the substantive resolution shall not be
i nval i dated by any error i n such rul ing.
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30.6 At any general meeting a declaration by the chairman of the meeting that a questi on
proposed for consideration has, on a show of hands, been carried, or carried
unanimously, or by a particular majori ty, or lost, and an entry to that effect in a book
containing the mi nutes of the proceedings of the Company shall, subject to these Bye-
laws, be conclusive evidence of that fact.
31. Power to Demand a Vote on a Poll

31.1 Notwithstanding the foregoing, a poll may be demanded by any of the following
persons:
(a) the chairman of such meeting; or
(b) at least three Members present in person or represented by proxy; or
(c) any Member or Members present in person or represented by proxy and hol ding
between them not less than one-tenth of the total voting ri ghts of all the
Members having the ri ght to vote at such meeting; or
(d) any Member or Members present in person or represented by proxy hol ding
shares in the Company conferring the ri ght to vote at such meeting, being shares
on which an aggregate sum has been paid up equal to not less than one-tenth of
the total amount paid up on all such shares conferring such ri ght.
31.2 Where a poll is demanded, subject to any rights or restrictions for the ti me being
lawfully attached to any class of shares, every person present at such meeting shall have
one vote for each share of whi ch such person is the hol der or for whi ch such person
holds a proxy and such vote shall be counted by ballot as described herein, or in the case
of a general meeting at which one or more Members are present by telephone, electronic
or other communication facili ties or means, in such manner as the chairman of the
meeti ng may di rect and the resul t of such poll shal l be deemed to be the resol uti on of
the meeti ng at whi ch the poll was demanded and shall repl ace any previous resol uti on
upon the same matter whi ch has been the subject of a show of hands. A person enti tled
to more than one vote need not use al l hi s votes or cast al l the votes he uses in the same
way.
31.3 A poll demanded for the purpose of electi ng a chai rman of the meeti ng or on a question
of adjournment shall be taken forthwi th. A pol l demanded on any other questi on shall
be taken at such ti me and i n such manner during such meeting as the chairman (or
acting chai rman) of the meeting may direct. Any business other than that upon which a
pol l has been demanded may be conducted pending the taking of the pol l .
31.4 Where a vote is taken by poll, each person physically present and entitled to vote shall
be furni shed wi th a ball ot paper on whi ch such person shal l record his vote in such
manner as shal l be determined at the meeti ng havi ng regard to the nature of the
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questi on on which the vote i s taken, and each ball ot paper shall be si gned or ini ti al led or
otherwise marked so as to i dentify the voter and the regi stered hol der i n the case of a
proxy. Each person present by telephone, electroni c or other communicati on faci li ties or
means shall cast his vote in such manner as the chairman of the meeting shall direct. At
the conclusion of the poll, the ballot papers and votes cast in accordance with such
directions shall be examined and counted by a committee of not less than two Members
or proxy holders appointed by the chairman of the meeting for the purpose and the
result of the poll shall be decl ared by the chai rman of the meeting.
32. Voting by Joint Holders of Shares

In the case of joint hol ders, the vote of the seni or who tenders a vote (whether in person or by
proxy) shall be accepted to the exclusion of the votes of the other joint holders, and for this
purpose seni ority shal l be determined by the order in whi ch the names stand i n the Regi ster of
Members.
33. Instrument of Proxy

33.1 A Member may appoint a proxy by an instrument which shall be in writing in
substanti al l y the foll owing form or such other form as the chairman of the meeting shall
accept:
Proxy
[ ] (the "Company")
I/We, [insert names here], being a Member of the Company with [number]
shares, HEREBY APPOINT [name] of [address] or fai l ing hi m, [name] of
[address] to be my/our proxy to vote for me/us at the meeting of the Members to
be held on the [ ] day of [ ], 20[ ] and at any adjournment thereof. (Any
restrictions on voting to be inserted here.)
Si gned thi s [ ] day of [ ], 20[ ]
Member(s)
33.2 The instrument appointing a proxy must be recei ved by the Company at the regi stered
office or at such other place or in such manner as i s speci fied i n the noti ce conveni ng the
meeting or in any instrument of proxy sent out by the Company in relation to the
meeti ng at whi ch the person named i n the instrument appointing a proxy proposes to
vote, and an instrument appoi nting a proxy whi ch i s not recei ved in the manner so
prescribed shall be invalid.
33.3 A Member who i s the hol der of two or more shares may appoint more than one proxy to
represent him and vote on his behalf in respect of different shares.
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33.4 The deci si on of the chairman of any general meeting as to the val i di ty of any
appointment of a proxy shall be fi nal.
33.5 In addi tion to the ri ght to be represented by a proxy, a Member may bring up to two
advisers to any general meeting and may grant one such adviser the right to speak.
34. Representation of Corporate Member

34.1 A corporati on which i s a Member may, by wri tten instrument, authorise such person or
persons as it thinks fit to act as its representative at any meeting and any person so
authori sed shall be enti tl ed to exerci se the same powers on behal f of the corporati on
which such person represents as that corporation could exercise if it were an individual
Member, and that Member shall be deemed to be present in person at any such meeting
attended by its authorised representative or representati ves.
34.2 Notwithstanding the foregoing, the chairman of the meeting may accept such assurances
as he thinks fit as to the ri ght of any person to attend and vote at general meetings on
behalf of a corporation which is a Member.
35. Adjournment of General Meeting

35.1 The chairman of any general meeting at which a quorum is present may with the
consent of Members holding a majori ty of the voting rights of those Members present in
person or by proxy (and shall if so di rected by Members hol di ng a majori ty of the voti ng
ri ghts of those Members present in person or by proxy), adjourn the meeting.
35.2 In addition, the chai rman of a general meeting may adjourn the meeting to another time
and place wi thout such consent or direction of the Members if it appears to him that:
(a) it is li kely to be impractical to hold or continue that meeting because of the
number of Members wishing to attend who are not present; or
(b) the unruly conduct of persons attending the meeting prevents, or is likel y to
prevent, the orderl y continuation of the business of the meeting; or
(c) an adjournment i s otherwi se clearl y necessary so that the business of the meeti ng
may be properly conducted.
34.3 The chai rman of a general meeti ng may, wi th the consent of the Members at any general
meeti ng at whi ch a quorum i s present, and shal l i f so di rected by the meeti ng, adjourn
the meeting. Unless the meeti ng i s adjourned to a specifi c date, pl ace and time
announced at the meeting bei ng adjourned, fresh noti ce of the date, place and ti me for
the resumption of the adjourned meeting shall be given to each Member entitled to
attend and vote thereat in accordance with these Bye-laws.
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36. Written Resolutions

36.1 Subject to these Bye-laws, anything which may be done by resolution of the Company in
general meeting or by resolution of a meeting of any class of the Members may, without
a meeting be done by written resolution in accordance with this Bye-law.
36.2 Notice of a written resolution shall be given, and a copy of the resolution shall be
circulated to all Members who would be entitled to attend a meeting and vote thereon.
The acci dental omission to give noti ce to, or the non-receipt of a noti ce by, any Member
does not inval i date the passi ng of a resol uti on.
36.3 A written resolution is passed when it is signed by, or in the case of a Member that is a
corporati on, on behalf of, the Members who at the date that the noti ce i s gi ven represent
such majori ty of votes as woul d be required i f the resol uti on was voted on at a meeting
of Members at which all Members entitled to attend and vote thereat were present and
voting.
36.4 A resol uti on in wri ting may be si gned in any number of counterparts.
36.5 A resolution in writing made in accordance wi th this Bye-law is as valid as if it had been
passed by the Company in general meeting or by a meeting of the relevant class of
Members, as the case may be, and any reference in any Bye-law to a meeting at which a
resolution is passed or to Members voting in favour of a resoluti on shall be construed
accordingly.
36.6 A resol uti on in wri ting made in accordance wi th thi s Bye-l aw shall consti tute minutes
for the purposes of the Act.
36.7 This Bye-law shall not apply to:
(a) a resolution passed to remove an Auditor from office before the expiration of his
term of office; or
(b) a resolution passed for the purpose of removi ng a Director before the expirati on
of his term of office.
36.8 For the purposes of thi s Bye-l aw, the effecti ve date of the resol uti on i s the date when the
resolution is signed by, or in the case of a Member that is a corporation whether or not a
company within the meaning of the Act, on behalf of, the last Member whose signature
results in the necessary voting majori ty being achieved and any reference in any Bye-law
to the date of passing of a resol uti on i s, in rel ation to a resol uti on made i n accordance
with this Bye-law, a reference to such date.
37. Directors and the Auditors Attendance at General Meetings

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The Di rectors and Chief Executi ve Offi cer shal l be enti tled to recei ve noti ce of, attend and be
heard at any general meeti ng, and the Chairman of the Board and the Chief Executi ve Officer
shall attend general meetings where possible. The auditor of the Company shall receive notice
of, attend and be heard at any general meeting in which the nature of the matters on the agenda
so requires, and the auditor has for any general meeting a ri ght to receive noti ce, attend and be
heard.
38. Motion for Inquiry
A Member may submi t a moti on requiring an i nquiry into the Companys incorporati on,
management or further specified aspects of the management or the accounts of the Company by
written notice to the Company one week prior to the notice of the annual general meeting or the
special general meeting being sent to Members. The motion may be submitted at an annual
general meeting or at a speci al general meeting of the Company for whi ch the conveni ng notice
states that an i tem on such an i nquiry i s to be discussed. If the moti on i s approved by Members
hol ding at least one-twentieth of the share capi tal and voti ng ri ghts represented at the general
meeting and is based on reasonable grounds, the Company shall engage one or more
independent persons to conduct the inquiry. The persons conducting the inquiry shall submit a
written inquiry report to the Company. The Company shall convene a general meeting to
discuss the inquiry report, and the report must be sent to each Member with a known address
no l ater than one week pri or to the meeti ng.
DIRECTORS AND OFFICERS

39. Election of Directors

39.1 The Board shall be elected or appointed in the fi rst place at the statutory meeting of the
Company and thereafter, except in the case of a casual vacancy, at the annual general
meeting or at any special general meeting called for that purpose.
39.2 Only persons who are proposed or nominated in accordance wi th this Bye-law 39 shal l
be eligible for election as a Director. Subject to these Bye-laws, any Member, the Board
or the nomi nation committee may propose any person for re-election or election as a
Di rector i n accordance wi th thi s Bye-l aw 39.
39.3 Where any person, other than a Director retiring at the meeting or a person proposed for
re-electi on or electi on as a Director by the Board or the nominati on commi ttee, is to be
proposed for electi on as a Di rector, noti ce must be gi ven to the Company of the
intention to propose him and of his willingness to serve as a Director. Whether a
Director is to be elected at an annual general meeting or a special general meeting, that
notice must be given not less than 21 days before the date of such general meeting.
39.4 The Company in general meeting shal l appoi nt a nomi nati on commi ttee (the
nomination committee ), compri sing such number of persons as the Members may
determine in general meeting from ti me to time, and members of the nominati on
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committee shal l be appointed by resolution of the Members. Members and the Board
may suggest candidates for the election of Directors to the nomination committee
provi ded such suggesti ons are in accordance wi th any nomi nati on commi ttee gui del ines
or corporate governance rules adopted by the Company in general meeting from time to
time and Members, Di rectors and the nomination committee may also propose any
person for election as a Director in accordance with Bye-laws 39.2 and 39.3. The
nomination committee may or may not recommend any candidates suggested or
proposed by any Member or the Board i n accordance wi th any nomi nati on commi ttee
gui deli nes or corporate governance rules adopted by the Company in general meeting
from time to time. The nominati on committee may provide recommendations on the
suitability of candidates for the Board, as well as the remuneration of the members of the
Board. The Members at any general meeting may stipulate guidelines for the duties of
the nominati on commi ttee.
39.5 Where persons are val i dl y proposed for re-election or electi on as a Director, the persons
recei ving the most votes (up to the number of Directors to be elected) shall be elected as
Directors, and an absolute majority of the votes cast shall not be a prerequisite to the
electi on of such Di rectors.
39.6 At any general meeting the Members may authorise the Board to fill any vacancy in
their number left unfilled at a general meeting.
40. Number of Directors
The Board shall consist of not less than fi ve Directors or such number in excess thereof as the
Members may determine.
41. Term of Office of Directors

Directors shall hold office for such term as the Members may determine or, in the absence of
such determi nati on, unti l the annual general meeti ng hel d i n the second year after the
appoi ntment or unti l their successors are elected or appointed or their offi ce is otherwise
vacated.
42. Alternate Directors

42.1 At any general meeting, the Members may elect a person or persons to act as a Director
i n the al ternati ve to any one or more Di rectors or may authori se the Board to appoi nt
such Al ternate Directors.
42.2 Unless the Members otherwi se resol ve, any Director may appoint a person or persons to
act as a Di rector in the alternative to hi mself by notice deposited with the Secretary.
42.3 Any person so elected or appointed pursuant to this Bye-law shall have all the rights
and powers of the Director or Directors for whom such person is elected or appointed in
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the alternative provided that such person shall not be counted more than once in
determining whether or not a quorum is present.
42.4 An Al ternate Director shall be entitled to receive notice of all meetings of the Board and
to attend and vote at any such meeting at which a Director for whom such Al ternate
Director was appointed in the al ternative is not personally present and generally to
perform at such meeting al l the functi ons of such Director for whom such Al ternate
Director was appointed.
42.5 An Alternate Directors office shall terminate
(a) i n the case of an al ternate elected by the Members:
(i ) on the occurrence in relation to the Al ternate Director of any event which,
i f i t occurred in rel ati on to the Director for whom he was elected to act,
would result in the termination of that Director; or
(ii) if the Director for whom he was elected in the alternative ceases for any
reason to be a Director, provided that the al ternate removed in these
circumstances may be re-appointed by the Board as an alternate to the
person appointed to fill the vacancy; and
(b) in the case of an al ternate appointed by a Director:
(i ) on the occurrence in relation to the Al ternate Director of any event which,
if it occurred in relation to his appointor, woul d result in the termination
of the appointors directorship; or
(ii) when the Al ternate Directors appointor revokes the appointment by
notice to the Company in writing specifying when the appointment is to
terminate; or
(i i i) i f the Al ternate Directors appoi ntor ceases for any reason to be a
Director.
43. Removal of Directors

43.1 Subject to any provision to the contrary in these Bye-laws, the Members entitled to vote
for the electi on of Directors may, at any speci al general meeting convened and hel d in
accordance with these Bye-laws, remove a Director provided that the notice of any such
meeti ng convened for the purpose of removing a Di rector shal l contain a statement of
the i ntenti on so to do and be served on such Di rector not less than 14 days before the
meeti ng and at such meeti ng the Director shal l be enti tled to be heard on the moti on for
such Director's removal.
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43.2 If a Director is removed from the Board under this Bye-law the Members may fill the
vacancy at the meeting at which such Director i s removed. In the absence of such
election or appointment, the Board may fill the vacancy.
44. Vacancy in the Office of Director

44.1 The offi ce of Director shall be vacated if the Director:
(a) i s removed from offi ce pursuant to these Bye-laws or is prohibited from being a
Director by law;
(b) i s or becomes bankrupt, or makes any arrangement or composition wi th his
credi tors general l y;
(c) i s or becomes of unsound mind or dies; or
(d) resi gns hi s offi ce by notice to the Company.
44.2 The Board shall have the power to appoint any person as a Di rector to fill a vacancy on
the Board occurring as a result of the death, di sability, disqualification or resignation of
any Director or as a result of an increase in the size of the Board and to appoint an
Al ternate Director to any Director so appointed.
45. Remuneration of Directors

The remunerati on (i f any) of the Directors shal l be determined by the Company in general
meeti ng and shall be deemed to accrue from day to day. The Directors may al so be pai d all
travel, hotel and other expenses properly incurred by them in attending and returning from the
meeti ngs of the Board, any commi ttee appointed by the Board, general meetings, or in
connection with the business of the Company or their duties as Directors generally.
46. Defect in Appointment

All acts done in good faith by the Board, any Director, a member of a committee appointed by
the Board, any person to whom the Board may have delegated any of its powers, or any person
acting as a Director shall, notwithstanding that it be afterwards discovered that there was some
defect in the appointment of any Director or person acting as aforesaid, or that he was, or any of
them were, di squalified, be as valid as if every such person had been duly appointed and was
qualified to be a Director or act in the relevant capacity.
47. Directors to Manage Business

47.1 The business of the Company shall be managed and conducted by the Board. In
managing the business of the Company, the Board may exercise al l such powers of the
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Company as are not, by the Act or by these Bye-l aws, required to be exerci sed by the
Company in general meeting.
47.2 The affairs of the Company shall not be conducted in a manner oppressive or prejudicial
to the i nterests of some part of the Members. In the event the affairs of the Company are
conducted in such a manner, any Member may make an application to the Supreme
Court of Bermuda pursuant to the Act.
48. Powers of the Board of Directors

The Board may:
(a) appoi nt, suspend, or remove any manager, secretary, clerk, agent or empl oyee of
the Company and may fix their remunerati on and determi ne their duties;
(b) exercise all the powers of the Company to borrow money and to mortgage or
charge or otherwi se grant a securi ty interest in i ts undertaking, property and
uncal led capi tal , or any part thereof, and may i ssue debentures, debenture stock
and other securi ties whether outright or as securi ty for any debt, li ability or
obligation of the Company or any third party;
(c) appoi nt one or more Di rectors to the offi ce of managing director or chief
executive officer of the Company, who shall , subject to the control of the Board,
supervise and administer all of the general business and affairs of the Company;
(d) appoint a person to act as manager of the Company's day-to-day business and
may entrust to and confer upon such manager such powers and duties as it
deems appropri ate for the transaction or conduct of such business;
(e) by power of attorney, appoi nt any company, firm, person or body of persons,
whether nomi nated directl y or i ndi rectl y by the Board, to be an attorney of the
Company for such purposes and wi th such powers, authorities and discretions
(not exceeding those vested in or exerci sable by the Board) and for such peri od
and subject to such conditions as it may think fit and any such power of attorney
may contain such provi si ons for the protecti on and convenience of persons
deal ing with any such attorney as the Board may think fit and may also authorise
any such attorney to sub-delegate all or any of the powers, authorities and
discretions so vested in the attorney;
(f) procure that the Company pays al l expenses i ncurred in promoting and
incorporating the Company and listing the shares of the Company;
(g) delegate any of its powers (including the power to sub-delegate) to a committee
of one or more persons appointed by the Board which may consist partly or
entirely of non-Directors, provided that every such committee shall conform to
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such directions as the Board shall impose on them and provided further that the
meetings and proceedings of any such committee shall be governed by the
provisions of these Bye-laws regulating the meetings and proceedings of the
Board, so far as the same are appl i cable and are not superseded by directi ons
imposed by the Board;
(h) delegate any of its powers (including the power to sub-delegate) for a specific
purpose to any person on such terms and i n such manner as the Board may see
fit, incl uding any restrictions that the Board may determine at the time of
delegation;
(i) present any peti tion and make any application in connection wi th the liquidation
or reorganisation of the Company;
(j) i n connecti on wi th the i ssue of any share, pay such commi ssi on and brokerage as
may be permitted by law; and
(k) authori se any company, firm, person or body of persons to act on behalf of the
Company for any speci fi c purpose and in connecti on therewi th to execute any
deed, agreement, document or instrument on behalf of the Company.
49. Register of Directors and Officers

The Board shall cause to be kept in one or more books at the regi stered offi ce of the Company a
Register of Directors and Officers and shall enter therein the particulars required by the Act.
50. Appointment of Officers

The Board may appoint such Offi cers (who may or may not be Directors) as the Board may
determine for such terms as the Board deems fi t.
51. Appointment of Secretary

The Secretary shal l be appoi nted by the Board from ti me to ti me for such term as the Board
deems fit.
52. Duties of Officers

The Officers shall have such powers and perform such duties in the management, business and
affairs of the Company as may be delegated to them by the Board from time to ti me.
53. Remuneration of Officers

The Officers shall receive such remuneration as the Board may determine.
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54. Conflicts of Interest

54.1 Any Director, or any Di rector's fi rm, partner or any company wi th whom any Di rector is
associated, may act in any capacity for, be employed by or render services to the
Company and such Director or such Director's associated firm, partner or company shall
be enti tled to remuneration as if such Director were not a Director. Nothing herein
contained shall authorise a Director or Director's firm, partner or company to act as
Auditor to the Company.
54.2 A Director who i s directl y or indirectl y interested i n a contract or proposed contract or
arrangement wi th the Company shal l declare the nature of such i nterest as required by
the Act.
54.3 Following a declaration being made pursuant to this Bye-law, and unless disquali fied by
the chairman of the relevant Board meeting, a Di rector may vote in respect of any
contract or proposed contract or arrangement i n whi ch such Director i s i nterested and
may be counted in the quorum for such meeting.
55. Related Party Transactions

All transactions between the Company and its Members, Directors or Officers shall be based on
arms length terms and conditi ons. In the event of any materi al transacti ons between the
Company and its Members, Directors or Offi cers, the Company shall arrange for a valuation to
be obtained from a reputable and independent financial institution, auditor or accountancy
firm.
56. Indemnification and Exculpation of Directors and Officers

56.1 The Directors, Resi dent Representati ve, Secretary and other Offi cers (such term to
incl ude any person appointed to any committee by the Board) acting in relation to any
of the affairs of the Company or any subsi di ary thereof and the l iqui dator or trustees (if
any) acting in relation to any of the affairs of the Company or any subsidiary thereof and
every one of them (whether for the time being or formerl y), and their heirs, executors
and admi ni strators (each of whi ch an i ndemnified party ), shall be i ndemnified and
secured harmless out of the assets of the Company from and against all actions, costs,
charges, l osses, damages and expenses which they or any of them, thei r heirs, executors
or administrators, shal l or may incur or sustai n by or by reason of any act done,
concurred in or omitted in or about the execution of their duty, or supposed duty, or in
their respective offi ces or trusts, and no indemnified party shall be answerable for the
acts, recei pts, neglects or defaul ts of the others of them or for joining in any recei pts for
the sake of conformi ty, or for any bankers or other persons wi th whom any moneys or
effects belonging to the Company shall or may be lodged or deposited for safe custody,
or for insufficiency or deficiency of any security upon which any moneys of or
belonging to the Company shall be placed out on or invested, or for any other loss,
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mi sfortune or damage whi ch may happen i n the executi on of thei r respecti ve offi ces or
trusts, or in relation thereto, PROVIDED THAT this indemnity shall not extend to any
matter in respect of any fraud or dishonesty in relation to the Company which may
attach to any of the indemnified parties.
56.2 The Company may purchase and maintain insurance for the benefit of any Director or
Officer agai nst any l i abi li ty incurred by hi m under the Act i n hi s capaci ty as a Director
or Offi cer or i ndemni fyi ng such Di rector or Offi cer in respect of any loss ari sing or
liability attaching to him by virtue of any rule of law in respect of any negligence,
defaul t, breach of duty or breach of trust of whi ch the Director or Officer may be gui l ty
in relation to the Company or any subsidiary thereof.
56.3 The Company may advance moneys to a Director or Officer for the costs, charges and
expenses incurred by the Di rector or Officer i n defending any ci vi l or cri minal
proceedings against him, on condition that the Director or Officer shall repay the
advance if any allegation of fraud or dishonesty in relation to the Company is proved
against hi m.
MEETINGS OF THE BOARD OF DIRECTORS

57. Board Meetings

The Board may meet for the transacti on of busi ness, adjourn and otherwise regul ate i ts
meetings as it sees fi t. Subject to these Bye-laws, a resolution put to the vote at a meeting of the
Board shall be carried by the affirmative votes of a majori ty of the votes cast and in the case of
an equality of votes the resolution shall fail.
58. Notice of Board Meetings

A Director may, and the Secretary on the requi siti on of a Di rector shal l , at any ti me summon a
meeting of the Board. Notice of a meeting of the Board shall be deemed to be duly given to a
Di rector if i t i s gi ven to such Di rector verbal ly (i ncl udi ng in person or by telephone) or
otherwise communicated or sent to such Di rector by post, electronic means or other mode of
representing words in a visible form at such Director's last known address or in accordance
with any other instructions given by such Director to the Company for this purpose.
59. Electronic Participation in Meetings

Directors may participate in any meeting by such telephonic, electronic or other communication
facilities or means as permit all persons participating in the meeting to communicate with each
other simultaneously and instantaneously, and participation in such a meeting shall constitute
presence in person at such meeting.
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60. Quorum at Board Meetings

The quorum necessary for the transaction of business at a meeting of the Board shall be the
majori ty of the Directors in office.
61. Board to Continue in the Event of Vacancy

The Board may act notwithstanding any vacancy in its number but, if and so long as its number
is reduced below the number fi xed by these Bye-laws as the quorum necessary for the
transaction of business at meetings of the Board, the continuing Directors or Director may act
for the purpose of (i) summoning a general meeti ng; or (ii ) preservi ng the assets of the
Company.
62. Chairman to Preside

Unless otherwise agreed by a majority of the Di rectors attending, the Chairman shall act as
chairman at all meetings of the Board at which such person is present. If the Chairman is
absent, a chairman shall be appointed or elected by the Di rectors present at the meeting.
63. Written Resolutions

A resolution signed by all the Di rectors, which may be in counterparts, shall be as valid as if it
had been passed at a meeting of the Board duly called and constituted, such resolution to be
effective on the date on which the last Director signs the resolution. For the purposes of this
Bye-law only, "the Directors" shall not include an Alternate Director.
64. Validity of Prior Acts of the Board

No regulation or alteration to these Bye-laws made by the Company in general meeting shall
invalidate any prior act of the Board which would have been vali d if that regulation or
alteration had not been made.
CORPORATE RECORDS

65. Minutes

The Board shall cause minutes to be duly entered in books provided for the purpose:
(a) of all elections and appointments of Officers;
(b) of the names of the Directors present at each meeting of the Board and of any
commi ttee appointed by the Board; and
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(c) of all resolutions and proceedi ngs of general meetings of the Members, meetings
of the Board, meetings of managers and meetings of committees appointed by
the Board.
66. Place Where Corporate Records Kept

Mi nutes prepared in accordance wi th the Act and these Bye-l aws shal l be kept by the Secretary
at the registered office of the Company.
67. Form and Use of Seal

67.1 The Company may adopt a seal in such form as the Board may determine. The Board
may adopt one or more duplicate seal s for use in or outside Bermuda.
67.2 A seal may, but need not, be affi xed to any deed, instrument or document, and if the seal
is to be affi xed thereto, it shall be attested by the signature of (i) any Director, or (ii) any
Officer, or (iii) the Secretary, or (i v) any person authorised by the Board for that purpose.
67.3 A Resident Representative may, but need not, affix the seal of the Company to certify
the authenti ci ty of any copi es of documents.
ACCOUNTS

68. Records of Account

68.1 The Board shall cause to be kept proper records of account wi th respect to all
transactions of the Company and in particular with respect to:
(a) al l amounts of money recei ved and expended by the Company and the matters
in respect of which the receipt and expenditure relates;
(b) all sales and purchases of goods by the Company; and
(c) all assets and liabili ties of the Company.
68.2 Such records of account shall be kept at the registered offi ce of the Company, or subject
to the Act, at such other place as the Board thinks fit and shall be available for inspecti on
by the Di rectors duri ng normal business hours.
69. Financial Year End

The fi nanci al year end of the Company may be determined by resol uti on of the Board and
failing such resolution shall be 31
st
December in each year.
AUDITS
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70. Annual Audit

Subject to any ri ghts to waive laying of accounts or appointment of an Auditor pursuant to the
Act, the accounts of the Company shall be audited at least once in every year.
71. Appointment of Auditor

71.1 Subject to the Act, at the annual general meeti ng or at a subsequent speci al general
meeting in each year, an independent representative of the Members shall be appointed
by them as Auditor of the accounts of the Company.
71.2 The Auditor may be a Member but no Director, Officer or employee of the Company
shall , duri ng hi s conti nuance i n offi ce, be el i gi ble to act as an Audi tor of the Company.
71.3 A Member or Members representi ng at least one-twentieth of the share capital may
request in writing to the Company that the Board appoints an additional auditing firm
to review the accounts of the Company in addition to the Companys Auditor appointed
pursuant to Bye-law 71.1 or Bye-law 77 as applicable if such request is based on
reasonable grounds. For the avoidance of doubt, an auditing firm appointed pursuant
to this Bye-law 71.3 is not the Companys auditor for the purposes of the Act. The
remunerati on of an auditing firm appointed pursuant to this Bye-law 71.3 shall be fixed
by the Board.
72. Remuneration of Auditor

Save in the case of an Auditor appointed pursuant to Bye-law 77, the remuneration of the
Audi tor shal l be fi xed by the Company in general meeting or in such manner as the Members
may determine. In the case of an Auditor appointed pursuant to Bye-law 77, the remuneration
of the Auditor shall be fixed by the Board.
73. Duties of Auditor

73.1 The fi nancial statements provided for by these Bye-laws shall be audited by the Auditor
i n accordance wi th generall y accepted auditing standards. The Audi tor shal l make a
written report thereon in accordance wi th generall y accepted auditing standards.
73.2 The generally accepted auditing standards referred to in this Bye-law may be those of a
country or juri sdi cti on other than Bermuda or such other general l y accepted audi ting
standards as may be provided for in the Act. If so, the financial statements and the
report of the Auditor shall identify the generally accepted auditing standards used.
74. Access to Records

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The Auditor shall at all reasonable times have access to all books kept by the Company and to
all accounts and vouchers relating thereto, and the Auditor may call on the Directors or Officers
for any i nformati on in their possessi on rel ati ng to the books or affairs of the Company.
75. Financial Statements

Subject to any ri ghts to waive laying of accounts pursuant to the Act, financial statements as
requi red by the Act shal l be l ai d before the Members in general meeti ng annuall y. A resol uti on
in writing made in accordance with Bye-law 36 receiving, accepting, adopting, approving or
otherwise acknowledging financi al statements shal l be deemed to be the l ayi ng of such
statements before the Members i n general meeting.
76. Distribution of Auditors Report

The report of the Auditor shal l be submi tted to the Members in general meeti ng.
77. Vacancy in the Office of Auditor

The Board may fill any casual vacancy in the offi ce of the auditor.
VOLUNTARY WINDING-UP AND DISSOLUTION

78. Winding-Up

If the Company shall be wound up the liquidator may, wi th the sancti on of a resol uti on of the
Members, di vide amongst the Members in specie or in kind the whole or any part of the assets
of the Company (whether they shal l consi st of property of the same ki nd or not) and may, for
such purpose, set such val ue as he deems fair upon any property to be divi ded as aforesai d and
may determine how such divi sion shall be carried out as between the Members or different
cl asses of Members. The l iqui dator may, with the l i ke sancti on, vest the whole or any part of
such assets in the trustees upon such trusts for the benefit of the Members as the liquidator shall
think fi t, but so that no Member shall be compelled to accept any shares or other securi ties or
assets whereon there is any liability.
CHANGES TO CONSTITUTION

79. Changes to Bye-laws

No Bye-law may be rescinded, al tered or amended and no new Bye-law may be made save in
accordance wi th the Act and unti l the same has been approved by a resoluti on of the Board and
by a resolution of the Members including the affi rmative vote of not less than two-thirds of the
shares and votes represented in the general meeting.
80. Changes to the Memorandum of Association

A37

No al terati on or amendment to the Memorandum of Associ ati on may be made save in
accordance with the Act and until same has been approved by a resolution of the Board and by
a resolution of the Members.
81. Discontinuance

The Board may exercise all the powers of the Company to discontinue the Company to a
jurisdiction outside Bermuda pursuant to the Act.

A38

Appendix B
Financial statements for the years ended 31 December 2012, 2011
and 2010

B1
Consolidated financial statements
2012
B2
B3
B4
BOARD OF DIRECTORS REPORT

Odfjell Drilling Ltd., is a privately owned international drilling, engineering and
well services company, with nearly 2,800 employees and operations in more
than 20 countries worldwide. The Odfjell Drilling Group generated revenues of
USD 1.1 billion in 2012 and a net profit of approximately USD 117 million.

Group structure

Odfjell Drilling Ltd., is the parent company of the Odfjell Drilling Group, an integrated
provider of mobile drilling units, platform drilling services, engineering, project management
services and well services.

The Company was incorporated in Hamilton, Bermuda in November 2005, based on 40
years experience in the offshore drilling industry. The operating entities in the Group are
based in Norway, the UK, the Netherlands, Brazil, the Middle East, Romania, and the
Philippines, as wholly or partly owned subsidiaries or joint ventures.

Odfjell Drillings vision is to become a recognised leader in the offshore drilling market. The
Group aims to continue strengthening its presence in the North Sea, Brazil and Africa in
addition to further broadening the geographical scope of its operations.

Important developments in 2012

The Groups activities are organised in three main business areas: Mobile Offshore Drilling
Units (MODU), Drilling & Technology and Well Services.

In recent years the MODU business area has grown considerably, with three mobile drilling
units mobilised for international operations in Angola, Tanzania and Brazil. The business
area is destined to grow further as a result of the delivery of the ultra-deepwater rig Deepsea
Aberdeen in 2014 and through new activities under the auspices of Odfjell Galvo, a 50/50
joint venture between Odfjell Drilling and Galvo Enghenaria in Brazil. Odfjell Galvo was
awarded substantial contracts for project management and drilling services by Sete Brazil
and Petrobras in July 2012. Under the contracts Odfjell Galvo will own 20 per cent of three
new drillships holding long term drilling service contracts with Petrobras.

The operated fleet also increased when Odfjell Drilling signed a management agreement
with Maracc ASA in 2012 for the semisubmersible Island Innovator. The rig is presently
being mobilised for drilling services for Lundin Petroleum Norway with start-up in the
summer of 2013. This will strengthen the Groups presence in the mobile drilling market on
the Norwegian continental shelf and positions the Group as a supplier to a new E&P
company in the region.

In the Drilling & Technology business area, the Group was awarded an important contract
with Statoil in 2012 for integrated platform drilling and engineering services on eight
production facilities in the North Sea. This strengthens the Groups market position in
platform drilling in the North Sea and provides opportunities for additional sales of
engineering and project management services to the largest E&P company in the region.

Drilling & Technology has in 2012 delivered project management and engineering services
in connection with two extensive yard stays for Deepsea Bergen and Songa Trym. It also
mobilised project management services for the Groups South Korea newbuild project in
addition to delivering project management and engineering services in connection with major
B5
modification projects on production facilities. In 2012 the biggest projects in this category
were related to modifications to Statoils Veslefrikk and Heidrun platforms.

The Well Services business area is experiencing high demand in all regional markets for all
of their range of products and services. Odfjell Well Services further expanded its
geographical scope significantly in 2012 by winning contracts in Jordan, Thailand and
Kurdistan.

One of Odfjell Drilling Ltd.s subsidiaries, Odfjell Rig Ltd., was notified by the Norwegian Tax
Administration (Tax Norway West) in late 2011 of a tax ruling that affects the Company. It
was ruled that income from its direct 52.913 percent participation in KS Deep Sea Drilling
Company II (KS DSDC II) was deemed taxable in Norway for the income years 2009-2010.
In 2012 the Norwegian Tax Administration also deemed Odfjell Rig Ltd., to be taxable for the
income year 2011. In 2012 the Norwegian Tax Administration taxed Odfjell Rig Ltd., as if the
Company were taxable for the income years 2009-2011. Total tax paid per this ruling was
classified as a long-term receivable because of Odfjell Rig Ltd.s argument that it is not
taxable for that period.

The total taxes paid and interest on taxes for the income years 2009-2011 amounts to NOK
110.3 million, NOK 2 million of which is interest on the tax amount for all three income years.
The receivable of USD 19.8 million is classified as a long-term receivable because of the
estimated duration of the court case.

As a consequence of the disagreement with the Norwegian Tax Administration decision,
Odfjell Rig Ltd., in 2012 initiated proceedings to resolve the dispute about whether Odfjell
Rig Ltd., is taxable for the income years 2009-2011. The start of the trial is scheduled for
June 2013.

Odfjell Rig Ltd., argues that the tax authorities assertion is based on incorrect assumptions
as to the factual circumstances of the case relating to its participation in KS DSDC II. Odfjell
Rig Ltd., considers the probability of winning the case, in the final court, to be in their favour.

Important developments in 2013
In January 2013 the Group acquired all of the shares owned by minority shareholders in the
Deepsea Bergen structure. As of the end of January 2013, the company has no minority
interests.

As part of the acquisition and the ensuing re-structuring of the Deepsea Bergen ownership,
several of the companies involved were merged in February 2013. As part of the acquisition
of minority shareholdings in 2013, the Group signed a new long-term loan agreement for
USD 270 million.

Going concern assumption
The financial statements have been prepared on the basis of the going concern assumption
and in accordance with Norwegian Accounting Act Section 3-3 the Directors have confirmed
that this was realistic at the time the accounts were approved. The basis for the assumption
is the positive status of the Companys equity, debt funding and secured contract portfolio.
The parent company and the Group are in good financial position for future growth in each of
their respective business areas.

Consolidated accounts
The below discussion comments on the major items in the Odfjell Drilling Group financial
statements for 2012.

B6
Income statement
Odfjell Drilling generated operating income of USD 1,093.8 million in 2012, an increase of
3.5 percent over 2011.

The operating profit (EBIT) amounted to USD 183.7 million in 2012, (2011: USD 237.4
million). EBIT in 2011 included a USD 43.3 million gain relating to the sale of shares in a
subsidiary; Odfjell Well Management AS.

EBIT was affected by losses from joint ventures which were USD 13.4 million in 2012 (2011:
USD 6.8 million). This increased loss was primarily caused by growing losses in the joint
venture with the Deep Sea Metro Ltd., Group.

Net financial costs amounted to USD 35.7 million in 2012 (2011: USD 83.9 million). Financial
costs included interest income of USD 7.4 million (2011: USD3.6 million), borrowing costs of
USD -64.0 million (2011: USD -80.5 million) and other financial items totaling USD 20.9
million (2011 a loss of USD7.1 million). The change in other financial items is primarily the
result of a gain on interest rate swaps of USD 1.6 million in 2012 (2011: loss of USD 26.1
million).

Pre-tax profit amounted to USD 148.0 million in 2012 (2011: USD 153.5 million).

The tax expenses amounted to USD 31.2 million in 2012, (2011: USD 32.2 million) and the
net profit for the Group declined to USD 116.9 million (2011: USD 121.3 million).

USD 102.5 million of the net profit was attributable to the owners of the parent company
(2011 USD108.8 million) while USD 14.3 million was attributable to non-controlling interests
(2011 USD12.4 million). The latter are primarily non-controlling interests in the Deepsea
Bergen structure.

Total comprehensive income in 2012 was USD 138.1 million (2011: USD 86.7 million).

Balance sheet
Consolidated total assets amounted to USD 2,804.4 million on 31 December 2012 (2011:
USD 2,740.6 million). The increase primarily relates to non-current assets increasing as a
result of investments in newbuild programmes.

Total non-current assets amounted to USD 2,323.4 million (2011: USD 2,158.4 million) and
this increase is mainly due to a higher property, plant and equipment base as well as higher
investments in joint ventures, mainly the Deep Sea Metro Ltd., Group and the Odfjell Galvo
joint venture in Brazil.

Current assets amounted to USD 480.9 million (2011: USD 582.2 million), USD 200.6 million
of which was cash and cash equivalents (2011: USD 303.1 million). The decline in cash and
cash equivalents is largely a result of our investment programme and a reduction in gross
borrowings.

Total equity amounted to USD 1,154.3 million (2011: USD1, 032.8 million), of which equity
attributable to the owners of the parent company amounted to USD 1,125.5 million (2011
USD 1,010.1 million). The equity ratio was 41.2 percent at the end of 2012 (2011: 37.7
percent).

Total liabilities amounted to USD 1,650.1 million at the end of 2012 (2011: USD 1,707.8
million), reflecting a decrease of post-employment benefits of USD 24.8 million and a
decrease in net interest-bearing debt of USD 56.0 million. Non-current liabilities decreased
B7
by USD 176.9 million to USD 1,233.7 million after repayments and the transfer to current
borrowings of payments due in 2013 plus a decrease in post-employment benefits liabilities.

Total current liabilities increased by USD 119.2 million to USD 416.4 million, mainly
reflecting an increase in short-term interest-bearing debt and an increase in current income
tax of USD 19.0 million.

Net interest bearing debt amounted to USD 1,351.8 million (2011: USD 1,407.8 million).

Cash flow
Cash flow from operating activities amounted to USD 267.2 million (2011: USD 197.6
million). The increase mainly reflected a decrease in trade receivables from 2011 to 2012,
compared with an increase from 2010 to 2011, as well as lower increase in other accruals
from 2011 to 2012 compared with the increase from 2010 to 2011.

The cash outflow from investing activities amounted to USD 305.9 million (2011: USD 213.0
million). The main investments in 2012 being in well services equipment, the investment in
the semi-submersible drilling unit Deepsea Aberdeen and a subordinated loan (originally for
USD 80 million) to the joint venture company; Deep Sea Metro Ltd.

The cash outflow from financing activities amounted to USD 61.0 million (2011: inflows of
USD 66.0 million). This mainly reflected the net repayment of debt to financial institutions of
USD 44.3 million (2011: net increase USD 89.8 million).

Parent company accounts

The business of the parent company; Odfjell Drilling Ltd., is as a holding company for
investments in both wholly and partly owned subsidiaries and joint ventures.

The parent company reported a profit of USD 5.4 million, (2011: USD 83.2 million). This
result primarily reflected that there were no dividends from subsidiaries in 2012 (2011: USD
53.3 million), as well as a decrease in net currency gains during 2012 of USD 33.1 million.
Dividends from subsidiaries are recognised as financial income and were USD zero in 2012
(2011: USD 53.3 million).

Total assets in the parent company amounted to USD 1, 376.1 million, as of 31 December
2012 (2011: USD 1,298.8 million). The increase mainly reflected an increase of USD 112.6
million in loans to Group companies. Equity in the parent company stood at USD 969.0
million (2011: USD 971.5 million), corresponding to an equity ratio of 70.4 percent (2011:
74.8 percent).

Cash flow from operating activities was USD 4.9 million (2011: USD 67.2 million). The
change was mainly a reflection of the decrease in profit from 2011 to 2012.

Cash flow from investing activities was down by USD 113.0 million in 2012 (2011: USD
132.0 million). This change reflected a net increase in long-term loans to subsidiaries in
2012 compared with a net decrease in long term loans to subsidiaries - as well as
repayments of short term receivables from group companies in 2011.

Cash flow from financing activities was USD 71.6 million (2011: decrease of USD 185.6
million). This change mainly reflected a net increase in long-term loans from subsidiaries in
2012 and a combination of increase in loans from subsidiaries and repayments of short term
liabilities to group companies in 2011.

B8
Allocation of profits

The parent company had distributable equity of USD 968.9 million as of 31December 2012.

The Board of Directors proposes the following allocation of the net profit of USD 5.4 million
in 2012:

Transferred to other equity: USD 5,421,335
Total allocated: USD 5,421,335

Segment reporting
Odfjell Drilling has organised its activities into three main business areas in order to keep the
Group at the forefront of both the operational and technological arenas:

1. Mobile Offshore Drilling Units
2. Drilling & Technology
3. Well Services

Mobile Offshore Drilling Units (MODU)
Odfjell Drilling has 40 years of experience in design, ownership and operational
management of semisubmersible rigs, drillships, jack-ups and modular drilling units. In
recent years, the Group has invested in a renewal of the fleet with state-of-the-art sixth
generation deepwater drilling units featuring harsh environment capabilities.

The total income in the MODU business area increased by USD 119.8 million in 2012 to
USD 693.4 million, with the growth mainly reflecting that the drillships Deepsea Metro I and
Deepsea Metro II started up on contracts in 2012, as well as higher financial rig uptime for
the groups fully owned mobile drilling units compared with 2011. EBITDA increased by USD
58.2 million in 2012 to USD 285.0 million.

MODU was responsible for the operation of five owned and partly owned mobile drilling units
in addition to two units under a management agreement with Songa Offshore.

Deepsea Atlantic is a sixth generation ultra-deepwater and harsh environment
semisubmersible on a long-term contract for Statoil on Gullfaks (on the Norwegian
continental shelf). The contract runs until 2014, with a 1 + 2 years option.

Deepsea Stavanger is a sixth generation ultra-deepwater and harsh environment
semisubmersible delivered by the Daewoo yard in July 2010. The rig is on contract to BP for
drilling operations off the coast of Angola. The contract expires in November 2013, with 3x1
years options.

Deepsea Bergen drilled for Statoil on the Norwegian continental shelf in 2012. The
semisubmersible is owned by KS Deep Sea Drilling Company II, which was 71.5 percent
owned by Odfjell Drilling at the end of 2012.

In 2012 the drilling service contract with Statoil was extended until 2017 and in September
2012 the rig was modified to enable drilling operations on fields in Statoils portfolio of fast
track- developments.

In January 2013 Odfjell Drilling purchased all outstanding shares in the rig owning entity and
now owns 100 percent of the rig .

B9
Deepsea Metro I is an ultra-deepwater drillship of Gusto P-10000 design delivered by
Hyundai Heavy Industries in South Korea during June 2011. Deepsea Metro I currently
operates off the coast of Tanzania for the BG Group, on a one-year drilling contract that
expires in June 2013. The rig is currently being marketed to new clients.

Deepsea Metro II is an ultra-deepwater drillship of Gusto P-10000 design, delivered by
Hyundai Heavy Industries in South Korea in November 2011. Deepsea Metro II
currentlyoperates on a three year contract, with Petrobras in Brazil, which expires in May
2015.

Deepsea Metro I and Deepsea Metro II are both owned by the Deep Sea Metro Group, a
joint venture between Odfjell Offshore (40 percent) and MetroExploration (60 percent).
Odfjell Drilling operates the vessels under individual management agreements.

Deepsea Aberdeen is a semisubmersible under construction by Daewoo
Shipbuilding & Marine Engineering (DSME) in South Korea, with delivery scheduled for May
2014. This sixth generation rig will be a sister rig to Deepsea Atlantic and Deepsea
Stavanger, built to the enhanced GVA 7500 harsh environment design. A seven-year
contract was signed with BP in January 2012, for start-up west of Shetland (UK sector)
during Q4 2014.

Managed drilling units
In addition to the wholly and partly owned units, the Group manages the rig Island
Innovator under a management agreement with Marine Accurate Well ASA (Maracc). The
management agreement comprises project management, marketing and operation of the rig,
including responsibility for crew, quality systems and technical operation.

Rig owner Maracc and Lundin Norway AS have signed a contract to drill 12 wells over a
period of approximately two years with start-up in the summer of 2013.

The management agreements for Songa Delta and Songa Trym were terminated in 2012,
with management responsibilities for the rigs being handed over to the owner Songa
Offshore in June and August 2012, respectively.

Odfjell Galvo Drillship Projects comprise three drillships to be built by Jurong in
Singapore and Estaleiro Jurong Aracruz in Brazil, scheduled for delivery from 2016 onwards.

In July 2012 Odfjell Galvo entered into agreements for the construction, mobilisation and
operation of the three drillships. All vessels have been designed and will be constructed in
accordance with Petrobras requirements. They have all been contracted to Petrobras on 15
years contracts with five-year extension options.

The Drilling & Technology business area is responsible for platform drilling, project
management and engineering services. This business unit is a leading company in platform
drilling in the North Sea region and is responsible for integrated drilling services on 20 fixed
and floating production drilling platforms off the coast of Norway and the UK. The business
area provides production drilling, completion, workovers, slot recovery, P&A and
maintenance and modification.

The business area is focusing on engineering services towards Mobile Drilling Units, fixed
platforms, core business support services and project management. Drilling & Technology
operates from offices in Bergen, Stavanger, Aberdeen and Stjrdal.

B10
Total income in this business area decreased by USD 5.5 million to USD 316.0 million in
2012. EBITDA declined by USD 13.1 million to USD 24.9 million, due to lower demand for
engineering services, higher operating expenses and lower margins on both engineering
services and platform drilling services in 2012 compared with 2011.

The Drilling & Technology business area offers a broad range of project management and
engineering services for both owners of mobile drilling units and drilling facilities on
production facilities. The broad range of services provided for mobile drilling units include
design, engineering, building supervision, classification, authorities compliance, yard stays,
technical support, marine operations, lifting operations, subsea services, project support,
supply chain management, maintenance systems, and drilling technology. The business
area offers its services to both internal and external clients. In 2012, services related to the
yard stays for Deepsea Bergen and Songa Trym represented the most important projects in
the business areas portfolio.

The business area provides engineering services for drilling facilities on production
installations. The services include drilling modules, specific drilling support modules and
associated drilling equipment, concept studies, FEED, detailed engineering, purchasing,
construction, supervision, installation, commissioning (EPCI), operation/P&A, project support
and maintenance systems.

Several large scale projects were executed in 2012, with the EPCI on Veslefrikk and the
Heidrun Well intervention unit being the most important.

The Drilling & Technology business area currently runs platform drilling operations for Statoil,
BP and Talisman Sinopec Energy on a total of 20 platforms in Norway and the UK.

In 2012, Odfjell Drilling was awarded a four year contract with Statoil for eight platforms in
Norway, with options for 3x2 years extensions. The new contract added two platforms to the
previous contract arrangement, boosting the Groups already strong market position on the
NCS.

In 2012, Talisman Sinopec Energy UK exercised all remaining 3x1 years options for seven
platforms in the UK sector and amended the contract with options for 2x1 years extensions.
The contract with BP for five platforms on the UK sector runs until 2014, with options for 3x2
years extensions.

Drilling & Technology hired over 100 new engineers in 2012 to deliver on existing contracts
and to meet expected market growth. Recruiting and retaining technical expertise is crucial
in relation to meeting the growing demand for the Groups services and it will still remain a
focus area for the Group in 2013.

Well Services
Odfjell Well Services provides a wide range of services to the oil industry, including mooring
services, drill tool rental, fishing services, well bore cleaning, tubular, casing and tubular
running services.

Total income in the Well Services business area increased by USD 15.3 million in 2012 to
USD 208.2 million, with the growth mainly due to higher demand in the market during 2012
compared with 2011. EBITDA increased by USD 4.8 million in 2012 to USD 95.3 million.

Odfjell Well Services strategy is to become an international service provider with the safest
and most efficient solutions for tubular running services and down-hole tools, while offering a
service level that meets the highest quality standards in the oil and gas industry.
B11

The business area aims at sustaining rapid growth through continuous improvement of
existing service areas, expansion into new service areas and continued internationalisation.

Odfjell Well Services has established operating bases in 11 countries in recent years and it
operates in more than 25 countries worldwide.

A high level of innovation and technology development will be crucial in relation to
supporting both existing business activities and entry into new areas. Odfjell Well Services is
a technology leader in the field of remotely-operated equipment that is designed to enhance
both safety and efficiency. To further strengthen its technological competitiveness, Odfjell
Well Services is currently building an in-house development department that will focus on
new down-hole tools technology related to the core business.

Organisation, health, safety and environment

The Groups operational activities are carried out in a number of wholly or partially owned
subsidiaries and joint ventures in Norway, the UK, the Netherlands, Brazil, UAE, Romania
and the Philippines.

Odfjell Drillings vision is to become a recognised leader within the global offshore drilling
market, aiming for leadership in QHSE, operational efficiency, technological achievements,
and profitable growth. Odfjell Drilling had a total of 2,793 employees at the end of 2012.

Working environment and personnel
The working environment in Odfjell Drilling is considered to be good and sustaining a healthy
working environment is seen as crucial to achieving continuous improvements in all aspects
of the Groups operations.

The Group has conducted annual working environment and organisational surveys since
2005. These surveys provide the Group with valuable information about the workings of the
organisation and they are important tools for promoting and developing the working
environment.

Odfjell Drilling had a personnel turnover of 9 percent in 2012 which was a slight reduction
from 10 percent in 2011, but still high compared to previous years.

The high turnover can be explained partly by a generally tight labour market, in particular in
the oil and gas industry. The Group also experienced reduced activity after the expiry of the
management agreements for Songa Delta and Songa Trym in summer 2012.

Measures are being taken to maintain a low sick absence rate. At Group level, sickness
absence was reported at 3.5 percent in 2012. The absence rate compares well with the
average sickness absence rate of 4.5 percent reported for industry workers in Norway in
2012.

Odfjell Drilling is a competence-intensive company that is dependent on a high level of
expertise and technological knowhow amongst its employees. The Group offers extensive
training to ensure that this expertise is continuously updated and to promote career
development for individual employees.

During 2012, Odfjell Drilling also strengthened its focus on leadership training at all levels.
Several programmes and courses were offered to managers both onshore and offshore,
B12
including a Business Management program, local courses in different regions and the QHSE
Safety Leadership Development programme. The latter is an internal self-development
programme based on Odfjell Drillings vision, culture, values, strategy and management
principles that offers tailor-made training adjusted to the distinctive characteristics of each of
the business areas.

Measures to promote equality and prevent discrimination
Odfjell Drilling emphasises that all activities, irrespective of country of operation, shall
comply with the applicable legislation and the Groups Code of business conduct. Its
Personnel policy states that the Odfjell Drilling Group shall recruit and develop staff based
on merit and equal opportunities, regardless of ethnicity, religion, national origin, gender, age,
sexual orientation, marital status, or disability.

Equality is an integral part of the Groups Personnel Policy that ensures that all employees
are given the same opportunities for employment, pay, as well as professional development
in terms of training and promotion. The Group works actively and systematically through
internal Governing documents, employee training and various other measures to prevent
any form of discrimination. Such measures include recruitment policies and practise, salary-
and working conditions, personal development opportunities, promotions and shelter against
harassment.

Although it is emphasised that equality and non-discrimination are ultimately the
managements responsibility, all parties in the enterprise have a responsibility for ensuring
and to safeguarding equality. All employees have access to the Groups governing
documents through Odfjell Drilling's intranet, which includes information about the ethics and
business culture in Odfjell Drilling, the Groups management system, managers guide,
employee handbook etc.

The governing documents also confirm the Group`s commitment to freedom of association
and the right to collective bargaining, which is continuously followed up in all activities. The
Group complies with internationally recognised labour standards covering areas such as
wages, working hours, disciplinary practices, employment contracts and working conditions.
The above requirements are also enforced in contracts with suppliers, business partners,
agents etc.

The Group employs people from a diverse range of ethnic backgrounds and 58 different
nationalities. Odfjell Drillings employees also have a wide age distribution, ranging from 19
to 67 years with an average age of 40.8 years. Of a total of 2,793 employees at the end of
2012, there were 2,434 male (91 percent) and 242 female (9 percent) employees, with an
unchanged gender composition compared to the previous year.

The onshore organisation employs 25 per cent females compared with 1 percent in the
offshore organisation.

Top management consists of ten persons, of whom one is female. Two of the five board
members are female, including the Chair. There are elected employee representatives on
the boards of five of the major management companies in the Group. The employees in
these companies represent more than 70 per cent of the total number of employees in the
Group.

Health, Safety and Environment
Odfjell Drilling strives continuously to improve health, safety and security towards a zero fault
target and to minimize the impact of its activities on the environment.

In 2012, Odfjell Drilling continued to focus on the following main QHSE topics:
B13

Prevention of major accidents
CMS improvements & simplification
Safety leadership & compliance
ISO 9001 certification
Quality improvement of all key processes

In recent years the level of risk in Odfjell Drilling has decreased and most HSE trends show
a positive trend.

Both the lost-time injury frequency and total recordable incident rate have improved steadily
in 2012 as did the trend for high-potential incidents and reportable spills to sea. There were
seven accidents, none of which caused serious personnel injuries. The injuries were four
arm injuries, two finger injuries and one fractured wrist.

The incidence rate relating to the dropping of objects remains too high and the Group has
developed and implemented the DROPS programme to prevent such incidents. The Groups
QHSE Safety Management Leadership programme covers a range of important topics,
including HSE culture and management, compliance with procedure, HSE rules and the
establishment of safety contracts and understanding of risk. The model is based on Odfjell
Drillings existing principles of continuous improvement at all levels and in all business areas.

Odfjell Drilling has further strengthened the Safety Leadership Training concept in its global
operations. The concept involves both offshore and onshore management, in the belief that
the leadership behaviour of managers often has an important influence on risk management.
Leadership and compliance are fundamental elements in building and maintaining a strong
QHSE culture.

In 2013, Odfjell Drillings QHSE programme will focus on the following elements:

Risk and change managements
Quality improvements
Groups exposed to risk
Dropped objects
Major accident risk
Safety leadership & compliance
ISO 14001 certification

Environmental reporting
Odfjell Drilling has a goal of zero environmentally hazardous discharges to sea. This
includes eliminating or significantly reducing discharges of defined environmental toxins and
substantially reducing the risk of harm from the use and discharge of chemicals. In 2012,
Odfjell Drilling continued its efforts to influence employees' knowledge, attitudes and
behaviour. Odfjell Drilling is in the process of certifying all business areas globally to the
Environmental Management Standard ISO 14001. In 2012 we completed base line audits
within all business areas and the certification process will take place in November 2013.

Both the number and volume of reportable incidental spills to sea have been reduced in
2012 compared to 2011. Preventive actions have focused on identifying onboard processes
where spills to sea are possible and on strengthening related barriers to prevent spills. In
addition measures have been implemented to improve communication and interaction with
supply vessels and to optimise related work procedures.

R&D activities
B14
The Groups activities are based on high competence and experience in offshore drilling
activities. Odfjell Drilling shall develop and implement technological knowhow and solutions
to achieve its strategic objective of becoming a leading and preferred drilling services
contractor and engineering and well service provider. The Groups technology strategy for
2012-2015 focuses on four core technological areas:

- Conceptual development
- Effective operations
- Availability of machinery
- Asset traceability

The technology strategy also supports the zero fault objectives and aims to improve the HSE
level of the Groups operations, as well as reducing the impact on the environment.

Risk factors

Operational and industrial risk factors
Odfjell Drilling provides drilling and maintenance services for the oil and gas industry, which
historically has been cyclical in its development. The level of activity in the offshore oil and
gas industry will depend, among other things, on the general climate in the global economy,
oil and gas prices, investment level for oil and gas exploration, production and drilling and
regulatory issues relating to operational safety and environmental hazards. Financial
performance will also depend on the balance of supply and demand for mobile drilling units.

The Group seeks to mitigate these risks by securing long-term contracts, for its main assets
and services, with reputable customers. However, all offshore contracts are associated with
considerable risk and responsibilities, including technical, operational, commercial and
political risks. The Group will take out the insurance coverage deemed adequate to limit
these risks. The Groups activities also entail risks related to its new-builds, including
construction risks, the risk of cost overruns, risk of delays, etc. These risks will be minimised
through construction contracts, active participation plus monitoring and insurance.

Financial risk factors
The Group is exposed to currency risks, particularly since charter contracts are typically
denominated in USD whereas operating expenses are primarily incurred in local currencies.
The Group seeks to minimise these risks through currency hedging.

The Group may also be exposed to currency risk relating to debt financing in foreign
currencies and it may also seek to mitigate these risks through currency swaps, hedges or
other derivatives. The Group is exposed to interest rate risk relating to its debt financing and
its holding of interest bearing assets and cash and cash equivalents. None of the Groups
borrowings are at fixed interest rates and interest rate risks are mitigated by using financial
instruments such as interest rate swap agreements.

The Groups commercial counterparts are primarily large international E&P companies, and
the credit risk is limited. Provisions for bad debt amounted to 3.4 percent of accounts
receivable in the balance sheet at year end 2012.

Odfjell Drilling held cash and cash equivalents amounting to USD 200.6 million at the end of
2012 and unused credit lines of USD 0. This is deemed to be sufficient funding for the
Groups current activity levels and committed capital expenditures. The Group has
scheduled instalment payments, on long-term borrowings, of USD 257.1 million in 2013.
Please refer to note 12 in the financial statements for an overview of borrowings and
maturity profiles.
B15
B16
Consolidated Income Statement
USD thousands Note 2012 2011
Operating revenue 4 1 093 754 1 056 704
Total operating income 1 093 754 1 056 704
Other gains/losses 16 3 438 45 972
Share of profit from joint ventures 7 -13 399 -6 834
Total other items -9 961 39 138
Personnel expenses 16 -486 182 -465 651
Depreciation and impairments 5, 6 -147 318 -144 998
Other operating expenses 16 -266 609 -247 766
Total operating expenses -900 109 -858 415
Operating profit (EBIT) 183 683 237 426
Interest income 16 7 369 3 635
Borrowing cost 16 -63 955 -80 451
Other financial items 16 20 936 -7 118
Financial income / (expenses) -35 650 -83 933
Profit/(loss) before tax 148 033 153 493
Income tax (expense) income 15 -31 176 -32 213
Profit/(loss) for the period 116 858 121 280
Of which attributable to the owners of the parent 102 549 108 833
Of which attributable to non-controlling interests 14 309 12 447
Basic earnings per share (USD) 19 0,07 0,08
Diluted earnings per share (USD) 19 0,07 0,08
B17
Consolidated Statement of Comprehensive Income
USD thousands Note 2012 2011
Profit for the year 116 858 121 280
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Actuarial gain/(loss) on post employment benefit obligations 13 15 726 -16 281
15 726 -16 281
Items that are or may be reclassified to profit or loss:
Interest rate swaps, reclassified to profit or loss 2 0 23 476
Forward foreign exchange contracts, reclassified to profit or loss 0 -4 635
Cash flow hegdes 2 -1 707 -110
Currency translation differences 11 7 234 -37 019
5 528 -18 289
Other comprehensive income, net of tax 21 254 -34 569
Total comprehensive income 138 112 86 710
Attributable to:
Owners of the parent 123 362 75 411
Non- controlling interests 14 750 11 300
Total comprehensive income for the period 138 112 86 710
Items in the statement above are disclosed net of tax. The income tax relating to each item of other
comprehensive income is disclosed in note 15
Items in the statement above are disclosed net of tax. The income tax relating to each item of other
comprehensive income is disclosed in note 15
B18
B19
Consolidated Statement of Cash Flows
USD thousands 2012 2011
Cash flows from operating activities:
Profit before income tax 148 033 153 493
Adjustments for:
Depreciation and impairment 147 318 144 998
Unrealised loss on interest rate swaps -1 616 23 366
Interest expense - net 50 271 51 875
Borrowing cost 4 588 24 418
Share of (profit)/loss from joint ventures 13 399 6 834
Net (gain)/loss on sale of shares 0 -45 972
Net (gain)/loss on sale of tangible fixed assets -2 629 426
Post-employment benefit expenses less post-employment benefit payments -6 518 6 708
Foreign exchange losses/(gains) on operating activities -21 907 -25 710
Impairment of investments in shares 893 -
Spare parts 710 -280
Trade receivables 8 373 -39 358
Trade payables 1 672 -4
Other accruals -5 230 -35 024
Cash generated from operations 337 355 265 770
Interest paid -55 672 -49 063
Income tax paid -14 476 -19 154
Net cash generated from operating activities 267 207 197 553
Purchase of property, plant and equipment -210 867 -148 836
Proceeds from sale of property, plant and equipment 6 081 2 981
Loans granted to employees 118 -645
Sub-ordinated loan to related parties -80 000 -
Other long term receivables -21 244 -
Purchase of shares incl. joint ventures - -92 893
Proceeds from sale of shares and bonds - 26 423
Net cash used in investing activities -305 911 -212 970
Proceeds from debt to financial institutions 49 408 1 413 781
Repayments of debt to financial institutions -99 928 -1 324 000
Dividends paid to owners of the parent -1 765 -7 509
Dividends paid to non-controlling interests -8 698 -16 234
Net cash from financing activities -60 983 66 038
Net change in cash and cash equivalents -99 688 50 621
Cash and cash equivalents 01.01 303 137 274 112
Exchange gains/(losses) on cash and cash equivalents -2 813 -21 596
Cash and cash equivalents at 31.12 200 635 303 137
B20
Consolidated Statement of Changes in Equity
USD thousands Share capital
Other contributed
capital
Other
reserves
Retained
earnings Total
Non-
controlling
interest Total equity
Balance at 1 January 2011 14 339 095 -18 841 621 935 942 203 26 586 968 789
Profit/(loss) for the period 0 0 0 108 833 108 833 12 447 121 280
Other comprehensive income for the year 0 0 -17 142 -16 281 -33 422 -1 147 -34 569
Total comprehensive income for the year 0 0 -17 142 92 552 75 411 11 300 86 710
Dividends paid 0 0 0 -7 509 -7 509 -15 158 -22 667
Transactions with owners 0 0 0 -7 509 -7 509 -15 158 -22 667
Balance at 1 January 2012 14 339 095 -35 982 706 978 1 010 104 22 727 1 032 831
Profit/(loss) for the period 0 0 0 102 549 102 549 14 309 116 858
Other comprehensive income for the year 1 -7 301 5 087 23 026 20 813 441 21 254
Total comprehensive income for the year 1 -7 301 5 087 125 574 123 362 14 750 138 112
Equity contribution from owners 0 0 0 0 0 0 0
Dividends paid 0 0 0 -7 943 -7 943 -8 698 -16 640
Other contributions to owners 0 0 0 0 0 0 0
Transactions with owners 0 0 0 -7 943 -7 943 -8 698 -16 640
Balance at 31 December 2012 15 331 794 -30 896 824 610 1 125 524 28 779 1 154 303
Attributable to owners of the parent
B21
Notes to the consolidated Financial Statements
(All amounts are in USD thousands unless otherwise stated)
Note 1 > Accounting Principles
General information
Odfjell Drilling Ltd. and its subsidiaries (together 'the Group')
operates mobile offshore drilling units in addition to well services
and drilling & technology, and operates in Norway and around the
world.
Odfjell Drilling Ltd. is incorporated and domiciled in Bermuda. The
address of its registered office is Clarendon House, 2 Church Street,
Hamilton HM11, Bermuda.
Basis of preparation
The consolidated financial statements of Odfjell Drilling Ltd. for the
year ended December 31, 2012, will be the first annual financial
statements that comply with IFRS. In these financial statements, the
term "Norwegian GAAP" refer to Norwegian GAAP in use before the
adoption of IFRS.
Subject to certain transition elections and exceptions disclosed in
note 26, the Group has consistently applied the accounting policies
used in the preparation of its opening IFRS statement of financial
position at January 1, 2011 throughtout all periods presented, as if
these policies had always been in effect. Note 26 discloses the
impact of the transition to IFRS on the Group's reported financial
position, financial performance and cash flows, including the nature
and effect of significant changes in accounting policies from those
used in the Group's consolidated financial statements for the year
ended December 31, 2011 prepared under Norwegian GAAP.
Going concern
The Group has adopted the going concern basis in preparing its
consolidated financial statements. When assessing this assumption,
management has assessed all available information about the
Standards effective after 1 January 2013 that have been early
adopted by the Group
IAS 19 (revised), effective for annual periods beginning on or after
January 1, 2013 has been early adopted. The corridor approach
was eliminated and all actuarial gains and losses recognised in OCI
as they occur. All past service costs are recognised immediately
and interest costs and expected return on plan assets are replaced
with a net interest amount that is calculated by applying the discount
rate to the net defined benefit liability (asset).
The Group has early adopted IFRS 11, 'Joint arrangements', on
January 1, 2012. Under IFRS 11 investments in joint arrangements
are classified as either joint operations or joint ventures depending
on the contractual rights and obligations each investor has rather
than the legal structure of the joint arrangement. The Group has
assessed the nature of its joint arrangements and determined them
to be joint ventures. Under IFRS 11, proportional consolidation of
joint ventures is no longer allowed, and the Group's share of post-
acquisition profit or loss is recognised in the income statement, and
its share of post-acquisition movements in other comprehensive
income is recognised in other comprehensive income with a
corresponding adjustment to the carrying amount of the investment.
IFRS 10 "Consolidated financial statements" and IFRS 12
"Disclosures of interests in other entities" have been early adopted,
whitout any material effects on the Financial Statements.
New standards, amendments and interpretations issued but
not effective for the financial year beginning January 1, 2012
and not early adopted
A number of new standards and amendments to standards and
interpretations are effective for annual periods beginning after
consolidated financial statements. When assessing this assumption,
future. This comprises information about net cash flows from
existing time charter contracts, drilling management contracts, other
service contracts, debt service and obligations under existing
newbuilding contracts. Forecasts take into consideration expected
future net income from assets under construction. After making such
assessments, management has a reasonable expectation that the
Group has adequate resources to continue its operational existence
for the foreseeable future.
Basis of measurement
The consolidated financial statements have been prepared under
the historical cost convention, except for available-for-sale financial
assets and derivative instruments, which are measured at fair value.
The preparation of financial statements in conformity with IFRS
requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of
applying the Group's accounting policies. The areas involving higher
degree of judgement or complexity, or areas where the assumptions
and estimates are significant to the consolidated financial
statements are disclosed in note 3.
and not early adopted
A number of new standards and amendments to standards and
interpretations are effective for annual periods beginning after
January 1, 2012 and have not been applied in preparing these
consolidated financial statements. None of these are expected to
have a significant effect on the consolidated financial statements of
the Group, except the following set out:
IFRS 9, Financial Instruments. IFRS 9 introduces new
requirements for classifying and measuring financial assets. The
standard is not applicable until January 1, 2013 but is available for
early adaptation. However, the standard has not yet been endorsed
by the EU, and IASB has made a suggestion to delay the
implementation to period starting after January 1, 2015 . Group is
yet to assess IFRS 9s full impact.
IFRS 13 Fair value Measurement. The Group intend to adopt IFRS
13 from the accounting period beginning January 1, 2013.
B22
Note 1 > Accounting Principles (cont.)
Consolidation
Subsidiaries are all entities over which the group has the power to
govern the financial and operating policies generally accompanying
a shareholding of more than one half of the voting rights. The
existence and effect of potential voting rights that are currently
exercisable or convertible are considered when assessing whether
the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from the date
that control ceases.
The Group applies the acquisition method to account for business
combinations. The consideration transferred for the aquisition of a
subsidiary is the fair values of the assets transferred, the liabilities
incurred to the former owners of the acquiree and the equity
interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair values at the
acquisition date. The Group recognises any non-controlling interest
in the acquiree on an acquisition-by-acquisition basis, either at fair
value or at the non-controlling interest's proportionate share of the
recognised amounts of acquiree's identifiable net assets.
Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, the acquistion
date carrying value of the acquirer's previously held equity interest
in the acquiree is re-measured to fair value at the acquisition date;
any gains or losses arising from such re-measurement are
as transactions with the owners in their capacity as owners. The
difference between fair value of any consideration paid and the
relevant share acquired of the carrying amount of net assets of the
subsidiary is recorded in equity. Gains or losses on disposals to
non-controlling interests are also recorded in equity.
Joint ventures are accounted for using the equity method. Under the
equity method, the investment is initially recognised at cost, and the
carrying amount is increased or decreased to recognise the
investor's share of the profit or loss of the investee after the date of
acquistion.
When the Group ceases to have control any retained interest in the
entity is re-measured to its fair value at the date when control is lost,
with the change in carrying amount recognised in profit or loss. The
fair value is the initial carrying amount for the purpose of
subsequently accounting for the retained interest as an associate,
joint venture or financial asset. In addition, any amounts previously
recongised in other comprehensive income in respect of that entity
are accounted for as if the Group had directly disposed of the
related assets or liabilities. This may indicate that amounts
previously recognised in other comprehensive income are
reclassified to profit or loss.
The Consolidated Financial Statements are presented on the basis
of the following group structure:
Odfjell Drilling Ltd (parent company)
-Odfjell Offshore Ltd (100%)
--Odfjell Invest Ltd (100%)
-----Odfjell Invest I Ltd (100%)
-----Odfjell Invest II Ltd (100%)
date carrying value of the acquirer's previously held equity interest
in the acquiree is re-measured to fair value at the acquisition date;
any gains or losses arising from such re-measurement are
recognised in profit or loss.
Goodwill is initially measured as the excess of the aggregate
consideration transferred and the fair value of non-controlling
interest over the net identifiable assets acquired and liabilities
assumed. If this consideration is lower than the fair value of the net
assets of the subsidiary acquired, the difference is recognised in
profit or loss.
Inter-company transactions, balances, income and expenses on
transactions between group companies are eliminated. Profits and
losses resulting from inter-company transactions that are
recognised in assets are also eliminated. Accounting policies of
subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group. Transactions
with non-controlling interests that do not result in loss of control are
accounted for as equity transactions - that is
--Odfjell Invest Ltd (100%)
-----Odfjell Invest I Ltd (100%)
-----Odfjell Invest II Ltd (100%)
-----Odfjell Invest AS (100%)
--Odfjell Rig Ltd (100%)
-----Odfjell Drilling Bergen AS (100%)
-----Odfjell Rig AS (100%)
-----KS AS Bergen Drillpart AS (72.375%)
-----AS Bergen Drillpart (100%)
-----Deep Sea Drilling Company AS (100%)
-----Deep Sea Drilling Company II AS (100%)
-----KS Deep Sea Drilling Company I (71.52%)
-----KS Deep Sea Drilling Company II (71.52%)
--Odfjell Rig II Ltd (100%)
--Odfjell Rig III Ltd (100%)
---Odfjell Drilling Shetland Ltd (100%)
-Odfjell Drilling Services Ltd. (100%)
--Odfjell Drilling AS (100%)
---Deep Sea Management AS (100%)
---Odfjell Drilling Management AS (100%)
---Deep Sea Rig AS (100%)
---Odfjell Drilling (UK) Ltd (100%)
---Odfjell Drilling US AS (100%)
--Odfjell Operations Ltd. (100%)
B23
---Deep Sea Management FZE Ltd. (100%)
----Odfjell Drilling Deep Sea Management DMCC (100%)
----Odfjell Services (Thailand) FLC (100%)
---Odfjell Arabia Drilling Services LLC (100%)
--Odfjell Partners Invest Ltd. (100%)
---Odfjell Well Services Europe AS (100%)
---Odfjell Casing Services AS (100%)
---Odfjell Rental Services AS (100%)
---Deep Sea Mooring AS (100%)
---Odfjell Well Services Ltd. (100%)
---Odfjell Well Services II Ltd. (100%)
--Odfjell Technology Ltd. (100%)
---Odfjell Technology AS (100%)
---Odfjell Technology Manila Corporation (100%)
--Odfjell Drilling Cooperatief UA (100%)
---Odfjell Invest Holland BV (100%)
---Odfjell Well Services SRL (100%)
---Odfjell Perfuracoes e Servicos Ltda (100%)
---Odfjell Drilling Netherlands BV (100%)
----Odfjell Galvao II BV (100%)
Segment reporting
Operating segments are reported in a manner consistent with the
internal financial reporting provided to the chief operating decision-
maker. The chief operating decision-maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the board who makes the strategic
decisions.
Foreign currency translation
(a) Functional and presentation currency
Items included in the separate financial statements of each of the
currency (USD) are translated into the presentation currency as
follows:
- Assets and liabilities for each balance sheet presented are
translated at the closing rate at the date of that balance sheet;
- Income and expenses for each income statement are translated at
average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated
at the rate on the dates of the transactions); and
- All resulting exchange differences are recognised in other
comprehensive income.
Fair value adjustments arising on the acquisition of a foreign entity are
treated as assets and liabilities of the foreign entity and translated at
the closing rate.
Intangible assets
Goodwill arises on the acquistion of subsidiaries and represents the
excess of the consideration transferred over the Group's interest in
net fair value of the net identifiable assets, liabilities and contingent
liabilities of the acquiree and the fair value of non-controlling interst in
the acquiree.
For the purpose of impairment testing, goodwill acquired in a business
combination is allocated to each of the cash generating units (CGUs),
or groups of CGUs, that is expected to benefit from the synergies of
the combination. Each unit or group of units to which the goodwill is
allocated represents the lowest level within the entity at which the
goodwill is monitored for internal management purposes. Goodwill is
monitored at the operating segment level.
Goodwill impairment reviews are undertaken annually or more
frequently if events or changes in circumstances indicate a potential
(a) Functional and presentation currency
Items included in the separate financial statements of each of the
Groups entities are measured using the currency of the primary
economic environment in which the entity operates (the functional
currency). The Consolidated Financial Statements are presented in
USD (in thousands), which is the Groups presentation currency.
b) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions or valuation where items are remeasured.
Foreign exchange gains and losses resulting from the settlement of
such transactions and from the translation at year-end exchange
rates of monetary assets and liabilities denominated in foreign
currencies are recognised in the income statement. Foreign
exchange gains and losses are presented in the income statement
within other financial items.
(c) Group companies
The results and financial position of all the Group's entities that have
a functional currency different from the presentation
Goodwill impairment reviews are undertaken annually or more
frequently if events or changes in circumstances indicate a potential
impairment. The carrying value of goodwill is compared to the
recoverable amount, which is the higher of value in use and the fair
value less costs to sell. Any impairment is recognised immediately as
an expense and is not subsequently reversed.
Property, plant and equipment comprise mainly mobile offshore
drilling units and machinery and equipment.
Property, plant and equipment is stated at historical cost less
depreciation. Historical cost includes its purchase price, any directly
attributable costs of bringing the asset to working condition and
borrowing costs.
Subsequent costs for day-to-day repairs and maintenance are
expensed as incurred. The cost of modernisation and rebuilding
projects is included in the assets carrying amount when it is probable
that the Group will derive future financial benefits and the cost of the
item can be measured reliably.
B24
The carrying amount of the replaced part is derecognised.
Modernisation and rebuilding projects are depreciated over the
remaining useful life of the related assets.
Depreciation is calculated on a straight-line basis over the useful life
of the asset or component. Depreciable amount equals historical
cost less residual value. Items of property, plant and equipment with
components that have substantially different useful lives is treated
separately for depreciation purposes.
The useful lives of assets and the depreciation method are reviewed
periodically in order to ensure that the method and period of
depreciation are consistent with the expected pattern of financial
benefits from the asset.
When assets are sold or retired, their cost and accumulated
depreciation and accumulated impairment loss are eliminated from
the accounts and any gain or loss resulting from their disposal is
included in the income statement as gain on sale of assets.
Residual value for mobile offshore drilling units are determined
based on the market prices for steel and second hand prices for
drilling equipment. Any changes are accounted for prospectively as
a change in the accounting estimate. The estimated useful life of the
rig could change, resulting in different depreciation amounts in the
future. Residual value for other property, plant and equipment are
estimated to be 0.
Rig and equipment are depreciated over a period of 5 - 30 years.
Periodic maintenance is depreciated over the expected period to
next docking, estimated to 5 years.
arms length transaction less costs associated with the disposal.
Value in use represents the present value of estimated future cash
flows expected to arise from the continuing use of an asset and from
its disposal at the end of its useful life.
Recoverable amounts are estimated for individual assets or, if this is
not possible, for the CGU. For mobile offshore drilling units, each
unit is deemed to be a CGU.
The value in use is determined on the basis of the total estimated
discounted cash flow, excluding financing expenses and taxes. In
determining impairment of mobile offshore drilling units and other
fixed assets, the management must make judgements and
estimates to determine whether the discounted cash flows
generated by those assets are less than their carrying amount,
including determining the appropriate discount rate to be used. The
data necessary for the execution of the impairment test are based
on managements estimates of future cash flows, which require
estimates to be made for future day rates, utilisation rates and profit
margins.
The assumptions used in estimating these cash flows are consistent
with internal forecasts. Market outlook and day rate considerations
provided by an independent third party are used to support
managements estimates. These considerations are mainly based
on the oil price.
Non-financial assets other than goodwill that suffered an impairment
are reviewed for possible reversal of the impairment at each
reporting date.
Financial assets
Periodic maintenance is depreciated over the expected period to
next docking, estimated to 5 years.
Estimated useful life for machinery and equipment is 3 - 5 years.
Newbuildings
Newbuildings under construction are capitalised as fixed assets
during the construction as installments are paid to the yard.
Capitalised costs include contractual costs and costs related to the
monitoring of the project during the construction period. Contractual
costs include costs related to the project for the duration of the
contract, i.e. from signing of the contract to final completion of the
contractual work. Any costs incurred prior to the signing of the
contract that relate to the procurement of the contract are regarded
as a purchase of contractual assistance and are included in
contractual costs.
Impairment of non-financial assets
All non-financial assets are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Whenever the carrying
amount of an asset exceeds its recoverable amount, an impairment
loss is recognised in the income statement.
The recoverable amount is the higher of an assets fair value less
costs to sell and value in use. The fair value less costs to sell is the
amount obtainable from the sale of an asset in an
reporting date.
Financial assets
The Group classify financial assets in the following categories:
trading financial assets at fair value through profit or loss, loans and
receivables and available-for-sale financial assets.
Management determines the classification of financial assets at their
initial recognition.
Financial assets carried at fair value through profit or loss are
initially recognised at fair value, and transaction costs are expensed
in the income statement. Derivatives are placed in this category
unless designated as hedges. Assets in this category are classified
as current.
Available-for-sale financial assets are non-derivatives that are either
designated in this category or not classified in any of the other
categories. They are included in non-current assets unless the
investment matures or management intends to dispose of it within
12 months of the end of the reporting period.
Loans and receivables are non-derivative financial assets with fixed
or determinable payments which are not quoted in an active market.
They are included in current assets, except for maturities greater
than 12 months after the balance sheet date, which are classified as
non-current assets.
B25
Loans and receivables are recognised initially at their fair value plus
transaction costs. Financial assets are derecognised when the
contractual rights to the cash flows from the financial assets expire
or are transferred, and the Group has transferred by and large all
risks and rewards from the financial asset.
Realised gains and losses are recognised in the income statement
as finance income in the period they arise.
Impairment of financial assets
For assets carried at amortised cost, the Group assesses at the end
of each reporting period whether there is objective evidence that a
financial asset or group of financial assets is impaired. A financial
asset or a group of financial assets is impaired and impairment
losses are incurred only if there is objective evidence of impairment
as a result of one or more events that occurred after the initial
recognition of the asset (a 'loss event') and that loss event (or
events) has an impact on the estimated future cash flows of the
financial asset or group of financial assets that can be reliably
estimated.
Evidence of impairment may include indications that the debtors or
a group of debtors is experiencing significant financial difficulty,
default or delinquency in interest or principal payments, the
probability that they will enter bankruptcy or other financial
reorganisation, and where observable data indicate that there is a
measurable decrease in the estimated future cash flows, such as
changes in arrears or economic conditions that correlate with
defaults.
For loans and receivables category, the amount of the loss is
measured as the difference between the asset's carrying amount
difference between the acquisition cost and the current fair value,
less any impairment loss on that financial asset previously
recognised in profit or loss - is removed from equity and recognised
in profit or loss. Impairment losses recognised in the consolidated
income statement on equity instruments are not reversed through
the consolidated income statement.
Derivative financial instruments and hedging
Derivatives are recognised at fair value on the date a derivative
contract is entered into and are subsequently re-measured on a
continuous basis at their fair value. The method of recognising the
resulting gain or loss depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the item
being hedged.
The Group designates certain derivatives as hedges of highly
probable forecast transactions (cash-flow hedges). At the date of
the hedging transaction, the Group documents the relationship
between hedging instruments and hedged items, as well as the
object of its risk management and the strategy underlying the
various hedge transactions. The Group also documents the extent
to which the derivatives used are effective in smoothing the changes
in fair value or cash flow associated with the hedge items. Such
assessments are documented both initially and on an ongoing
basis.
The effective portion of changes in the fair value of derivatives
designated as cash-flow hedges are recognised in other
comprehensive income (net of tax). Gain and loss on the ineffective
portion is recognised immediately in the income statement.
Amounts recognised directly in other comprehensive income are
For loans and receivables category, the amount of the loss is
measured as the difference between the asset's carrying amount
and the present value of estimated future cash flows (excluding
future credit losses that have not incurred) discounted at the
financial asset's original effective interest rate. The carrying amount
of the asset is reduced and the amount of the loss is recognised in
the consolidated income statement.
If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an event
occuring after the impairment was recognised (such as an
improvement in the debtor's credit rating), the reversal of the
previously recognised impairment loss is recognised in the
consolidated income statement.
For assets classified as available for sale the Group assesses at the
end of each reporting period whether there is objective evidence
that a financial asset or a group of financial assets is impaired. A
significant or prolonged decline in the fair value of an equity security
below its cost is evidence that the assets are impaired. If any such
evidence exists for available-for-sale financial assets, the
cumulative loss - measured as the
portion is recognised immediately in the income statement.
Amounts recognised directly in other comprehensive income are
reclassified as income or expense in the income statement in the
period when the hedged liability or planned transaction will affect the
income statement.
When a hedging instrument expires or is sold, or when a hedge no
longer meets the criteria for hedge accounting, any cumulative gain
or loss existing in equity at that time remains in equity and is
reclassified when the forecast transaction is ultimately recognised in
the income statement. When a forecast transaction is no longer
expected to occur, the cumulative gain or loss that was reported in
equity is immediately transferred to the income statement within
financial income/expenses.
Current and deferred income tax, withholding tax
The tax expense for the period comprises current and deferred tax.
Tax is recognised in the income statement, except to the extent that
it relates to items recognised in other comprehensive income or
directly in equity. In this case, the tax is also recognised in other
comprehensive income or directly in equity, respectively.
B26
The current income tax charge is calculated on the basis of the tax
laws enacted or substantively enacted at the balance sheet date in
the countries where the company and its subsidiaries operate and
generate taxable income. Management periodically evaluates
positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes
provisions where appropriate on the basis of amounts expected to
be paid to the tax authorities.
Deferred income tax is recognised, using the liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated financial
statements. However, deferred tax liabilities are not recognised if
they arise from the initial recognition of goodwill; deferred income
tax is not accounted for if it arises from initial recognition of an
asset or liability in a transaction other than a business combination
that at the time of the transaction affects neither accounting nor
taxable profit or loss. Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantially enacted
by the balance sheet date and are expected to apply when the
related deferred income tax asset is realised or the deferred
income tax liability is settled.
Deferred income tax assets are recognised only to the extent that
it is probable that future taxable profit will be available against
which the temporary differences can be utilised.
Deferred income tax assets and liabilities are offset when there is
a legally enforceable right to offset current tax assets against
current tax liabilities and when the deferred income taxes assets
and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable
entities where there is an intention to settle the balances on a net
basis.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at
call with banks, other current highly-liquid investments with original
maturities of three months or less, and bank overdrafts. Bank
overdrafts are shown under borrowings in current liabilities in the
balance sheet.
Borrowings
Borrowings are recognised initially at fair value, net of transaction
costs incurred. Borrowings are subsequently carried at amortised
cost; any difference between the proceeds (net of transaction
costs) and the redemption value is recognised in the income
statement over the period of the borrowings using the effective
interest method.
Fees paid on the establishment of loan facilities are recognised as
transaction costs of the loan to the extent that it is probable that
some or all of the facility will be drawn down. In this case, the fee
is deferred until the draw-down occurs. To the extent there is no
evidence that it is probable that some or all of the facility will be
drawn down, the fee is capitalised as a pre-payment for liquidity
services and amortised over the period of the facility to which it
relates.
Trade payables
Trade payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business from
suppliers. Accounts payable are classified as current liabilities if
payment is due within one year or less (or in the normal operating
cycle of the business if longer). If not, they are presented as non-
current liabilities.
Trade payables are recognised initially at fair value and
subsequently measured at face value, due to short time to
maturity
basis.
Withholding tax is the tax withheld on border-crossing gross
income, generated in Angola. Withholding tax is presented as tax
expense in the income statement.
Trade receivables
Trade receivables and other receivables, that have fixed or
determinable payments that are not quoted in an active market are
classified as receivables.
If collection is expected in one year or less (or in the normal
operating cycle of the business if longer), they are classified as
current assets. If not, they are presented as non-current assets.
Receivables are initially recognised at fair value and subsequently
at amortised cost using the effective interest method, less
provision for impairment. Provision for impairment is made to
specified receivable items when there is objective evidence that,
as a result of one or more events that occurred after the initial
recognition of the receivable, the estimated future cash flows of
the investments have been affected.
Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost is attributed using the first-in, first-out (FIFO) method. The
costs of inventories comprise the purchase price, import duties
and other taxes, transport and handling and other costs directly
attributable to the acquisition of the goods. Trade discounts,
rebates and other similar items are deducted in determing cost.
subsequently measured at face value, due to short time to
maturity.
Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable. Revenue is stated net of value-added tax,
returns, rebates and discounts and after eliminating sales within
the Group.
The Group recognises revenue when the amount of revenue can
be reliably measured, it is probable that future economic benefits
will flow to the entity and when specific criteria have been met for
each of the Groups activities as described below.
The Group bases its estimates on historical results, taking into
consideration the type of customer, the type of transaction and the
specifics of each arrangement.
The Group's revenues are derived from day-rate based drilling
contracts and day-rates from management drilling contracts and
other service contracts.
Revenue from management drilling contracts and other service
contracts is recognised when the services are performed and at
the rates specified in the contracts.
Day-rate based drilling contracts may include lump sum fees for
mobilisation and demobilisation. Both day-rate based and lump
sum fee revenues are recognised ratably over the contract
B27
period when services are rendered. Under some contracts, the
Group is entitled to additional payments for exceeding performance
targets. Such additional payments are recognised when any
uncertainties are resolved or upon completion of the drilling
program.
Mobilisation costs incurred as part of a contract are capitalised as
receivable and recognised as expense over the contract term,
excluding option periods not exercised.
Earnings per share
Earnings per share is calculated based upon the weighted average
number of oustanding shares in Odfjell Drilling Ltd.
B28
Note 2 > Financial risk management
The Group is exposed to a range of financial risks: market risk
(including currency risk, interest rate risk, and price risk), credit
risk and liquidity risk.
The financial risk management focuses on the unpredictability of
financial markets and seeks to minimize potential adverse effects
on the Groups financial performance. To some extent, the Group
uses derivative financial instruments to reduce certain risk
exposures.
Risk management is carried out on a Group level. The Group
identifies, evaluates and hedges financial risks in close co-
operation with the Group's operational units. The board of Odfjell
Drilling Ltd Group has established written principles for risk
management of foreign exchange risk, interest rate risk and use
of derivative financial instruments.
a) Market risk
Market risk is the risk of change in market prices and demand,
hereunder changes in currency exchange rates and interest
levels.
i) Foreign exchange risk
The consolidated subsidaries' reporting and functional currency
are USD, NOK, GBP, EUR, BRL, RON and PHP.
The Group operates internationally and is exposed to foreign
exchange risk arising from various currency exposures, primarily
with respect to USD and NOK. Foreign exchange risk arises
when future commercial transactions or recognised assets or
liabilities are denominated in a currency that is not the entitys
functional currency. The group is exposed to risks due to
fluctuations in exchange rates especially as charter contracts
The Group had 11 interest rate swap agreements at
December 31, 2012. Market inputs have been used to
determine the fair value of the swap agreements at the end
of the year. The fair value of the interest swap agreements
is confirmed by the financial institution with which the
company has entered into the agreements.
During 2012 a gain from change in market value of interest
rate swaps was recongised at USD 1.6 million in the income
statement, as compared to the negative market value of
USD 23.0 million during 2011. In addition, a loss of USD 0.1
million was classified as a component of the equity as of
December 31, 2011 relating to interest rate swaps qualified
for hedge accounting. In 2012 the loss of USD 1.7 million
was classified as a component of the equity as of December
31, 2012 relating to interest rate swaps qualified for hedge
accounting.
The Group monitors its interest rate exposure on a dynamic
basis. The Group calculates the impact on profit and loss of
a defined interest rate shift.
The result of the calculation on sensitivities returns the
following expected values:
- If interest is increased by 1.0 %, the effect will be an
increase in financing costs of USD 8,5 million for 2012,
compared to USD 8.4 million in 2011.
b) Credit risk
The Group operates in three core business areas: Mobile
offshore drilling units (MODU), Drilling & Technology and
Well Services (OWS). The market for the Groups services is
the offshore oil and gas industry, and the customers consist
2012 2011
Current receivables -27 226 11 196
Cash -19 951 6 508
Current liabilities 21 319 -1 833
Net effect on profit before tax -25 858 15 870
functional currency. The group is exposed to risks due to
fluctuations in exchange rates, especially as charter contracts
are normally in USD while most of the operating expenses are in
local currency.
If USD is weakend by 10 % against other relevant currencies, on
the balance-sheet date, we can expect the following effect on
profit before tax in USD thousands:
( ) p
the offshore oil and gas industry, and the customers consist
primarily of major integrated oil companies, independent oil
and gas producers and government-owned oil companies.
The Group performs ongoing credit evaluations of the
customers and generally do not require material collateral.
Reserves for potential credit losses are maintained when
necessary. With respect to credit risk arising from other
financial assets of the Group, which comprise cash and cash
equivalents, marketable securities, other receivables and
certain derivatives instruments receivable amount, the
Groups exposure to credit risk arises from default of the
counterparty, with a maximum exposure equal to the
carrying amount of these instruments. However, the Group
believes this risk is limited as the counterparties mainly have
a high credit quality.
The maximum exposure regarding trade receivables is the
carrying amount of USD 242 million.
c) Liquidity risk
The Group's objective is to maintain a balance between
continuity of funding and flexibility through the use of credit
facilities and to have sufficient cash or cash equivalents at
any time to be able to finance its operations and investments
in accordance with the Group's strategic plan.
With regular forecasts and liquidity analysis updates, the
Group will ensure sufficient available liquidity to fulfill its
ii) Interest rate risk
The Group's exposure to the risk of changes in market interest
rates relates primarily to the Group's long-term debt obligations
at floating interest rates. The Group evaluates the share of
interest rate hedging based on assessment of the Groups total
interest rate risk and currently has a combination of fixed and
floating interest rates in order to limit exposure.
B29
Note 2 > Financial risk management (cont.)
duties at loan maturity, without unacceptable loss or risk of
damaging the Groups reputation.
Prudent liquidity risk management implies maintaining
sufficient cash, the availability of funding through credit
facilities and the ability to close out market positions. Due to
the dynamic nature of the underlying businesses, the Group
aims to maintain flexibility in funding by keeping committed
credit lines available.
The Groups cash flow forecasting is performed by Group
finance. Group finance monitors rolling forecasts of the
Groups liquidity requirements to ensure it has sufficient cash
to meet operational needs while maintaining sufficient head-
room on its undrawn committed borrowing facilities at all
times, so that the Group does not breach borrowing limits or
covenants on any of its borrowing facilities. Such forecasting
takes into consideration the Groups debt financing plans and
covenant compliance.
Surplus cash held by the operating entities over and above
balance required for working capital management are
transferred to the Group treasury. Group treasury invests
surplus cash in interest bearing current accounts, time
deposits, money market deposits and marketable debt
securities, choosing instruments with appropriate maturities or
sufficient liquidity to provide sufficient head-room as
determined by the above-mentioned forecasts.
At the reporting date December 31, 2012, the Group held time
deposits of USD 4 million that are expected to generate cash
inflows for managing liquidity risk, compared to USD 157.7
million in 2011. million in 2011.
Reference is made to note 12 on maturity of debt.
d) Other risks
Rig rates
The Group has signed long-term contracts for Deepsea
Atlantic and Deepsea Bergen at fixed rates. The rate consists
of a USD element and a NOK element; the latter is annually
escalated to reflect the increased costs of staffing and
maintenance. Both rigs are contracted to Statoil ASA. Deepsea
Atlantic has a contract with fixed duration to August 2014 with
1 + 2 years options, the first option with duration of 1 year and
the second option with a duretion of 2 years.
The drilling contract with Statoil for Deepsea Bergen expired in
June 2012, and a new drilling contract of five years has been
entered into with Statoil ASA, which commenced immediately
after expiry of the previous contract. Statoil ASA declared the
fixed period of the new contract to be 5 years.
The drilling contract for the drillship Deepsea Metro I in the
joint venture company Deep Sea Metro Ltd Group expires in
June 2013, and the companies is currently seeking
engagements with major oli companies. No drilling contract
has been signed os of this date, but the company currently
follows several leads for engagements.
B30
The Group had the following financial instruments at each reporting period:
Assets at 31.12.2012 Level 1 Level 2 Level 3 Total
Available-for-sale financial assets
- Other non-current assets 22 22
Loans and receivables
- Sub-ordinated loan to related parties 52 069 52 069
- Other non-current assets 38 387 38 387
- Trade receivables 242 055 242 055
- Other current receivables 35 289 35 289
- Cash and cash equivalents 200 636 200 636
Total assets - - 568 458 568 458
Liabilities at 31.12.2012 Level 1 Level 2 Level 3 Total
Derivatives held at fair value through profit or loss
- Other non-current liabilities 24 574 24 574
Derivatives held as hedge instrument
Financial liabilities at amortised cost -
The tables below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as
follows:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)
- Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices)
or indirectly (that is, derived from prices) (Level 2)
- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3). For short term
assets and liabilities at level 3, the value is approximately equal to the carrying amount. As the time horizon is due in short term, future
cash flows are not discounted.
Financial liabilities at amortised cost
- Interest-bearing debt 1 351 814 1 351 814
- Trade payables 36 033 36 033
- Other current liabilities 110 324 110 324
Total liabilities - 26 390 1 502 777 1 529 168
Assets at 31.12.2011 Level 1 Level 2 Level 3 Total
Available-for-sale financial assets
- Other non-current assets 914 914
Loans and receivables -
- Other non-current assets 17 144 17 144
- Trade receivables 250 429 250 429
- Other current receivables 15 045 15 045
Total assets - - 283 531 283 531
Liabilities at 31.12.2011 Level 1 Level 2 Level 3 Total
Derivatives held at fair value through profit or loss
Derivatives held as hedge instrument
- Other non-current liabilities 110 110
Financial liabilities at amortised cost
- Interest-bearing debt 1 407 797 1 407 797
- Trade payables 34 361 34 361
- Other current liabilities 108 858 108 858
Total liabilities - 26 300 1 557 510 1 583 811
B31
Assets Liabilities Assets Liabilities
- -24 574 - -26 190
- -1 817 - -110
Total - -26 390 - -26 300
Less non-current portion -26 390 - -26 300
Current portion - - - -
As of 31.12. Odfjell Drilling Ltd. held the following interest rate derivatives:
Instrument Fixed rate Floating rate
Notional
amount Effective from Duration Market value
31.12.2012
Interest rate swaps 0,671%-2,890% USD-LIBOR-BBA 553 617 2010-2012 3-4 years -24 574
Interest rate swaps under
hedge accounting 0 920% 1 565% USD LIBOR BBA 215 000 2012 2014 3 7 years 1 817
Interest rate swaps - cash flow hegdes under hedge accounting
2012
Interest rate swaps - cash flow hedges
2011
The Group had 11 interest rate swap agreements at December 31, 2012. Market values have been used to determine the fair value of the
swap agreements at the end of the year. The Group has applied hedge accounting for three of the swap agreements entered into in
2012. The instrument were documented as cash flow hedges, and changes in fair value were recognised directly in equity.
As of 2012, the reduction in loss from negative market value of the swaps was recognised at USD 1.6 million in the income statement. A
loss of USD 1.7 million was classified as component of the equity.
hedge accounting 0,920%-1,565% USD-LIBOR-BBA 215 000 2012-2014 3-7 years -1 817
31.12.2011
Interest rate swaps 1,705%-2,89% USD-LIBOR-BBA 483 150 2008-2015 3-4 years -26 190
Interest rate swaps under
hedge accounting 0,968 % USD-LIBOR-BBA 75 000 09/02/2012 4 years -110
B32
Note 3 > Critical accounting estimates and judgements
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances.
The Group makes estimates and assumptions concerning the
future. These estimates are based on the actual underlying
business, its present and forecasted profitability over time, and
expectations about external factors such as interest rates, foreign
exchange rates and other which are outside the Groups control.
The resulting estimates will, by definition, seldom equal the related
actual results. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are
addressed below.
Revenue
The Group's revenues are derived from day rate based drilling
contracts, management drilling contracts and other service
contracts. Day-rate based drilling contracts may include lump sum
fees for mobilisation and demobilisation.
Both day rate based and lump sum fee revenues are recognized
ratably over the contract period when services are rendered.
Income tax
The Group is subject to income tax in many jurisdictions. Various
tax systems have required some use of judgement for certain
countries in determining income tax for all countries taken together
in the consolidated financial statements. The final tax liability for
some transactions and calculations will be uncertain.
Impairment of non-financial assets
Assets that have an indefinite useful life, i.e. goodwill, are not
subject to amortisation and are tested annually for impairment.
Assets that are subject to amortisation or depreciation, i.e. mobile
drilling units, are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may
not be recoverable. An impairment loss is recognised for the
amount by which the assets carrying amount exceeds its
recoverable amount.
The recoverable amount is the higher of an assets fair value less
costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash flows (CGUs). Non-financial assets
other than goodwill that suffered impairment are reviewed for
possible reversal of the impairment at each reporting date.
If available, estimated fair value of an asset is obtained externally.
In addition, the Group has financial models which calculate and
determine the value in use through a combination of actual and
expected cash-flow generation discounted to present value. The
expected future cash-flow generation and models are based on
assumptions and estimates.
The discount factor applied in the cash flow budgets is a pre-tax
weighted average cost of capital. Beyond the period covered by
the business plan, a growth factor which varies between 0 % and 5
% is applied, with an expectation that gross margins will not
weaken substantially over time.
in the consolidated financial statements. The final tax liability for
some transactions and calculations will be uncertain.
The Group recognises tax liabilities associated with future
decisions in tax cases/disputes, based on estimates of the
likelihood that additional income tax will fall due.
Should the final outcome of these cases vary from the amount of
the original provision, this variance will affect the stated tax
expense and provision for deferred tax in the period when the final
outcome is determined.
The parent company recognises tax liabilities when these are
incurred. In other words, the tax expense is related to the
accounting profit/loss before tax. The tax expense comprises tax
payable and the change in net deferred tax. Reference is made to
note 21 relating to disclosed information related to dispute with
Norwegian Tax Authorities, and hence the classification of paid tax
as long term receivable.
Withholding tax is the tax withheld on border-crossing gross
income, generated in Angola. Withholding tax is presented as tax
expense in the income statement.
B33
Note 4 > Segment reporting
2012 2011 2012 2011 2012 2011
Income statement
Total income 693 390 573 624 316 049 321 213 208 159 192 869
EBITDA 284 987 226 767 24 885 42 464 95 320 90 530
Depreciation and impairment -122 741 -94 626 -5 874 -9 671 -42 610 -41 599
EBIT 162 246 132 141 19 010 32 794 52 709 48 930
Mobile Offshore
Drilling Units Drilling & Technology Well services
The Group provides drilling and related services to the offshore oil and gas industry, and has three main business
areas, the operation of mobile drilling units, drilling & technology and well services.
The board is the Group's chief operating decision maker. Management has determined the operating segments
based on the information reviewed by the Board for the purposes of allocating resources and assessing
performance. Mobile Offshore Drilling Units (MODU), Drilling & Technology and Odfjell Well Services (OWS) has
been determined as the operating segments.
In accordance with the internal financial reporting, the Group's 40% interest in Deep Sea Metro Ltd Group has been
presented in the MODU segment using the line-by-line proportionate method. See more information regarding this
joint venture arrangement in note 7.
2012 2011 2012 2011
Income statement
Total income -123 844 -31 003 1 093 754 1 056 704
EBITDA -74 190 22 663 331 001 382 424
Depreciation and impairment 23 907 898 -147 318 -144 998
EBIT -50 283 23 561 183 683 237 426
Eliminations Total Group
B34
Note 5 > Goodwill
Goodwill
Cost
At 1 January 2012 27 022
Additions -
Currency translation differences 2 069
As at 31 December 2012 29 091
Accumulated impairment
At 1 January 2012 -
Impairment charge -
As at 31 December 2012 -
Net book value at 31 December 2012 29 091
Cost
At 1 January 2011 27 651
Additions -
Currency translation differences -629
As at 31 December 2011 27 022
Accumulated impairment
At 1 January 2011 -
Impairment charge -
As at 31 December 2011 -
Net book value at 31 December 2011 27 022
Impairment tests for goodwill
Goodwill is monitored by the management at the operating segment level. The following is a summary of goodwill allocation
for each operating segment:
2012 Opening Addition Disposal Impairment Other adjustments Closing
Drilling & Technology 20 955 1 605 22 560
Well Services 6 067 465 6 531
Total 27 022 2 069 29 091
2011
Drilling & Technology 21 443 -488 20 955
Well Services 6 208 -141 6 067
Total 27 651 -629 27 022
B35
Note 5 > Goodwill (cont.)
The recoverable amount of all CGUs has been determined based on value-in-use calculations. These calculations use pre-tax
cash flow projections based on financial budgets approved by management covering a five-year period. Cash flows beyond
the five-year period are extrapolated using the estimated growth rates stated below.
The key assumptions used for value-in-use calculations in 2012 are as follows:
Drilling &
Technology Well Services
EBIT margin 6,0 % 25.3%
Growth rate 2.0% 2.0%
Discount rate 6.3% 6.3%
The key assumptions used for value-in-use calculations in 2011 are as follows:
Drilling &
Technology Well Services
EBIT margin 8.8% 25.4%
Growth rate 2.0% 2.0%
These assumptions have been used for the analysis of each CGU within the operating segment.
Management determined budgeted EBIT margin based on past performance and its expectations of market development. The weighted
average growth rates used are consistent with the forecasts included in industry reports. The discount rates used are pre-tax and reflect
specific risks relating to the relevant operating segments.
B36
Note 6 > Tangible fixed assets
Mobile drilling
units
Periodic
maintenance
Construction
in progress
Machinery &
equipment
Total fixed
assets
2012
Cost price 01.01 1 748 030 116 830 - 422 898 2 287 758
Additions 18 922 6 081 109 119 110 940 245 062
Disposals - - -78 419 -78 419
Currency translation differences 145 - 32 892 33 037
Cost price 31.12 1 767 097 122 911 109 119 488 311 2 487 438
Accumulated depreciation and impairment losses 01.01 210 531 43 095 239 337 492 963
Depreciation 75 000 22 163 50 155 147 318
Disposals -1 375 -30 -39 403 -40 808
Reclassifications and other items - - -
Currency translation differences -2 055 - 18 121 16 066
Accumulated deprec. and impairm. losses 31.12 282 102 65 228 - 268 210 615 539
Carrying amounts 31.12.2012 1 484 995 57 682 109 119 220 102 1 871 897
2011
Cost price 01.01 1 692 244 110 858 - 380 317 2 183 419
Additions 56 738 5 971 - 61 250 123 959
Disposals - - - -6 855 -6 855
Currency translation differences -952 - - -11 814 -12 766
Cost price 31.12 1 748 030 116 830 - 422 898 2 287 758
Accumulated depreciation and impairment losses 01.01 137 380 21 868 - 199 161 358 409
Disposals - - - -3 540 -3 540
Depreciation 72 749 21 228 - 51 021 144 998
Currency translation differences 402 - - -7 305 -6 904 Currency translation differences 402 7 305 6 904
Accumulated deprec. and impairm. losses 31.12 210 531 43 095 - 239 337 492 963
Carrying amounts 31.12.2011 1 537 499 73 735 - 183 561 1 794 795
Useful lifetime 5 - 35 years 5 years 3 - 10 years
Depreciation schedule Straight line Straight line Straight line
B37
Note 6 > Tangible fixed assets (cont.)
Mobile drilling units
The Group owns three mobile drilling units.
Odfjell Drilling Group entered into a construction contract on February 24, 2006 with the shipyard DSME to design and
build Deepsea Atlantic, a semi-submersible drilling rig of GVA 7500 design, and the delivery of the rig took place on
February 6, 2009. The Group also entered into a building contract on February 27, 2006 with NOV for a complete drilling
package. The installation of the drilling package on Deepsea Atlantic was carried out at DSME before the said delivery
took place from the shipyard.
On February 24, 2007 Odfjell Offshore Group entered into a construction contract with the shipyard DSME to design and
build Deepsea Stavanger, a semisubmersible drilling rig of GVA 7500 design, and the delivery of the rig took place on July
8, 2010. The Group also entered into a building contract on February 27, 2007 with NOV for a complete drilling package.
The installation of the drilling package on Deepsea Stavanger was carried out at DSME before the said delivery took place
from the shipyard.
The Group has invested in additional 2,500m riser for Deepsea Stavanger. This additional riser will increase Deepsea
Stavanger's flexibility in connection with possible operations in ultra-deep water.
The paid installments, including initial project costs, project management cost under the Project Management Agreements,
costs of variation orders, costs for preparations for operation and interest cost have been capitalised on the rigs.
Deepsea Bergen is a semisubmersible drilling rig with Aker H-3.2 design, built in 1983. Deepsea Bergen has completed a
5 year classification in 2010 and got a renewal of the certificate Samsvarsuttalelse (SUT) from Norwegian Petroleum
Directorate.
Newbuildings
The Group has signed a construction contract with Daewoo Shipbuilding & Marine Engineering Co. Ltd on November 12,
2011 for building of ultra semisubmursible deepwater rig Deepsea Aberdeen with expected delivery date in May 2014.
Expected basis for depreciation/ allocation of expenditure
Deepsea Atlantic was delivered from the shipyard DSME on February 6, 2009 and commenced on the contract with Statoil
Petroleum AS on August 4, 2009. The total expenditures on the rig are decomposed into groups of components that have
different expected useful lifetime. Periodic maintenance is one of the decomposed components. The different groups of
components are depreciated over their expected useful lifetime The main group of component is expected to have an
different expected useful lifetime. Periodic maintenance is one of the decomposed components. The different groups of
components are depreciated over their expected useful lifetime.The main group of component is expected to have an
economic useful lifetime of 30 years. The rig is depreciated using the straight line method as from the date of completion
on August 4, 2009. When calculating depreciation, estimated residual value is taken into consideration.
Deepsea Stavanger was delivered from the shipyard DSME on July 8, 2010 and commenced on the contract with Ophir
Services Energy Ltd. on September 16, 2010. The total expenditures on the rig are decomposed into groups of
components that have different expected useful lifetime. Periodic maintenance is one of the decomposed components. The
different groups of components are depreciated over their expected useful lifetime. The main group of component is
expected to have an economic useful lifetime of 30 years. The rig is depreciated using the straight line method as from the
date of completion on September 16, 2010. When calculating depreciation, estimated residual value is taken into
consideration.
Deepsea Bergen was built in 1983. The rig is on a contract with Statoil. The contract commenced June 15, 2009 and has
duration on three years. The group has also entered into a new contract commencing in June 2012 with duration of three-
five years. The main group of component is expected to have an economic useful lifetime of 35 years. The rig is
depreciated using the straight line method. When calculating depreciation, estimated residual value is taken into
consideration.
B38
Note 7 > Investments in joint ventures
Deep Sea
Metro Ltd.
Odfjell
Galvo BV
PSW Group
AS
Ross
Holding
Group AS Total
Deep Sea
Metro Ltd.
PSW
Group AS
Ross
Holding
Group AS Total
Book value of equity at 01.01 298 679 - - 14 573 313 253 211 607 1 978 - 213 585
Investments/ Aquisitions
during the year 28 397 2 024 - - 30 421 92 000 892 14 971 107 863
Share of profits -17 581 -30 - 4 283 -13 329 -4 928 -795 912 -4 811
Share of OCI result -114 - - - -114
Depreciation of excess value -70 - - - -70
Impairment of excess value - - - - - - -2 023 - -2 023
Other changes - - - -547 -547 - - - -
Currency deviations 185 33 - 1 312 1 530 - -51 -1 310 -1 361
Book value of equity at 31.12 309 496 2 026 - 19 621 331 144 298 679 0 14 573 313 253
The groups share of the results, aggregated assets and liabilities in its joint ventures, are as follows:
Deep Sea
Metro Ltd.
Odfjell
Galvo BV
PSW Group
AS
Ross
Holding
Group AS Total
Deep Sea
Metro Ltd.
PSW
Group AS
Ross
Holding
Group AS Total
Assets 728 257 3 795 12 539 38 627 783 218 708 676 9 329 42 107 760 112
Liabilities 421 338 1 389 11 178 25 538 459 442 412 450 8 480 27 355 448 285
Revenues 98 551 389 16 697 47 490 163 127 944 10 009 17 759 28 712
Profit -17 581 -30 - 4 283 -13 329 -4 928 -795 912 -4 811
2011
2011 2012
2012
Deep Sea Metro Ltd Group
Deep Sea Metro Ltd Group is owned by Odfjell Offshore Ltd Group (40%) and Metro Exploration (60%) and managed by the joint venture agreement signed
in 2008. Deep Sea Metro Ltd Group is incorporated in Bermuda. Of book value investment in joint venture Deep Sea Metro Ltd as per 31.12.2012, excess
value of 2 576 523 USD is included. Excess value is derpreciated over life time of the drillships owned by the Deep Sea Metro Ltd Group. Depreciation of
e cess al e in 2012 amo nt to 70 TUSD and is incl ded in the profit fromjoint ent res in the income statement
in 2008. Deep Sea Metro Ltd Group is incorporated in Bermuda. Of book value investment in joint venture Deep Sea Metro Ltd as per 31.12.2012, excess
value of 2 576 523 USD is included. Excess value is derpreciated over life time of the drillships owned by the Deep Sea Metro Ltd Group. Depreciation of
excess value in 2012 amount to 70 TUSD, and is included in the profit from joint ventures in the income statement.
Petro Service West Group AS
Petro Services West Group AS was incorporated in Norway in March 2010, and is owned by Odfjell Drilling Technology Ltd (50 %) and Dalseide & Flysand
AS (50 %).
PSW Group's subsidiaries are PSW Consultants AS (former name Deep Fjord Consultants AS), PSW Property AS, Fedje Sikkerhetssenter AS and PSW
Subsea & Drilling AS.
At December 31 2011 the investment in the joint venture has been written down to USD 0, which is considered the lowest of share of equity and fair value
of the investment as per 31.12.2012. The write down in 2011 relates to loss and negative fair value of the investment. There is no recognition of profit in the
joint venture PSW Group AS in 2012.
Ross Holding Group AS
Ross Holding Group AS is owned by Odfjell Drilling Ltd Group (50 %) and Ross Offshore Invest AS (50 %).
Ross Holding AS owns 79.82 % of the shares in Ross Offshore AS. Ross Offshore AS owns 100 % of the shares in Ross Well Management AS (former
Odfjell Well Management AS) and Ross Well Management Consultants AS (former Odfjell Well Management Consultants AS) as per December 31, 2012.
Ross Holding AS Group is incorporated in Norway.
Odfjell Galvo BV
Odfjell Galvvo BV is owned by Odfjell Drilling Netherlands BV (50%) and Galvvo Oil & Gas Holding BV (50%). Odfjell Galvvo was a former subsidiary of
Odfjell Drilling Cooperatief U.A. as per 31.12.2011. 50% of the shares in Odfjell Galvvo BV was sold to Galvvo Oil & Gas Holding BV in 2012 for 9 000
EUR.
Odfjell Galvvo BV owns shares in Siri Drilling (20%), Itaoca Drilling BV (20%) and Guarapiri Drilling BV (20%) as per 31.12.2012.
B39
Note 7 > Investments in joint ventures (cont.)
Summarised financial information - according to the Group's ownership in DSM Ltd:
Share of total income 98 551 944
Share of operating expenses -75 022 -4 390
Share of net financial items -33 407 -1 389
Share of profit/(loss) before tax -9 879 -4 835
Share of taxes -7 702 -93
Share of profit/(loss) for the year -17 581 -4 928
Share of non-current assets 658 405 640 916
Share of cash 46 275 54 896
Share of current assets 23 578 12 864
Total assets 728 257 708 676
Share of equity 01.01 296 226 209 170
Share of profit/(loss) for the period -17 581 -4 928
Capital contribution 28 397 92 000
Currency deviation -123 -15
Share of equity 31.12 306 920 296 226
Share of non-current liabilities 389 950 380 936
Share of current liabilities 31 387 31 513
Total liabilities 421 338 412 450
Total equity and liabilities 728 257 708 676
For the investment in Deep Sea Metro Ltd, the figures according to ownership share (using the line-by-line method) are as follows:
B40
Note 8 > Trade receivables and other receivables
Trade receivables 2012 2011
Trade receivables 222 114 220 695
Earned, not yet invoiced operating revenues 28 119 37 338
Provision for impairment of accounts receivable -8 177 -7 604
Trade receivables - net 242 055 250 429
Other current receivables 2012 2011
Reimbursable expenses 11 995 3 402
Prepayments 10 695 12 660
VAT- receivables 9 626 7 022
Other short term receivables 2 973 1 864
Total other current receivables 35 289 24 947
Other non-current receivables 2012 2011
Loans to employees 417 536
Loans to related-parties 15 902 15 464
Tax paid to norwegian tax authorities (disputed) 19 824 -
Other non-current receivables 2 244 1 144
Total other non-current receivables 38 387 17 144
The fair value of trade receivables and other receivables are as follows: 2012 2011
Trade receivables 242 055 250 429
Other Receivables 73 676 42 091
Total 315 732 292 519
As the accounts receivables are due in short term, the value is approximately equal to the carrying amount, and the future cash flows are
not discounted.
The carrying amounts of the trade receivables are denominated in the following currencies:
2012 2011
USD 78 584 109 871
NOK 138 596 109 933
Other 24 875 30 624
Total 242 055 250 429
The ageing of the trade receivables, past due but not impaired: 2012 2011
0 to 3 months 26 965 42 936
3 to 6 months 1 253 1 990
Over 6 months 2 933 1 730
Total 31 151 46 656
The ageing of the trade receivables, past due and impaired: 2012 2011
0 to 3 months - -
3 to 6 months - -
Over 6 months 8 177 7 604
Total 8 177 7 604
Movements on the provision for impairment of trade receivables are as follow:
2012 2011
Pr 01.01 7 604 7 285
This years change in provisions 573 319
Pr 31.12 8 177 7 604
B41
Note 9 > Cash and cash equivalents
2012 2011
Cash in bank 180 957 117 876
Time deposits 4 056 157 691
Restricted capital 15 623 27 569
Total 200 636 303 137
2012 2011
Restricted bank deposits regarding payroll tax: 15 623 14 688
Restricted capital regarding advance from customers 12 881
Total restricted capital 15 623 27 569
Restricted capital regarded to advance from customers is restricted to management of rigs.
B42
Note 10 > Share Capital
Odfjell Drilling Ltd was founded 16 November 2005 with a share capital of USD 12 000.
The company has 1 376 687 078 shares pr 31.12.2012 with nominal value USD 0,00001 per share.
The share capital in USD was originally recorded when the parent company had NOK as it's funtional currency.
As per 1 January 2012 the parent company converted it's functional currency from NOK to USD.
This explains the difference between the book value of share capital and nominal value of the share capital.
Share capital and shareholders
The share capital and information about shareholders:
Number Nominal value Book value
Shares 1 376 687 078 USD 0,00001 15 224
1 376 687 078 USD 0,00001 15 224
All shares carry equal voting rights.
Overview of shareholders as per 31.12.12:
Shares Participating
interests/
share of votes
Odfjell Drilling Holding Ltd. 1 376 687 078 100,0 %
Total number of shares 1 376 687 078 100,0 %
Helene Odfjell controls 69,67% of the shares, the Larine Trust (of which Marianne Odfjell is beneficiary) controls 25,9% of the shares, Elin
Odfjell controls 3,96% of the shares, and the CEO controls 0,47% of the shares in Odfjell Drilling Holding Ltd.
B43
Note 11 > Other reserves
Note Financial
instruments
Translation
difference
Total
At 1 January 2011 -18 841 -18 841
Interest rate swap, previously under hedge accounting 2 23 476 23 476
Forward foreign exchange contracts, used -4 635 -4 635
Cash flow hegdes 2 -110 -110
Currency translation difference Group -35 966 -35 966
Currency translation difference joint ventures 94 94
At 31 December 2011 -110 -35 872 -35 982
Interest rate swap, under hedge accounting -1 707 -1 707
Currency translation difference Group 5 924 5 924
Currency translation difference joint ventures 869 869
At 31 December 2012 -1 817 -29 079 -30 896
B44
Note 12 > Interest-bearing debt
Non-current interest-bearing debt 2012 2011
Bank borrowings 1 160 949 1 316 720
Transaction cost, unamortised -20 405 -26 725
Non-current interest-bearing debt 1 140 544 1 289 995
Current interest-bearing debt
Current portion of non-current interest bearing debt 204 167 112 500
Accrued interest cost 7 104 5 302
Total current interest-bearing debt 211 270 117 802
Total interest-bearing debt 1 351 814 1 407 797
Average interest rate for 2012 was 4,04 % (compared with 4.01 % for 2011), after the effect of interest rate hedging.
Repayment schedule for interest-bearing debt 2013 2014 2015 2016 2017 Subsequent
Bank borrowings 257 095 249 766 342 686 671 310 - -
Total per 31 12 12 257 095 249 766 342 686 671 310
The table below analyses the Group's financial liabilities into relevant maturity groupings based on the remaining period at the end of the
reporting period to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows which
includes expected interest payments.
The interest-bearing debt is a combination of secured debt, unsecured debt and bond loans. Interest rates are generally based on LIBOR-
rates.
Total per 31.12.12 257 095 249 766 342 686 671 310 - -
Repayment schedule for interest-bearing debt 2012 2013 2014 2015 2016 Subsequent
Bank borrowings 172 460 258 127 249 567 341 890 622 109 -
Total per 31.12.11 172 460 258 127 249 567 341 890 622 109 -
B45
Note 12 > Interest-bearing debt (cont.)
Liabilities secured by mortgage 2012 2011
Current liabilities 211 270 117 802
Non-current liabilities 1 140 544 1 289 995
Total 1 351 814 1 407 797
Carrying amount of mortgaged assets:
Property, plant and equipment 1 871 897 1 794 795
Receivables 277 345 275 375
Bank deposits 200 636 303 137
Total 2 349 877 2 373 307
2012 2011
6 months or less 1 351 814 1 407 797
6-12 months - -
1-5 years - -
Later than 5 years - -
Total 1 351 814 1 407 797
The carrying amounts of the Group's borrowings are denominated in the following currencies:
2012 2011
USD 1 351 814 1 407 797
Total 1 351 814 1 407 797
The exposure of the Group's borrowings to interest rate changes and the contractual repricing dates at the end of the reporting period are as
follows:
Total 1 351 814 1 407 797
The carrying amount and fair value of the non-current liabilities are as follows:
2012 2011 2012 2011
Bank borrowings 1 140 544 1 289 995 1 140 544 1 289 995
Total 1 140 544 1 289 995 1 140 544 1 289 995
The fair value of non-current borrowings equals their carrying amount, as the loans has floating rate and credit margin has been stable
from the loan raising.
The Group has the following undrawn borrowing facilties:
2012 2011
Floating rate:
- Expiring within one year - -
- Expiring beyond one year - -
Total - -
Carrying amount Fair value
The undrawn borrowing facilities have been arranged to help finance the construction of drillships and mobile drilling units.
B46
Note 12 > Interest-bearing debt (cont.)
The borrowing facility in Odfjell Drilling Group includes the following financial covenants:
Odfjell Invest Ltd USD 950 million facility
The Odfjell Drilling Group has agreed to maintain, at all times, a minimum liquidity (cash and cash equivalents) requirement of USD
50,000,000 and minimum 5 per cent of interest bearing debt (on consolidated basis) (if the Odfjell Drilling Group 12 months prior to delivery
of any investment in excess of USD 100,000,000 has any unfinanced capital expenditure related to such investment, the minimum liquidity
requirement will increase to USD 100,000,000 in addition to 5 per cent of interest bearing debt). Further, the Odfjell Drilling Group has
agreed to maintain an equity ratio (equity to total assets) of minimum 30 per cent at all times until and including 30 September 2012, and
thereafter minimum 35 per cent, at all times from 30 June 2012 to maintain a leverage ratio (interest bearing debt to EBITDA) not exceeding
5.00:1.00 and likewise to ensure that the ratio of current assets to current liabilities at all times being minimum 1.00:1.00. From the date that
Odfjell Drilling Ltd. is released as guarantor under the facility agreement, the abovementioned financial covenants shall no longer apply to
the Odfjell Drilling Group, but shall instead apply equally to the Odfjell Offshore Group.
Deep Sea Drilling Company II KS USD 70 million facility
The main restrictive covenants are i) a fair market value covenant in which the value of Deepsea Bergen shall at all times cover at least
250% of the outstanding amount under the loan, ii) a provision that the uncalled capital of DSDC II KS shall remain at at least NOK 100
million and iii) an ownership covenant under which DSDC II KS shall be owned with minimum 71.52% directly or indirectly by Odfjell Rig Ltd.
Odfjell Rig Ltd. USD 170 million facility
The main restrictive covenants are i) a fair market value covenant in which the value of Deepsea Bergen shall at all times cover at least
160% of the combined outstanding amount under the loan and the USD 70 million loan to DSDC II KS, ii) a minimum free cash requirement
of USD 50 million and iii) total cash is minimum 5% of interest bearing debt at all times, of which the free cash requirement is subject to
increase to USD 100 million in the event of any unfinanced capital expenditures in excess of USD 100 million 12 month prior to delivery of
such investments, iv) the ratio of book equity to total book assets shall be minimum 35%, v) the ratio of EBITDA to net interest expenses
shall not, from 30 June 2012, be less than 2.50, vi) dividend payments from the Company are restricted to maximum 50% of net income for
each financial year (however, any amounts permitted to be distributed, but which are not distributed in one year may be carried forward and
distributed in subsequent years). The Facility was amended and restated to a USD 170 million facility on 23 August 2012.
Odfjell Drilling Services - USD 300 million
The main restrictive covenants are i) free cash shall not fall below USD 50 million in the Odfjell Drilling Group or below USD 15 million in the
Odfjell Drilling Services Group In addition free cash shall at minimumbe 5 % of total interest bearing debt for both groups ii) equity ratio
Odfjell Drilling Services - USD 300 million
The main restrictive covenants are i) free cash shall not fall below USD 50 million in the Odfjell Drilling Group or below USD 15 million in the
Odfjell Drilling Services Group. In addition free cash shall at minimum be 5 % of total interest bearing debt for both groups, ii) equity ratio
shall at all times during the period from and including September 30, 2012, up to, but excluding September 30, 2013, not fall below 30 % for
the Odfjell Drilling Group and 35 % for the Odfjell Drilling Services Group, and thereafter not fall below 35 % for the Odfjell Drilling Group
and 30 % for the Odfjell Drilling Services Group, iii) for the Odfjell Drilling Services Group, adjusted leverage ratio I (ratio of interest bearing
debt plus undrawn and available amounts under the revolving facility, divided by EBITDA on a twelve-month rolling basis) shall not increase
above 2.40 for USD less than 100 million, or above 3.00 for USD more than 100 million. Adjusted leverage ratio II (the same deifinition as
adjusted leverage ratio I but divided by EBITDA less USD 40 million), shall not increase above 3.75 for USD less than 100 million, or above
4.50 for USD more than 100 million, iv) ratio of current assets to current liabilities in the Odfjell Drilling Services Group shall at all times be
minimum 1.00, and v) equity for the Odfjell Drilling Group shall not fall below USD 750 million.
For the financial years 2011 and 2012 the Group has not been in violation of the covenants.
B47
Note 13 > Post employment benefits
The Group operates various post-employment schemes, including both defined benefit and defined contribution pension plans.
The pension plans are measured and presented according to IAS 19 (revised 2011).
Pension obligations
A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group
has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all
employees the benefits relating to employee service in the current and prior periods. A defined benefit plan is a pension plan
that is not a defined contribution plan.
Typically defined benefit plans define an amount of pension benefit that an employee will receive upon retirement, usually
dependent on one or more factors such as age, years of service and compensation.
The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined
benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is
calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit
obligation is determined by discounting the estimated future cash outflows using interest rates of government bonds that are
denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of
the related pension obligation.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited
to equity in other comprehensive income in the period in which they arise.
Past-service costs are recognised immediately in income.
For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a
mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been
paid. The contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised
as an asset to the extent that a cash refund or a reduction in the future payments is available.
Defined benefit pension plans
Amounts recognised in the balance sheet:
2012 2011
Present value of funded obligations 150 667 167 102
Fair value of plan assets 119 189 110 577
Deficit of funded plans 31 477 56 525
Present value of unfunded obligations 30 670 30 466
Total deficit of defined benefit pension plans 62 148 86 990
as an asset to the extent that a cash refund or a reduction in the future payments is available.
Defined benefit pension plans
The Group has a pension scheme covering a total of 1 662 persons, of which 110 pensioners. The scheme entitles staff to
defined future benefits. These are mainly dependent on the number of years of service, the salary level at pensionable age
and the size of benefits paid by the national insurance. The liabilities are covered through an insurance company (funded).
The Group also has a contractual pension agreement (CPA) covering 1 322 persons, of which 46 pensioners. The agreement
entitles staff to benefits from the age of 62 until they are eligible for a national insurance pension when reaching the age of 67.
The employer's contribution to these amounts to 20 % of the pension paid. These liabilities are not covered through an
insurance company (unfunded).
A number of the Norwegian subsidiaries in the Group are required to have a civil service pension scheme according to the
Norwegian Act relating to mandatory occupational pensions. These subsidiaries have pension schemes in accordance with the
requirements in this Act.
B48
Note 13 > Post employment benefits (cont)
Movement in the net defined benefit obligation over the years:
Present value of
obligation
Fair value of plan
assets Total
At 1 January 2012 197 568 -110 577 86 990
Current service cost -1 892 15 292 13 399
Interest expense/ (income) 4 732 -3 066 1 666
Pension expense 2 840 12 225 15 065
Remeasurements:
Return on plan assets, excluding amounts included in
interest expense/(income)
Total actuarial (gain)/loss -30 930 9 088 -21 842
-30 930 9 088 -21 842
Exchange differances 15 112 -8 872 6 239
Contributions: -
Employers -
Plan participants - -22 569 -22 569
Payments from plans: -
Benefit payments -3 252 1 515 -1 737
At 31 December 2012 181 337 -119 189 62 148
Present value of
obligation
Fair value of plan
assets Total
At January 2011 162 344 -99 224 63 121
Current service cost 18 519 336 18 855
Interest expense/ (income) 6 350 -4 433 1 916
Pension expense 24 868 4 097 20 771 Pension expense 24 868 -4 097 20 771
Remeasurements:
Return on plan assets, excluding amounts included in
interest expense/(income) - 4 005 4 005
Total actuarial (gain)/loss 18 607 - 18 607
18 607 4 005 22 612
Exchange differences -5 089 3 469 -1 621
Contributions:
Employers - -16 036 -16 036
Payments from plans:
Benefit payments -3 163 1 306 -1 857
At 31 December 2011 197 568 -110 577 86 990
The significant actuarial assumptions were as follows:
2012 2011
Salary growth rate 0% - 3.5% 3.5%
Expected growth in G (base social security amount) 3.25% 3.75%
Pension growth rate 0.2% - 3.25% 0.1%
B49
Note 13 > Post employment benefits (cont)
The sensitivity of the defined benefit obligation to changes in the weigthed principal assumptions is:
Change in
assumption
Increase in
assumption
Decrease in
assumption
Discount rate 1 % Decrease by 17% Increase by 22%
Salary growth rate 1 % Increase by 11% Decrease by 10%
Pension growth rate 1 % Increase by 13% Decrease by 1%*
*Assumption is here that pension growth rate is decreased from 0.1 % to 0 %.
Total pension expenses (including defined benefit and defined contribution scheme) are splitted to the following:
2012 2011
Pension expenses from defined benefit scheme 15 065 20 771
Pension expenses from defined contribution scheme 4 645 5 823
Total pension expense 19 710 26 594
See also note 17 for further information regarded to personnel expenses.
Impact on defined benefit obligation
B50
Note 14 > Other liabilities
Other non-current liabilities
2012 2011
Non-current liabilties under related-party agreement 2 563 7 255
Other non-current liabilities 2 043 79
Total other non-current liabilities 4 606 7 334
Other current liabilities
2012 2011
Prepayments from customers 3 407 31 727
Deferred revenue 3 724 546
Accrued salaries 14 357 13 882
Holiday pay 22 875 20 339
Employee bonus provisions 21 428 18 210
Other accrued expenses 44 532 24 154
Total other current liabilities 110 324 108 858
B51
Note 15 > Tax
In USD thousands
Specification of tax expenses for the year 2012 2011
Withholding tax -7 453 0
Payable tax, ordinary taxation -26 075 -13 865
Adjustments in respect of prior years 320 -314
Change in deferred tax 2 033 -18 034
Total tax -31 176 -32 213
Tax reconciliation 2012 2011
Profit before tax 148 033 153 493
Tax calculated at domestic tax rates applicable to profits in respective countries* -33 398 -32 494
Non-taxable income 2 223 281
Taxes -31 176 -32 213
* Domestic tax rates applicable to the Group varies between 0 % and 28 %
Effective tax rate 21,1 % 21,0 %
The tax (charge)/credit relating to components of the comprehensive income is as follows:
2012
Before tax
Tax (charge)/
credit After tax
Actuarial loss on post employment benefit obligations 21 842 (6 116) 15 726
Cash flow hegdes
Currency translation differences
Other comprehensive income 21 842 -6 116 15 726
Current tax - - -
Deferred tax - -6 116 -
2011
Before tax
Tax (charge)/
credit After tax
Actuarial loss on post employment benefit obligations -22 612 6 331 -16 281
Cash flow hegdes - - -
Currency translation differences - - -
Other comprehensive income -22 612 6 331 -16 281
Current tax - - -
Deferred tax - 6 331 -
B52
Note 15 > Tax (cont.)
In USD thousands
The gross movement on the deferred tax account is as follows: 2012 2011
Net deferred tax assets/(deferred tax liabilities) at 01.01 5 303 15 886
Income statement charge 2 033 -18 034
Charged directly to equity -6 116 6 331
Group contribution -846 0
Currency translation differences 460 1 120
Net deferred tax assets/(deferred tax liabilities) at 31.12 835 5 303
Deferred tax assets
In USD thousands Current assets
Net pension
liabilities
Loss carried
forward Total
2012
Opening balance 01.01. 741 24 357 0 25 098
Income statement charge -433 -2 587 846 -2 174
Charged directly to equity 0 -6 116 0 -6 116
Use of losses for the year 0 0 -846 -846
Currency translation differences 37 1 747 0 1 784
31.12. 344 17 401 0 17 746
2011
Opening balance 01.01. 112 17 674 23 953 41 739
Income statement charge 675 464 -25 018 -23 880
Charged directly to equity 0 6 331 0 6 331
Currency translation differences -46 -112 1 065 907
31.12. 741 24 357 0 25 098
Deferred tax liabilities
In USD thousands
Share in
limited
partnership Fixed assets
Deferred capital
gains Total
2012
Opening balance 01.01. -46 -4 708 -15 040 -19 794
Income statement charge 210 894 3 104 4 207
Charged directly to equity 0 0 0 0
Currency translation differences 6 -320 -1 010 -1 324
31.12. 169 -4 134 -12 946 -16 911
2011
Opening balance 01.01. -681 -6 365 -18 807 -25 853
Income statement charge 662 1 616 3 569 5 846
Charged directly to equity
Currency translation differences -27 41 198 212
31.12. -46 -4 708 -15 040 -19 794
B53
Note 16 > Combined items, income statement
USD thousands
Other gains and losses 2012 2011
Gain on disposals of casing, mooring and rental equipment 3 371 2 677
Disposal of subsidiary - 43 295
Gain on sale of other assets 67 -
Gain on sale of assets 3 438 45 972
Other operating expenses 2012 2011
Consumption of purchased goods for resale -1 436 -3 389
Hired services, subcontractors and stand-in employees -58 137 -64 204
Hired casing, mooring and rental services -16 518 -15 934
Tools, fixtures and fittings, and working plant -49 036 -45 950
Repair and maintenance -18 976 -18 484
Insurance, guarantee and service costs -7 192 -7 589
Loss on disposal of machinery and bad debt -619 -3 103
Course expenses (fees. rent of premises etc.) -7 524 -7 794
Freight. transport and insurance -11 834 -7 931
Office rent and warehouses -13 514 -9 642
Fees for financial and legal assistance -6 298 -5 706
Inspection -4 184 -4 384
Travel expenses -38 418 -25 333
Other operating and administrative expenses -32 366 -28 323
Total other operating expenses -266 051 -247 766
Financial income/expenses 2012 2011
Interest income
Interest income 2 171 3 635
Interest income from related parties 5 198 -
Total interest income 7 369 3 635
Borrowing cost
Interest incurred -57 639 -55 510
Interest expenses to related parties - -258
Other borrowing expenses -6 315 -24 682
Total borrowing cost -63 955 -80 451
Currency gain 43 201 58 742
Other financial income 6 643 -
Currency loss -20 449 -35 966
Gain/loss on interest rate swaps 1 616 -26 190
Other financial expenses -10 075 -3 703
Total other financial items 20 936 -7 118
B54
Note 17 > Personnel expenses
Personnel expenses 2012 2011
Salaries and wages 385 631 360 658
Employer`s national insurance contributions 46 189 44 946
Pension expenses 19 710 26 594
Other benefits 17 623 17 118
Hired personnel 17 029 16 335
Total personnel expenses 486 182 465 651
No. of employees (annual average) 2 763 2 676
Audit
2012 2011
Audit (incl. technical assistance with financial statements) 848 864
Other assurance services 31 20
Tax advisory fee (incl. technical assistance with tax returns) 0 149
Total audit fees 880 1 033
The fees are net of VAT.
B55
Note 18 > Remuneration to the Board of Directors and key executive management
2012
Executive management:
USD thousands Salary Bonus
Pension
premium Other remuneration Total
Simen Lieungh (CEO in Odfjell Drilling AS) 754 321 11 34 1 119
Atle Sb (CFO in Odfjell Drilling AS) 387 132 18 21 559
Total remuneration executive
management 1 141 453 28 55 1 678
Board of non executive directors:
Helene Odfjell 57 57
Marianne Odfjell 28 28
Kirk L. Davis 43 43
Carl-Erik Haavaldsen 28 28
Bengt Lie Hansen 28 28
Total remuneration Board of non
executive directors 185 185
2011
Executive management:
USD thousands Salary Bonus
Pension
premium Other remuneration Total
Simen Lieungh (CEO in Odfjell Drilling AS) 701 10 4 716
Atle Sb (CFO in Odfjell Drilling AS) 413 248 18 34 713
Total remuneration executive
management 1 114 248 29 38 1 429
Board of non executive directors:
Helene Odfjell 59 59
Marianne Odfjell 29 29
Kirk L. Davis 45 45
Carl-Erik Haavaldsen 29 29
Bengt Lie Hansen 29 29
Total remuneration Board of non
executive directors 192 192
B56
Note 19 > Earnings per share
2012 2011
Profit/ (Loss) attributable to equity holders of the company 102 549 108 833
Weighted average number of ordinary shares in issue 1 376 687 078 1 376 687 078
Earnings per share 0,07 0,08
The basic and diluted earnings per share are the same, as the Company has no convertible bond loan or stock option plan.
Earnings per share is calculated as net result allocated to shareholders for the year divided by the weighted average number
of outstanding shares.
B57
Note 20 > Securities and mortgages
Odfjell Invest Ltd. USD 950 million Facility Agreement
As security for the loan, substantially all of the assets of Odfjell Invest Ltd. and its subsidiaries have been pledged in favour of the
lenders. This includes the shares in Odfjell Invest I Ltd., Odfjell Invest II Ltd. and the charter company Odfjell Invest AS, mortgages
over the semi-submersible drilling rigs "Deepsea Stavanger" and "Deepsea Atlantic" and assignment of rights to revenue, interest
proceeds and bank accounts. In addition, the shares in Odfjell Invest Ltd. have been pledged by Odfjell Offshore Ltd. in favour of
the lenders. Also, Odfjell Invest I Ltd., Odfjell Invest II Ltd., Odfjell Drilling Ltd. and Odfjell Offshore Ltd. have guaranteed as and for
its own debt the due and punctual observance and performance of the obligors' obligations under the finance documents, however
such that Odfjell Drilling Ltd. may be released as guarantor under the facility agreement upon the occurrence of either an initial
public offering or a private placement of Odfjell Offshore Ltd.
Deep Sea Drilling Company II KS. USD 70 million facility
Deep Sea Drilling Company II KS entered into a facility with DNB Bank ASA as Agent on behalf of several banks on 26 April
2011. The assets of DSDC II KS, including Deepsea Bergen, DSDC II KS rights under a bareboat charter party and its bank
accounts have been pledged as security for the loan, together with a sub-pledge of Deep Sea Drilling Company KS i) rights under
the charter with Statoil and ii) bank accounts, and the Company has provided an unconditional and irrevocable on-demand
guarantee for Odfjell Rig Ltd.s share of the uncalled capital of DSDC II KS. Odfjell Offshore Ltd has provided an uncalled capital
guarantee towards Deep Sea Drilling Company II KS for Odfjell Rig Ltd's part of the uncalled capital requirement according to the
loan agreement . Odfjell Offshore Ltds liability under this guarantee is limited to NOK 71,520,000 plus interest and costs. In
addition, shares in Deep Sea Drilling Company II KS are pledged as security for the facility.
Odfjell Rig Ltd. USD 170 million facility
As security, Odfjell Rig Ltd. pledges its shares in DSDC II KS and Odfjell Drilling Bergen AS and its bank accounts, and gives an
assignment of intra-group receivables. Further, the Company has pledged all its shares in Odfjell Rig Ltd. The guarantee from
Odfjell Drilling will be released following a private placement or listing of the Company. The Facility was amended and restated to
a USD 170 million facility on 23 August 2012. The company furnishes the following securities for the loan: account pledge over the
companys bank accounts with DNB Bank ASA ; and pledge of the companys shares in Deep Sea Drilling Company II KS and
Odfjell Drilling Bergen AS. In addition, the company's shares has been pledged in favour of DNB Bank ASA as Agent on behalf of
the lenders in the USD 170 million loan agreement.
USD 300 million term loan facility agreement entered into on 4 November 2011 with Odfjell Drilling Services Ltd as borrower and
USD 300 million term loan facility agreement entered into on 4 November 2011 with Odfjell Drilling Services Ltd as borrower and
DNB Bank ASA and Danske Bank A/S as lenders. The liability of Odfjell Drilling Ltd hereunder shall be limited to USD 330 million
plus any unpaid amount of interest, fees and expenses, and shall be reduced with amounts actually repaid (and prepaid, if any)
under the loan agreement.
B58
Note 21 > Contingencies
One of Odfjell Drilling Ltds subsidiaries, Odfjell Rig Ltd, was notified by Norwegian Tax Authorities (Skatt Vest) late 2011 that income from
its direct 52.913% participation in KS Deep Sea Drilling Company II (KS DSDC II) is deemed taxable in Norway for the income years 2009-
2010. In 2012 the Norwegian Tax Authorities also deemed Odfjell Rig Ltd taxable for the income year 2011.
The Norwegian Tax Authorities have in 2012 taxed Odfjell Rig Ltd as if the company was taxable for the income years 2009-2011. Total
tax is classified as long term receivable due to the argumentation of Odfjell Rig Ltd of not beeing taxable for the income years 2009-2011.
Total paid taxes and interests on taxes for the income years 2009-2011 are NOK 110 350 400, whereof NOK 1 972 831 are interests on
tax amount for all three income years. The receivable of USD 19 824 375 is classified as long term receivable, hence the estimated
duration of the trial.
Due to not agreeing with Norwegian Tax Authorities' decision, Odfjell Rig Ltd in 2012 commenced proceedings against Norwegian Tax
Authorities which relates to dispute of Odfjell Rig Ltd beeing taxable for the income years 2009-2011. It is uncertain the time for start up of
the trial.
Odfjell Rig Ltd is arguing that the tax authorities assertion is based on wrong assumptions as to the factual circumstances in the case of
its participation in KS DSDC II. Odfjell Rig Ltd considers that the probability of winning the trial is higher than loosing the trial in the final
court.
B59
Note 22 > Commitments
Due in year 1 53 047 101 503
Due in year 2 598 000 -
Due in year 3 - 527 850
Value of new building commitments 651 047 629 353
2012 2011
Rental, casing and mooring equipment, due in 1 year 15 989 13 683
Total 15 989 13 683
Operating lease commitments - group company as lessee
The Group leases various offices under non-cancellable operating lease arrangements. The lease terms are between 1 and 10 years,
and the majority of the lease arrangements are renewable at the end of the lease period at market rates.
Capital Commitments
The Group has signed a contract with Daewoo Shipbuilding & Marine Engineering (DSME) to build a new semi-submersible
drilling rig DeepSea Aberdeen for the use in the UK's West of Shetland region under a future contract with BP. The commitments
related to the newbuilding programme are summarised in the table below:
Capital expenditure other than newbuildings contracted for at the end of the reporting period but not yet incurred is as follows:
2012 2011
No later than 1 year 4 457 2 546
Later than 1 year and no later than 5 years 12 635 10 184
Later than 5 years 4 715 8 525
Total 21 806 21 255
B60
Note 23 > Capital Disclosures
Capital Management
The primary objective of the Group`s capital management is to ensure that it maintains healthy capital ratios and liquidity
available to take advantage of investment opportunities and generally support the business. Capital management should
be such that the capital structure is sufficiently robust to withstand prolonged adverse conditions in significant risk factors,
such as long-term down-cycles in our markets and unfavourable conditions in financial markets. Capital management also
comprise securing the company to be in compliance with covenants on interest bearing debt. Reference is made to note
12 which disclose information about covenants on long term interest bearing liabilities.
The Group will manage the capital structure and make adjustments to it, to maintain an optimal structure adapted to
current economic conditions. In order to maintain or adjust the capital structure, the Group may adjust dividend payments,
buy treasury shares, return capital to shareholders or issue new shares.
Deposits / placements
The liquidity management has four main objectives:
- Matching of surplus funds against borrowing requirements.
- Secure a high level of liquidity (a targeted minimum of two months cash flow) in order to meet future plans of the Odfjell
Drilling.
- Limitation of credit risks.
- Maximise return on liquid assets.
Accordingly, investments may only be made in securities with a rating of Investment grade, Baa (Moodys) , BBB-
(Standard and Poors and Fitch IBCA) or better.
For companies not rated by international rating bureaus, investments may be made in accordance with DnBs rating BBB
or better.
A list of counter party exposure limits shall be established by the CFO, and be reported to the Board of Odfjell Drilling on a
yearly basis.
The following instruments are allowed for short term placements;
- Deposits in banks
2012 2011
Equity 1 154 303 1 032 831
Total assets 2 804 385 2 740 613
Equity ratio 41 % 38 %
Cash and cash equivalents 185 013 275 567
Available drawing facilities - -
Total available liquidity 185 013 275 567
The following instruments are allowed for short term placements;
- Deposits in banks
- Loans to companies/institutions/funds (like fixed or floating rate bonds, senior or subordinated debt)
- Certificates
- Money-market funds
- Equity
Working Capital
The company's policy is to have working capital corresponding to 2 months operating expenses.
Interest Rate Risk
The administration is authorised to hegde up to 50% of the interest payments of the external financing based on an
approval from the Finance Committee (CEO, CFO and VP Finance). Status is to be reported to the Board on a yearly
basis.
B61
Note 24 > Transactions with related parties
2012 2011
Sales of services:
- Entities controlled by Odfjell Partners Ltd. (management services) 26 289
- Associates 93 191 24 400
Total 93 217 24 689
Operating expenses
Associates 14 068 7 567
Total 14 068 7 567
Leases:
- Entities controlled by Odfjell Partners Ltd. (office rent) 1 909 4 696
Total 1 909 4 696
Interest expenses: 2012 2011
- Odfjell Partners Ltd. - 258
Interest income:
- Deep Sea Metro Ltd. 5 198 -
Key management compensation
The Group is 100% controlled by Odfjell Drilling Holding Ltd. Odfjell Drilling Holding Ltd. is controlled by Odfjell Partners Ltd., which owns
69.67% of the company's shares. The remaining shares are owned by the Larine Trust (25.90%), Elin Odfjell (3.96%) and Simen Lieungh
(0.47%).
The following transactions were carried out with related parties:
Key management compensation
Key management includes directors (executive and non-executive). The compensation paid or payable to key management for
employee services is shown in Note 18 - Remuneration.
Year-end balances arising from purchase of services
Current receivables from related parties: 2012 2011
Current receivables from related parties: 14 285 58 098
Total 14 285 58 098
Current liabilities to related parties: 2012 2011
Current liabilities to related parties 349 -
Current liabilities to parent company 6 286
Total 6 635 -
Non-current loans from related parties 2012 2011
Non-current liability under related party agreement - 7 255
Total - 7 255
Non-current receivables from related parties 2012 2011
Non-current receivable under related-party agreement 52 069 -
Non-current receivable Odfjell Capital Ltd 15 902 15 464
Total 67 970 15 464
B62
Note 24 > Transactions with related parties (cont.)
Commitments
The Group leases various offices under non-cancellable operating lease agreements. The lease terms are between 1 and 10 years,
and the majority of lease agreements are renewable at the end of the lease period at market rate.
2012 2011
No later than 1 year 1 911 4 432
Later than 1 year and no later than 5 years 7 543 17 630
Later than 5 years 4 715 15 040
Total 14 169 37 103
B63
Note 25 > Events after the reporting period
There are not identified events after the reporting period with effect for the financial statement for 2012.
B64
Note 26 > First-time adoption of IFRS
Note NGAAP Adjustments IFRS NGAAP Adjustments IFRS
Assets
Goodwill c 24 168 2 854 27 022 27 651 0 27 651
Deferred income tax asset h 0 5 303 5 303 5 430 8 647 14 077
Property, plant and equipment 1 794 795 0 1 794 795 1 825 055 0 1 825 055
Investments in joint ventures a, d 310 502 2 751 313 253 213 666 0 213 666
Available-for-sale financial assets 914 0 914 935 0 935
Held-to-maturity financial assets 0 0 0 3 796 0 3 796
Financial instruments f 0 0 0 0 4 038 4 038
Other non-current assets 17 144 0 17 144 15 659 0 15 659
Total non-current assets 2 147 522 10 909 2 158 431 2 092 192 12 685 2 104 877
Spare parts 3 669 0 3 669 3 389 0 3 389
Trade receivables 250 429 0 250 429 211 071 0 211 071
Financial instruments f 0 0 0 0 2 400 2 400
Other current receivables 24 947 0 24 947 26 242 0 26 242
Cash and cash equivalents 303 137 0 303 137 274 112 0 274 112
Total current assets 582 181 0 582 181 514 814 2 400 517 214
Total assets 2 729 703 10 909 2 740 613 2 607 007 15 085 2 622 091
Effect of transition to IFRS
December 31, 2011 January 1, 2011
These financial statements are the Group's first annual financial statements prepared in accordance with IFRS. This note discloses the
impact of the transition to IFRS on the Group's reported financial position, financial performance and cash flows, including the nature and
effect of significant changes in accounting policies from those used in the Group's consolidated financial statements for the year ended
December 31, 2011 prepared under Norwegian GAAP.
Reconciliation of consolidated statement of financial position as previously reported under Norwegian GAAP to IFRS:
Share capital 14 0 14 14 0 14
Other contributed capital 339 095 0 339 095 339 095 0 339 095
Other reserves 0 -35 982 -35 982 0 -18 841 -18 841
Retained earnings 708 899 -1 921 706 978 648 805 -26 870 621 935
Total equity attributable to owners of the parent 1 048 008 -37 903 1 010 104 987 914 -45 711 942 203
Non-controlling interests 22 727 0 22 727 26 586 0 26 586
Total equity 1 070 735 -37 903 1 032 831 1 014 499 -45 711 968 789
Borrowings 1 402 495 -112 500 1 289 995 1 328 263 -652 417 675 847
Derivative financial instruments e, f 26 190 110 26 300 0 23 476 23 476
Deferred income tax liability h 11 574 -11 574 0 0 0 0
Post-employment benefits b 26 715 60 275 86 990 25 801 37 320 63 121
Other non-current liabilities 7 334 0 7 334 11 620 0 11 620
Total non-current liabilites 1 474 308 -63 688 1 410 620 1 365 685 -591 621 774 064
Borrowings i 5 302 112 500 117 802 8 466 652 417 660 883
Trade payables 34 361 0 34 361 34 365 0 34 365
Current income tax 7 040 0 7 040 12 015 0 12 015
Social security and other taxes 29 100 0 29 100 29 225 0 29 225
Other current liabilities 108 858 0 108 858 142 751 0 142 751
Total current liabilities 184 661 112 500 297 161 226 822 652 417 879 239
Total equity and liabilities 2 729 703 10 909 2 740 613 2 607 007 15 085 2 622 091
B65
Note 26 > First-time adoption of IFRS (cont.)
Reconciliation of consolidated income statement as previously reported under Norwegian GAAP to IFRS:
Effect of transition to IFRS
Note NGAAP adjustments IFRS
Revenues
Operating revenue 1 056 704 - 1 056 704
Total operating income 1 056 704 - 1 056 704
Other gains/losses a 43 541 2 431 45 972
Share of profit from joint ventures d -7 420 586 -6 834
Personnel expenses b -466 292 642 -465 651
Depreciation and impairments c -148 049 3 051 -144 998
Other operating expenses -247 766 - -247 766
Total operating expenses -862 108 3 692 -858 415
Operating profit (EBIT) 231 303 6 123 237 426
Interest income 3 635 - 3 635
Borrowing cost -80 451 - -80 451
Other financial items b -5 201 -1 916 -7 118
Financial income / (expenses) -82 017 -1 916 -83 933
Profit/(loss) before tax 148 700 4 793 153 493
Income tax expense income -32 213 - -32 213
Profit/(loss) for the period 116 487 4 793 121 280
Attributable to:
Owners of Odfjell Drilling Ltd 104 040 4 793 108 833
Non-controlling interests 12 447 - 12 447
Other comprehensive income (net of tax):
Interest rate swap, previously under hedge accounting e - 23 476 23 476
Forward foreign exchange contracts, used f - -4 635 -4 635
Change in fair value of cash flow hegdes f - -110 -110
Post-employment benefits - actuarial gains and losses b - -16 281 -16 281
Currency translation differences g - -37 019 -37 019
Other comprehensive (loss) income for the period - -34 569 -34 569
Total comprehensive income 116 487 -29 776 86 711
2011
B66
Reconciliation of comprehensive income as previously reported under Norwegian GAAP to IFRS:
Note 2011
Comprehensive income as reported under Norwegian GAAP 116 487
Increase (decrease) in net income for:
Adjusted gain on sale of subsidiary a 2 431
Post-employment benefits-adjustment on service cost b 642
Post-employment benefits-adjustment on interest cost b -1 916
Reversal of amortisation on goodwill c 3 051
Reversal of amortisation on goodwill relating to investment in joint venture d 586
4 793
Increase (decrease) in other comprehensive income for: -
Interest rate swap, previously under hedge accounting e 23 476
Forward foreign exchange contracts, settled during the year e,f -4 635
Change in fair value of cash flow hegdes f -110
Post-employment benefits - actuarial gains and losses b -16 281
Currency translation differences g -37 019
-34 569
Total comprehensive income as reported under IFRS 86 710
Reconciliation of equity as previously reported under Norwegian GAAP to IFRS:
Note
January 1,
2011 Note
December 31,
2011
Total equity reported under NGAAP 1 015 081 1 070 735
IFRS adjustments
Financial instruments, forward foreign exchange contracts e,f 4 635 -
Financial instruments, interest rate swaps e,f -23 476 -110
Reversal of amortisation on goodwill c - 2 854
Change in pension liability (net of tax) b -26 870 -43 398
Change in cost of investment in Ross Holding a - 2 751
Reclassification of currency translation g -35 872
Total adjustments -45 711 -73 775
Total adjustments above were reclassified within equity g - 35 872
Total equity reported under IFRS 969 371 1 032 831
B67
a) The Group disposed a subsidiary in 2011 with a
consolidated gain under Norwegian GAAP of USD 40.8 million.
Part of the consideration was shares in Ross Holding AS,
which became a joint venture for the Group. Under Norwegian
GAAP this gain was proportionately recognised as the Group
retained ownership in the new joint venture. Under IFRS, the
full gain were recognised in accordance with IAS 27.34d, and
the gain increased to USD 43.2 million.
b) The Group has early adopted IAS19 (revised) when
accounting for employee benefits. Under IAS19 (revised) the
corridor approach is eliminated and all actuarial gains and
losses recognised in OCI as they occur. All past service costs
are recognised and interest costs and expected return on plan
assets are replaced with a net interest amount that is
calculated by applying the discount rate to the net defined
benefit liability (asset). The interest expense has been
reclassified as a finance item.
As at 31 December this adjustment has increased the pension
liability (net of tax) by USD 26.8 million. Service cost decreased
by USD 0.6 million and interest cost related to future employee
benefits increased with USD 1.9 million.
c) Under Norwegian GAAP, goodwill is amortised over its
estimated useful life. Under IFRS goodwill is not subject to
amortisation. This resulted in a reversal of USD 3 million.
d) Goodwill amortisation related to investment in joint venture is
reversed due to the difference between Norwegian GAAP and
IFRS as explained above.
) Th G h d i t t th t d i t d h
g) As allowed by IFRS, the company reset its cumulative
translation adjustment account to zero at January 1, 2011. The
translation adjustment at December 31 classified as retained
earnings under Norwegian GAAP, has under IFRS been
reclassified to Other reserves through other comprehensive
income.
h) As a result of tax effect on IFRS adjustments, deferred
income tax asset/liability has been changed.
i) In accordance with IFRS, current portion of non-current
interest bearing debt has been reclassified from non current to
current liabilities.
Adjustments to the statement of cash flows
The transition from Norwegian GAAP to IFRS had no significant
impact on the cash flow statement except for some
reclassifications and specifications required under IFRS. In
addition, IFRS adjustments to P&L and Statement of Financial
position have been adjusted for in the Cash flow statement as
there are no cash flow effects from the IFRS adjustments.
g
IFRS as explained above.
e) The Group had instruments that were designated as cash
flow hedges directly in equity until Q4 2011. Due to refinancing
of loans during second half of the year, it was concluded that
hedge accounting no longer could be applied as the forecast
transaction is no longer expected to occur. The cumulative loss
in other comprehensive income was immediately reclassified
from equity to profit or loss in accordance with IAS 39.101c.
f) Under Norwegian GAAP, interest rate swaps were
recognised at cost. Under IFRS interest rate swaps are
recognised at fair value, and the change in fair value of cash
flow hedges is recognised. This resulted in a loss of USD 0.11
million recognised in other comprehensive income.
B68
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B69
INCOME STATEMENT Odfjell Drilling Ltd.
for the period 1 January to 31 December
(All figures in USD)
Notes 2012 2011
OPERATING EXPENSES
Other operating expenses 2 -1 956 928 -1 294 365
Total operating expenses -1 956 928 -1 294 365
OPERATING PROFIT/LOSS -1 956 928 -1 294 365
FINANCIAL INCOME AND FINANCIAL EXPENSES
Interest income 61 789 1 172 394
Interest income from group companies 6, 9 18 581 374 25 436 168
Other financial income group companies 0 426 969
Other financial income 9, 10 3 677 927 124 985 977
Share dividends 0 53 343 339
Interest expenses -1 386 -18 758 517
Interest expenses from group companies 6, 9 -14 831 691 -3 650 829
Interest expense from related parties 0 -258 238
Other financial expenses group companies -110 641 -2 682 754
Other financial expenses 10 891 -95 503 068
Net financial items 7 378 263 84 511 441
ORDINARY PROFIT/LOSS BEFORE TAX 5 421 335 83 217 075
Tax on ordinary result 12 0 0
NET PROFIT/LOSS FOR THE YEAR 5 421 335 83 217 075
Allocation:
Transferred from/to other equity 3 5 421 335 83 217 075
B70
B71
CASH FLOW STATEMENT Odfjell Drilling Ltd.
for the year ended 31 December
(All figures in USD)
2012 2011
Profit/(loss) before tax 5 421 335 77 861 088
Adjustments for:
Decrease/(increase) in trade accounts receivable and other receivables 20 235 -7 479 833
Decrease/(increase) in trade accounts payable and other current liabilities 121 603 -3 132 228
Changes in net intercompany short-term liabilities and receivables -681 638 0
Cash flows from operating activities 4 881 536 67 249 026
Cash flows from investing activities
Investments in group companies 0 -1 568 462
Investments in associated companies 0 0
Long term loan to group companies -112 578 375 38 877 704
Decrease/increase in net intercompany short-term liabilities and receivables 0 87 809 401
Subordinated loan 0 1 161 008
Long-term bonds 0 3 709 733
Long-term loan -438 297 2 046 806
Other short-term investments 0
Net cash flow used in investing activities -113 016 672 132 036 190
Cash flows from financing activities
Long term debt -4 692 524 -3 744 443
Changes in long term debt group companies 78 077 877 314 269 512
Short term loan 0 -488 627 831
Paid out dividende -1 765 000 -7 509 136
Net cash flow from financing activities 71 620 353 -185 611 898
Net increase/(decrease) in cash and cash equivalents -36 514 784 13 673 318
Cash and cash equivalents at beginning of period 38 818 752 25 145 434
Cash and cash equivalents at end of period 2 303 968 38 818 752
B72
Odfjell Drilling Services Ltd.
Notes 2012
Note 1 Accounting principles
The accounting information includes profit and loss statement, balance sheet statement, notes and cashflow statement.
The accounts are prepared in accordance with Norwegian GAAP. Figures are reported in USD.
The company is located at Bermuda.
Recognition of income
The company is a single purpose company with the only interest of owning its shares in subsidiaries.
Any dividend received or other financial income are recognised as financial income.
Classification of balance sheet items
Assets identified as being permanently owned or used, are classified as fixed assets. Other assets are classified as
current assets. Liabilities due more than one year after they are incurred are classified as long-term liabilities.
First year instalment on long-term loans are classified as long-term liabilities.
Liabilities due less than one year after being incurred are classified as short-term liabilities.

Accounts receivable
Trade debtors and other receivables are accounted for at net value after deductions for expected losses.
Foreign currency
Balance sheet items in foreign currencies are translated to USD at the currency rate at the balance date.
Profit and loss transactions in other currencies, are translated to USD at the currency rate at the transaction day.
Cash and bank deposits
Cash and bank deposits also include other liquid investments with a period to maturity of 90 days or less
from the date of issue.
Impairment of asset
The asset is reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount of the asset may not be recoverable. Whenever the carrying amount of an asset exceeds
its recoverable amount, an impairment loss is recognised in the income statement.
The assets are tested annually for impairment at each reporting date.
Cash flow statement
Change of funtional and presentation currency
Balance sheet items and cash flow statement as per 31.12.2011 are converted from NOK to USD with exchange rate
Proit and loss statement items are converted from NOK to USD with average exchange rate NOK/USD for 2011
which were 5,6070. Difference between average exchange rate and year end exchange rate for 2011 profit is presented as
currency difference in the equity reconciliation.
The cash flow statement is prepared using the indirect method.
As per 1 January 2012 the company changed its functional and presentation currency from NOK to USD.
NOK/USD as per 31.12.2011, which were 5,9927.
B73
Notes 2012
Note 2 Operating expenses, remuneration of the board of directors and CEO and number of employees etc.
2012 2011
Fee to the auditor(ex. VAT):
Auditors Iee 42 654 16 922
Technical assistance related to conversion oI Iinancial statement Irom NGAAP to IFRS 190 283 -
Total 232 937 16 922
Other operating expenses:
Board oI directors Iee 275 956 191 725
Financial and legal assistance ex VAT 800 701 445 313
Management Iee 583 051 574 282
Other expenses 64 069 66 058
Total 1 956 713 1 277 378
The administration oI the company is perIormed by OdIjell Drilling AS Ior a management Iee oI USD 583 051.
The company has no employees, and no remuneration were paid to the General Manager during the year.
General Manager receives salary Irom OdIjell Drilling AS.
No loans or guarantees have been given to the General Manager or to the members oI the board oI directors.
The company is not required to have an occupational pension scheme in accordance with the Norwegian law oI
required occupational pension.
Note 3 Shareholders' equity
The share capital consists oI 1 376 687 078 shares with a nominal value oI USD 0,00001. Total book value USD 15 224 due to
convertion Irom NOK to USD pr. 01.01.2012
Share capital
Other contributed
capital
Other equity Total
Shareholders' equity as per 01.01.2011 15 578 339 516 377 582 561 522 922 093 478
Dividend -7 509 136 -7 509 136
ProIit 2011 83 217 075 83 217 075
Currency diIIerence -354 -7 722 076 -18 605 964 -26 328 394
Shareholders' equity as per 01.01.2012 15 224 331 794 302 639 663 497 971 473 022
Dividend -7 942 500 -7 942 500
ProIit Ior the year 5 421 335 5 421 335
Shareholders' equity as per 31.12. 2012 15 224 331 794 302 637 142 333 968 951 858
Note 4 Share capital and shareholders
Shares 1 376 687 078 USD 0,00001 15 224
Total 1 376 687 078 USD 0,00001 15 224
Shares Participating interests/
share of votes
OdIjell Drilling Holding Ltd. 1 376 687 078 100.00
Total number of shares 1 376 687 078 100.00
Helene OdIjell controls 69,67 oI the shares, the Larine Trust oI which Marianne OdIjell is beneIiciary controls 25,9 oI the shares, the share
Elin OdIjell controls 3,96 oI and the CEO controls 0,47 oI the shares in OdIjell Drilling Holding Ltd.
B74
Notes 2012
Note 5 Subsidiaries
Company
Acquisition/
formation date Registered office
Shares and percent
of votes Percent of votes Share capital USD
Profit/loss 2012 in
USD
Equity as per
31.12.2012 in USD Book value
Odfjell Offshore Ltd. 2011 Hamilton, Bermuda 100 % 100 % 10 000 (15 728 830) 732 487 104 714 766 309
Odfjell Drilling Services Ltd. 2011 Hamilton, Bermuda 100 % 100 % 10 000 35 346 747 357 490 779 272 042 350
Total 986 808 660
The shares are recognised in the accounts according to the cost method.
Note 6 Intercompany balances
Long term: Receivables Liabilities Receivables Liabilities Interests Interests
2012 2012 2011 2011 2012 2011
Odfjell Drilling AS 3 mnths Nibor + 3,5%margin 2 925 031
Odfjell Drilling Technology AS 3 mnths Nibor + 1,5%margin 198 182
Odfjell Partners Invest Ltd 3 mnths Nibor + 1,5%margin 5 952 281
Odfjell Invest Ltd 3 mnths Nibor + 1,5%margin 800 306
Odfjell Casing Services AS 3 mnths Nibor + 1,5%margin 250 145
Odfjell Rental Services AS 3 mnths Nibor + 1,5%margin 213 638
Odfjell Rig Ltd 3 mnths Nibor + 1,5%margin -1 659 994
Odfjell Drilling Bergen AS 3 mnths Nibor + 1,5%margin 303 611
Odfjell Offshore Ltd 365 578 375 Fixed annual interest rate of 6,95% 253 000 000 18 581 374 14 792 972
Odfjell Drilling Services Ltd 397 474 200 3 mnths LIBOR + 3,63%margin 319 396 323 -14 831 691 -1 755 861
Total long term 365 578 375 397 474 200 253 000 000 319 396 323 3 749 682 22 020 312
Repayment and interest conditions:
Loan fromOdfjell Drilling Services Ltd : Final maturity date 9 November 2018, applicable interest is 3 months LIBOR + 3,63%margin
Loan given to Odfjell Offshore Ltd: Final maturity date 9 May 2013, applicable interest is fixed annual 6,95%
Short term: Receivables Liabilities Receivables Liabilities
2012 2012 2011 2011
Odfjell Offshore Ltd. 786 780
Odfjell Drilling AS 10 939
Odfjell Drilling Holding Ltd 16 599 6 286 000
Odfjell Drilling Services Ltd 1 550
Odfjell Rig Ltd 3 600 000 3 600 000
Odfjell Drilling Technology Ltd 533 000 533 000
Odfjell Invest Ltd 1 907 000 334 000
Total short term 5 523 599 6 831 489 4 720 780 533 000
The short termreceivables have less than one year maturity.
Note 7 Cash and bank deposits
2012 2011
Current account NOK 170 667 77 060
Current account USD 2 133 300 239 220
Time Deposits - 38 502 472
Total 2 303 968 38 818 752
Bank deposits are not restricted.
Note 8 Short-termliabilities
2012 2011
Provision for directors' fees 201 651 148 097
Trade creditors 105 838 19 763
Other short termdebt 0 18 025
Accrued interest 0 0
Total 307 489 185 886
B75
Notes 2012
Note 9 Related parties transactions
Revenue fromrelated parties
Type of transaction Related party Relation Amount 2012 Amaount 2011
Interest Odfjell Offshore Ltd Subsidiary 18 581 374 25 436 168
Guarantee provision Odfjell Invest Ltd Subsidiary 1 907 000 334 000
Guarantee provision Odfjell Rig AS Subsidiary - 45 000
Guarantee provision Odfjell Rig Ltd Subsidiary 366 000 332 000
Guarantee provision Odfjell Drilling Services Ltd Subsidiary 1 380 000 202 000
Sum 22 234 374 26 349 168
Cost fromrelated parties
Type of transaction Related party Relation Amount 2012 Amount 2011
Management services Odfjell Drilling AS Subsidiary 583 051 574 282
Interest Odfjell Drilling Services Ltd Subsidiary 14 831 691 1 876 645
Sum 15 414 742 2 450 927
Note 10 Financial income and expenses
Other financial income:
2012 2011
Foreign exchange profit 13 508 86 777 276
Regulation bank balance 11 419 35 643 690
Other financial income 3 653 000 974 865
Gain on sale of bonds 0 1 590 146
Total other financial income 3 677 927 124 985 978
Other financial expenses:
2012 2011
Interest expenses 0
Foreign exchange loss 11 332 55 421 073
Regulation bank balance 2 561 33 880 242
Bank charges 0
Other financial expenses -14 785 6 201 754
Write down shares in subsidiaries
Total other financial expenses -891 95 503 068
B76
Notes 2012
Note 11 Guarantees and security
Guarantee liabilities 2012 2011
Parent company guarantee in relation to the subsidiaries' loan agreements;
Loan agreement in Odfjell Drilling Services Ltd 300 000 000 300 000 000
Loan agreement in Odfjell Invest Ltd 950 000 000 950 000 000
Loan agreement in Odfjell Rig Ltd 170 000 000 107 500 000
Total guarantee liabilities 1 420 000 000 1 357 500 000
Book value of assets pledged as security 2012 2011
Shares in Odfjell Offshore Ltd 714 766 309 714 766 309
Shares in Odfjell Drilling Services Ltd 272 042 350 272 042 350
Total book value of assets pledged as security 986 808 660 986 808 660
Intra-group receivables (Odfjell Drilling group) 2 012 2 011
Total book value of receivables pledged as security 387 015 420 273 216 163
Note 12: Tax
The following assets are pledged as security by the parent company Odfjell Drilling Ltd
C C u L
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Note 12: Tax
Note 13: Financial liabilities
The table below summarises the maturity profile of the company's financial liabilities at 31 December 2012:
Less than 3 months 3 to 12 months 1 to 5 years > 5 years
Long term debt 2 562 819
Long term loan from subsidiary 397 474 200
Intercompany long term liabilities
Intercompany short-term liabilities 6 831 681
Total 7 139 171 2 562 819 397 474 200
Odfjell Drilling Ltd is registered in Bermuda.
There is no Bermuda income, corporation, or profit tax, withholding tax, capital gains, capital transfer tax, estate duty or
inheritance tax payable by the company or its shareholders not ordinarily resident in Bermuda. The company is not subject to
Bermudan stamp duty on the issue, transfer or redemption of its shares.
The company has received from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1996 an
assurance that, in the event of there being enacted in Bermuda any legislation imposing tax computed on profits or income, or
computed on any capital assets, gain or appreciation or any tax in the nature of estate duty or inheritance tax, such tax shall not
until 28 March 2016 be applicable to the company or to any of its operations, or to the shares, debentures or other obligations of
the company except insofar as such tax applies to persons ordinarily resident in Bermuda and holding such shares, debentures or
other obligations of the company or any land leased or let to the company.
As an exempted company, the company is liable to pay a registration fee in Bermuda at a rate presently amounting to USD 1.995
per annum.
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Notes 2012
Note 14 Interest rate swap agreements
As per a novation agreement entered into on 2 July 2010, two interest rate swaps were novated from Odfjell Capital (Bermuda) Ltd to
Due to the agreed division of rights and obligations of the interest rate swaps between Odfjell Capital (Bermuda) Ltd and Odfjell Drilling Ltd.,
the principles of hedge accounting are not used in relation to the swaps.
Market values have been used to determine the fair value of the interest rate swap agreements. At year end these interest rate swap agreements
had a negative market value of USD 2,56 million. The market value has been posted as debt in the company's books at year end. The negative
market value in addition to the net interest paid by Odfjell Drilling Ltd since 2 July 2010 in relation to the swaps are also posted as a receivable.
Interest swap agreements at 31 December 2012:
Fixed interest rate in % Due date Fair value 31.12.12
Interest swap agreement, USD 165 million 3.64 29.03.2013 (2 498 229)
Interest swap agreement, USD 5 million 3.20 29.03.2013 (64 590)
Total fair value pr 31.12.12 (2 562 819)
B78

THE
ODFJELL DRILLING GROUP
Financial statements
2011
B79
B80
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BOARD OF DIRECTORS' REPORT FOR

ODFJELL DRILLING LTD. 2011

Company overview

Odfjell Drilling Ltd. is the parent company of the Odfjell Drilling Group.

The company was formed in November 2005 in Bermuda. Its subsidiaries have
nearly four decades of offshore related business experience.

The company owns and operates mobile drilling units and is engaged in platform
drilling, well service activities, engineering, and technology services. Odfjell
Drilling operates across all drilling service segments in the North Sea as well as
providing well services in more than 20 countries from our offices in Europe and
the Middle East.

Odfjell Drilling Ltd. is incorporated in Hamilton, Bermuda, and has operating
entities in Bergen, Stavanger, and Stjrdal in Norway, Coevorden and
Amsterdam in the Netherlands, Aberdeen in the UK, Manila in the Philippines,
Dubai in the United Arab Emirates and Rio in Brazil. In addition, the Company
has presence in South Korea, Tanzania, Angola and Romania.
Odfjell Drilling has organized its business units into three areas in order to
achieve a clear profile in relation to customers and markets and ensure that the
company is at the forefront in terms of excellence and technology. The new
organizational model was implemented 1
st
quarter 2011.
The business units in the Odfjell Drilling group comprise of:
1. Mobile Offshore Drilling Units (MODU)
2. Platform Drilling and Engineering (OD&T)
3. Well Services (OWS)
The company is positioned for further growth in the domestic market (Norwegian
continental shelf/ North Sea) at the same time as its international activities is
increasing significantly.

Business activities in 2011

Mobile Offshore Drilling Units has in 2011 been responsible for the operation
of 5 semi-submersible drilling rigs, 2 jack-ups and taken delivery from yard and
mobilized 2 new drillships;

Deepsea Atlantic -a sixth generation ultra deep water and harsh environment
semisubmersible rig, is on a long term contract for Statoil on the Norwegian
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Continental Shelf for drilling operations at the Gullfaks field. The contract
duration is until 2014, with options for 3-year extension.

Deepsea Stavanger - a new sixth generation ultra deep water and harsh
environment semisubmersible. The rig was operating for Ophir Energy offshore
Tanzania until April 2011. After a yard stay in South Africa, the rig started
operations under a two year contract with BP for drilling operation offshore
Angola in November. This contract has an option for 3 one year extensions.

Deepsea Bergen- a mid-water harsh environment semisubmersible rig has
been drilling for Statoil in 2011. The rig is owned by KS Deep Sea Drilling
Company, which is owned 71.5% by Odfjell Drilling. Deepsea Bergen is currently
on a three year contract with Statoil for development- and exploration drilling in
the Halten Nordland area on the Norwegian Continental Shelf (NCS). In February
2011, Statoil and Odfjell Drilling signed a new 3 year contract for Deepsea
Bergen commencing in June 2012.

Songa Trym- a mid-water harsh environment semisubmersible rig was on
contract with Statoil in 2011. The rig is owned by Songa Offshore SE and Odfjell
Drilling has a management agreement for the operation and manning of the
platform until the expiration of the contract in 2012.

Songa Delta- a mid-water harsh environment semisubmersible rig is owned by
Songa Offshore SE and is contracted to a consortium of "Det norske Oljeselskap
and Wintershall, and Odfjell Drilling has a management agreement for the
operation and manning of the platform until the expiration of the contract in
2012.

Deepsea Metro I is an ultra deep water drillship delivered from Hyundai Heavy
Industries in South Korea in June 2011. Deepsea Metro I is on contract with the
BG Group operating offshore Tanzania under a. The contract with BG Group has
a firm duration of 1 year with 3x6 months options.

Deepsea Metro II is an ultra deep water drillship of Gusto P-10000 design
delivered from Hyundai Heavy Industries in South Korea in November 2011.
Deepsea Metro II will commence a 3 year contract with Petrobras in Brazil in May
2011.

Deepsea Metro I and Deepsea Metro II are owned by Deep Sea Metro Ltd, a joint
venture between Odfjell Offshore (40%) and MetroExploration (60%). The
vessels are operated by Odfjell Drilling under separate management agreements.

20 December 2011 Odfjell Drilling signed a contract with DSME, for a new build
ultra deepwater and harsh environment semi-submersible for delivery in May
2014. The unit, to be named Deepsea Aberdeen, is contracted to BP on a
seven year fixed contract for work West of Shetland.

Jack-ups Offshore Freedom and Offshore Intrepid have in 2011 been
contracted to Al-Khafji Joint Operations (KJO) for operations in the Arabian Gulf.
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The rigs have been operated by Odfjell Drilling under management agreements
with the rig owner Scorpion Offshore. Scorpion was in 2011 acquired by Seadrill
and management of the rigs was handed over to the new owner in November
2011.

In January 2011 the two business areas Platform Drilling and Technology were
merged to create the new business area Odfjell Drilling and Technology (OD&T).
The objective of the merger was to secure further cost and market synergies.

Platform Drilling operations - provides integrated platform drilling and
engineering services on the Norwegian and UK continentals shelf. The strategy is
to maintain and expand the market position while exploiting new opportunities
for profitable growth.

Platform Drilling provides production drilling, well completion, workovers, slot
recovery, P&A and maintenance activities to clients in Norway and UK. Odfjell
Drilling is a leading contractor in the production drilling market, operating 18
fixed and floating production drilling platforms for its clients Statoil, BP and
Talisman.
The offices are located in Bergen, Stavanger, Aberdeen and Stjrdal.

- The platform drilling contracts with Talisman Energy UK were extended in
2010 with two years and have three further one year options.
- The firm contract with BP expires in 2014, but there is a further three times
two years options.
- The Statoil platform drilling portfolio is currently on tender with expected
contract award in May. The tendering of Statoil platform drilling portfolio of
18 platforms is regarded as an growth opportunity of the Norwegian platform
drilling portfolio.

Technology and Engineering services- During 2011 Odfjell Drilling has
maintained and grown its strong position as market leader in its niche in
Norway:

Core business areas for Engineering and projects are;

MODUs (Odfjell Drilling and external customers) with design, engineering,
building supervision, classification, authorities compliance, yard stays,
technical support, marine operations, lifting operations, subsea services,
project support, supply chain management, maintenance systems, and
drilling technology.

Fixed platforms including drilling modules (DES), Drilling Support Modules
(DMS) and associated Modules supporting drilling. Concepts, studies, FEED,
detailed engineering, purchasing, construction, supervision, installation,
commissioning (EPCI), operation / P&A, project support, and maintenance
systems.

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Core Business Support services within Maintenance Technique and Marine
Services.

Project Management (PMT): Following the partnership agreement between
Odfjell Drilling and Metrostar for the construction activities for two drillships
at Hyundai Heavy Industries in South Korea, the Project Management
Division has continued growth supporting said projects. These projects have
created a unique opportunity to position OD&T in the international arena to
support the ever increasing demand of fleet renewals and increased drilling
requirement.

Odfjell Well Management was established in 2007 and grew rapidly during
the first years of operations with planning and drilling of wells, including HPHT
wells. OWM with approximately 65 employees merged with Ross Offshore
(RO) in August 2011. The latter company acquired the two Odfjell Drilling
companies Odfjell Well Management AS and Odfjell Well Management
Consultants AS. The name of the combined company is Ross Offshore. Odfjell
Drilling controls, through a joint holding company approximately 40% of the
combined business.

Organization and technology

In 2011 the Technology area has grown and hired close to a 100 new engineers,
while managing to increase the utilization of resources and delivering better
results than budgeted for. The competition for senior engineers has been
substantial in Norway in 2010, and for 2011 we will continue the aggressive
recruitment strategy to attract the resources needed to serve our customers
nationally and internationally, and to fully develop as an EPCI contractor.

During 2011, the technology focus has been maintained. Several major step
changing technology projects are running internally or through our Technology
Cooperation Agreement with Statoil. Our ambition for 2011 is to bring some of
these development projects into a piloting phase to further strengthen the
organization. A separate department, Technology & Business Improvement, will
handle these areas. For 2011 our main focus areas will continue to be highly
efficient and Fully Automated Drilling Facilities, Managed Pressure Drilling (MPD)
solutions for mid-/deepwater and to further strengthen our Onshore Operations
Model. Late in 2011 the internal innovation campaign "Trigger was launched.
The campaign aims at increasing the internal involvement in innovation
processes.

Well Services' (OWS) strategy is to establish the company as one of the
leading casing service company in Europe, as well as in targeted areas
internationally, by delivering the safest and most efficient services using remote-
operated technology. The Well Services business areas consist of four
departments: Casing Services Europe, Rental Services Europe, Mooring Services
and OWS Middle East.
B85

OWS supplies a wide range of services to the oil industry. The range of services
comprises mooring services, drilling tool rental, fishing services, tubular rental,
casing and tubing running services. In recent years, OWS has expanded rapidly
in Europe and the Middle East, and further expansion is planned. This rapid
growth is based on a strategy of continuously improving existing service areas
and to extend into new areas. This is achieved by supplying innovative
technology that uses remotely-operated equipment to improve both safety and
efficiency.

In recent years, OWS has succeeded in maintaining its position as market leader
on the Norwegian Continental Shelf, and it has expanded by increasing its
market share in several other areas worldwide. OWS currently operates in more
than 20 countries worldwide.

Going concern
The financial statements have been prepared on the basis of the going concern
assumption. The basis for this is the companys secured contract portfolio,
positive equity and the substantial subordinated loan capital furnished to the
company. The company is in a sound financial position for future growth within
the business areas described above.

HSE, working environment and personnel

Odfjell Drilling has a long term objective of achieving zero faults through
continuous improvement.

The company works continually to improve health, safety and security. Odfjell
Drilling have achieved improvement within most of HSE key performance
indicators, and have therefore decided to keep focus on the implementation and
compliance phase of what we already have in place rooted in the Company
Management System (CMS).

During 2011, the total number of reported incidents with high potential is
reduced.

In 2011, there has been 8 accidents with injuries to personnel.

In 2011 Odfjell Drilling updated the structure of the CMS in order to reflect the
global structure of the company. In order to improve and increase the efficiency
of the CMS across the Business Areas, Odfjell Drilling will in 2012 work towards a
process oriented CMS. Expected result will be better quality and predictability in
all our operations.

During 2011, Odfjell Drilling has further strengthened the CMS and the process
for both Safety Leadership as well as Risk Management. In 2012 Odfjell
Drilling will continue to focus on the above elements through:
B86

Prevention of major accident risk
CMS improvements & simplification
Safety Leadership & compliance
ISO 9001 & 14001 certification
Quality improvement of all key processes

A good working environment is important both to individual employees and to
the group in order to achieve continuous improvement in all aspects of its
operations. Several processes with the objective to maintain a low sickness
absence rate in the company have continued through 2011. Total sickness
absence in the company was 3.2% (139,501 hours) in 2011. The sickness
absence was 3.2% (141,893 hours) in 2010.

The working environment in Odfjell Drilling is considered good.

In 2011, Odfjell Drilling had a personnel turnover of 10 %. Compared with 2010,
the company had a personnel turnover of 5.6 %. A generally increasing labour
market pressure, lack of activity on the Delta and Trym in 2012 and
reorganization in the Company in 2011, explain the main reason of the increased
turnover. Also mobilization of new units in new geographical areas, have been
challenging with regards to establish stable crews from day one.

Leadership and competence

Odfjell Drilling is a supplier of operational leadership, project management and
technology based solutions. Development of leadership and expertise is of
strategic importance to the Companys future development. The company offers
extensive training to ensure that expertise is continuously updated and to ensure
career development.

A new Leadership Development program was launched autumn 2011. This
program is an internal self development program, and offer tailor-made training
on the basis of Odfjell Drillings vision, culture, values, strategy, and
management principles. The Leadership Development program is opened to
participants from all geographical areas.

During 2010 /2011, Odfjell Drilling has strengthened the processes for Safety
Leadership and our managers from both on- and offshore have been offered
training in Safety leadership, which are adjusted to the distinctive characteristics
of the business units and address important safety themes.

The topics that are covered in Safety Leadership are: HSE management, HSE
culture, compliance with procedures, understanding risk, HSE rules and
establishment of safety contracts. The model builds on same principles that
Odfjell Drilling already follows; Continuous improvement at all levels and in all
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business areas, based on Deming`s Circle philosophy. This is described in Odfjell
Drilling`s Quality Manual.
Implementation of the "best practice document", the use of Safety
Supervisors and Safety Leadership Training has been important initiatives in
2010 and 2011.


The company emphasizes that all its activities irrespective of country of
operation shall comply with applicable legislation and in accordance with the
companys code of business conduct. The personnel policy makes clear that the
Odfjell Drilling Group shall recruit and develop staff based on merit and equal
opportunities regardless of ethnicity, religion, national origin, gender, age,
sexual orientation, marital status or disability.

Hence, equality is an integrated part of the Company`s Personnel Policy. The
Group aims to be a workplace, where it encourages that all employees are given
the same opportunities for employment and professional development, and
equated with regard to employment, wages, training and advancement. It is
emphasized that equality is a management responsibility. However, all parties in
the enterprise have a common responsibility for the implementation and
safeguard of the equality perspective.

The Group works actively and systematically through internal steering
documents, training of employees and various measures to prevent any form of
discrimination. Such measures include recruitment, salary- and working
conditions, promotion, opportunity of development and shelter against
harassment.

One of several measures to prevent discrimination, are related to the Group's
effort for a good working environment. Odfjell Drilling has conducted annual
working environmental and organization surveys since 2005. These surveys
provide the company with valuable information about the organization inner life
and are an important tool for promoting and developing a good working
environment.

The Group has organized access to the company's governing documents by
Odfjell Drilling's intranet pages, which includes information for all employees
about the company's management system, leader's guide and employee
handbook etc. These measures highlight the Group's attitude to promoting equal
opportunities, fair treatment and preventing discrimination. Ethics and business
culture in Odfjell Drilling is also published for new employees.

The steering documents also confirm the Group`s freedom of association and the
rights to collective bargaining, which is continuously followed up for all activities.

B88
The Group shall comply with internationally recognized labour standards covering
areas such as wages, working hours, disciplinary practices, employment
contracts and working conditions. The above requirements are also enforced in
contracts with suppliers, business partners, agents etc.

The Group has employees from a diverse range of ethnic backgrounds and
nationalities, where 55 different nationalities are represented.

Pr 31.December 2011 there were 2,494 men and 238 women employed in
Odfjell Drilling, a total of 2,732 employees. Number of female employees were at
the same level in 2010 and 2011 approximately 9%. The onshore organisations
employ 27.5 % females compared with less than 1.5 % in the offshore
organisations.

The Group has elected employee representatives of the five major management
companies representing approximately 80 % of the total employees. The Board
of Directors has five members whereof two are females.

With staff aged between 19 and 67, the average age for both offshore and
onshore is approximately 41.6 year.

Odfjell Drilling has a goal of zero environmentally hazardous discharges to sea.
This includes eliminating or significantly reducing the emission of defined
environmental toxins and substantially reducing the risk of harm from the use
and discharge of chemicals. The group companies work in a multidisciplinary
environment and focus on the zero discharge goal throughout the organisation
and in all processes. In 2011, Odfjell Drilling continued its efforts to influence
employees' attitudes and behaviour. The environmental management system
based on ISO 14000, defines the measures required to prevent and reduce
discharges to the natural environment.

The number of reportable discharge incidents has been reduced in connection
with Odfjell Drillings activities in 2011. There were 5 reportable discharge
incidents in 2011 and 6 in 2010.

Future developments
The oil price has increased gradually through 2011 and also other financial
indicators have improved in 2011 compared to 2010. It is expected that a further
increase in the oil price will positively impact both the oil service markets and the
drilling market further into 2011.

All the operating mobile units owned and operated by Odfjell Drilling are
deployed on long-term contracts, securing cash flows from its activities in the
following year.

B89
By far the largest proportion of Odfjell Drillings revenue in recent years has
been generated in the Norwegian market. During the last few years, the
company has succeeded in expanding its home market to include the whole of
the North Sea and the Middle East. Odfjell Drilling is now well positioned for
further growth in both the home market and in other selected areas as Africa
and Brazil.

It is expected that the slow increase in the oil price will continue to influence the
market positively in 2012, even more outside the Norwegian Continental Shelf
than for Norwegian activities. Though, it is expected that the oil companies will
continue their efforts to reduce their overall cost, putting pressure on all
suppliers to reduce cost and day rates in all our business areas and in all
geographical areas. However, the market day rates are expected to increase in
the 2012 as a result of increased demand for drilling operations and service
operations.

Odfjell Drilling has developed and implemented operational concepts based on E-
field and Integrated Operations to strengthen its strategic position with respect
to cost efficient drillings services.

Risk factors

+ Financial risks
The company is exposed to risks due to fluctuations in interest and exchange
rates, especially as charter contracts are normally in USD while most of the
operating expenses are in local currency. The company seeks to reduce such risk
by currency hedging.

+ Operational risks
Odfjell Drilling provides drilling and maintenance services for the cyclical oil and
gas industry. Activity levels in connection with oil and gas exploration and
production fluctuate and the group endeavours to reduce this risk by securing
long-term contracts. One of the major activity level drivers is the development of
oil and gas prices.

+Commercial risks
Contracts in the offshore sector require high safety standards. It is important to
note that all offshore contracts are associated with considerable risk and
responsibilities, including technical, operational, commercial and political risks.
The Company will take out insurance coverage deemed adequate in order to limit
the above risks.

Revenues, investments, financing and liquidity

Parent company
The parent company activity is to own and control shares in other companies,
both subsidiaries and associates.

B90
In 2011, the parent company Odfjell Drilling Ltd. recorded a profit for the year
loss for the year of MNOK 466.6, compared with a loss of MNOK 218.6 for 2010.
The loss for 2010 was related to the write down of investment in the subsidiary
Odfjell Invest Ltd of 651 MNOK. The parent company has recognised dividend
from subsidiaries as financial income in 2011 and 2010, respectively MNOK
299.1 and MNOK 127.8.

As of 31 December 2011, the parent companys total assets amounted to MNOK
7,784, compared with MNOK 8,995 at year end 2010.

The company has a strong equity, with an equity ratio of 75% at year end 2011,
and 60% at the end of 2010. The companys short-term dept amounts to MNOK
4 at year end 2011, compared to MNOK 3,059 at year end 2010.

The operating income in the consolidated accounts for 2011 was MNOK 5,925
compared with an operating income in 2010 of MNOK 4,725. Including the gain
on sale of assets and other operating income, the total operating income was
MNOK 5,940 in 2011 and MNOK 4,751 in 2010.

The net profit for 2011 was MNOK 653, compared with a net profit of MNOK 305
in the consolidated accounts for 2010.

As of 31 December 2011, the companys total assets amounted to MNOK 16,390,
compared with MNOK 15,303 at year end 2010. MNOK 12,654 represented the
capitalisation of long-term assets, compared with NOK 12,144 million in 2010.
Cash and cash equivalents amounted to MNOK 1,817 at year end 2011,
compared with MNOK 1,605 in 2010.

At 31 December 2011, the company had MNOK 8,555 in interest-bearing long-
term debt of which are loans raised at financial institutions. At year end 2010,
the company had MNOK 7,923 in interest-bearing long-term debt, of which
MNOK 30.7 was subordinated loan capital. At year end 2011, its total equity was
MNOK 6,417. The corresponding figure for 2010 was MNOK 5,945. The equity
ratio was 39.2% at year end 2011, and 38.8% at year end 2010.

The company has strong equity and a solid cash flow from its activities,
providing a sound foundation for further growth. Cash flow from operating
activities for 2011 was MNOK 699 compared to MNOK 135 in 2010. After
investment activities and financing activities net change in cash and cash
equivalents for the year 2011 was MNOK 217 compared to MNOK -1,324 in
2010.

Net result for the year and allocations
The Board proposes the following allocation of the net profit of NOK 466 598 141
in the parent company Odfjell Drilling Ltd.:

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THE ODFJELL DRILLING GROUP
Profit and loss statement - Group
All figures in NOK
Note 2011 2010
OPERATING INCOME
Operating income 20, 15 5 924 937 824 4 724 909 236
Gain on sale of assets 15 010 257 26 002 408
Total operating income 5 939 948 081 4 750 911 644
OPERATING EXPENSES
Personnel expenses 10,11,12 2 614 501 723 2 544 838 707
Depreciation and write-off 4 822 116 858 538 317 166
Bad debts 15 257 619 673 622 742
Other operating expenses 23 1 381 962 317 999 467 283
Total operating expenses 4 833 838 517 4 756 245 898
OPERATING PROFIT/LOSS 1 106 109 565 -5 334 254
Income from associates 21 -41 605 539 25 697 310
Interest income 20 381 865 38 473 459
Other financial income 13 609 366 202 602 909 259
Interest expenses to related parties 25 -1 447 941 0
Interest expenses -311 244 930 -185 108 429
Other financial expenses 13 -547 798 465 -201 151 634
Net financial items -272 348 807 280 819 965
Tax on ordinary result 9 180 618 917 -29 782 620
NET PROFIT FOR THE YEAR 653 141 841 305 268 331
Minority share of profit for the year 19 69 788 717 59 666 315
Majority share of profit for the year 583 353 124 245 602 016
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Assets - Group
All figures in NOK
Note 31.12.2011 31.12.2010
FIXED ASSETS
Intangible assets
Goodwill 4 144 829 260 161 934 669
Deferred tax asset 9 0 31 800 032
Other intangible assets 4 217 702 364 456
Total intangible assets 145 046 961 194 099 157
Periodic maintenance 4, 7 441 869 546 521 594 750
Mobile drilling units 4, 7 8 966 618 518 8 961 361 735
Machinery and equipment 4 1 099 810 642 1 060 816 149
Total tangible fixed assets 10 508 298 706 10 543 772 634
Financial fixed assets
Pension funds 10 36 248 718 35 758 518
Investments in associated companies 21 1 860 742 480 1 251 315 372
Investments in shares 22 5 478 571 5 478 572
Investments in bonds 0 22 231 319
Other long-term receivables 24 97 705 511 91 705 366
Total financial fixed assets 2 000 175 280 1 406 489 147
Total fixed assets 12 653 520 947 12 144 360 938
CURRENT ASSETS
Spare parts 14 269 141 004 163 962 330
Receivables
Trade debtors 1 1 500 744 453 1 236 115 242
Other receivables 1 149 498 151 153 512 417
Total receivables 1 650 242 604 1 389 627 659
Investments
Other short-term investments 2 0 173 043
Total investments 0 173 043
Cash and bank deposits 2 1 816 606 249 1 605 307 703
Total current assets 3 735 989 857 3 159 070 735
TOTAL ASSETS 16 389 510 805 15 303 431 673
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B95
Cash flow statement - Group
All figures in NOK
Cash flow from activities 2011 2010
Profit before tax 833 760 758 275 485 711
Adjustments to reconcile profit before tax
with net cash flow from operations:
Depreciation 822 116 858 538 317 166
Write off shares in limited partnership 0 -63 952 260
Loss on financial instruments -144 423 026
Income from associates 41 605 539 -25 697 310
Net (gain)/loss on sale of shares -221 926 068 -
Net (gain)/loss on sale of tangible fixed assets -15 010 257 -26 002 408
Changes in pension liabilities 8 991 922 69 475 760
Changes in assets and liabilities:
Accounts receivable -264 629 211 -173 403 881
Spare parts -105 178 674 -107 564 659
Tax payable -73 809 941 -216 153 417
Trade creditors 4 658 211 42 872 339
Other accruals -187 477 184 -178 795 768
Net cash flow from operating activities 698 678 924 134 581 273
Cash flow from investment activities:
Investments in intangible and tangible fixed assets -588 974 340 -2 516 244 241
Investments in long-term receivables -6 000 145 383 053 517
R l i bl 0 205 763 666 Repayment long-term receivables 0 -205 763 666
Investments in shares incl. associated companies -624 432 845 -535 865 645
Aquisition shares subsidiary 0 -259 460 404
Investments in bonds and other short term investments 0 61 151 568
Devestments in bonds and other short term investments 22 231 319 0
Sale of shares 210 000 000 5 899 465
Sale of fixed assets 29 684 366 41 842 143
Net cash flow from investment activities -957 491 645 -3 025 387 263
Cash flow from financing activities:
Net changes in long-term liabilities 656 612 015 1 679 472 326
Sale of shares - reduction of cash -44 840 381 0
Dividends (paid) -45 000 000 -40 000 000
Capital paid to minorities -90 839 428 -72 449 183
Net cash flow from financing activities 475 932 206 1 567 023 143
Net change in cash and cash equivalents for the year 217 119 486 -1 323 782 847
Cash and bank deposits as per 01.01 1 605 307 703 2 929 090 552
B96
The Odfjell Drilling Group

ACCOUNTING PRINCIPLES

General
The accounting information presented here reflects the financial position of Odfjell Drilling Ltd. and its
subsidiaries, which have been consolidated (group accounts).

The financial statements have been prepared in accordance with the Norwegian Accounting Act and
generally accepted accounting principles in Norway.

Accounts for subgroups in the group are prepared for the subgroups Odfjell Offshore Ltd, Odfjell
Drilling Services Ltd, Odfjell Invest Ltd, Odfjell Drilling AS and Odfjell Drilling Bergen AS. Accounts
are not prepared for the other subgroups in the group, cf. the exception in the Norwegian Accounting
Act section 3 7.

Consolidation principles
The consolidated accounts show the total financial result and the total financial position when the
parent company Odfjell Drilling Ltd. and its controlling interests in other companies are presented as
one financial unit .

A controlling interest is normally obtained when the group owns more than 50% of the shares in the
company and can exercise control over the company. Minority interests are included in the groups
equity. Transactions between group companies have been eliminated in the consolidated financial
statement. The consolidated financial statement has been prepared in accordance with the same
accounting principles for both parent and subsidiary.

The subsidiaries' accounts are incorporated into the consolidated accounts with effect from the date
they were acquired. The cost price of the shares is eliminated against the equity of the respective
subsidiaries using the acquisition method. Excess values over and above book values are recognised at
gross value with provision being made for deferred tax, and any residual value is assigned to goodwill.
Goodwill and permanent excess values relating to operating assets are depreciated over the expected
useful life of the asset.

An associate is an entity in which the group has a significant influence but does not control the
management of its finances and operations (normally when the group owns 20%-50% of the company).
The consolidated financial statements include the groups share of the profits/losses from associates,
accounted for using the equity method, from the date when a significant influence is achieved and until
the date when such influence ceases.

When the groups share of a loss exceeds the groups investment in an associate, the amount carried in
the groups balance sheet is reduced to zero and further losses are not recognised unless the Group has
an obligation to cover any such loss.

Investment in other companies than subsidiaries, associates and joint ventures are accounted for using
the cost method.

All companies that are defined as subsidiaries are included 100 per cent in the income statement and
balance sheet. The minority interests' share of profit/loss and equity is specified.

Group companies reporting in foreign currency are converted into NOK using the average currency
rate on profit-and loss statement, and year end rates in the balance sheet. Currency differences related
to consolidating the subsidiaries and the associates are adjusted against the groups equity. Through the
elimination of internal accounts receivable and accounts payable, exchange rate differences are offset
directly against equity.

Most of the group's income is based on day rates from drilling contracts and other service contracts.
The income is recognised in the income statement when the services are performed and at the rates
specified in the contract.
B97


Construction contracts
Construction contracts are recognised in accordance with the percentage of completion method. The
income is allocated in accordance with the progress of the contracts, if the outcome of the construction
contracts can be estimated in a reliable manner. The stage of completion is measured by portion of
costs incurred to date bear to the estimated total costs of the contracts, when reliable estimates are
available. When outcome of the contracts cannot be reliably estimated, only the income corresponding
to the accrued costs will be entered as an income. In the period it is identified that a contract will give
negative outcome, the estimated deficit on the contract will be fully allocated.

Foreign currency
Transactions in foreign currency are translated at the rate applicable on the transaction date. Monetary
items in a foreign currency are translated into NOK using the exchange rate applicable on the balance
sheet date. Non-monetary items that are measured at their historical price expressed in a foreign
currency are translated into NOK using the exchange rate applicable on the transaction date. Non-
monetary items that are measured at their fair value expressed in a foreign currency are translated at the
exchange rate applicable on the balance sheet date. Changes to exchange rates are recognised in the
income statement as they occur during the accounting period.

Financial risk - General
The group's principal financial liabilities comprise bank loans, subordinated loan capital and trade
payables. The main purpose of these financial liabilities is the financing of the group's operations. The
group has financial assets such as cash, short-term investments and trade receivables. The group has
also entered into derivative transactions, primarily currency forward contracts and interest rate swaps.
The purpose is to manage the currency exposure arising from the group's operations and exposure of
fluctuations in interest level.

(I) Credit risk
The market for the Companys services is the offshore oil and gas industry, and the customers consist
primarily of major integrated oil companies, independent oil and gas producers and government-owned
oil companies. The Company performs ongoing credit evaluations of the customers and generally do
not require material collateral. Reserves for potential credit losses are maintained when necessary.

With respect to credit risk arising from other financial assets of the Group, which comprise cash and
cash equivalents, marketable securities, other receivables and certain derivatives instruments receivable
amount, the Company's exposure to credit risk arises from default of the counterparty, with a maximum
exposure equal to the carrying amount of these instruments. However, the Company believes this risk
is remote as the counterparties are of high credit quality parties.

(II) Interest-rate risk
The group's exposure to the risk of changes in market interest rates relates primarily to the group's
long-term debt obligations at floating interest rates. The group evaluates the share of interest rate
hedging based on assessment of the groups total interest rate risk. .

(III) Liquidity risk
The group's objective is to maintain a balance between continuity of funding and flexibility through the
use of credit facilities and to have sufficient cash or cash equivalents at any time to be able to finance
its operations and investments in accordance with the group's strategic plan. The group monitors its
liquidity risk using a recurring liquidity planning tool. This tool considers the maturity of both its
financial investments and financial assets and projected cash flow from operations.

(IV) Exchange-rate risk
Most of the group's operating costs are in NOK, while investments and revenues are primarily in USD.
The group has entered into forward currency contracts to manage the currency exposure arising from
the group's operations. The groups main currency policy is that income in USD equivalent to the
amount of all working expenses in NOK, are to be hedged in such manner that at all times minimum
50% of the total amount of income that cover the matching working expenses are hedged.

B98


Capital management
The group has adopted financial guidelines for the handling of deposits and placements. The objective
of these guidelines is to reduce the risk of capital loss while maintaining maximum liquidity and
availability of cash to fund the group's operations. The group shall at all times maintain a low risk
profile, and shall maintain necessary funds in operating accounts or time deposits.

The following instruments are allowed for short term placements: deposits in banks, loans to
companies/institutions/funds (like fixed or floating rate bonds, senior or subordinated debt),
certificates, money market funds.

Use of estimates
The management has used estimates and assumptions that have affected assets, liabilities, incomes,
expenses and information on potential liabilities in accordance with generally accepted accounting
principles in Norway.

Assets identified as being permanently owned or used are fixed assets. Other assets are current assets.
Liabilities which fall due more than one year after they are incurred are entered as long-term liabilities.
Therefore, the first year's instalments on long-term loans are included in long-term liabilities.
Liabilities which fall due for payment less than one year after being incurred are classified as short-
term liabilities.

Tangible assets and goodwill
Tangible assets and goodwill are entered in the accounts at acquisition cost minus accumulated
depreciation and write-downs. Depreciation is linear over the expected useful life of the asset. Write-
downs are done when fair value is lower than the book value and this is not expected to be temporary.
The group's mobile units are expected to have a residual value at the end of their useful life. For other
tangible assets no account has been taken of possible scrap value when calculating depreciation.

When the market value of the assets increases above the book value, previous write-downs will be
reversed according to the original depreciation plan.

Periodic maintenance
The group capitalises periodic maintenance on the group's mobile units and depreciates this until the
next major planned maintenance.

Spare parts
Spare parts are recognised at the lower of cost price and market value. Spare parts are presented net
after write-downs for obsolescence.

Accounts receivable
Trade debtors and other receivables are valued at net value after deductions for expected losses.

Shares, bonds and money market funds
Shares, bonds and money market funds are recognised at market value at year end. The group
recognises losses during the period if market value is lower than book value.

Cash and bank deposits also include other liquid investments with a period to maturity of less than 90
days from the date of issue.

Pensions
Pension costs and pension liabilities are calculated on the basis of linear earnings based on assumptions
regarding the discount rate, future wage increases, pensions and national insurance benefits, future
returns on pension assets and actuarial assumptions about mortality, voluntary retirement etc. Pension
assets are valued at fair value and deducted in net pension liabilities in the balance sheet. Changes in
the liability that are due to changes in the pension plans are taken over the result with full effect in the
B99


accounting year. When the accumulated effects of changes in estimates, changes in assumptions and
deviation of actuarial assumptions are above 10 % of the larger gross pension liabilities and pension
assets, the excess amount are recognized in the income statement over the estimated average remaining
service period.

A linear earning profile and expected salary on retirement are used in the accounts as the earnings
basis.

Leasing
Operating lease payments are recognised as an expense in the income statement on a straight line basis
over the lease term.

Cost of borrowings
Costs in connection with borrowings are charged to income in the period during which the loan is
drawn on, on a linear basis.

Tax
The tax expense in the accounts includes both tax payable for the period and change in deferred tax.
Deferred tax is calculated at 28 per cent on the basis of the temporary differences that exist between
accounting and tax values. Tax-increasing and tax-reducing temporary differences that are reversed or
can be reversed in the same period are assessed and recognised at net value.

Cash flow statement

Events after the balance sheet date
New information on the group's position on the balance sheet date is taken into account in the financial
statements. Events after the balance sheet date that do not affect the group's position on the balance
sheet date but which will affect the group's position in the future, are stated if they are significant.
B100
NOTES 2011
Note 1 Receivables
31.12.2011 31.12.2010
Trade debtors 1 500 744 453 1 236 115 244
Other receivables 149 498 151 153 512 417
Total 1 650 242 604 1 389 627 661
The group receivables are all due within one year after the balance sheet date.
Other receivables consist of the following main items:
31.12.2011 31.12.2010
Reimbursables 20 384 630 49 982 596
Other short-term receivables 9 207 967 19 906 038
Pre-paid personnel insurance 15 768 472 8 934 233
Other pre-payments 59 336 976 37 197 517
VAT- receivables 42 077 932 36 656 866
Accrued interest income 760 535 835 078
Other current items 1 961 640 89
Total 149 498 151 153 512 417
Note 2 Cash and bank deposits / Short-term financial investments
31.12.2011 31.12.2010
Cash and bank deposits 706 395 440 815 770 804
Time deposits 944 995 687 655 207 712
Restricted capital, advance from customer 77 193 064 55 486 137
Restricted capital, tax deductions 88 022 058 78 843 052
Total cash and bank deposits 1 816 606 249 1 605 307 705 p

31.12.2011 31.12.2010
Other short-term investments 0 173 043

Share capital
Contributed
capital Other equity Minorities Total
Shareholders' equity as per 31.12.2010 91 231 1 985 876 297 3 803 059 122 155 696 506 5 944 723 156
Adjusted for error in earlier years` accounts -3 488 178 -3 488 178
Net result of the year 583 353 124 69 788 717 653 141 841
Dividend -45 000 000 -90 839 428 -135 839 428
Currency translation difference associates 26 599 795 26 599 795
Currency translation difference subsidiaries -70 096 441 1 550 435 -68 546 006
B101
NOTES 2011
Note 4 Tangible and intangible assets
Total assets Goodwill
Other intangible
assets, software
Mobile drilling
unit
Periodic
maintenance
mobile drilling
unit
Machinery and
equipment Total assets
Acquisition cost as per 31.12.2010 535 063 367 6 147 827 9 766 343 349 649 231 011 2 221 142 987 13 177 928 541
Acquisition - 154 241 212 065 599 33 481 954 343 272 546 588 974 340
Disposals -38 433 516 -38 433 516
Currency deviations 8 518 241 622 419 17 413 188 2 008 463 261 052 588
Accumulated depreciation as per 31.12.2010 -373 128 696 -4 097 485 -804 552 699 -128 065 173 -1 162 269 026 -2 472 113 079
Disposals 19 333 260 19 333 260
Ordinary depreciation -17 105 411 -1 984 073 -399 911 474 -119 023 383 -284 092 517 -822 116 858
Write-down -
Currency deviations -11 326 -48 948 675 -11 168 049 -1 151 557 -61 279 607
Accumulated depreciation as per 31.12.2011 -390 234 107 -6 092 884 -1 253 412 848 -258 256 605 -1 428 179 840 -3 336 176 284
Book value as per 31.12.2011 144 829 260 217 702 8 966 618 518 441 869 546 1 099 810 642 10 653 345 668
Useful life 5/20 years 3 years 35 years 5 years 3 - 12 years
Depreciation plan Linear Linear Linear Linear Linear
Leasing expenses operating assets - - - - -
The recoverable amount for Deepsea Bergen are higher than carrying value.
2002 2004 2005
The residual value of the rig Deepsea Bergen has been set at NOK 100 mill. at the end of the useful life.
Goodwill relates to excess values in acquired subsidiaries. In accordance with NGAAP assumed financial life time is estimated to 5-20 years
from acquisition date. The group is a leading company in the current business areas and is building the business activities in the future on the
acquired experience. According to the group's long term business view, the main part of the goodwill are recognised on a straight-line basis
over the useful life of 20 years.
Goodwill
Group
restructuring
Aquisition
Drilltools AS
Aquisition
Ntera Ltd. Total
Book value as per 31.12.2010 139 167 438 2 821 000 19 946 233 161 934 671
Depreciation (12 372 281) (217 000) (4 516 128) (17 105 411)
Write-down -
Book value as per 31.12.2011 126 795 157 2 604 000 15 430 105 144 829 260
Useful life 20 20 10
Depreciation plan Linear Linear Linear

Year of
construction
Part as per
31.12.2011
Investments
2011
Depreciation
2011
Book value incl
PM as per
31.12.2011
Deepsea Bergen* 1983 100.00 % 43 388 407 110 979 299 720 758 376
Deepsea Atlantic 2009 100.00 % 86 912 184 206 753 690 4 337 888 718
Deepsea Stavanger 2010 100.00 % 115 246 962 201 201 868 4 349 840 970
TOTAL 245 547 553 518 934 857 9 408 488 064
* The majority owns 71,526% of the rig.

B102
NOTES 2011
Note 5 Share capital and shareholder information
The share capital consists of No. of shares Nominal value Tot. book value
Shares 1 376 687 078 USD 0,00001 91 231
Total 1 376 687 078 USD 0,00001 91 231
List of shareholders as per 31.12.2011
Share of votes
Odfjell Drilling Holding Ltd 1 376 687 078 100 %
Total number of shares 1 376 687 078 100 %
Helene Odfjell controls 69% through Odfjell Partners Ltd. Marianne Odfjell family controls 25,9% of the shares in
Odfjell Drilling Holding Ltd.
Elin Odfjell controls 3,96% through the company ASEO Ltd and the CEO in Odfjell Drilling controls
0,47% personally.
Note 6 Long-term liabilities

Debt to credit institutions and other long-term liabilities
31.12.2011 31.12.2010
S b di t d l it l 0 30 723 441
Subordinated loan capital 0 30 723 441
Loans in USD presented in NOK 8 404 730 448 7 748 118 433
Other long-term liabilities 195 870 643 68 052 615
Total 8 600 601 091 7 846 894 489
Loans in USD are stated at the year-end exchange rate.
The group's interest-bearing loans from credit institutions have the following settlement structure:
Year USD NOK
2012 112 500 000 674 178 750
2013 179 166 666 1 073 692 079
2014 179 166 666 1 073 692 079
Thereafter 956 666 668 5 733 016 341
Total 1 427 500 000 8 554 579 250
The Odfjell Drilling Group has repaid all external bank loans during 2011, and drawn up new loans of a total
of MUSD 1 440.
B103
NOTES 2011
Note 7 Secured liabilities and partnership capital not called
31.12.2011 31.12.2010
Secured liabilities 8 554 579 250 7 892 127 807
Capitalized loan cost -149 848 802 -144 009 374
Net secured liabilities 8 404 730 448 7 748 118 433
Book value of assets pledged as security
Mobile drilling units 9 408 488 064 9 482 956 488
Machinery and equipment 1 099 810 642 0
Receivables 1 650 242 604 180 316 681
Bank deposits 1 816 606 249 423 934 955
Total 13 975 147 560 10 087 208 124
Partnership capital not called
As per 31.12.2009, the group's share of non called-up limited partnership capital amounts to
NOK 11,041,649.
Note 8 Other short-term liabilities
31.12.2011 31.12.2010
Other short-term liabilities 2 742 031 2 887 102
Accrued other personnel expenses 319 190 702 300 947 211
Other accrued expenses 161 091 379 336 312 518
Advance payment from customer 68 063 399 55 486 137
Advance payment from customer, construction contracts 0 65 684 858
Accrued interest liability 31 772 337 0
Other prepayments 101 266 585 74 691 813 Other prepayments 101 266 585 74 691 813
Total other short-term liabilities 684 126 432 885 589 664
The group short -term liabilities are all due within one year after the balance sheet date.
31.12.2011 31.12.2010
Construction contracts under completion 0 90 801 805
Advances received 0 156 486 663
Net advance payment from customer 0 -65 684 858
The Odfjell Drilling Group had in 2010 a few fixed price contruction contracts, and the revenue was
recognised on the percentage of completion method. The stage of completion was measured by portion
of costs incurred to date bear to the estimated total costs of the contracts.
The fixed price construction contracts are presented as a net advance payment from customer, together
with other short-term liabilities.
Pr 31.12.2011 all construction contracts has been completed, and hence there are no advance payments from
customer in the balance related to construction contracts.
B104
NOTES 2011
Note 9 Tax
Tax expenses for the year are as follows: 2011 2010
Tax payable 75 930 936 69 650 633
Tax payable prior periods 1 761 078 -1 846 500
Change in deferred tax 102 926 903 -97 586 753
Total tax expenses 180 618 917 -29 782 620
The tax expenses 2011 are related to the legal entities in the Norwegian Tax regime.
Deferred tax
Deferred tax shows the effect of temporary differences that occur when assets and liabilities are
valued for financial accounting and tax accounting purposes respectively. Deferred tax relates to
the following main items.
31.12.2011 31.12.2010
Negative temporary differences
Tax-related loss carryforward -500 994 745
Receivables -3 328 166
Current assets -12 523 183 -2 343 146
Net pension liabilities -160 094 886 -150 799 875
Net negative temporary differences -175 946 235 -654 137 766
Positive temporary differences
Fixed assets 100 922 941 133 124 205
Share in limited partnership 993 631 14 246 464 Share in limited partnership 993 631 14 246 464
Profit and loss account 321 715 912 393 354 946
Net positive temporary differences 423 632 484 540 725 615
Net temporary differences 247 686 249 (113 412 151)
Deferred tax (+) / tax asset (-) 69 357 448 (31 755 402)
Odfjell Rig Ltd, a wholly owned subsidiary of the Company incorporated in Bermuda, was notified by Norwegian
Tax Authorities (Skatt Vest) late 2011 that income from its direct 52.913% participation in KS Deep Sea Drilling
Company II (KS DSDC II) is deemed taxable in Norway for the income years 2009-2010. KS DSDC II is the owner
of the rig Deepsea Bergen, which has been leased to KS Deep Sea Drilling Company (KS DSDC) under a
bareboat charter at a fixed dayrate of USD 171,557.
KS DSDC has, in turn, entered into a drilling contract with Statoil for the provision of drilling services to Statoil on
the Norwegian Continental Shelf. Odfjell Rig Ltd has not received response to its reply to the tax authorities,
arguing that the tax authorities assertion is based on wrong assumptions as to the factual circumstances in the
case. There can be no assurances that the Norwegian Tax Authorities will accept the arguments set forth by Odfjell
Rig Ltd and conclude that the company is not taxable in Norway for its participation in KS DSDC II. Hence, there is
a risk that Odfjell Rig Ltd. will be deemed taxable in Norway for the income years 2009-2010 (and/or subsequent
years should the Norwegian Tax Authorities successfully challenge the companys tax treatment for these years).
B105
NOTES 2011
Note 10 Pensions - defined benefit plans
2011 2010
unfunded funded unfunded funded
Present value of pension entitlements 10 741 775 78 991 024 71 655 859 81 179 208
Interest expenses on pension liabilities 3 428 325 26 294 218 3 713 551 35 087 304
Anticipated return on pension funds 0 -25 053 869 -28 409 934
Administrative expenses 0 3 836 021 4 500 000
Periodised employer's national insurance contributions 1 997 984 11 853 503 1 744 087 13 022 277
Effect of changes in estimates 3 141 577 -5 915 646 -29 286 074 4 665 766
Net pension expenses 19 309 661 90 005 251 47 827 423 110 044 621
Pension liabilities as per 31.12. 159 116 333 773 251 048 156 250 864 870 644 680
Pension funds (market value) as per 31.12. 0 -580 767 137 -509 283 530
Net pension liabilities as per 31.12. 159 116 333 192 483 911 156 250 864 361 361 150
Employer's national insurance contributions 13 792 103 27 140 231 13 148 372 50 951 922
Changes in the estimates not recorded in the accounts -18 713 700 -213 723 991 -24 104 133 -406 505 212
Net pension liabilities (+) / assets (-) 154 194 735 5 900 151 145 295 103 5 807 860
2011 2010
Pension liabilities 196 343 604 186 861 482
Pension assets (pension funds) 36 248 718 35 758 518
Net pension liabilities (+) / assets (-) 160 094 886 151 102 964
The group has a pension scheme covering a total of 1,665 persons, of which 105 pensioniers. The scheme entitles staff to defined future benefits.
These are mainly dependent on the number of years of service, the salary level at pensionable age and the size of benefits paid by the national
insurance. These liabilities are covered through an insurance company (funded).
The group also has a contractual pension agreement (CPA) covering 817 persons, of which 28 pensioniers. The agreement entitles staff to
benefits from the age of 62 until they are eligible for a national insurance pension when reaching the age of 67. The employer`s contribution to
these benefits amounts to 20% of the pension paid. These liabilities are not covered through an insurance company (unfunded).
A number of the Norwegian subsidiaries in the group are required to have a civil service pension scheme according to the Norwegian Act relating to
mandatory occupational pensions. These subsidiaries have pension schemes in accordance with the requirements in this Act.
The defined benefit plans' pension expenses and liabilities are presented according to the Norwegian Accounting Standard no. 6 (NRS 6).
Assumptions
31.12.2011 31.12.2010
Discount rate 3,90 % 3,80 %
Expected return on pension assets 4,80 % 4,60 %
Expected wage adjustments 4,00 % 4,00 %
Expected pension increase 0,70 % 3,75 %
Expected increase in national insurance basic amount 3,75 % 3,75 %
Early retirement acceptance rate 30,00 % 30,00 %
Voluntary retirement by employees 4,00 % 4,00 %
Defined pension contribution agreement
In addition, the group has several defined pension contribution arrangement. By 31.12.2011, these arrangements involve 607 employees.
Employer's contribution 2011; NOK 22 668 342.
Weighted-average investment profile for plan assets at year end:
Asset category 31.12.2011 31.12.2010
Shares 9,2 % 20,9 %
Bonds, short-dated 15,2 % 15,4 %
Money market 22,3 % 11,5 %
Bonds, long-dated 35,0 % 33,2 %
Property 17,8 % 17,6 %
Other 0,4 % 1,5 %
100,0 % 100,0 %
The Group's pension schemes are with the life assurance company DNB Liv ASA.
The actuarial assumptions are based on generally used assumptions in the insurance industry with respect to demographic factors and retirement.
The above calculations are based on annual actuarial calculations.
B106
NOTES 2011
Note 11 Payroll expenses
Payroll expenses 2011 2010
Salaries 2 022 212 138 2 010 415 514
Employer`s national insurance contributions 252 010 194 256 728 587
Pension expenses 152 709 758 187 276 696
Other benefits 95 979 588 90 417 910
Hired personnel 91 590 045
Total 2 614 501 723 2 544 838 707
Note 12 Remuneration of the board of directors, CEO and auditor
Remuneration CEO Board of Directors
Salary 3 932 845
Bonus 0
Other benefits 20 595
Pension costs 58 602
Board of directors' fee 0 1 075 000
4 012 042 1 075 000
No loans or guarantees have been given to the CEO, members of the Board or their related parties.
Employee loans amount to a total of NOK 3 208 908 pr 31.12.2011.
Fee to the auditor: 2011 2010
Statutory audit fee 1 622 429 1 528 100
Assurance services 113 372 198 037
Tax and legal advisory services 834 142 745 477
Other services, not part of the auditing (ex. Legal consultancy) 3 221 736 0
Total 5 791 679 2 471 614
All fees to auditor presented above are without VAT.
Note 13 Other financial income/expenses
2011 2010
Realised exchange rate gains long term debt 0 0
Unrealised exchange rate gains long term debt 0 283 883 050
Realised exchange rate gain other 303 599 545 268 867 257
Unrealised exchange rate gain other 56 678 798 0
Gain from sale of subsidiary 221 926 068
Other financial income 27 161 791 50 158 952
Realised exchange rate loss long term debt 0 80 804 700
Unrealised exchange rate loss long term debt 30 911 758 0
Realised exchange rate loss other 194 462 054 0
Unrealised exchange rate loss other 0 158 998 666
Other financial expenses 322 424 654 -38 651 732
Total other financial expenses 547 798 466 201 151 634
Note 14 Spare parts
Inventory of spare parts is carried at cost price and is written down when its assumed market value is lower
than the cost price.
Note 15 Hedging of income
Some of the subsidiaries had forward contracts during 2011.
As per 31.12.2011, there are no active forward contracts since alle contracts were closed in January 2011.
Normally profit/loss related to the forward contracts are booked in the same period as the income is earned
when forward contracts qualify as hedging instruments. When forward contracts qualify as hedging instruments
the contracts are not capitalised and not presented in the balance sheet.
B107
NOTES 2011
Note 16 Group companies
Companies Main office Voting and owning interest
Subsidiaries
Bergen Drillpart AS Bergen, Norway 100.00 %
Deep Sea Drilling Company AS Bergen, Norway 100.00 %
Deep Sea Drilling Company II AS Bergen, Norway 100.00 %
Deep Sea Management AS Bergen, Norway 100.00 %
Deep Sea Management Ltd. FZE UAE 100.00 %
Deep Sea Mooring AS Sola, Norway 100.00 %
Deep Sea Rig AS Bergen, Norway 100.00 %
Odfjell Casing Services AS Sola, Norway 100.00 %
Odfjell Drilling (UK) Ltd Aberdeen, UK 100.00 %
Odfjell Drilling AS Bergen, Norway 100.00 %
Odfjell Drilling Coperatief U.A. Amsterdam, the Netherlands 100.00 %
Odfjell Drilling Management AS Bergen, Norway 100.00 %
Odfjell Drilling Shetland Ltd Aberdeen, UK 100.00 %
Odfjell Drilling Technology AS Bergen, Norway 100.00 %
Odfjell Drilling Technology Ltd Hamilton, Bermuda 100.00 %
Odfjell Invest AS Bergen, Norway 100.00 %
Odfjell Invest Holland BV Amsterdam, the Netherlands 100,00 %
Odfjell Invest I Ltd Hamilton, Bermuda 100,00 %
Odfjell Invest II Ltd Hamilton, Bermuda 100,00 %
Odfjell Invest Ltd Hamilton, Bermuda 100,00 %
Odfjell Operations Ltd Hamilton, Bermuda 100.00 %
Odfjell Partners Invest Ltd Hamilton, Bermuda 100.00 %
Odfjell Perfuraes e Servios Ltda Rio de Janeiro, Brazil 100,00 %
Odfjell Rental Services AS Sola, Norway 100.00 %
Odfjell Rig AS Bergen, Norway 100.00 %
Odfjell Rig Ltd Hamilton, Bermuda 100.00 %
Odfjell Technology Manila Corporation Manila, Philippines 100.00 %
Odfjell Well Services Europe AS Bergen, Norway 100.00 %
Odfjell Well Services Ltd British Virgin Islands 100.00 %
Limited partnerships
Deep Sea Drilling Company KS Bergen, Norway 71.53 %
Deep Sea Drilling Company II KS Bergen, Norway 71.53 %
KS AS Bergen Drillpart Oslo, Norway 72.38 %
The following group companies were acquired/established in 2011:
Odfjell Arabia Drilling Services LLC Saudi Arabia 100.00 %
Odfjell Drilling Bergen AS Bergen, Norway 100.00 %
Odfjell Drilling Netherlands BV Amsterdam, the Netherlands 100.00 %
Odfjell Galvo BV Amsterdam, the Netherlands 100.00 %
Odfjell Offshore Ltd Hamilton, Bermuda 100.00 %
Odfjell Perfuraes e Servios Ltda Rio de Janeiro, Brazil 100.00 %
Odfjell Rig II Ltd Hamilton, Bermuda 100.00 %
Odfjell Rig III Ltd Hamilton, Bermuda 100.00 %
Odfjell Well Services II Ltd Hamilton, Bermuda 100.00 %
Odfjell Well Services SRL Bucharest, Romania 100.00 %
The following companies were sold in 2011:
Odfjell Drilling Services LLC Saudi Arabia 80.00 %
Odfjell Invest Holland II BV Amsterdam, the Netherlands 100.00 %
Odfjell Well Management AS Bergen, Norway 100.00 %
Odfjell Well Management Consultants AS Bergen, Norway 100.00 %
B108
NOTES 2011
Note 17 Subordinated loan capital
Subordinated loans including accrued interest 2011 2010
Odfjell Partners Ltd. NOK 0 30 723 441
Total NOK 0 30 723 441
The loan from Odfjell Partners Ltd.was defined as a subordinated loan and was subordinated other secured liabilities .
Interest for 2011 of NOK 1,447,941 was accumulated to the loan balance and paid at repayment of loan.
Note 18 Guarantees and loans
Odfjell Drilling Ltd. has furnished guarantees with joint and several liability for the outstanding loan amount in the
group's loan agreements.
Note 19 Minority interests
Minority interests represent external shares in Odfjell Drilling subsidiaries.
The minority's share of: 2011 2010
Operating profit/loss 71 579 651 57 493 412
Pre-tax profit/loss 66 041 184 56 567 781
Tax income / expense 3 747 533 3 095 285
The minority interests have developed as follows:
Minority interests as per 01.01. 155 696 506 168 479 373
Minority interests' share of the year's profit/loss 69 788 717 59 666 316
Capital payments to minority interests -90 839 428 -72 449 183
Currency differences 1 550 435
Note 20 Operating income
2011 2010
(in NOK '000) (in NOK '000)
Operations, drilling units 3 425 521 3 238 075
Well services 915 154 801 474
Odfjell Drilling & Technology 1 397 840 646 753
Other 186 423 38 607
Operating income 5 924 938 4 724 909
(in NOK '000) (in NOK '000)
Norway 4 611 489 3 810 484
UK 505 068 404 686
Denmark 1 4 744
Europe, other countries 94 608 119 016
Middle East 157 097 126 845
Phillipines 1 327 141
Africa 555 348 258 993
By business area
By geography
B109
NOTES 2011
Note 21 Investment in associates
Company Acquisition Registered office Share ownership Voting rights
Petro Services West Group AS 2010 Bergen, Norway 50,00 % 50,00 %
Ross Holding AS Group 2011 Stavanger, Norway 50,00 % 50,00 %
Deep Sea Metro Ltd 2008 Hamilton, Bermuda 40,00 % 40,00 %
The associated companies PSW Group AS, Ross Holding AS Group and Deep Sea Metro Ltd. are valued and presented by using the equity method in the consolidated financial
statements.
The 50% share in Ross Holding Group AS was acquired as a part of the sale of the subsidiary Odfjell Well Management AS in 2011. As a part of the payment from sale of
Odfjell Well Management AS, Odfjell Drilling Group received 50% of the shares in Ross Holding AS Group.
PSW Group AS Ross Holding Group AS Deep Sea Metro Ltd Total PSW Group AS Deep Sea Metro Ltd Total
Book value of equity at 01.01 11 581 356 - 1 239 734 016 1 251 315 372 - 748 652 818 748 652 818
Investments/Aquisitions during the year 5 000 000 68 104 445 551 328 400 624 432 845 16 596 777 516 312 645 532 909 422
Share of profits (4 456 044) 6 028 628 (27 766 856) (26 194 272) (3 590 359) -12 898 221 (16 488 580)
Currency translation effect NOK/USD - 26 599 795 26 599 795 - -12 333 226 (12 333 226)
Amortization of excess value (1 710 075) (3 285 948) (4 996 023) (1 425 062) (1 425 062)
Write down of excess value (10 415 237) (10 415 237)
Book value of equity at 31.12 - 70 847 125 1 789 895 355 1 860 742 480 11 581 356 1 239 734 016 1 251 315 372
Note 22 Investment in other companies
Acquisition/
Share ownership/
Percentage of
votes Book value
Meland Golfklubb Meland, Norway 20 000
Westfal-Larsen Chemical Carriers I KS 2006 Bergen, Norway 7,14 % 5 458 571
Total 5 478 571
As per 31.12.2011, the group's share of non called-up limited partnership capital in Westfal-Larsen Chemical Carriers I KS amounts to NOK 11 041 649.
2011 2010
B110
NOTES 2011
Note 23 Other operating expenses
Consumption of purchased goods for resale 19 003 001 20 673 423
Hired services and subcontractors 335 096 267 210 456 944
Hire machines, fixtures and fittings 89 344 568 92 615 450
Tools, fixtures and fittings, and working plant 257 641 885 199 154 538
Repair and maintenance 103 637 460 70 754 950
Insurance, guarantee and service costs 42 551 830 27 882 591
Loss 2 139 456 1 265 040
Other operating and administrative expenses 532 547 850 376 664 346
Total 1 381 962 317 999 467 282
Note 24 Other long term receivables
Other long term receivables 2011 2010
Loan to employees 3 208 908 3 109 077
Loan to associate 1 620 116 0
Other long term accruals 92 876 487 88 596 289
Total 97 705 511 91 705 366
Note 25 Related parties transactions Note 25 Related parties transactions
kevenue from re|ated part|es
1ransact|on category ke|ated party ke|at|on Amount 2011
Management services Kokstad Invest AS Related parties 1 500 000
Management services Kokstad Invest Holding AS Related parties 30 000
Management services Kokstad Eiendom AS Related parties 30 000
Management services Sandslimarka 185 AS Related parties 60 000
Total 1 620 000
Lxpenses from re|ated part|es
1ransact|on category ke|ated party ke|at|on Amount 2011
Interest expenses Odfjell Partners Ltd Related party 1 447 941
Office rent Kokstad Invest AS Related party
Office rent Sandslimarka 185 AS Related party
B111
:c :c :c :c
B112
(All figures in NOK)
Notes 2011 2010
OPERATING EXPENSES
Interest income 6 573 616 14 152 242
Interest income from group companies 5 142 620 592 51 643 930
Interest income from related parties 0 0
Other financial income group companies 2 394 015 1 477 360
Share dividends 10 299 096 100 127 833 199
Interest expenses -105 179 004
Interest expenses from group companies -20 470 196 -26 440 177
Interest expense from related parties -1 447 941 -723 441
Other financial expenses group companies -15 042 204 -11 948 288
Net financial items 473 855 647 -212 853 468
ORDINARY PROFIT/LOSS BEFORE TAX 466 598 141 -218 638 003
NET PROFIT/LOSS FOR THE YEAR 466 598 141 -218 638 003
Allocation:
Transferred from/to other equity 2 466 598 141 -218 638 003
B113
BALANCE SHEET Odfjell Drilling Ltd.
at 31 December
Notes 2011 2010
ASSETS
FIXED ASSETS
Investments in subsidiaries 4 5 913 648 254 5 675 918 204
Investments in associated companies 0 1 327 753 738
Long term loan to group companies 5 1 516 153 100 1 585 120 811
Long term bonds 0 22 231 319
Long term loan 92 668 294 104 934 188
CURRENT ASSETS
Receivables
Other short time receivables 190 888 304 980
Intercompany short-term receivables 5 28 290 216 127 833 199
Total receivables 28 481 104 128 138 179
Cash and cash equivalents 7 232 629 135 150 689 041
Total Cash and cash equivalents 232 629 135 150 689 041
Total current assets 261 110 239 278 827 220
TOTAL ASSETS 7 783 579 887 8 994 785 481
B114
B115
for the year ended 31 December
2011 2010
Profit/(loss) before tax 466 598 141 -218 638 003
Adjustments for:
Decrease/(increase) in trade accounts receivable and other receivables -44 824 396 -75 577 974
Decrease/(increase) in trade accounts payable and other current liabilities -18 770 504 130 277 646
Cash flows from operating activities 403 003 241 -163 938 331
Investments in group companies -9 399 322 -5 373 490 374
Investments in associated companies 0 389 820 630
Long term loan to group companies 232 982 414 -978 551 220
(Decrease)/increase in net intercompany short-term liabilities and receivables
526 215 397 0
Subordinated loan 6 957 574 383 053 517
Long-term bonds 22 231 319 -302 547
Long-term loan 12 265 894 -104 934 188
Other short-term investments 0 57 657 503
Net cash flow used in investing activities 791 253 276 -5 626 746 679
Long term debt -22 439 326 65 918 420
Changes in long-term liabilities 0 23 689 778
Changes in long term debt group companies 1 883 322 905 0
Short term loan -2 928 200 000 2 928 200 000
Capital increase 0 1 177 913 853
Paid out dividende -45 000 000 -40 000 000
Net cash flow from financing activities -1 112 316 422 4 155 722 051
Net increase/(decrease) in cash and cash equivalents 81 940 095 -1 634 962 959
Cash and cash equivalents at beginning of period 150 689 040 1 785 651 999
Cash and cash equivalents at end of period 232 629 135 150 689 040
B116
Notes 2011
2011 2010
Auditors fee 94 881 83 000
Other confirmations 22 912
Other services - 12 750
Total 94 881 118 662
Board of directors fee 1 075 000 781 250
Advisory committee 0 145 000
Financial and legal assistance ex VAT 2 496 870 1 514 400
Management fee 3 220 000 3 119 000
Total 7 257 137 5 784 536
The administration of the company is performed by Odfjell Drilling AS for a management fee of NOK 3,220,000
General Manager receives salary from Odfjell Drilling AS.
No loans or guarantees have been given to the General Manager or to the members of the board of directors.
The company is not required to have an occupational pension scheme in accordance with the Norwegian law of
Share
capital
Other
contributed
capital Other equity Total
Shareholders' equity as per
01.01.2011 91 231 1 988 343 711 3 411 713 300 5 400 148 242
Dividend paid out -45 000 000 -45 000 000
Profit for the year 466 598 141 466 598 141
31.12. 2011 91 231 1 988 343 711 3 833 311 440 5 821 746 381
Shares 1 376 687 078 USD 0,00001 91 231
Total 1 376 687 078 USD 0 00001 91 231 Total 1 376 687 078 USD 0,00001 91 231
share of votes
Odfjell Drilling Holding Ltd. 1 376 687 078 100.00 %
Total number of shares 1 376 687 078 100.00 %
Helene Odfjell controls 69,67% through Odfjell Partners Ltd, Marianne Odfjell controls 25,9% personally,
Abraham Odfjell controls 3,96% though the company ASEAO Ltd and the CEO in Odfjell Drilling controls 0,47% personally.
B117
Notes 2011
Note 4 Subsidiaries
Company
Acquisition/
formation
date Registered office
Shares and
percent of votes Percent of votes
Share capital
USD Profit/loss 2011
Equity as per
31.12.2011 Book value
Odfjell Offshore Ltd. 2011 Hamilton, Bermuda 100 % 100 % 10 000 (172 282 047) 4 483 833 628 4 283 380 061
Odfjell Drilling Services Ltd. 2011 Hamilton, Bermuda 100 % 100 % 10 000 189 835 594 1 930 512 541 1 630 268 193
Total 5 913 648 254
Profit/loss and equity in USD for both subsidiaries are presented in NOK by using currency rate NOK / USD 5,9927 (year end rate 2011)
Due to the re-structuring of the Odfjell Drilling Group in 2011, Odfjell Drilling Ltd has only shares in two new-established subsidiaries pr 31.12.2011
2011 2011 2010 2010 2011 2010
Odfjell Drilling AS 3 mnths Nibor + 3,5% margin 216 897 330 16 400 647 12 464 771
Odfjell Drilling Technology AS 3 mnths Nibor + 1,5% margin 6 419 774 1 111 206 288 408
Odfjell Partners Invest Ltd 3 mnths Nibor + 1,5% margin 862 977 510 33 374 442 18 902 895
Odfjell Invest Ltd 3 mnths Nibor + 1,5% margin 401 669 382 4 487 318 14 177 157
Odfjell Casing Services AS 3 mnths Nibor + 1,5% margin 45 693 582 1 402 566 1 924 505
Odfjell Rental Services AS 3 mnths Nibor + 1,5% margin 51 463 233 1 197 869 2 337 824
Odfjell Rig Ltd 3 mnths Nibor + 1,5% margin 438 963 604 -9 947 846
Odfjell Drilling Technology Ltd 3 mnths Nibor + 1,5% margin 1 548 370
Odfjell Drilling Bergen AS 3 mnths Nibor + 1,5% margin 1 702 349
Odfjell Offshore Ltd 1 516 153 100 Fixed annual interest rate of 6,95% 82 944 194
Odfjell Drilling Services Ltd 1 914 046 346 3 mnths LIBOR + 3,63% margin -10 522 349
Total long term 1 516 153 100 1 914 046 346 1 585 120 811 438 963 604 122 150 396 51 643 930
Loan from Odfjell Drilling Services Ltd : Final maturity date 9 November 2018, applicable interest is 3 months LIBOR + 3,63% margin
Loan given to Odfjell Offshore Ltd: Final maturity date 9 May 2013, applicable interest is fixed annual 6,95%
2011 2011 2010 2010
Odfjell Offshore Ltd. 4 714 934 0 0
Odfjell Operations Ltd 75 833 199 58 886 700
Odfjell Rig Ltd 21 573 720 0 0
Odfjell Partners Invest Ltd 0 60 610
Odfjell Drilling Technology Ltd 3 194 109 52 000 000 52 000 000
Odfjell Invest Ltd 2 001 562 0 0
Total short term 28 290 216 3 194 109 127 833 199 110 947 310
The short term receivables have less than one year maturity.
Note 6 Secured liabilities
Subordinated loan including accrued interest as per:
2011 2010
Odfjell Rig Ltd. 0 438 963 604
Total 0 438 963 604
Odfjell Rig Ltd. Loan, interest 2011: NOK 9.947.846
2011 2010
Current account NOK 461 795 42 247 811
Time Deposits 230 733 765 107 779 400
Total 232 629 135 150 689 041
Note 8 Short-term liabilities
2011 2010
Other short term debt 108 021 0
Accrued interest 0 19 119 438
Total 1 113 958 19 884 463
B118
Notes 2011
Note 9 Related parties transactions
kevenue from re|ated part|es
1ype of transact|on ke|ated party ke|at|on Amount 2011
Interest Cdf[ell urllllng AS Subsidiary 16 400 647
Interest Cdf[ell Caslng Servlces AS Subsidiary 1 402 366
Interest Cdf[ell 8enLal Servlces AS Subsidiary 1 197 869
Interest Cdf[ell arLners lnvesL LLd Subsidiary 33 374 442
Interest Cdf[ell urllllng 1echnology AS Subsidiary 1 111 206
Interest Odfjell Invest Ltd Subsidiary 4 487 318
Interest Cdf[ell urllllng 8ergen AS Subsidiary 1 702 349
Interest Cdf[ell Cffshore LLd Subsidiary 82 944 194
Sum 142 620 S92
Cost from re|ated part|es
1ype of transact|on ke|ated party ke|at|on Amount 2011
Management services Odfjell Drilling AS Subsidiary 3 220 000
Interest Odfjell Rig Ltd Subsidiary 9 947 846
Interest Odfjell Drilling Services Ltd Subsidiary 10 322 349
Sum 23 690 196
2011 2010
Foreign exchange profit 486 560 185 6 620 277
Regulation bank balance 199 854 172 482 013 980
Gain on sale of bonds 8 915 949 0
Share dividends of MNOK 299,1 from the subsidiary Odfjell Rig Ltd is recognised as
financial income in 2011.
2011 2010
Interest expenses 0 66 393 147
Foreign exchange loss 310 745 957 9 711 468
Bank charges 0 7 165
Other financial expenses 34 773 232 18 919 537
Write down shares in subsidiaries 0 651 741 628
B119
Notes 2011
Guarantees; investment in Deep Sea Metro Ltd 0
Loan agreement in Odfjell Drilling Services Ltd 1 583 970 000 0
Loan agreement in Odfjell Invest Ltd 5 015 905 000
Loan agreement in Odfjell Rig AS 137 625 400
Total guarantee liabilities 7 167 464 250 474 368 400
Shares in Odfjell Offshore Ltd 4 283 380 061
Shares in Odfjell Drilling Services Ltd 1 630 268 193
Shares in Odfjell Invest Ltd 5 373 490 374
Shares in Odfjell Operations Ltd 60 610
Shares in Odfjell Drilling Technology Ltd 64 823 497
Shares in Odfjell Rig Ltd 81 000
Shares in Odfjell Partners Invest Ltd 192 033 658
Shares in Odfjell Drilling AS 45 429 066
Total book value of assets pledged as security 5 913 648 254 5 675 918 205
Note 12: Taxation

Guarantees from Odfjell Drilling Ltd in relation to subsidiaries loan agreements
Odfjell Drilling Ltd has furnished an On-Demand Guarantee under the following facility agreements:
- USD 300 million term loan facility agreement entered into on 4 November 2011 with Odfjell Drilling Services Ltd as borrower and DNB Bank
ASA and Danske Bank A/S as lenders. The liability of Odfjell Drilling Ltd hereunder shall be limited to USD 330 million plus any unpaid
amount of interest, fees and expenses, and shall be reduced with amounts actually repaid (and prepaid, if any) under the loan agreement.
- USD 950 million term loan facility agreement entered into on 4 November 2011 with Odfjell Invest Ltd as borrower and DNB Bank ASA as
Agent of behalf of the Lenders. The liability of Odfjell Drilling Ltd hereunder shall be limited to USD 1 140 million plus any unpaid amount of
interest, fees and expenses, and shall be reduced with amounts actually repaid (and prepaid, if any) under the loan agreement.
- USD 120 million term loan facility agreement entered into on 26 April 2011 with Odfjell Rig Ltd as borrower and DNB Bank ASA as Agent of
behalf of the Lenders. The liability of Odfjell Drilling Ltd hereunder shall be limited to USD 132 million plus any unpaid amount of interest,
fees and expenses, and shall be reduced with amounts actually repaid (and prepaid, if any) under the loan agreement
Share pledges
Odfjell Drilling Ltd has pledged its shares in Odfjell Offshore Ltd and Odfjell Drilling Services Ltd as security for any amounts outstanding
under the USD 300 million loan agreement entered into by Odfjell Drilling Services Ltd on 4 November 2011.
Other security
Odfjell Drilling Ltd has further assigned any present and future receivables as security for Odfjell Drilling Services Ltd's USD 300 million loan
entered into on 4 November 2011.
The following assets are pledged as security by the parent company Odfjell Drilling
Long term debt 0 0 43 479 094 0
Long term loan from subsidiary 0 0 0 1 914 046 346
Intercompany short-term liabilities 0 3 194 109 0 0
Total 4 308 066 43 479 094 1 914 046 346
There is no Bermuda income, corporation, or profit tax, withholding tax, capital gains, capital transfer tax, estate duty or
inheritance tax payable by the company or its shareholders not ordinarily resident in Bermuda. The company is not subject to
Bermudan stamp duty on the issue, transfer or redemption of its shares.
The company has received from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1996 an
assurance that, in the event of there being enacted in Bermuda any legislation imposing tax computed on profits or income, or
computed on any capital assets, gain or appreciation or any tax in the nature of estate duty or inheritance tax, such tax shall not
until 28 March 2016 be applicable to the company or to any of its operations, or to the shares, debentures or other obligations of
the company except insofar as such tax applies to persons ordinarily resident in Bermuda and holding such shares, debentures or
other obligations of the company or any land leased or let to the company.
As an exempted company, the company is liable to pay a registration fee in Bermuda at a rate presently amounting to USD 1.995
per annum.
B120

THE
ODFJELL DRILLING GROUP
Financial statements
2010
B121
B122
B123
BOARD OF DIRECTORS' REPORT FOR

ODFJELL DRILLING LTD. 2010

Business activities
Odfjell Drilling Ltd. is the parent company of the Odfjell Drilling Group.

The company was formed in November 2005 in Bermuda, and its subsidiaries have
nearly four decades of offshore related business experience.

The company owns and operates mobile drilling units and is engaged in platform drilling,
well service activities, and engineering and technology services. Odfjell Drilling operates
across all service segments in the North Sea as well as providing well services in more
than 20 countries from our offices in Europe and the Middle East.

Odfjell Drilling Ltd. is incorporated in Hamilton, Bermuda, and it has operating entities in
Bergen, Stavanger, and Stjrdal in Norway, Coevorden in the Netherlands, Aberdeen in
the UK, Manila in the Philipines, Dubai in the United Arab Emirates and Rio in Brazil.
In addition, the Company has presence in South Korea, Tanzania, Angola and Romania.
Odfjell Drilling has organized its business units into three areas in order to achieve a
clear profile in relation to customers and markets. The new organizational model was
implemented 1
st
quarter 2011.
The business units in the Odfjell Drilling group comprise of:
1. Mobile Units (MODU)
2. Platform Drilling and Engineering (OD&T)
3. Well Services (OWS)

The company will position itself for further growth in the domestic market at the same
time as its international focus will be substantially strengthened.
Odfjell Drilling was organised into four business areas in 2010:

1. Mobile Drilling Units is responsible for the operation of the semi-submersible
drilling rigs "Deepsea Bergen, "Songa Trym, "Songa Delta, "Deepsea Atlantic,
"Deepsea Stavanger, "Offshore Intrepid and "Offshore Freedom.

"Deepsea Bergen" Deepsea Bergen" has been drilling for Statoil in 2010. Deepsea
Bergen is owned by the company KS Deep Sea Drilling Company, which is owned 71.5%
by Odfjell Drilling Group Ltd. The rig is currently under contract with Statoil until 2015,
with an option for a further 2 year extension.

"Songa Trym" was on contract with Statoil in 2010. The platform is owned by Songa
Offshore SE and Odfjell Drilling AS has a management agreement for the operation and
manning of the platform until the expiration of the contract in 2012.

"Songa Delta" was on contract with Statoil until May 2010. The platform is owned by
Songa Offshore SE and is contracted to a consortium of "Det norske Oljeselskap and
Wintershall, and managed by Odfjell Drilling until summer 2012.
B124

"Deepsea Atlantic" - the sixth generation deep water and harsh environment
semisubmersible is on a long term contract with Statoil and has been docked part of the
year 2010, for replacement of the rig's BOP and other modifications related to wellhead
problems on Gullfaks. The contract duration is until 2014, with options for 3-year
extension.

"Deepsea Stavanger", the new sixth generation deepwater and harsh environment
semisubmersible, was delivered from DSME in July 2010. The rig is operating for Ophir
Engergy plc offshore Tanzania until February / March 2011. After a yard stay, the rig will
start its two years programme with BP for drilling operation offshore in Angola. This
contract has an option for 3 one year extensions.

"Deepsea Metro I og II" - Odfjell Drilling and the Metrostar Group have entered a
joint venture agreement in July 2008 for the ownership of two state of the art ultra deep
water drillships of Gusto design. Both units are to be delivered by Hyundai Heavy
Industries (HHI) in South Korea in 2nd and 4th quarter 2011. The construction of both
vessels is progressing according to plan. Both vessels, the Deepsea Metrostar I & II are
tendering for drilling contracts in all international deepwater areas ex. harsh environment
areas.

"Offshore Freedom"
On behalf of our partner Scorpion offshore, Odfjell Drilling entered in August 2008 a 48
months contract with Al-Khafji Joint Operations (KJO) for operations in the Arabian Gulf.
The oil company KJO is situated in the neutral zone between Saudi Arabia and Kuwait
and is operated by Aramco Gulf Operations (AGOC) and Gulf Oil Company (KGOC). The
contract started as planned 21.st June 2009 and the first wells have been drilling
according to plan and with no serious incidents.

"Offshore Intrepid"
In January 2009 Odfjell Drilling entered into another 42 months contract for the
provision of a second jack up rig for Al-Khafji Joint Operations (KJO) for operation in the
Arabian Gulf. The contract is signed on behalf of our drilling partner in the Middle East;
Scorpion Offshore. The rig was mobilized 14th May 2009 and all operations have been
successful with no major incidents.
Seadrill has acquired Scorpion, so they took over ownership of the rigs in 2010.

2. Platform Drilling provides integrated platform drilling services in the North Sea. The
divisions strategy is to maintain and expand its market position while exploiting new
opportunities for profitable growth.

Odfjell Drilling perform production drilling, completion activities, well maintenance and
equipment maintenance for various operator companies in Norwegian and UK waters.
Odfjell Drilling is a leading contractor in the production drilling market, operating a
number of fixed and floating production drilling platforms in the North Sea, with Statoil,
Talisman and British Petroleum as customers. This business unit has offices in Bergen,
Stavanger, Aberdeen and Stjrdal.

The platform drilling contracts with Statoil and Talisman Energy were extended in 2010
with 2 years for each. The Statoil portfolio has another 2 years optional period while the
Talisman contract has 3 one year options.

B125
The platform drilling contract with ConocoPhillips for The Greater Ekofisk Area expired on
June 1
st,
2010.

3. Well Services' (OWS) strategy is to establish the company as the leading casing
service company in Europe, as well as in targeted areas internationally, by delivering the
safest and most efficient services using remote-operated technology. The Well Services
division consists of four departments: Casing Services Europe, Rental Services Europe,
Mooring Services and OWS Middle East.

OWS supplies a wide range of services to the oil industry. The range of services
comprises drill tool rental, tubular rental, casing and tubing running services. In recent
years, OWS has expanded rapidly in Europe and the Middle East, and further expansion
is planned. This rapid growth is based on a strategy of continuously improving existing
service areas and to extend into new areas. This is achieved by supplying innovative
technology that uses remote-operated (hands-off) equipment to improve both safety and
efficiency.

In recent years, OWS has succeeded in maintaining its position as market leader on the
Norwegian Continental Shelf, and it has expanded by increasing its market share in
several other areas worldwide. OWS currently operates in more than 20 countries around
the world.

4. Technology division (ODT) - During 2010 ODT has maintained its strong position
as market leader in its niche in Norway:

Core business areas for Engineering and projects are;
MODUs (OD and external customers) with design, engineering, building supervision,
classification, authorities compliance, yard stays, technical support, marine
operations, lifting operations, subsea services, project support, supply chain
management, maintenance systems, and drilling technology.
Fixed platforms including drilling modules (DES), Drilling Support Modules (DMS)
and associated Modules supporting drilling. Concepts, studies, FEED, detailed
engineering, purchasing, construction, supervision, installation, commissioning
(EPCI), operation / P&A, project support, and maintenance systems.
Core Business Support services within Maintenance Technique and Marine
Services.

The Well Management business area was established in 2007 and has grown rapidly
during the first years of operations. OWM has approximately 65 employees working for
the major oil companies and also for the drilling consortium Songa Delta, where the
clients are Wintershall, Det norske, Total, Nexen and PetroCanada. The campaign has
been successful with planning and drilling a total of 9 wells since the start up of the well
operations including HPHT wells. In 2010 OWM also signed up frame agreements with
E&P companies for further well planning. OWM holds ISO certificates within quality ISO
9001 and within Environment ISO 14001. OWM also won a Tender for services on the
Maersk Giant, where OWM will be providing well planning and logistics services.

B126
Project Management (PMT): Following the partnership agreement between Odfjell
Drilling and Metrostar for the construction activities for building two drillships at Hyundai
Heavy Industries in South Korea, the Project Management Division has continued
growth supporting said projects. This has created a unique opportunity to position OD&T
in the international arena to support the ever increasing demand of fleet renewal and
increased drilling requirement.

By the end of 2010 ODT had 383 employees and consultants engaged. This is a
reduction in number of employees compared to 2009, as we transferred resources to
Kongsberg Group when selling "Interactive Services, DFC resources transferred to PSW
Group and the activities in OKPO were terminated. Still, we managed to increase the
utilization of resources and delivered better results than budgeted for. The competition
for senior engineers has been substantial in Norway in 2010, and for 2011 we have a
more aggressive recruitment strategy to attract the resources needed to serve our
customers nationally and internationally, and to fully develop as an EPCI contractor.

During 2010 ODT further increased its Technology focus. Several major step changing
technology projects are running internally or through our Technology Cooperation
Agreement with Statoil. Our ambition for 2011 is to bring some of these development
projects into a piloting phase to further strengthen the organization. A separate
department, Technology & Business Improvement, will handle these areas. For 2011 our
main focus areas will continue to be highly efficient and Fully Automated Drilling
Facilities, Managed Pressure Drilling (MPD) solutions for mid/deepwater and to further
strengthen our Onshore Operations Model.

Other major events
In July 2010 Odfjell Drilling Ltd acquired 70,75% of the shares in Odfjell Invest Ltd, and
at year end 2010 Odfjell Drilling Ltd owned 100% of the shares in Odfjell Invest Ltd.

Odfjell Drilling by November 2010 reached a settlement with Statoil regarding dispute of
revenues related to the contract for Deepsea Atlantic.

Odfjell Drilling by desember 2010 also reached a settlement with the Norwegian Tax
Authorities regarding taxable gain from sale of the rigs Deepsea Delta, Deepsea Trym
and the shares in KS DSDC II in 2005. The settlement resulted in an increased taxable
gain of MNOK 500.

Going concern
The financial statements have been prepared on the basis of the going concern
assumption. The basis for this is the companys secured contract portfolio, positive
equity and the substantial subordinated loan capital furnished to the company. The
company is in a good financial position for future growth within the business areas
described above.

Working environment and personnel
A good working environment is important both to individual employees and to the group
if it is to achieve continuous improvement in all aspects of its operations. Several
processes have through 2010 continued with a view to maintaining a low sickness
absence rate in the company. As a result of these efforts, total sickness absence in the
B127
company was reduced from 3,9% (184493 hours) in 2009 to 3.2% (141893 hours) in
2010.

Odfjell Drilling demonstrates leadership in the provision of technology, know-how and
solutions as well as in terms of the quality and expertise of its employees. The company
offers extensive training to ensure that expertise is continuously updated and to ensure
career development. In 2008 a new Pedigree training programme in four levels was
introduced in UK. In Norway a new management training programme was launched and
the "Managing for The Future master management programme was opened to
participants from all geographical areas. By the end of 2010 more than 60 key personnel
have completed the programme.

In 2010, Odfjell Drilling had a personnel turnover of 5,6 %. Compared with 2009, the
company had a personnel turnover of 4,2 %. At year end 2010 the number of employees
was 2.672. This number does not include engineering consultants in the UK, employees
through Petro Support West (PSW - 50 % owned) nor Filipino agency personnel on
Deepsea Stavanger.

The company works continually to improve health, safety and security.

During 2010, there has been a positive development in connection with events, where
the total number of incidents with high potential is reduced. There has been 12 accidents
with personal injuries in 2010. One of the accidents took place on Deepsea Stavanger
when the rig was sailing from shipyard to Tanzania. The injured employee was injured in
the head as a result of hit by a moving object. The employee was transported to
hospital, where he did fully recover. The employee has returned to work onboard
Deepsea Stavanger.

Implementation of the "best practice document", the use of Safety Supervisors and
Safety Leadership Training have been important initiatives in 2010.

In addition, we continued to improve on previous focus areas as we firmly believe that
systematic and thorough safety efforts over time will produce positive results.

The working environment in Odfjell Drilling is considered good.

Gender equality
Gender equality has to do with culture and tradition and cannot be seen isolated from
the Group's other activities. Hence, gender equality is an integrated part of personnel
policy and the Group aims to be a workplace, where it encourages full equality between
women and men. Pr 31.December 2010 there were 2 434 men and 238 women
employed in Odfjell Drilling, a total of 2 672 employees.

Measures to promote equality, is incorporated into the Group's policy, which emphasizes
that all employees - regardless of gender - are given the same opportunities for
employment and professional development, and equated with regard to employment,
wages, training and advancement. The Companys Personal Policy shall safeguard gender
equality perspective in employment, wages, promotions and continuing education.

B128
It is emphasized that gender equality is a management responsibility. However, all
parties in the enterprise have a common responsibility for the implementation of
equality.

There is a minor increase in number of female employees from 8.0 % in 2009 to 8,9% in
2010. While the onshore organisations employ approximately 27 % females there is less
than 1.5 % in the offshore organisations.

The Group has elected employee representatives of the five major management
companies representing approximately 80 % of the total employees.

The Board of Directors have 5 members whereof 2 are females.

The company emphasizes that all activities irrespective of country of operation shall
comply with applicable legislation and in accordance with the companys code of business
conduct. The personal policy has resolved that the Odfjell Drilling Group shall recruit and
develop staff based on merit and equal opportunities regardless of ethnicity, religion,
national origin, gender, age, sexual orientation, marital status or disability.

The Group works actively and systematically through internal steering documents,
training of employees and various measures to prevent any form of discrimination. Such
measures include recruitment, salary- and working conditions, promotion, opportunity of
development and shelter against harassment.

The Group has organized access to the company's governing documents by Odfjell
Drilling's intranet pages, which includes information for all employees about the
company's management system, leader's guide and employee handbook etc. These are
measures taken, among other things, to highlight the Group's attitude to promoting
equal opportunities, fair treatment and preventing discrimination. Ethics and business
culture in Odfjell Drilling is also published for new employees.

The steering documents also confirm the Group`s freedom of association and the rights
to collective bargaining, which is continuously followed up for all activities.

The Group shall comply with internationally recognized labor standards covering areas
such as wages, working hours, disciplinary practices, employment contracts and working
conditions. The above requirements are also enforced in contracts with suppliers,
business partners, agents etc.

The Group has employees from 50 different nationalities. One of several measures to
prevent discrimination, are related to the Group's effort for a good working environment.
Odfjell Drilling has conducted annual working environmental and organization surveys
since 2005. These surveys provide the company with valuable information about the
organization inner life and are an important tool for promoting and developing a good
working environment.

Odfjell Drilling has a goal of zero environmentally hazardous discharges to sea. This
concept involves eliminating or significantly reducing the emission of defined
environmental toxins and substantially reducing the risk of harm from the use and
discharge of chemicals. The group companies work in a multidisciplinary environment
and focus on the zero discharge goal throughout the organisation and in all processes. In
2010, Odfjell Drilling continued its efforts to influence employees' attitudes and
B129
behaviour. The environmental management system based on ISO 14000, defines the
measures required to prevent and reduce discharges to the natural environment. The
number of reportable discharge incidents has increased slightly in connection with Odfjell
Drillings activities in 2010. There were 6 reportable discharge incidents in 2010 and 4 in
2009.

Future developments
The oil price has increased gradually through 2010 and also other economic indicators
have improved in 2010 compared to 2009. It is expected that a further increase in the oil
price will positively impact both the oil service markets and the drilling market further
into 2011.

All the operating mobile units owned and operated by the group are deployed on long-
term contracts, securing cash flows from its activities in the following year.

By far the largest proportion of Odfjell Drillings revenue in recent years has been
generated in the Norwegian market. During the last few years, the company has
succeeded in expanding its home market to include the whole of the North Sea and the
Middle East. Odfjell Drilling is now well positioned for further growth in both the home
market and in other selected areas.

It is expected that the slow increase in the oil price will continue to influence the market
positively in 2011, even more outside the Norwegian Continental Shelf than for
Norwegian activities. Though it is expected that the oil companies will continue their
efforts to reduce their overall cost, putting pressure on all suppliers to reduce cost and
dayrates in all our business areas and in all geographical areas. However, the dayrates
are expected to increase in the second half of 2011.

Odfjell Drilling aims to further capitalise on its competitive advantage as a frontrunner
within the development and use of E-Field and Integrated Operations in 2011 and the
coming years.

Risk factors

+ Financial risks
The company is exposed to risks due to fluctuations in interest and exchange rates,
especially as charter contracts are normally in USD while most of the operating expenses
are in local currency. The company seeks to reduce such risk by currency hedging.

+ Operational risks
Odfjell Drilling provides drilling and maintenance services for the cyclical oil and gas
industry. Activity levels in connection with oil and gas exploration and production
fluctuate and the group endeavours to reduce this risk by securing long-term contracts.
One of the major activity level drivers is the development of oil and gas prices.

+Commercial risks
Contracts in the offshore sector require high safety standards. It is important to note
that all offshore contracts are associated with considerable risk and responsibilities,
including technical, operational, commercial and political risks. The Company will take
out insurance coverage deemed adequate in order to limit the above risks.

B130
Revenues, investments, financing and liquidity

Parent company
The parent company activity is to own and control shares in other companies, both
subsidiaries and associates.

In 2010, the parent company Odfjell Drilling Ltd. recorded a loss for the year of MNOK
218 638 003, compared with a profit of MNOK 51 million for 2009. The loss for 2010 is
related to the write down of investment in its subsidiary Odfjell Invest Ltd of 651 MNOK.
The parent company has recognised dividend from subsidiaries as financial income in
2010 and 2009, respectively MNOK 127,8 and MNOK 50.

As of 31 December 2010, the parent companys total assets amounted to MNOK 8,995,
compared with MNOK 4,927 at year end 2009.

The company has a strong equity, with an equity ratio of 60% at year end 2010, and
90,9% at the end of 2009. The companys short-term dept amounts to MNOK 3,059 at
year end 2010, compared to MNOK 0,5 at year end 2009.

The operating income in the consolidated accounts for 2010 was MNOK 4,724 compared
with an operating income in 2009 of MNOK 4.542. Including the gain on sale of assets
and other operating income, the total operating income was MNOK 4,751 in 2010 and
MNOK 4,555 in 2009.

The net profit for 2010 was MNOK 305, compared with a net profit of MNOK 425 in the
consolidated accounts for 2009.

As of 31 December 2010, the companys total assets amounted to MNOK 15 447,
compared with MNOK 7,888 at year end 2009. MNOK 12,288 represented the
capitalisation of long-term assets, compared with NOK 3,741 million in 2009. Cash and
cash equivalents amounted to MNOK 1,605, compared with MNOK 2,929 in 2009.

At 31 December 2010, the company had MNOK 7,923 in interest-bearing long-term debt
of which are loans raised at financial institutions, of which 30,7 MNOK are subordinated
loan capital. At year end 2009, the company had MNOK 1,444 in interest-bearing long-
term debt. At year end 2010, its total equity was MNOK 5,945. The corresponding figure
for 2009 was MNOK 5,047. The equity ratio was 38,5% at year end 2010, and 64% at
year end 2009.

The company has strong equity and a solid cash flow from its activities, providing a
sound foundation for further growth. Cash flow from operating activities for 2010 was
MNOK 135 compared to MNOK 957 in 2009. After investment activities and financing
activities net change in cash and cash equivalents for the year 2010 was MNOK -1,324
compared to MNOK 229 in 2009.

B131
B132
Profit and loss statement - Group
Note 2010 2009
OPERATING INCOME
Operating income 20, 15 4 724 909 236 4 542 018 058
Gain on sale of assets 26 002 408 12 925 358
Other operating income 0
Total operating income 4 750 911 644 4 554 943 416
OPERATING EXPENSES
Personnel expenses 10,11,12 2 544 838 707 2 522 588 851
Depreciation and write-off 4 538 317 166 358 558 542
Bareboat hire 4 0 11 055 450
Bad debts 1 673 622 742 27 251 951
Other operating expenses 23 999 467 283 971 364 854
Total operating expenses 4 756 245 898 3 890 819 648
OPERATING PROFIT/LOSS -5 334 254 664 123 768
Income from associates 21 25 697 310 -11 951 213
Interest income 38 473 459 74 333 705
Interest expenses -185 108 429 -40 080 324
Net financial items 280 819 965 -130 357 917
Tax on ordinary result 9 -29 782 620 109 099 316
NET PROFIT FOR THE YEAR 305 268 331 424 666 535
Minority share of profit for the year 19 59 666 315 51 105 944
Majority share of profit for the year 245 602 016 373 560 591
B133
Assets - Group
Note 31.12.2010 31.12.2009
FIXED ASSETS
Intangible assets
Goodwill 4 161 934 669 179 040 079
Deferred tax asset 9 31 800 032
Other intangible assets 4 364 456 3 992 762
Total intangible assets 194 099 157 183 032 841
Periodic maintenance 4, 7 521 594 750 64 143 125
Mobile drilling units 4, 7 8 961 361 735 549 395 670
Machinery and equipment 4 1 060 816 149 884 215 940
Total tangible fixed assets 10 543 772 634 1 497 754 735
Pension funds 10 35 758 518 44 234 605
Subordinated loan to associated companies 24 383 053 517
Investments in shares 22 5 478 572 5 048 571
Investments in bonds 25 22 231 319 21 928 772
Other long-term receivables 26 235 714 740 29 951 074
CURRENT ASSETS
Spare parts 14 163 962 330 16 369 881
Receivables
Trade debtors 1 1 236 115 242 1 023 211 361
Other receivables 1 153 512 417 117 018 660
Total receivables 1 389 627 659 1 140 230 021
Investments
Other short-term investments 2 173 043 62 057 159
Total investments 173 043 62 057 159
Cash and bank deposits 2 1 605 307 703 2 929 090 552
Total current assets 3 159 070 735 4 147 747 613
TOTAL ASSETS 15 447 441 047 7 888 413 157
B134
B135
Cash flow statement - Group
Cash flow from activities 2010 2009
Profit before tax 275 485 711 533 765 851
Adjustments to reconcile profit before tax
with net cash flow from operations:
Depreciation 538 317 166 358 558 542
Recognition negative excess value -63 952 260
Income from associates -25 697 310 11 951 213
Net (gain)/loss on sale of tangible fixed assets -26 002 408 -12 925 358
Changes in pension liabilities 69 475 760 15 557 587
Changes in assets and liabilities:
Accounts receivables -173 403 881 -35 343 223
Spare parts -107 564 659 -4 845 976
Tax payable -216 153 417 -162 694 756
Trade creditors 42 872 339 -3 130 602
Other accruals -178 795 768 256 528 152
Net cash flow from operating activities 134 581 273 957 421 430
Cash flow from investment activities:
Investments in intangible and tangible fixed assets -2 516 244 241 -541 173 044
Investments in long-term receivables 383 053 517 -399 636 517
Repayment long-term receivables -205 763 666 0
In estments in shares incl associated companies 535 865 645 449 102 866 Investments in shares incl. associated companies -535 865 645 -449 102 866
Aquisition shares subsidiary -259 460 404
Investments in bonds and other short term investments 61 151 568 73 975 071
Sale of shares 5 899 465 0
Sale of fixed assets 41 842 143 29 291 820
Net cash flow from investment activities -3 025 387 263 -1 286 645 536
Cash flow from financing activities:
Changes in long-term liabilities 1 679 472 326 610 438 133
Dividends (paid) -40 000 000 0
Capital paid to minorities -72 449 183 -52 402 025
Net cash flow from financing activities 1 567 023 143 558 036 108
Net change in cash and cash equivalents for the year -1 323 782 847 228 812 002
B136


General
The accounting information presented here reflects the financial position of Odfjell Drilling Ltd. and its
subsidiaries, which have been consolidated (group accounts).

The financial statements have been prepared in accordance with the Norwegian Accounting Act and
generally accepted accounting principles in Norway.

Accounts for subgroups in the group are only prepared for the subgroup Odfjell Drilling AS. Accounts
are not prepared for the other subgroups in the group, cf. the exception in the Norwegian Accounting
Act section 3 7.

Consolidation principles
The consolidated accounts show the total financial result and the total financial position when the
parent company Odfjell Drilling Ltd. and its controlling interests in other companies are presented as
one financial unit .

A controlling interest is normally obtained when the group owns more than 50% of the shares in the
company and can exercise control over the company. Minority interests are included in the groups
equity. Transactions between group companies have been eliminated in the consolidated financial
statement. The consolidated financial statement has been prepared in accordance with the same
accounting principles for both parent and subsidiary.

The subsidiaries' accounts are incorporated into the consolidated accounts with effect from the date
they were acquired. The cost price of the shares is eliminated against the equity of the respective
subsidiaries using the acquisition method. Excess values over and above book values are recognised at
gross value with provision being made for deferred tax, and any residual value is assigned to goodwill.
Goodwill and permanent excess values relating to operating assets are depreciated over the expected
useful life of the asset.

An associate is an entity in which the group has a significant influence but does not control the
management of its finances and operations (normally when the group owns 20%-50% of the company).
The consolidated financial statements include the groups share of the profits/losses from associates,
accounted for using the equity method, from the date when a significant influence is achieved and until
the date when such influence ceases.

When the groups share of a loss exceeds the groups investment in an associate, the amount carried in
the groups balance sheet is reduced to zero and further losses are not recognised unless the Group has
an obligation to cover any such loss.

Investment in other companies than subsidiaries, associates and joint ventures are accounted for using
the cost method.

All companies that are defined as subsidiaries are included 100 per cent in the income statement and
balancesheet. The minority interests' share of profit/loss and equity is specified.

Group companies reporting in foreign currency are converted into NOK using the average currency
rate on profit-and loss statement, and year end rates in the balance sheet. Currency differences related
to consolidating the subsidiaries and the associates are adjusted against the groups equity. Through the
elimination of internal accounts receivable and accounts payable, exchange rate differences are offset
directly against equity.

Most of the group's income is based on day rates from drilling contracts and other service contracts.
The income is recognised in the income statement when the services are performed and at the rates
specified in the contract.
B137


Construction contracts are recognised in accordance with the percentage of completion method. The
income is allocated in accordance with the progress of the contracts, if the outcome of the construction
contracts can be estimated in a reliable manner. The stage of completion is measured by portion of
costs incurred to date bear to the estimated total costs of the contracts, when reliable estimates are
available. When outcome of the contracts cannot be reliably estimated, only the income corresponding
to the accrued costs will be entered as an income. In the period it is identified that a contract will give
negative outcome, the estimated deficit on the contract will be fully allocated.

Foreign currency
Transactions in foreign currency are translated at the rate applicable on the transaction date. Monetary
items in a foreign currency are translated into NOK using the exchange rate applicable on the balance
sheet date. Non-monetary items that are measured at their historical price expressed in a foreign
currency are translated into NOK using the exchange rate applicable on the transaction date. Non-
monetary items that are measured at their fair value expressed in a foreign currency are translated at the
exchange rate applicable on the balance sheet date. Changes to exchange rates are recognised in the
income statement as they occur during the accounting period.

Financial risk - General
The group's principal financial liabilities comprise bank loans, subordinated loan capital and trade
payables. The main purpose of these financial liabilities is the financing of the group's operations. The
group has financial assets such as cash, short-term investments and trade receivables. The group has
also entered into derivative transactions, primarily currency forward contracts. The purpose is to
manage the currency exposure arising from the group's operations.

(I) Credit risk
The market for the Companys services is the offshore oil and gas industry, and the customers consist
primarily of major integrated oil companies, independent oil and gas producers and government-owned
oil companies. The Company performs ongoing credit evaluations of the customers and generally do
not require material collateral. Reserves for potential credit losses are maintained when necessary.

With respect to credit risk arising from other financial assets of the Group, which comprise cash and
cash equivalents, marketable securities, other receivables and certain derivatives instruments receivable
amount, the Company's exposure to credit risk arises from default of the counterparty, with a maximum
exposure equal to the carrying amount of these instruments. However, the Company believes this risk
is remote as the counterparties are of high credit quality parties.

(II) Interest-rate risk
The group's exposure to the risk of changes in market interest rates relates primarily to the group's
long-term debt obligations at floating interest rates. The group evaluates the share of interest rate
hedging based on assessment of the groups total interest rate risk. .

(III) Liquidity risk
The group's objective is to maintain a balance between continuity of funding and flexibility through the
use of credit facilities and to have sufficient cash or cash equivalents at any time to be able to finance
its operations and investments in accordance with the group's strategic plan. The group monitors its
liquidity risk using a recurring liquidity planning tool. This tool considers the maturity of both its
financial investments and financial assets and projected cash flow from operations.

(IV) Exchange-rate risk
Most of the group's operating costs are in NOK, while investments and revenues are primarily in USD.
The group has entered into forward currency contracts to manage the currency exposure arising from
the group's operations. The groups main currency policy is that income in USD equivalent to the
amount of all working expenses in NOK, are to be hedged in such manner that at all times minimum
50% of the total amount of income that cover the matching working expenses are hedged.

B138


Capital management
The group has adopted financial guidelines for the handling of deposits and placements. The objective
of these guidelines is to reduce the risk of capital loss while maintaining maximum liquidity and
availability of cash to fund the group's operations. The group shall at all times maintain a low risk
profile, and shall maintain necessary funds in operating accounts or time deposits.

The following instruments are allowed for short term placements: deposits in banks, loans to
companies/institutions/funds (like fixed or floating rate bonds, senior or subordinated debt),
certificates, money market funds.

Use of estimates
The management has used estimates and assumptions that have affected assets, liabilities, incomes,
expenses and information on potential liabilities in accordance with generally accepted accounting
principles in Norway.

Assets identified as being permanently owned or used are fixed assets. Other assets are current assets.
Liabilities which fall due more than one year after they are incurred are entered as long-term liabilities.
Therefore, the first year's instalments on long-term loans are included in long-term liabilities.
Liabilities which fall due for payment less than one year after being incurred are classified as short-
term liabilities.

Tangible assets and goodwill
Tangible assets and goodwill are entered in the accounts at acquisition cost minus accumulated
depreciation and write-downs. Depreciation is linear over the expected useful life of the asset. Write-
downs are done when fair value is lower than the book value and this is not expected to be temporary.
The group's mobile units are expected to have a residual value at the end of their useful life. For other
tangible assets no account has been taken of possible scrap value when calculating depreciation.

When the market value of the assets increases above the book value, previous write-downs will be
reversed according to the original depreciation plan.

The group capitalises periodic maintenance on the group's mobile units and depreciates this until the
next major planned maintenance.

Spare parts
Spare parts are recognised at the lower of cost price and market value. Spare parts are presented net
after write-downs for obsolescence.

Accounts receivable
Trade debtors and other receivables are valued at net value after deductions for expected losses.

Shares, bonds and money market funds
Shares, bonds and money market funds are recognised at market value at year end. The group
recognises losses during the period if market value is lower than book value.

Cash and bank deposits also include other liquid investments with a period to maturity of less than 90
days from the date of issue.

Pensions
Pension costs and pension liabilities are calculated on the basis of linear earnings based on assumptions
regarding the discount rate, future wage increases, pensions and national insurance benefits, future
returns on pension assets and actuarial assumptions about mortality, voluntary retirement etc. Pension
assets are valued at fair value and deducted in net pension liabilities in the balance sheet. Changes in
B139


the liability that are due to changes in the pension plans are taken over the result with full effect in the
accounting year. When the accumulated effects of changes in estimates, changes in assumptions and
deviation of actuarial assumptions are above 10 % of the larger gross pension liabilities and pension
assets, the excess amount are recognized in the income statement over the estimated average remaining
service period.

A linear earning profile and expected salary on retirement are used in the accounts as the earnings
basis.

Leasing
Operating lease payments are recognised as an expense in the income statement on a straight line basis
over the lease term.

Cost of borrowings
Costs in connection with borrowings are charged to income in the period during which the loan is
drawn on, on a linear basis.

Tax
The tax expense in the accounts includes both tax payable for the period and change in deferred tax.
Deferred tax is calculated at 28 per cent on the basis of the temporary differences that exist between
accounting and tax values. Tax-increasing and tax-reducing temporary differences that are reversed or
can be reversed in the same period are assessed and recognised at net value.

Cash flow statement

Events after the balance sheet date
New information on the group's position on the balance sheet date is taken into account in the financial
statements. Events after the balance sheet date that do not affect the group's position on the balance
sheet date but which will affect the group's position in the future, are stated if they are significant.
B140
NOTES 2010
Note 1 Receivables
31.12.2010 31.12.2009
Trade debtors 1 236 115 244 1 023 211 361
Other receivables 153 512 417 117 018 660
Total 1 389 627 661 1 140 230 021
The trade debtors are primarily major national and international oil and gas companies.
At year end there were provisons for bad debts in total of MNOK 42,7. Of these, MNOK 8,3 are related to Odfjell Drilling Technology AS
and MNOK 26,8 are related to Odfjell Well Services Ltd.
The group expensed bad debts of MNOK 673,6 in 2010, mostly related to receivables that Odfjell Invest AS had towards Statoil ASA.
The group receivables are all due within one year after the balance sheet date.
Other receivables consist of the following main items:
31.12.2010 31.12.2009
Reimbursables 49 982 596 48 809 612
Other short-term receivables 19 906 038 11 973 509
Pre-paid personnel insurance 8 934 233 10 367 724
Other pre-payments 37 197 517 22 745 696
VAT- receivables 36 656 866 18 442 135
Accrued interest income 835 078 4 001 028
Other current items 89 678 956
Total 153 512 417 117 018 660
Note 2 Cash and bank deposits / Short-term financial investments
31.12.2010 31.12.2009
Cash and bank deposits 815 770 804 549 334 470
Time deposits 655 207 712 2 180 237 951
Restricted capital, advance from customer 55 486 137 110 342 535
Restricted capital, tax deductions 78 843 052 89 175 596
Total cash and bank deposits 1 605 307 705 2 929 090 552 p

31.12.2010 31.12.2009
Bonds 57 657 503
Shares for trading 4 399 656
Other short-term investments 173 043 62 057 159

Share capital
Contributed
capital Other equity Minorities Total
Shareholders' equity as per 31.12.2009 79 800 807 973 875 4 070 628 763 168 479 374 5 047 161 812
Capital increase 11 431 1 177 902 422 1 177 913 853
Repayment of capital contributions to minorities -72 449 183 -72 449 183
Adjusted for error in earlier years` accounts 1 515 215 1 515 215
Net result of the year 245 602 016 59 666 315 305 268 331
Dividend -40 000 000 -40 000 000
Currency difference associates 87 069 968 87 069 968
Currency difference subsidiaries -561 756 840 -561 756 840
B141
NOTES 2010
Note 4 Tangible and intangible assets
Total assets Goodwill
Other intangible assets,
software Mobile drilling unit
mobile drilling unit
Machinery and
equipment Total assets
Acquisition 282 663 9 711 500 114 466 749 689 453 763 996 10 632 296 462
Disposals -5 567 976 -43 529 901 -49 097 877
Currency deviations 3 360 -964 522 746 776 898 -963 742 488
Acquisition cost as per 31.12.2010 535 063 367 574 823 9 766 343 349 648 109 694 2 212 925 069 13 163 016 302
Accumulated depreciation as per 31.12.2009 -356 023 287 -1 864 014 -541 570 697 -117 216 880 -917 698 143 -1 934 373 021
Disposals 3 548 367 27 532 675 31 081 042
Ordinary depreciation -17 105 409 -1 891 520 -277 649 872 -9 298 064 -261 526 817 -567 471 682
Write-down -327 465 -327 465
Currency deviations -3 199 14 238 954 -89 171 14 146 584
Accumulated depreciation as per 31.12.2010 -373 128 696 -210 367 -804 981 615 -126 514 944 -1 152 108 922 -2 456 944 543
Book value as per 31.12.2010 161 934 669 364 456 8 961 361 735 521 594 750 1 060 816 149 10 706 071 759
Useful life 5/20 years 3 years 35 years 5 years 3 - 12 years
Depreciation plan Linear Linear Linear Linear Linear
Leasing expenses operating assets - - - -
The residual value of the rig Deepsea Atlantic has been set at 100 MUSD at the end of the useful life. The recoverable amount for Deepsea Atlantic are higher than carrying value.
The residual value of the rig Deepsea Stavanger has been set at 100 MUSD at the end of the useful life. The recoverable amount for Deepsea Stavanger are higher than carrying value.
Goodwill
2002 Group
restructuring
2004 Acquisition
Drilltools AS
2005 Acquisition
Ntera Ltd. Total
Book value as per 31.12.2009 151 539 719 3 038 000 24 462 361 179 040 080
Depreciation (12 372 281) (217 000) (4 516 128) (17 105 409)
The residual value of the rig Deepsea Bergen has been set at NOK 100 mill. at the end of the useful life. The recoverable amount for Deepsea Bergen are higher than carrying value.
Goodwill relates to excess values in acquired subsidiaries. In accordance with NGAAP assumed financial life time is estimated to 5-20 years from acquisition
date. The group is a leading company in the current business areas and is building the business activities in the future on the acquired experience. According
to the group's long term business view, the main part of the goodwill are recognised on a straight-line basis over the useful life of 20 years.
Write-down -
Book value as per 31.12.2010 139 167 438 2 821 000 19 946 233 161 934 669
Useful life 20 20 10
Depreciation plan Linear Linear Linear

Year of construction Part as per 31.12.2010 Investments 2010 Depreciation 2010 Book value incl PM as
per 31.12.2010
Deepsea Bergen* 1983 100.00 % 73 817 123 57 011 850 566 200 943
Deepsea Atlantic 2009 100.00% 4 949 150 926 170 554 126 4 235 911 467
Deepsea Stavanger 2010 100.00% 4 688 532 065 50 083 896 4 159 249 323
TOTAL 9 711 500 114 277 649 872 8 961 361 735
* The majority owns 71,526% of the rig.

The mobile drilling unit Deepsea Trym was sold to Songa Offshore ASA in 2007, and was bareboat chartered by the owners to Group company Deep Sea Rig AS until
ending the curent StatoilHydro contract the 2 February 2009. The mobile unit changed name to Songa Trym during 1Q 2009.
The Odfjell Drilling Group has a lease and management agreement with Songa Offshore regarding Songa Delta (former Deepsea Delta) which has been effective throughout
the year 2010.
B142
NOTES 2010
Note 5 Share capital and shareholder information
The share capital consists of No. of shares Nominal value Tot. book value
Shares 1 376 687 078 USD 0,00001 91 231
Total 1 376 687 078 USD 0,00001 91 231
List of shareholders as per 31.12.2010
Outstanding shares Participating interests/
Share of votes
Odfjell Drilling Holding Ltd 1 376 687 078 100 %
Total number of shares 1 376 687 078 100 %
Note 6 Long-term liabilities

Debt to credit institutions and other long-term liabilities
31.12.2010 31.12.2009
Subordinated loan capital 30 723 441 0
Loans in USD in NOK 7 892 127 807 1 444 175 000
Other long-term liabilities 68 052 615 13 332 546
Total 7 990 903 863 1 457 507 546
Loans in USD are stated at the year-end exchange rate.
The group's interest-bearing loans from credit institutions have the following settlement structure:
Year USD NOK
2011 652 416 669 3 820 812 980
2012 150 833 336 883 340 349
2012 150 833 336 883 340 349
2013 107 333 337 628 586 955
Thereafter 436 916 658 2 558 758 716
Total 1 347 500 000 7 891 499 000
Approx. MNOK 66 of other long-term liabilities consists of negative fair market values on two interest swaps agreement entered into by
B143
NOTES 2010
Note 7 Secured liabilities and partnership capital not called
31.12.2010 31.12.2009
Secured liabilities 7 892 127 807 1 444 175 000
Book value of assets pledged as security
Mobile drilling units 9 482 956 488 613 538 795
Receivables 180 316 681 291 513 418
Bank deposits 423 934 955 8 556 143
Total 10 087 208 123 913 608 356
Partnership capital not called
As per 31.12.2010, the group's share of non called-up limited partnership capital in
Westfal-Larsen Chemical Carriers I KS to NOK 11,471,429.
Note 8 Other short-term liabilities
31.12.2010 31.12.2009
Earned, not invoiced income
Accrued other personnel expenses 300 947 211 330 151 706
Accrued interest liability 49 580 025 1 211 741
Other accrued expenses 336 312 518 155 044 077
Advance payment from customer 55 486 137 3 774 290
Advance payment from customer, construction contracts 65 684 858 91 030 518
Short-term loans 0
Total other short-term liabilities 885 589 664 690 485 459
The group short -term liabilities are all due within one year after the balance sheet date.
The Odfjell Drilling Group has a few fixed price construction contracts, and the revenue is recognised on the
percentage of completion method. The stage of completion is measured by portion of costs incurred to date bear to
the estimated total costs of the contracts.
31.12.2010 31.12.2009
Construction contracts under completion 90 801 805 259 028 010
Advances received 156 486 663 350 058 528
Net advance payment from customer -65 684 858 -91 030 518
The Odfjell Drilling Group has a few fixed price construction contracts, and the revenue is recognised on the
percentage of completion method. The stage of completion is measured by portion of costs incurred to date bear to
the estimated total costs of the contracts.
The fixed price construction contracts are presented as a net advance payment from customer, together with other
The stage of completion per 31 Dec 2010 : 51%
B144
NOTES 2010
Note 9 Tax
Tax expenses for the year are as follows: 2010 2009
Tax payable 69 650 633 147 833 417
Tax payable prior periods -1 846 500 -3 497 676
Tax expenses prior periods - 446 636
Adjustment from prior periods - -2 711 938
Change in deferred tax -97 586 753 -32 971 123
Total tax income/expenses (-/+) -29 782 620 109 099 316
The tax income in 2010 are related to the legal entities in the Norwegian Tax regime.
Deferred tax
Deferred tax shows the effect of temporary differences that occur when assets and liabilities are
valued for financial accounting and tax accounting purposes respectively. Deferred tax relates to the
following main items.
31.12.2010 31.12.2009
Negative temporary differences
Tax-related loss carryforward -500 994 745 -
Long term liabilities in foreign currency - -3 042 000
Provisions in accordance with NGAAP - -370 411
Current assets -2 343 146 -
Net pension liabilities -150 799 875 -81 481 095
Net negative temporary differences -654 137 766 -84 893 506
Positive temporary differences
Fixed assets 133 124 205 168 597 314
Current assets - 11 592 359
Share in limited partnership 14 246 464 8 997 958
Profit and loss account 393 354 946 241 078 048
Net positive temporary differences 540 725 615 430 265 679
Net temporary differences (113 412 151) 345 372 173
Deferred tax asset/ deferred tax liability (31 800 032) 96 709 072
B145
NOTES 2010
Note 10 Pensions - defined benefit plans
2010 2009
unfunded funded unfunded funded
Present value of pension entitlements 71 655 859 81 179 208 11 599 117 69 978 191
Interest expenses on pension liabilities 3 713 551 35 087 304 4 367 399 33 529 474
Anticipated return on pension funds -28 409 934 0 -27 029 301
Administrative expenses 4 500 000 0 3 864 000
Periodised employer's national insurance contributions 1 744 087 13 022 277 2 251 280 11 328 273
Effect of changes in estimates -29 286 074 4 665 766 205 488 11 140 057
Net pension expenses 47 827 423 110 044 621 18 423 284 102 810 694
Pension liabilities as per 31.12. 156 250 864 870 644 680 85 778 879 705 935 579
Pension funds (market value) as per 31.12. -509 283 530 0 -507 962 392
Net pension liabilities as per 31.12. 156 250 864 361 361 150 85 778 879 197 973 187
Employer's national insurance contributions 13 148 372 50 951 922 12 094 822 27 914 219
Changes in the estimates not recorded in the accounts -24 104 133 -406 505 212 3 304 223 -245 438 126
Net pension liabilities (+) / assets (-) 145 295 103 5 807 860 101 177 924 -19 550 720
2010 2009
The group has a pension scheme covering a total of 1,650 persons, of which 106 pensioniers. The scheme entitles staff to defined future benefits. These
are mainly dependent on the number of years of service, the salary level at pensionable age and the size of benefits paid by the national insurance. These
liabilities are covered through an insurance company (funded).
The group also has a contractual pension agreement (CPA) covering 1,442 persons, of which 38 pensioniers. The agreement entitles staff to benefits from
the age of 62 until they are eligible for a national insurance pension when reaching the age of 67. The employer`s contribution to these benefits amounts
to 20% of the pension paid. These liabilities are not covered through an insurance company (unfunded).
A number of the Norwegian subsidiaries in the group are required to have a civil service pension scheme according to the Norwegian Act relating to
mandatory occupational pensions. These subsidiaries have pension schemes in accordance with the requirements in this Act.
The defined benefit plans' pension expenses and liabilities are presented according to the Norwegian Accounting Standard no. 6 (NRS 6).
2010 2009
Pension liabilities 186 861 482 125 861 809
Pension assets (pension funds) 35 758 518 44 234 605
Assumptions
31.12.2010 31.12.2009
Discount rate 3,80 % 5,40 %
Expected return on pension assets 4,60 % 5,60 %
Expected wage adjustments 4,00 % 4,25 %
Expected pension increase 3,75 % 4,00 %
Expected increase in national insurance basic amount 3,75 % 4,00 %
Early retirement acceptance rate 30,00 % 30,00 %
Voluntary retirement by employees 4,00 % 4,00 %
Defined pension contribution agreement
In addition, the group has several defined pension contribution arrangement. By 31.12.2010, these arrangements involve 409 employees.
Employer's contribution 2010; NOK 17 435 330.
Weighted-average investment profile for plan assets at year end:
Asset category 31.12.2010 31.12.2009
Shares 20,9 % 13,5 %
Bonds, short-dated 15,4 % 23,3 %
Money market 11,5 % 8,5 %
Bonds, long-dated 33,2 % 35,7 %
Property 17,6 % 16,6 %
Other 1,5 % 2,4 %
100,0 % 100,0 %
The Group's pension schemes are with the life assurance company Vital Forsikring ASA.
The actuarial assumptions are based on generally used assumptions in the insurance industry with respect to demographic factors and retirement. The
above calculations are based on annual actuarial calculations.
B146
NOTES 2010
Note 11 Payroll expenses
Payroll expenses 2010 2009
Salaries 2 010 415 514 2 015 114 352
Employer`s national insurance contributions 256 728 587 274 851 908
Pension expenses 187 276 696 153 930 814
Other benefits 90 417 910 78 691 777
Total 2 544 838 707 2 522 588 851
Note 12 Remuneration of the board of directors, CEO and auditor
Remuneration CEO Board of Directors
Salary 3 529 472
Bonus 4 161 353
Other benefits 136 703
Pension costs 197 932
Board of directors' fee 833 750
8 025 460 833 750
No loans or guarantees have been given to the CEO, members of the Board or their related parties.
Employee loans amount to a total of NOK 4 432 132.
Fee to the auditor: 2010 2009
Statutory audit fee ex VAT 1 528 100 2 419 069
Assurance services ex VAT 198 037 59 708
Tax and legal advisory services ex VAT 745 477 2 838 802
Note 13 Other financial income/expenses
2010 2009
Realised exchange rate gains long term debt - 22 710 000
Unrealised exchange rate gains long term debt 283 883 050 22 630 000
Realised exchange rate gain other 268 867 257 57 956 378
Unrealised exchange rate gain other - -
Realised exchange rate loss long term debt 80 804 700 -
Unrealised exchange rate loss long term debt - -
Realised exchange rate loss other - 53 716 964
Unrealised exchange rate loss other 158 998 666 206 392 331
Change in value market based short term financial investments - -
Other financial expenses -38 651 732 1 224 476
Write off shares in limited partnership - -
Note 14 Spare parts
Inventory of spare parts is carried at cost price and is written down when its assumed market value is lower then
the cost price.
Note 15 Hedging of income
Some of the subsidiaries have signed forward contracts on part of the income in USD against NOK.
As per 31.12.2010, the amount of the income sold was USD 31.5 mill. at an average exchange rate of USD/NOK 7.2.
The signed contracts mature between 15 January 2011 and 15 July 2013.
Unrealised gain related to the forward contracts amounts to MNOK 38 at year end 2010.
Profit/loss related to the forward contracts are booked in the same period as the income is earned.
The signed forward contrcats are not capialised and presented in the balace sheet.
B147
NOTES 2010
Note 16 Group companies
Companies Main office Voting and owning interest
Subsidiaries
Bergen Drillpart AS Bergen, Norway 100.00 %
Deep Sea Drilling Company AS Bergen, Norway 100.00 %
Deep Sea Drilling Company II AS Bergen, Norway 100.00 %
Deep Sea Management AS Bergen, Norway 100.00 %
Deep Sea Management Ltd. FZE UAE 100.00 %
Deep Sea Mooring AS Sola, Norway 100.00 %
Deep Sea Rig AS Bergen, Norway 100.00 %
Odfjell Casing Services AS Sola, Norway 100.00 %
Odfjell Drilling AS Bergen, Norway 100.00 %
Odfjell Drilling Management AS Bergen, Norway 100.00 %
Odfjell Drilling Services LLC Saudi Arabia 80.00 %
Odfjell Drilling Technology AS Bergen, Norway 100.00 %
Odfjell Drilling Technology Ltd Hamilton, Bermuda 100.00 %
Odfjell Drilling (UK) Ltd Aberdeen, UK 100.00 %
Odfjell Operations Ltd Hamilton, Bermuda 100.00 %
Odfjell Partners Invest Ltd Hamilton, Bermuda 100.00 %
Odfjell Rental Services AS Sola, Norway 100.00 %
Odfjell Rig AS Bergen, Norway 100.00 %
Odfjell Rig Ltd Hamilton, Bermuda 100.00 %
Odfjell Technology Manila Corporation Manila, Philippines 100.00 %
Odfjell Well Management AS Bergen, Norway 100.00 %
Odfjell Well Services Ltd British Virgin Islands 100.00 %
Odfjell Well Services Europe AS Bergen, Norway 100.00 %
Limited partnerships
Deep Sea Drilling Company KS Bergen, Norway 71,52 %
Deep Sea Drilling Company II KS Bergen, Norway 71,52 %
KS AS Bergen Drillpart Oslo, Norway 72.38 %
The following companies were established in 2010:
Odfjell Consulting AS Bergen, Norway 100.00 %
Odfjell Drilling Caspian Ltd. Aberdeen, UK 100,00 %
Odfjell Drilling Coperative U.A. Coevorden, the Netherlands 100,00 %
Odfjell Perfuraes e Servios Ltda Rio de Janeiro, Brazil 100,00 %
Odfjell Well Management Consultants AS Bergen, Norway 100.00 %
The following company was sold in 2010:
Odfjell Consulting AS Bergen, Norway 100,00 %
The following companies were bought in 2010:
Odfjell Invest Ltd Hamilton, Bermuda 100,00 %
Odfjell Invest I Ltd Hamilton, Bermuda 100,00 %
Odfjell Invest II Ltd Hamilton, Bermuda 100,00 %
Odfjell Invest Holland BV Coevorden, the Netherlands 100,00 %
Odfjell Invest Holland II BV Coevorden, the Netherlands 100,00 %
PSW Group AS Bergen, Norway 50,00 %
B148
NOTES 2010
Note 17 Subordinated loan capital
Subordinated loans including accrued interest 2010 2009
Odfjell Partners Ltd. NOK 30 723 441 0
Total NOK 30 723 441 0
The loan from Odfjell Partners Ltd.was defined as a subordinated loan and was subordinated other secured liabilities .
Interest for 2010 of NOK 723 441 was accumulated to the loan balance and paid at repayment of loan.
Note 18 Guarantees and loans
Odfjell Drilling Ltd. has furnished guarantees with joint and several liability for the outstanding loan amount in the
group's loan agreements.
Note 19 Minority interests
Minority interests represent external shares in Odfjell Drilling subsidiaries.
The minority's share of: 2010 2009
Operating profit/loss 57 493 412 41 608 887
Pre-tax profit/loss 56 567 781 41 845 402
Tax income / expense 3 095 285 2 851 126
The minority interests have developed as follows:
Changes in minotity interests 568 303
Minority interests' share of the year's profit/loss 59 666 316 51 105 944
Capital payments to minority interests -72 449 183 -53 396 525
Currency differences 0
Note 20 Operating income
2010 2009
(in NOK '000) (in NOK '000)
Operations, drilling units 3 238 075 2 722 884
Well services 801 474 883 980
Technology 646 753 698 872
Other 38 607 236 282
(in NOK '000) (in NOK '000)
Norway 3 810 484 3 981 680
UK 404 686 253 380
Denmark 4 744 47 850
Europe, other countries 119 016 146 929
Middle East 126 845 112 179
Phillipines 141 -
Tanzania 258 993 -
By business area
By geography
B149
NOTES 2010
Note 21 Investment in associates
Company Acquisition Registered office Share ownership Voting rights
Petro Services West Group AS 2010 Bergen, Norway 50,00 % 50,00 %
Deep Sea Metro Ltd 2008 Hamilton, Bermuda 40,00 % 40,00 %
The associated companies Deep Sea Metro Ltd. and PSW Group AS are valued and presented by using the equity method in the consolidated financial
statements.
PSW Group AS Deep Sea Metro Ltd Total Odfjell Invest Ltd Deep Sea Metro Ltd Total
Book value of equity at 01.01 0 748 652 818 748 652 818 629 940 661 780 462 994 1 410 403 655
Investments/Aquisitions during the year 16 596 777 516 312 645 532 909 422 332 375 335 114 798 960 447 174 295
Share of profits -3 590 359 -12 898 221 -16 488 580 -4 667 857 -7 283 356 -11 951 213
Convertion from IFRS to NGAAP 0 - 3 760 779 3 760 779
Currency translation effect NOK/USD 0 -12 333 226 -12 333 226 -134 400 307 -139 325 780 -273 726 087
Amortization of excess value -1 425 062 -1 425 062
Book value of equity at 31.12 11 581 356 1 239 734 016 1 251 315 372 827 008 611 748 652 818 1 575 661 429
Odfjell Invest Ltd
Petro Service West Group AS
Deep Sea Metro Ltd.
2010 2009
PSW Group AS was incorporated in March 2010, and is owned by Odfjell Drilling Technology Ltd (50%) and Dalseide & Flysand AS (50%).
PSW Group's subsidiaries are PSW Consultants AS, PSW Property AS, Fedje Sikkerhetssenter AS and PSW Subsea & Drilling AS.
Former subsiduary of Odfjell Drilling Technology Ltd, Deep Fjord Consultants AS has changed name to PSW Consultants AS.
At 31st of December 2010, excess value amounts to 7 125 312 NOK. Excess value is amortized over 5 years from aquisition of the shares in PSW
Group AS pr March 2010. The amortization of excess value for 2010 amounts to 1 425 062 NOK. Aquisition cost of the shares in PSW Group AS
was 16,6 MNOK. The equity in PSW Group AS pr 01.03.2010 (aquisition date) was 16,1 MNOK.
Deep Sea Metro Ltd was incorporated in September 2008, and is own by Odfjell Drilling Ltd (40%) and Metro Exploration Holding Corp., Liberia (60%).
Deep Sea Metro's subsidiaries Golden Close Maritime Corp. Ltd and Chloe Maritime Corporation Ltd has entered into shipbuilding contracts for one drillship each, with
Hyundai Heavy Industries Co., South Korea. The two ultradeepwater drillships are to be delivered in 2nd and 4th quarter 2011.
At 31 December 2010, excess value amounts to NOK 14,751,727. Excess value is not amortized in 2008, 2009 or 2010. Amortization will start when Deep Sea Metro's drillships are in operation.
Th h h ld h i d MUSD 210 6 i h d i 2010 hi h f MUSD 84 3 b Odfj ll D illi L d (40%)
Odfjell Drilling Ltd aquired 70,754% of the shares in Odfjell Invest Ltd pr 1st of July 2010. Pr 31.12.2010 Odfjell Invest Ltd is a 100% owned
subsidiary of Odfjell Drilling Ltd. Odfjell Invest Group was incorporated in the Odfjell Drilling group pr 01.07.2010. Negative excess value on 63
952 260 NOK is related to the uncertainty of the outcome of the dispute between Odfjell Invest AS and Statoil ASA. Since the dispute is solved pr
31.12.2010, the negative excess value has been taken as income in 2010. The share of profits related to Odfjell Invest Ltd as an associated company
for first half of 2010 is 43 498 896 NOK. Share of profits for first half of 2010 has been taken as income in the financial statement for 2010.
Note 22 Investment in other companies
Acquisition/
h
a
r Book value
Meland Golfklubb Meland, Norway 20 000
Westfal-Larsen Chemical Carriers I KS 2006 Bergen, Norway 5 458 572
Total 5 478 572
As per 31.12.2010, the group's share of non called-up limited partnership capital in Westfal-Larsen Chemical Carriers I KS amounts to NOK 11,471,429.
At 31 December 2010, excess value amounts to NOK 14,751,727. Excess value is not amortized in 2008, 2009 or 2010. Amortization will start when Deep Sea Metro's drillships are in operation.
The shareholders have invested MUSD 210,6 in the company during 2010, which of MUSD 84,3 by Odfjell Drilling Ltd. (40%).
B150
NOTES 2010
Note 23 Other operating expenses
Consumption of purchased goods for resale 20 673 423 24 129 007
Hired services and subcontractors 210 456 944 177 799 130
Hire machines, fixtures and fittings 92 615 450 98 814 422
Tools, fixtures and fittings, and working plant 199 154 538 177 922 681
Repair and maintenance 70 754 950 77 699 435
Insurance, guarantee and service costs 27 882 591 12 009 408
Loss 1 265 040 3 469 199
Other operating and administrative expenses 376 664 346 399 521 572
Total 999 467 283 971 364 854
Note 24 Subordinated loan to associated company Odfjell Invest Ltd.
2010 2009
Subordinated loan to Odfjell Invest Ltd. including accrued interest - 383 053 517
Total - 383 053 517
This is no longer treated as subordinated loan to Odfjell Invest Ltd. as Odfjell Drilling Ltd now controls
100% of the borrower.
Note 25 Investments in bonds, long term
Currency Market value USD Book value NOK Interest rate Term to maturity Date of payment Description
Bonds USD 5 393 203 22 231 319 11 % 07.12.2011 07.12.2011 Fixed Call
Note 26 Other long term receivables
Other long term receivables 2010 2009
Loan to employees 3 109 077 4 432 132
Capitalised expenses regarding loan raising 144 009 374 25 518 942
Other long term accruals 88 596 289 0
Total 235 714 740 29 951 074
B151
:cc :cc :cc :cc
B152
Notes 2010 2009
OPERATING EXPENSES
Interest income 14 152 242 33 917 075
Interest income from group companies 5 51 643 930 58 157 919
Interest income from related parties 0 7 749 902
Other financial income group companies 1 477 360 2 129 500
Share dividends 11 127 833 199 50 000 000
Interest expenses from group companies -26 440 177 -576 078
Interest expence from related parties -723 441 -15 374 565
Other financial expenses group companies -11 948 288 -44 200
Net financial items -212 853 468 56 618 178
ORDINARY PROFIT/LOSS BEFORE TAX -218 638 003 51 167 918
NET PROFIT/LOSS FOR THE YEAR -218 638 003 51 167 918
Allocation:
Transferred from/to other equity 2 -218 638 003 51 167 918
B153
BALANCE SHEET Odfjell Drilling Ltd.
at 31 December
Notes 2010 2009
ASSETS
FIXED ASSETS
Investments in subsidiaries 4 5 675 918 204 302 427 830
Long term loan to group companies 5 1 585 120 811 606 569 590
Subordinated loan 0 383 053 517
Long term bonds 10 22 231 319 21 928 772
Long term loan 104 934 188 0
CURRENT ASSETS
Receivables
Other short time receivables 304 980 1 949 970
Intercompany short-term receivables 5 127 833 199 50 610 236
Total receivables 128 138 179 52 560 206
Investments
Bonds, short 0 57 657 503
Total investments 0 57 657 503
Cash and cash equivalents 7 150 689 041 1 785 651 999
Total Cash and cash equivalents 150 689 041 1 785 651 999
Total current assets 278 827 220 1 895 869 707
TOTAL ASSETS 8 994 785 481 4 927 423 785
B154
B155
for the year ended 31 December 2010
2010 2009
Profit/(loss) before tax -218 638 003 51 167 918
Adjustments for:
Decrease/(increase) in trade accounts receivable and other -75 577 974 247 980 506
Decrease/(increase) in trade accounts payable and other
current liabilities
130 277 646 -11 793 856
Cash flows from operating activities -163 938 331 287 354 568
Investments in group companies -5 373 490 374 -9 930 847
Investments in associated companies 389 820 630 -447 174 295
Long term loan to group companies -978 551 220 847 283 623
Subordinatedd loan 383 053 517 -383 053 517
Long-term bonds -302 547 4 639 560
Long-term loan -104 934 188 0
Other short-term investments 57 657 503 -57 657 503
Net cash flow used in investing activities -5 626 746 679 -45 892 979
Long term loan 65 918 420 0
Changes in long-term liabilities 23 689 778 -234 057 245
Short term loan 2 928 200 000 0
Capital increase 1 177 913 853
Paid out dividende -40 000 000 0
Net cash flow from financing activities 4 155 722 051 -234 057 245
Net increase/(decrease) in cash and cash equivalents -1 634 962 958 7 404 346
Cash and cash equivalents at beginning of period 1 785 651 999 1 778 247 653
Cash and cash equivalents at end of period 150 689 041 1 785 651 999
B156
Notes 2010
2010 2009
Auditors fee 83 000 220 356
Other confirmations 22 912 20 000
Other services 12 750 0
Total 118 662 240 356
Board of directors fee 781 250 695 000
Advisory committee 145 000 145 000
Financial and legal assistance ex VAT 1 514 400 713 919
Management fee 3 119 000 3 235 530
Total 5 784 536 5 450 260
The administration of the company is performed by Odfjell Drilling AS for a management fee of NOK 3,119,000
General Manager receives salary from Odfjell Drilling AS.
No loans or guarantees have been given to the General Manager or to the members of the board of directors.
The company is not required to have an occupational pension scheme in accordance with the Norwegian law of
Share
capital
Contributed
capital Other equity Total
01.01.2010 79 800 810 441 288 3 670 351 303 4 480 872 391
Dividende paid out june -40 000 000 -40 000 000
Profit for the year -218 638 003 -218 638 003
Capital increase per 01.07.2010 11 431 1 177 902 423 1 177 913 854
31.12. 2010 91 231 1 988 343 711 3 411 713 300 5 400 148 242
Shares 1 376 687 078 USD 0,00001 91 231
T t l 1 376 687 078 USD 0 00001 91 231 Total 1 376 687 078 USD 0,00001 91 231
share of votes
Odfjell Drilling Holding Ltd. 1 376 687 078 100.00 %
Total number of shares 1 376 687 078 100.00 %
B157
Notes 2010
Note 4 Subsidiaries
Company
Acquisitio
n/
formation Registered office
Shares and
percent of
votes Percent of votes Share capital
Profit/loss
2010
Equity as per
31.12.2010 Book value
Odfjell Partners Invest Ltd. 2005 Hamilton, Bermuda 100 % 100 % 75 061 -15 074 908 248 995 266 192 033 658
Odfjell Drilling AS 2005 Hamilton, Bermuda 100 % 100 % 4 029 045 -191 797 667 238 858 363 45 429 066
Odfjell Drilling Technology Ltd. 2007 Hamilton, Bermuda 100 % 60 610 91 854 564 96 155 961 64 823 497
Odfjell Rig Ltd. 2002 Hamilton, Bermuda 100 % 79 744 114 191 663 243 894 924 81 000
Odfjell Operations Ltd 2009 Hamilton, Bermuda 100 % 58 564 75 833 200 40 250 399 60 610
Odfjell Invest Ltd 2006 Hamilton, Bermuda 100 % 810 031 474 ######## 5 244 884 838 5 373 490 374
Total 5 675 918 204
Odfjell Drilling Ltd aquired 70,75% of the shares in Odfjell Invest Ltd in July 2010.
By year end there was a write down of the investment in Odfjell Invest Ltd of 651 MNOK. Basis for value of investment in Odfjell Invest Ltd
is a exchange rate of 6 (NOK/USD).
Odfjell Drilling Ltd. has entered into a management agreement with Odfjell Drilling AS. The agreement is based on commercial terms and
conditions.
2010 2010 2009 2009 2010 2009
Odfjell Drilling AS 216 897 330 3 mnths Nibor + margin 372 221 549 0 12 464 771 29 628 915
Odfjell Drilling Technology AS 6 419 774 3 mnths Nibor + margin 11 131 366 0 288 408 1 720 987
Odfjell Partners Invest Ltd 862 977 510 3 mnths Nibor + margin 79 116 913 0 18 902 895 18 596 454
Odfjell Invest Ltd 401 669 382 3 mnths Nibor + margin 0 0 14 177 157 0
Odfjell Casing Services AS 45 693 582 3 mnths Nibor + margin 53 269 076 0 1 924 505 2 575 047
Odfjell Rental Services AS 51 463 233 3 mnths Nibor + margin 70 125 410 0 2 337 824 3 807 322
Odfjell Rig Ltd 438 963 604 0 445 997 268 0
Odfjell Well Services Europe 0 0 825 132
Odfjell Drilling Technology Ltd 3 mnths Nibor + margin 20 705 276 0 1 548 370 1 004 062
Total long term 1 585 120 811 438 963 604 606 569 590 445 997 268 51 643 930 58 157 919
Loan given to Odfjell Drilling AS: Final maturity in Dec 2017. Applicable interest: NIBOR + 1.5% margin
Loan given to Odfjell Drilling Technology AS: Final maturity in Jan 2018. Applicable interest: NIBOR + 1.5% margin
Loan given to Odfjell Partners Invest AS: Final maturity in Dec 2023. Applicable interest: NIBOR + 1.5% margin
Loan given to Odfjell Casing Services AS: Final maturity in Dec 2017. Applicable interest: NIBOR + 1.5% margin
Loan given to Odfjell Rental Services AS: Final maturity in Dec 2012. Applicable interest: NIBOR + 1.5% margin
Loan given to Odfjell Drilling Technology Ltd: Final maturity in Jun 2013. Applicable interest: NIBOR + 1.5% margin
Loan received from Odfjell Rig Ltd:
2010 2010 2009 2009
Odfjell Operations Ltd 75 833 199 58 886 700 319 806 0
Odfjell Rig Ltd 0 0 50 000 000 0
Deep Fjord Consultants AS 0 0 250 000 0
Odfjell Partners Invest Ltd 0 60 610 0 60 610
Odfjell Drilling Technology Ltd 52 000 000 52 000 000 40 430 0
Total short term 127 833 199 110 947 310 50 610 236 60 610
The short term receivables have less than one year maturity.
Note 6 Secured liabilities
Subordinated loan including accrued interest as per: 108 491 426
2010 2009
Odfjell Rig Ltd. 438 963 604 445 997 268
Total 438 963 604 445 997 268
The loans are defined as a subordinated loans and are subordinated other secured liabilities in the Odfjell Drilling group per 31.12.2010.
Odfjell Rig Ltd. Loan, interest 2010: NOK 26.440.177
2010 2009
Current account NOK 42 247 811 7 521 880
Time Deposits 107 779 400 1 767 331 521
Total 150 689 041 1 785 651 999
Note 8 Short-term liabilities
2010 2009
Short term debt to other companies 0 79 800
Accrued interest 19 119 438 0
Total 19 884 463 493 516
This is an internal NOK loan from Odfjell Rig Ltd. The pricing is based on Odfjell Rig Ltd's effective interest costs on long-term debt from
ING Bank N.V., Fortis Bank N.V. and NIBC Bank N.V. with respect to fluctuations in NIBOR. Interests is to be accumulated to the loan at
an interest equal to NIBOR + 3,72% margin.
B158
Notes 2010
Note 9 Investments in associated companies
Company
Acquisition/
formation
date
Registered
office
Share
ownership
Share capital
USD
Profit/loss
2010
USD
Equity as per
31.12.2010
USD
Book value
NOK
Deep Sea Metro Ltd 2008 Hamilton, Bermuda 40 % 532 000 000 7 220 117 541 127 093 1 327 753 738
Total 1 327 753 738
Note 10 Bonds
Company
Acquisition/
formation
date Number
Acquisition
cost per bond,
USD
Total
acquisition
cost, USD
Accrued
interest, USD Total, USD Total, NOK
Deep Sea Bergen In 17.10.2008 52 750 72 3 771 625 1 371 500 5 143 125 22 088 145
Deep Sea Bergen In 05.12.2008 385 64 79 800 24 448 13 090 37 538 143 174
Total 53 135 135 79 800 3 796 073 1 384 590 5 180 663 22 231 319
Maturity date is December 2011 and coupon rate is 11 %.
Applicable USD/NOK rate as per 31 December 2010 is 5.85
2010 2009
Foreign exchange profit 6 620 277 1 263 246
Other financial income 4 310 302 138 800
Change in value of market-based fin. cur. assets 0 43 436
Share dividends of MNOK 52 from the subsidiary Odfjell Drilling Technology Ltd and MNOK 75,8 from Odfjell Operation Ltd is recognised as
financial income.
2010 2009
Interests 66 393 147 596
Foreign exchange loss 9 711 468 157 698
Bank charges 7 165 6 355
Other financial expenses 18 919 537 9 145
Write down shares in subsidiaries 651 741 628
Note 12 Interest rate swap agreements
As per a novation agreement entered into on 2 July 2010, two interest rate swaps were novated from Odfjell Capital (Bermuda) Ltd to
Due to the agreed division of rights and obligations of the interest rate swaps between Odfjell Capital (Bermuda) Ltd and Odfjell Drilling Ltd.,
the principles of hedge accounting are not used in relation to the swaps.
Market values have been used to determine the fair value of the interest rate swap agreements. At year end these interest rate swap agreements
had a negative market value of USD 11.3 million. The market value has been posted as debt in the company's books at year end. The negative
market value in addition to the net interest paid by Odfjell Drilling Ltd since 2 July 2010 in relation to the swaps are also posted as a receivable
Interest swap agreements at 31 December 2010:
Fixed interest
rate in % Due date
Fair value at
31 December
2010
Interest swap agreement, USD 165 million 3.64 29.03.2013 -64 293 310
Interest swap agreement, USD 5 million 3.20 29.03.2013 -1 625 110
Fair value of interest rate swaps -65 918 420
The two ultradeepwater drillships are to be delivered in 2nd and 4th quarter 2011.
The associated company Deep Sea Metro Ltd is recognised in the accounts according to the cost method.
Deep Sea Metro Ltd was incorporated in September 2008, and is own by Odfjell Drilling Ltd (40%) and Metro Exploration Holding Corp.,Liberia (60%).
Deep Sea Metro's subsidiaries Golden Close Maritime Corp. Ltd and Chloe Maritime Corporation Ltd has entered into shipbuilding contracts for one
drillship each, with Hyundai Heavy Industries Co., South Korea.
B159
Notes 2010
Guarantees; investment in Deep Sea Metro Ltd 0 412 793 739
Loan agreement in Odfjell Partners Invest Ltd 0 634 447 000
Loan agreement in Odfjell Rig AS 137 625 400 190 334 100
Total guarantee liabilities 474 368 400 1 681 687 739
Shares in Odfjell Invest Ltd 5 373 490 374 0
Shares in Odfjell Operations Ltd 60 610 60 610
Shares in Odfjell Drilling Technology Ltd 64 823 497 62 172 354
Shares in Odfjell Rig Ltd 81 000 81 000
Shares in Odfjell Partners Invest Ltd 192 033 658 0
Shares in Odfjell Drilling AS 45 429 066 0

Guarantees from Odfjell Drilling Ltd in relation to subsidiaries loan agreements
Odfjell Drilling Ltd has furnished parent company guarantee under the following facility agreements:
- USD 70 million term loan facility agreement entered into on 18 December 2009 with Odfjell Rig Ltd as borrower and ING Bank N.V., Fortis
Bank (Nederland) N.V. (Oslo Branch) and NIBC Bank N.V. as lenders. The liability of Odfjell Drilling Ltd hereunder shall be limited to USD 77
million plus any unpaid amount of interest, fees and expenses, and shall be reduced with amounts actually repaid under the loan agreement.
- USD 30 million term loan facility agreement entered into on 18 December 2009 with Odfjell Rig AS as borrower and ING Bank N.V., Fortis
Bank (Nederland) N.V. (Oslo Branch) and NIBC Bank N.V. as lenders. The liability of Odfjell Drilling Ltd hereunder shall be limited to USD 33
million plus any unpaid amount of interest, fees and expenses, and shall be reduced with amounts actually repaid under the loan agreement.
Share pledges
Odfjell Drilling Ltd has pledged its shares in Odfjell Rig Ltd (on second priority ), Odfjell Invest Ltd, Odfjell Operations Ltd, Odfjell Drilling
Technology Ltd, Odfjell Partners Invest Ltd and Odfjell Drilling AS as security for any amounts outstanding under the USD 500 million loan
agreement entered into by Odfjell Drilling Ltd on 28 June 2010.
Odfjell Drilling Ltd has pledged its shares in Odfjell Rig Ltd (on first priority ) as security for the loan agreement entered into by Odfjell Rig
Ltd on 18 December 2009.
Other security
Odfjell Drilling Ltd has further assigned any present and future intra-group receivables and any present and future intra-group loans entered
into by Odfjell Drilling Ltd. as security for Odfjell Drilling Ltd's USD 500 million loan entered into on 28 June 2010.
The following assets are pledged as security by the parent company Odfjell Drilling
Shares in Odfjell Drilling AS 45 429 066 0
Total book value of assets pledged as security 5 675 918 205 62 313 964
Note 14: Taxation
Long term debt 0 0 65 918 420 0
Subordinated loan capital 0 0 438 963 604 0
Related parties long-term debt 0 0 30 723 441 0
Interest bearing loans and borrowings *) 0 2 928 200 000 0 0
Accounts payable 0 0 0 0
Intercompany short-term liabilities 0 110 947 310 0 0
Total 3 059 031 773 535 605 466 0
*) The average interest rate on the USD 500 million loan facility in 2010 was 4.35%.
Odfjell Drilling Technonlogy Ltd is registered in Bermuda.
There is no Bermuda income, corporation, or profit tax, withholding tax, capital gains, capital transfer tax, estate duty or inheritance tax
payable by the company or its shareholders not ordinarily resident in Bermuda. The company is not subject to Bermudan stamp duty on the
issue, transfer or redemption of its shares.
The company has received from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1996 an assurance
that, in the event of there being enacted in Bermuda any legislation imposing tax computed on profits or income, or computed on any
capital assets, gain or appreciation or any tax in the nature of estate duty or inheritance tax, such tax shall not until 28 March 2016 be
applicable to the company or to any of its operations, or to the shares, debentures or other obligations of the company except insofar as
such tax applies to persons ordinarily resident in Bermuda and holding such shares, debentures or other obligations of the company or any
land leased or let to the company.
As an exempted company, the company is liable to pay a registration fee in Bermuda at a rate presently amounting to USD 1.995 per
annum.
B160

Appendix C
Interim financial information for the three and six month periods
ended 30 June 2013 and 2012

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C9
Condensed Consolidated Financial Statements for the three and six months ended June 30, 2013
Condensed Consolidated Income Statement
Note Q2 13 Q2 12 YTD 13 YTD 12 FY 12
Operating revenue 289 018 259 297 585 231 525 170 1 093 754
Other gains and losses 12 21 101 687 21 411 1 178 3 438
Share of profit/(loss) from joint ventures 8 (2 277) (1 678) (4 640) (3 296) (13 399)
Personnel expenses (132 216) (116 499) (271 237) (241 131) (486 182)
Other operating expenses (62 374) (61 035) (128 845) (120 763) (266 609)
EBITDA 113 252 80 771 201 919 161 158 331 000
Depreciation and impairment 4 (36 078) (35 847) (73 718) (72 294) (147 318)
Operating profit (EBIT) 77 174 44 924 128 201 88 864 183 682
Net financial items 13 (15 451) (24 691) (38 666) (26 935) (35 650)
Profit/(loss) before tax 61 723 20 233 89 534 61 929 148 032
Income taxes 10 (70 933) (7 255) (77 208) (16 356) (31 176)
Profit/(loss) for the period (9 210) 12 978 12 327 45 573 116 858
Condensed Consolidated Statement of Comprehensive Income:
Note Q2 13 Q2 12 YTD 13 YTD 12 FY 12
Profit/(loss) for the period (9 210) 12 978 12 327 45 573 116 858
Items that will not be reclassified to profit or loss:
Actuarial gain/(loss) on post employment benefit obligations - 3 468 - 7 303 15 726
Total - 3 468 - 7 303 15 726
Items that are or may be reclassified to profit or loss:
Cash flow hedges 3 667 81 4 179 (503) (1 707)
Currency translation differences (4 736) (4 640) (14 434) 639 7 234
Total (1 069) (4 559) (10 255) 136 5 528
Total other comprehensive income, net of tax (1 069) (1 091) (10 255) 7 439 21 254
Comprehensive income for the period (10 279) 11 887 2 072 53 012 138 112
Profit or loss for the period attributable to
Non-controlling interests - 4 522 1 360 8 071 14 309
Owners of Odfjell Drilling Ltd. (9 210) 8 456 10 967 37 502 102 549
Comprehensive income for the period attributable to
Non-controlling interests - 4 253 984 8 023 14 750
Owners of Odfjell Drilling Ltd. (10 279) 7 634 1 087 44 989 123 362
Earnings per share (USD)
Basic earnings per share 7 -0,01 0,01 0,01 0,03 0,07
Diluted earnings per share 7 -0,01 0,01 0,01 0,03 0,07
Unaudited
C10
Condensed Consolidated Statement of Financial Position
Note 30.06.13 30.06.12 31.12.12
Assets
Intangible assets 26 870 28 903 29 926
Property, plant and equipment 4 1 777 891 1 867 209 1 871 897
Financial fixed assets 8 426 345 411 687 421 622
Total non-current assets 2 231 106 2 307 799 2 323 445
Spare parts 4 267 3 345 2 960
Trade receivables 227 618 206 512 242 055
Other current assets 32 036 42 712 35 289
Cash and cash equivalents 245 187 161 829 200 636
Total current assets 509 108 414 398 480 940
Total assets 2 740 214 2 722 197 2 804 385
Total paid-in capital 331 810 331 810 331 809
Other equity 6 751 745 723 284 793 714
Non-controlling interests 24 791 28 779
Total equity 1 083 554 1 079 885 1 154 303
Borrowings 9 1 177 641 1 223 453 1 140 544
Post-employment benefits 55 574 70 074 62 148
Deferred tax liability 10 32 931 - -
Other non-current liabilities 19 189 33 801 30 996
Total non-current liabilites 1 285 336 1 327 327 1 233 688
Borrowings 9 180 944 144 888 211 270
Trade payables 38 544 30 796 36 033
Other current liabilities 151 837 139 301 169 091
Total current liabilities 371 324 314 985 416 394
Total liabilities 1 656 660 1 642 312 1 650 082
Total equity and liabilities 2 740 214 2 722 197 2 804 385
Unaudited
C11
Condensed Consolidated Statement of Changes in Equity
Share
capital
Other
contributed
capital
Other
reserves
Retained
earnings Total
Non-
controlling
interest Total equity
Balance at 1 January 2012 14 339 095 (35 982) 706 978 1 010 104 22 727 1 032 831
Profit/(loss) for the period - - - 37 502 37 502 8 071 45 573
Other comprehensive income for the period 1 (7 301) 185 14 603 7 488 (48) 7 439
Total comprehensive income for the period 1 (7 301) 185 52 105 44 989 8 023 53 012
Dividends paid (5 959) (5 959)
Transactions with owners (5 959) (5 959)
Balance at 30 June 2012 15 331 794 (35 797) 759 083 1 055 094 24 791 1 079 885
Total comprehensive income for the period Q3-Q4 - - 4 902 73 471 78 373 6 727 85 100
Transactions with owners for the period Q3-Q4 - - - (7 943) (7 943) (2 739) (10 681)
Balance at 1 January 2013 15 331 794 (30 896) 824 610 1 125 524 28 779 1 154 303
Profit/(loss) for the period - - - 10 967 10 967 1 360 12 327
Other comprehensive income for the period - - (9 879) - (9 879) (376) (10 255)
Total comprehensive income for the period (9 879) 10 967 1 087 984 2 072
Acquisition minority shares - - (34 496) - (34 496) (29 764) (64 259)
Dividends paid - - - (8 561) (8 561) - (8 561)
Transactions with owners - - (34 496) (8 561) (43 057) (29 764) (72 820)
Balance at 30 June 2013 15 331 794 (75 270) 827 016 1 083 555 - 1 083 554
Reference is made to Note 9 regarding acquisition of minority shares in Deepsea Bergen.
Attributable to owners of the parent
Unaudited
C12
Condensed Consolidated Statement of Cash Flows
Note Q2 13 Q2 12 YTD 13 YTD 12 FY 12
Cash flows from operating activities:
Profit before income tax 61 723 20 233 89 534 61 929 148 033
Adjustments for:
Depreciation and impairment 36 078 35 847 73 718 72 294 147 318
Unrealised (gain)/loss on interest rate swaps (4 358) 226 (7 016) (148) (1 616)
Interest expense - net 12 065 13 061 24 522 26 824 50 271
Borrowing cost 1 347 1 314 6 011 2 685 4 588
Share of (profit)/loss from joint ventures 2 277 1 678 4 640 3 296 13 399
Net (gain)/loss on sale of shares (3 112) - (3 112) - -
Net (gain)/loss on sale of tangible fixed assets (17 990) (687) (18 299) (1 178) (2 629)
Post-employment benefit expenses less post-employment benefit payments - (3 058) (1 374) (6 336) (6 518)
Foreign exchange losses/(gains) on operating activities (1 997) 20 073 (2 733) 8 296 (21 907)
Profit earned during period by disposed subsidary 81 - 81 - -
Impairment of investments in shares - - - - 893
Changes in working capital (excluding the effect of acquisition and
exchange differences on consolidation):
Spare parts (1 354) 453 (1 307) 324 710
Trade receivables (1 146) 11 115 14 437 43 917 8 373
Trade payables 5 817 895 2 511 (3 565) 1 672
Other accruals (10 687) (24 539) (20 956) (35 382) (5 230)
Cash generated from operations 78 746 76 613 160 658 172 956 337 357
Interest paid (14 539) (13 152) (28 004) (24 738) (55 672)
Income tax paid (3 145) (820) (16 710) (2 803) (14 476)
Net cash generated from operating activities 61 061 62 642 115 943 145 416 267 207
Purchase of property, plant and equipment (22 061) (75 892) (38 825) (158 073) (210 867)
Proceeds from sale of property, plant and equipment 60 390 (1 257) 62 642 941 6 081
Loans granted to employees 23 (222) 52 (129) 118
Sub-ordinated loan to related parties (12 183) (78 400) (12 183) (78 400) (80 000)
Other long term receivables (4 713) 740 (8 239) (1 906) (21 244)
Purchase of shares incl. joint ventures (3 354) - (4 083) - -
Proceeds from sale of shares and bonds 5 051 - 5 051 - -
Net cash used in investing activities 23 152 (155 032) 4 415 (237 566) (305 911)
Proceeds from debt to financial institutions - - 347 764 - 49 408
Repayments of debt to financial institutions (51 667) (43 750) (346 667) (43 750) (99 928)
Acquisition shares non-controlling interests - - (64 259) - -
Dividends paid to owners of the parent (8 561) - (14 847) - (1 765)
Dividends paid to non-controlling interests - (5 959) - (5 959) (8 698)
Net cash from financing activities (60 228) (49 709) (78 009) (49 709) (60 983)
Net change in cash and cash equivalents 23 986 (142 099) 42 349 (141 859) (99 688)
Cash and cash equivalents at beginning of period 218 912 305 521 200 636 303 137 303 137
Exchange gains/(losses) on cash and cash equivalents 2 289 (1 593) 2 202 551 (2 813)
Cash and cash equivalents at period end 245 187 161 829 245 187 161 829 200 636
Unaudited
C13
Note 1 | Accounting Principles
Use of estimates
The preparation of interim financial information requires
management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing these interim financial statements, the significant
judgements made by management in applying the Groups
accounting policies and the key sources of estimation uncertainty
were the same as those that applied to the consolidated financial
statements for the year ended 31 December 2012, except for
income taxes and post-employment benefits.
Income tax expense and deferred income tax liability is
calculated by applying a weighted average of the expected
effective tax rates across jurisdictions, in addition to specific
accruals for the gain incurred by the internal restructuring of the
ownership in Deepsea Bergen, while in annual financial
statements income tax expense and deferred income tax liability
is calculated by applying the tax rate for each individual
jurisdiction to measures of income for each jurisdiction.
When accounting for uncertain tax positions, the company
applies the general measurement principles in IAS 12. Under IAS
12, uncertain tax positions (whether assets or liabilities) are
reflected at the amount expected to be recovered from or paid to
the taxation authorities. The amount expected to be paid, is
calculated by using the single best estimate of the most likely
outcome. A change in estimate is recognized in the period when
new information occurs. Where an entity has paid more than the
amount it believes is payable under the relevant tax legislation, it
General information
Odfjell Drilling Ltd. ('the Company') and its subsidiaries (together
'the Group') operate mobile offshore drilling units in addition to
providing well services and engineering services, in Norway and
around the world.
Odfjell Drilling Ltd. is incorporated and domiciled in Bermuda. The
address of its registered office is Clarendon House, 2 Church
Street, Hamilton HM11, Bermuda.
There has not been any significant changes in the Group structure
since year end, except for acquisition of minority shares in
Deepsea Bergen and that the Group sold their subsidiary Deep
Sea Mooring AS including mooring equipment in May 2013.
Reference is made to note 9 and 12 respectively.
These condensed interim financial statements were approved by
the Board of Directors for issue on 19 August 2013 and have been
reviewed, not audited.
Basis for preparation
These condensed interim financial statements for the three and six
month periods ended 30 June 2013 have been prepared in
accordance with IAS 34, 'Interim financial reporting'. The
condensed interim financial statements should be read in
conjunction with the annual audited financial statements for the
year ended 31 December 2012, which have been prepared in
accordance with IFRS.
Going concern
interim financial statements. When using this assumption,
Unaudited
outcome. A change in estimate is recognized in the period when
new information occurs. Where an entity has paid more than the
amount it believes is payable under the relevant tax legislation, it
will estimate the recovery of a tax asset.
Present value of defined benefit obligations and the fair value of
plan assets at the end of each interim reporting period is
estimated by extrapolation of the latest actuarial valuation, while
in the annual financial statements this estimate is based on an
updated actuarial valuation.
Going concern
interim financial statements. When using this assumption,
future. This comprises information about net cash flows from
existing contracts, debt service and obligations under existing new
building contracts. Forecasts also take into consideration expected
future net income from assets under construction. After making
such assessments, management has a reasonable expectation
that the Group has adequate resources to continue its operational
existence for the foreseeable future.
Accounting principles
The accounting policies adopted are consistent with those of the
previous financial year except that income tax expense is
recognised in each interim period using the expected weighted
average annual income tax rate for the full financial year. Taxes on
income in the interim periods are accrued using the tax rate that
would be applicable to expected total annual profit or loss.
The following new standards have been adopted from 1 January
2013:
- IFRS 13 "Fair value measurement" are applicable for the
December 2013 year end. The adoption of IFRS 13 did not have
an material impact on the Groups results. The Group has included
the disclosures required by IAS 34 para 16A(j). See Note 2.
Unaudited
C14
Note 2 | Financial risk management and Financial instruments
The Group had the following financial instruments that are measured at fair value as at 30 June 2013:
Level 1 Level 2 Level 3 Total
Assets
Available-for-sale financial assets 22 22
Derivatives used for hedging 3 295 3 295
T t l t 3 295 22 3 317
The Group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow
interest rate risk and price risk), credit risk and liquidity risk.
The condensed interim financial statements do not include all financial risk management information and disclosures required in the
annual financial statements; consequently they should be read in conjunction with the Group's annual audited financial statements as at
31 December 2012. There are no material changes compared to the description in the year-end financial statements.
Calculation of the Groups sensitivity to interest rate fluctuations showed that the effect of an increase in interest rates by one percentage
point (e.g. from 4.0% to 5.0%) was approx. USD 8.5 million for 2012, including interest rate swaps. There is no material change in the
Groups interest rate sensitivity compared to year-end.
Liquidity risk
Compared to year end, there was no material change in the contractual undiscounted cash out flows for financial liabilities, except
changes in non-current liabilities disclosed in note 9.
Fair value estimation
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as
follows:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1)
- Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices) (Level 2)
- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3). For short term
assets and liabilities at level 3, the value is approximately equal to the carrying amount. As the time horizon is due in short term, future
cash flows are not discounted.
Unaudited
Total assets 3 295 22 3 317
Liabilities
Derivatives held at fair value through profit or loss 17 550 17 550
Derivatives used for hedging 933 933
During the quarter there have been no transfers between levels of the fair value hierarchy.
The Group had the following financial instruments that are measured at fair value as at 30 June 2012:
Assets
Total assets 914 914
Liabilities
The Group had the following financial instruments that are measured at fair value as at 31 December 2012:
Assets
Total assets 22 22
Liabilities
Unaudited
C15
30.06.2013 30.06.2012 31.12.2012
Non-current 1 177 641 1 223 453 1 140 544
Current 180 944 144 888 211 270
Total 1 358 585 1 368 341 1 351 814
Valuation techniques used to derive Level 2 fair values
Level 2 derivatives held at fair value through profit or loss and hedging derivatives comprise interest rate swaps. Interest rate swaps are
fair valued using forward interest rates extracted from observable yield curves. The effects of discounting are generally insignificant for
Level 2 derivatives.
Fair value of financial assets and liabilities measured at amortised cost
The fair value of borrowings are as follows:
The fair value of the following financial assets and liabilities approximate their carrying amount:
- Trade and other receivables
- Other current financial assets
- Cash and cash equivalents (excluding bank overdrafts)
- Trade and other payables
Unaudited Unaudited
C16
Note 3 | Segment summary
Q2 13 Q2 12 Q2 13 Q2 12 Q2 13 Q2 12 Q2 13 Q2 12 Q2 13 Q2 12
External segment revenue 148 589 143 611 86 003 57 652 44 513 43 884 9 912 14 149 289 018 259 296
Inter segment revenue 2 114 1 179 2 717 15 050 10 963 7 212 (15 794) (23 441) - -
Deep Sea Metro Ltd Group revenue 33 713 20 254 - - - - (33 713) (20 254) - -
Total revenue 184 416 165 043 88 720 72 702 55 477 51 096 (39 595) (29 546) 289 018 259 297
EBITDA 80 900 63 819 7 623 5 430 25 418 23 605 (689) (12 082) 113 252 80 772
Depreciation and impairment (33 212) (29 039) (1 551) (1 380) (9 570) (10 508) 8 256 5 080 (36 078) (35 847)
EBIT 47 688 34 780 6 072 4 050 15 848 13 097 7 567 (7 002) 77 174 44 924
Mobile Offshore
Drilling Units Drilling & Technology Well Services Corporate / Eliminations Consolidated
The Group provides drilling and related services to the offshore oil and gas industry, and has three main business areas; the operation of mobile
drilling units, drilling & technology and well services.
The Board is the Group's chief operating decision maker. Management has determined the operating segments based on the information reviewed by
the Board for the purposes of allocating resources and assessing performance. Mobile Offshore Drilling Units (MODU), Drilling & Technology and
Odfjell Well Services (OWS) have been determined as the operating segments.
In accordance with the internal financial reporting, the Group's 40% interest in Deep Sea Metro Ltd Group has been presented in the MODU segment
using the line-by-line proportionate method. See more information regarding this joint venture arrangement in note 8.
- Mobile Offshore Drilling Units (MODU): In the MODU segment, the Group operates drilling units owned by the Group and by third parties. The
MODU segment also offers management services to other owners of semisubmersibles, drillships and jack-ups; mainly operational management,
management of regulatory requirements, marketing, contract negotiations and client relations, preparations for operation and mobilisation.
- Platform Drilling & Engineering (OD&T): Within the Drilling & Technology segment, the Platform Drilling business area provides integrated drilling
and maintenance services for fixed platform drilling rigs in the North Sea.
The Technology business area offers engineering services, including design, project management and operation and support.
- Well Services (OWS): The Well Services segment provides casing and tubular running services as well as drilling tool and tubular rental services
both for exploration wells and for production purposes.
The Group's internal reporting is prepared accordring to Norwegian GAAP. This gives nature to differences between the measurements of segment
disclosures and comparable items disclosed in this financial report. Such differences are identified and reconciled in the tables below.
In accordance with the internal financial reporting, the Groups 40% interest in Deep Sea Metro Ltd Group has been presented in the MODU segment
using the line-by-line proportionate method. See more information regarding this joint venture arrangement in note 8.
Unaudited
YTD 13 YTD 12 YTD 13 YTD 12 YTD 13 YTD 12 YTD 13 YTD 12 YTD 13 YTD 12
External segment revenue 299 704 293 652 167 695 120 244 94 998 88 483 22 833 22 792 585 231 525 170
Inter segment revenue 3 731 2 516 9 479 27 512 21 004 13 546 (34 214) (43 574) - -
Deep Sea Metro Ltd Group revenue 66 451 38 548 - - - - (66 451) (38 548) - -
Total revenue 369 886 334 716 177 175 147 755 116 001 102 030 (77 832) (59 330) 585 231 525 170
EBITDA 161 023 131 743 12 672 10 044 54 044 45 256 (25 819) (25 886) 201 919 161 158
Depreciation and impairment (66 177) (57 147) (2 687) (2 793) (20 842) (20 952) 15 987 8 599 (73 718) (72 294)
EBIT 94 846 74 596 9 985 7 251 33 202 24 304 (9 832) (17 287) 128 201 88 864
FY12 FY12 FY12 FY 12 FY 12
External segment revenue 588 918 234 790 178 319 91 728 1 093 754
Inter segment revenue 5 921 81 259 29 840 (117 020) -
Deep Sea Metro Ltd Group revenue 98 551 - - (98 551) -
Total revenue 693 390 316 049 208 159 (123 843) 1 093 754
EBITDA 284 987 24 885 95 320 (74 190) 331 001
Depreciation and impairment (122 741) (5 874) (42 610) 23 907 (147 318)
EBIT 162 246 19 010 52 709 (50 283) 183 682
Reconciliations: Q2 13 Q2 12 YTD 13 YTD 12 FY 12
Total EBIT for reportable segments 69 608 51 927 138 033 106 151 233 966
Corporate / Eliminations (2 665) (5 121) (9 364) (9 208) (23 258)
Gain from sale of Mooring business unit incl. equipment 20 649 - 20 649 - -
40% share of EBIT DSM Ltd. Group (8 657) (3 264) (17 522) (10 915) (23 528)
Share of profit from JV (2 277) (1 678) (4 640) (3 296) (13 399)
Accounting differences 518 3 061 1 045 6 132 9 902
EBIT Total Group 77 174 44 924 128 201 88 864 183 683
Net financial items (15 451) (24 691) (38 666) (26 935) (35 650)
Profit before tax Group 61 723 20 233 89 534 61 929 148 032
Mobile Offshore
Mobile Offshore
Unaudited
C17
Note 4 | Tangible fixed assets
Mobile
drilling units
Periodic
maintenance
Construction in
progress
Well Services
equipment
Machinery &
equipment
Total fixed
assets
Opening net book amount as at 1 January 2013 1 484 995 57 682 109 119 176 035 44 067 1 871 897
Additions 4 992 2 980 8 665 22 217 2 466 41 320
Disposals - - - (2 914) (616) (3 530)
Disposal - Mooring business area (Note 12) - - - (41 560) - (41 560)
Depreciation and amortisation (38 635) (11 703) - (20 545) (2 836) (73 718)
Currency translation differences (2 085) (40) - (11 176) (3 217) (16 518)
Closing net book amount as at 30 June 2013 1 449 267 48 920 117 784 122 057 39 864 1 777 891
Opening net book amount as at 1 January 2012 1 537 499 73 735 - 140 194 43 367 1 794 795
Additions 2 495 1 642 100 410 34 621 4 528 143 697
Disposals 1 375 - - (2 019) 2 063 1 418
Depreciation and amortisation (36 732) (10 969) - (20 622) (3 972) (72 294)
Currency translation differences 45 (7) - (276) (168) (407)
Closing net book amount as at 30 June 2012 1 504 681 64 400 100 410 151 898 45 818 1 867 209
Useful lifetime 5 - 35 years 5 years 3 - 10 years 3 - 10 years
Depreciation schedule Straight line Straight line Straight line Straight line
Unaudited
C18
Note 5 | Commitments
The Group has signed a contract with Daewoo Shipbuilding & Marine Engineering (DSME) to build a new semi-submersible
drilling rig named Deepsea Aberdeen, for use in the UK's West of Shetland region under contract with BP. Expected delivery
from the yard is May 2014. The commitments related to the new building programme are summarised in the table below:
30.06.2013 30.06.2012 31.12.2012
Due in year 1 596 289 27 936 53 047
Due in year 2 30 055 626 344 598 000
Total 626 344 654 280 651 047
Capital expenditure other than new buildings contracted for at the end of the reporting period but not yet incurred was as follows:
30.06.2013 30.06.2012 31.12.2012
Well Services equipment, due in 1 year 10 785 26 697 15 989
Total 10 785 26 697 15 989
Unaudited
C19
Note 6 | Paid dividends
The group has paid out dividends of USD 14.8 million in 2013, of which USD 6.3 million was resolved in 2012 and distributed in 2013.
Note 7 | Earnings per share
Earnings per share is based on the issued number of shares in Odfjell Drilling Ltd., which were 1 376 687 078 shares as at
June 30, 2013.
Unaudited
C20
Note 8 | Financial fixed assets
30.06.2013 30.06.2012 31.12.2012
Investment in joint ventures 331 485 309 755 331 144
Subordinated loan to joint venture 64 251 80 000 52 069
Long term receivable related parties 15 904 15 705 15 902
Other long term receivables 14 684 5 313 22 485
Investments in shares 22 914 22
Total financial fixed assets 426 345 411 687 421 622
The group has maintained its ownership interests in joint ventures during the interim period.
30.06.2013 30.06.2012 31.12.2012
Opening net book amount as at beginning of the period 331 144 313 253 313 253
Investments/ Aquisitions during the year 6 624 - 30 421
Share of profits (4 597) (3 296) (13 329)
Share of OCI result 152 (146) (114)
Depreciation of excess value (43) - (70)
Other changes - - (547)
Currency translation differences (1 795) (56) 1 530
Closing net book amount as at end of period 331 485 309 755 331 144
Deep Sea Metro Ltd.
The Group's most significant joint venture investment is in the Deep Sea Metro Ltd Group, which is owned 40% by Odfjell Offshore Ltd., and
60% by Metro Exploration. The investment is accounted for using the equity method of accounting, while in the segment figures as reported
in note 3 the Group's share of revenue, EBITDA, depreciation and EBIT from Deep Sea Metro are included in the MODU segment using
the line-by-line method. The Group's share of profit and loss using the line-by-line method is as follows:
Q2 13 Q2 12 YTD 13 YTD 12 FY 12
Share of total income 33 713 20 254 66 451 38 548 98 551
Share of operating expenses (25 056) (16 990) (48 929) (27 633) (75 022)
Share of net financial items (9 651) (7 364) (18 903) (13 744) (33 407)
Share of profit/(loss) before tax (994) (4 100) (1 381) (2 830) (9 879)
Share of taxes (2 347) (1 320) (4 574) (2 619) (7 702)
Share of profit/(loss) for the year (3 340) (5 420) (5 955) (5 449) (17 581)
The Group's share of assets and liabilities in Deep Sea Metro Ltd. using the line-by-line method is as follows:
30.06.2013 30.06.2012 31.12.2012
Share of non-current assets 646 973 663 020 658 405
Share of cash 32 436 31 997 46 275
Share of current assets 29 156 31 417 23 578
Total assets 708 565 726 434 728 257
Share of equity 01.01 306 920 296 226 296 226
Share of profit/(loss) for the period (5 955) (5 430) (17 581)
Capital contribution 1 273 - 28 397
Currency deviation (44) (155) (123)
Share of equity 31.12 302 194 290 641 306 920
Share of non-current liabilities 376 062 419 589 389 950
Share of current liabilities 30 310 16 203 31 387
Total liabilities 406 372 435 793 421 338
Total equity and liabilities 708 565 726 434 728 257
Unaudited
C21
Note 9 | Borrowings
30.06.13 30.06.12 31.12.12
Non-current 1 177 641 1 223 453 1 140 544
Current 180 944 144 888 211 270
Total 1 358 585 1 368 341 1 351 814
Movements in non current borrowings are analysed as follows:
Opening amount as at 1 January 2013 1 140 544
New bank loan raised 350 000
Repayment bank loan (346 667)
Reclassified to current portion of non
current borrowings 30 834
Change in transaction cost, unamortised 2 930
Closing amount as at 30 June 2013 1 177 641
Opening amount as at 1 January 2012 1 289 995
Repayment bank loan (43 750)
Reclassified to current portion of non
current borrowings (25 000)
Change in transaction cost, unamortised 2 208
Closing amount as at 30 June 2012 1 223 453
The Group has the following undrawn borrowing facilities:
30.06.13 30.06.12 31.12.12
Floating rate: 530 000 - -
- expiring beyond one year
Unaudited
The undrawn borrowing facility of USD 530 million will be available at the time of delivery of the mobile drilling unit,
Deepsea Aberdeen, in 2014.
New and repaid bank loans in 2013
For the purpose of completing the group's acquisition of the minority shares, Odfjell Offshore Ltd. entered into a short-term
facility agreement of USD 80 million with DNB Bank ASA on 24 January 2013. The facility was repaid on 20 February 2013
together with Odfjell Rig Ltd.s USD 132.5 million loan balance and Deep Sea Drilling Company II KS USD 57.5 million loan
balance. These repayments were effected after the drawdown of a new long-term senior secured loan agreement of USD 270
million entered into by Odfjell Rig II Ltd. as borrower, Odfjell Drilling Ltd. and Odfjell Offshore Ltd. as guarantors and DNB Bank
ASA, ABN AMRO Bank N.V., SpareBank 1 SR-Bank ASA and Swedbank AB (publ) as mandated lead arrangers on 15
February 2013. The facility shall be repaid by August 2018, latest.
Covenants for USD 270,000,000 Senior Secured Term Loan Facility
The Odfjell Drilling group has agreed to maintain, at all times, a minimum liquidity (cash and cash equivalents) requirement of
USD 50 million and a minimum 5 per cent of interest bearing debt (on consolidated basis) (if the Odfjell Drilling group 12 months
prior to delivery of any investment in excess of USD 100 million has any unfinanced capital expenditure related to such
investment, the minimum liquidity requirement will increase to USD 100 million in addition to 5 per cent of interest bearing debt).
Further, the Odfjell Drilling group has agreed to maintain an equity ratio (equity to total assets) of a minimum 35 per cent at all
times, to maintain a leverage ratio (interest bearing debt to EBITDA) not exceeding 5.00:1.00 and likewise to ensure that the
ratio of current assets to current liabilities at all times being not less then 1.00:1.00. From the date that Odfjell Drilling Ltd. is
released as guarantor under the facility agreement, the above mentioned financial covenants shall no longer apply to the Odfjell
Drilling group, but shall instead apply equally to the Odfjell Offshore group.
For the financial year 2012 and the interim period ended 30 June 2013, The Group has not been in violation of any covenants
related to borrowing agreements.
Unaudited
C22
Note 10 | Income taxes
Q2 13 Q2 12 YTD 13 YTD 12 FY 12
Withholding tax, ordinary taxation (1 846) (1 184) (3 803) (2 803) (7 453)
Payable tax, ordinary taxation (6 163) (5 798) (13 264) (12 958) (26 075)
Change in deferred tax, ordinary taxation (23) (273) 2 760 (594) 2 033
Total tax expense current year items (8 032) (7 255) (14 307) (16 355) (31 496)
Estimated average annual tax rate 13 % 36 % 16 % 26 % 21 %
Payable tax prior years, disputed (24 597) - (24 597) - 320
Change in deferred tax, disputed (38 304) - (38 304) - -
Total tax expense (70 933) (7 255) (77 208) (16 355) (31 176)
Tax rate for the period 75 % 36 % 59 % 26 % 21 %
Income tax expense is recognised based on management's estimate of the weighted average annual income tax rate expected for the full financial year. The
estimated average annual tax rate used for the year to date 30 June 2013 is 16%, excluding disputed payable from tax previous years.
Payable tax prior years, disputed, is tax paid by Odfjell Rig Ltd. for it's participation in Deep Sea Drilling Company II KS for the
years 2009, 2010 and 2011. Due to negative outcome of trial between Odfjell Rig Ltd. and the Norwegian Tax Authorities, the Group has changed their
estimate regarding the expected amount to be paid in this case. It is now assessed that the most likely outcome will be to pay the full amount that is disputed,
and as a result the tax receivable booked at 31.12.2012 is expensed. Odfjell Rig Ltd. still disputes the Norwegian Tax Authorities view that Odfjell Rig Ltd. is
taxable for its participation in Deep Sea Drilling Company II KS. The case will be appealed through the court system.
Change in deferred tax, disputed, is recognised as tax expense due to the outcome of trial between Odfjell Rig Ltd. and the Norwegian Tax Authorities
mentioned above. The change in deferred tax expense relates to Odfjell Rig Ltd.'s ownership in Deep Sea Drilling Company II KS, and the remaining gain and
loss account generated from the sale of the drilling unit Deepsea Bergen by Deep Sea Drilling Company II KS to Odfjell Rig II Ltd. in January 2013.
TAX COURT CASE
Odfjell Rig Ltd. is a company incorporated in Bermuda, and the sole shareholder is Odfjell Drilling Ltd. During the years 2009 2011 Odfjell Rig Ltd. was the
owner (limited partner) of 52.913% of Deep Sea Drilling Company II KS (DSDCII), which in turn was the owner of the rig Deepsea Bergen. The general partner
of DSDCII was Deep Sea Drilling Company II AS, and additionally there were two other limited partners. The rig Deepsea Bergen has operated on the
Norwegian Continental Shelf since spring 2006 under a bareboat charter with Deep Sea Drilling Company KS. All main decisions pertaining to the rig
(purchase, sale, financing etc) are made by partnership meeting of DSDCII. The company Odfjell Drilling AS resident in Norway has been contracted to
carry out the day-to-day operations/management of the bareboat charter.
The dispute between Odfjell Rig Ltd. and the Norwegian tax authorities is whether Odfjell Rig Ltd. has a limited tax liability to Norway as a result of its
Unaudited
ca y out t e day to day ope at o s/ a age e t o t e ba eboat c a te
The dispute between Odfjell Rig Ltd. and the Norwegian tax authorities is whether Odfjell Rig Ltd. has a limited tax liability to Norway as a result of its
ownership in DSDCII. The tax authorities made their decision for the years 2009 2010 on 29 June 2012, and later also for 2011. The case for 2009 2011
was brought before the Norwegian courts by Odfjell Rig Ltd. pursuant to a writ of summons on 20 December 2012, and the district court made its decision on
12 July 2013. For all three income years, the dispute amount (before-tax income) is approximately NOK 387,000,000.
The district court concluded that the bareboat charter business of DSDCII was carried out from Norway, and thus a limited tax liability exists for the owner
Odfjell Rig Ltd. on the basis of the Norwegian Tax Act section 2-3 para. 1, letter b. The district court came to this conclusion inter alia on the basis that the day-
to-day management of the bareboat charter by Odfjell Drilling AS in Bergen involves considerable activity in Norway on behalf of DSDCII, and also that the rig
Deepsea Bergen had been deployed within Norwegian jurisdiction (i.e. on the Norwegian Continental Shelf). Furthermore, the district court concluded that a
tax exemption in the Norwegian Tax Act section 2-34 was not applicable as this only relates to international business which in the courts opinion is not the
case as long as the rig is operated on the Norwegian Continental Shelf.
TAX AUDIT CASE
Odfjell Invest I Ltd. (Odfjell Invest I), a wholly-owned subsidiary of the Group incorporated in Bermuda, is the owner of the rig Deepsea Atlantic, which has
been leased to Odfjell Invest AS under a bareboat charter at a fixed day rate of USD 300,000. Odfjell Invest AS has in turn entered into a drilling contract with
Statoil for the provision of drilling services to Statoil on the Norwegian Continental Shelf. Soon after commencement of drilling services under the drilling
contract, Statoil stopped paying the operating rate based on the contention that Odfjell Invest AS was not able to provide the drilling services as contemplated
by the drilling contract. Odfjell Invest AS challenged Statoils decision to stop payment of the operating rate and instigated legal proceedings to recover lost
income. Odfjell Invest AS lost the court case in the first instance. As part of a settlement with Statoil, Odfjell Invest AS decided not to appeal the decision.
Odfjell Invest AS has taken the position that it had no legal basis for stopping payment of bareboat hire to Odfjell Invest I under the bareboat charter during the
period of non-payment of the operating rate by Statoil under the drilling contract.
The tax authorities have notified that they do not consider Odfjell Invest AS as entitled to a tax deduction under the Norwegian Tax Act section 6-1, resulting in
an increase of the taxable income for 2009 with NOK 103,305,720 and for 2010 with NOK 520,607,220. Following the tax audit (report dated 5 July 2013) the
notice of reassessment also relates to the omission of taking a payment of hire from Statoil as income, resulting in an increase of the income for 2010 with
NOK 6,552,467. Furthermore, the tax authorities have notified that they do not consider the bareboat charter between Odfjell Invest AS and Odfjell Invest I in
accordance with the arm's length principle. This results in a reduction of bareboat hire for the years 2009 2012 with in total NOK 209,434,800. Note that the
above notifications from the tax authorities have not yet resulted in any decision of reassessment.
The potential tax exposure amounts to USD 39.0 million excluding interest cost. Calculated potential interest cost amounts to USD 8.0 milion. Odfjell Invest AS
will dispute any assessment based on the notification, and hence no tax expense is recognised in the financial statements pr 30.06.2013, as the Company's
best estimate of the amount it will ultimately pay is zero. Odfjell Invest AS will revert within the deadline for response.
For the first half year of 2013, there is an additional tax exposure of USD 2.0 million related to to the transfer pricing issue of Deepsea Atlantic as described
above.
Unaudited
C23
Note 11 | Contingencies
Note 12 | Disposal of Deep Sea Mooring
On 16 April 2013, the Group agreed to sell it's Mooring business unit, including shares in Deep Sea Mooring AS
and property, plant and equipment related to the operations of the unit, which consist of well services and rental
of mooring equipment. The transaction was completed on 16 May 2013 with a total net gain of USD 20.6 million.
The business is not presented in this interim financial information as a discontinued operation, as it does
not represent a separate major line of business.
Financial information relating to the mooring business area is set out below:
Q2 13 Q2 12 YTD 13 YTD 12 FY 12
Operating revenue 2 575 4 516 11 400 9 802 24 110
Other gains/(losses) 1 24 62 292 464
Personnel expenses (102) (842) (1 162) (1 858) (3 655)
Other operating expenses (241) (523) (800) (1 060) (2 620)
EBITDA 2 233 3 176 9 501 7 175 18 299
Depreciation and impairment (692) (1 955) (2 770) (3 875) (7 745)
Operating profit 1 541 1 220 6 731 3 300 10 554
Net financial items (4) 3 4 6 13
Profit/(loss) before tax 1 538 1 223 6 735 3 306 10 567
30.06.13 30.06.12 31.12.12
Property, plant and equipment - 39 051 41 593
Contingencies related to income tax are disclosed in note 10 Tax. There are no other contingencies to be disclosed as per 30 June
2013.
Unaudited Unaudited
C24
Note 13 | Net financial items
Q2 13 Q2 12 YTD 13 YTD 12 FY 12
Interest income 671 637 1 118 1 486 2 171
Interest income from related parties 1 634 1 040 3 234 1 040 5 198
Interest expense (14 370) (14 738) (28 875) (29 350) (57 639)
Other borrowing expenses (1 347) (1 314) (6 011) (2 685) (6 315)
Gain/(loss) on interest rate swaps 4 358 (277) 7 016 97 1 616
Currency gains 6 077 11 243 15 942 36 889 43 201
Currency losses (12 153) (22 659) (30 633) (34 025) (20 449)
Other financial items (322) 1 377 (458) (387) (3 433)
Net financial items (15 451) (24 691) (38 666) (26 935) (35 650)
Unaudited
C25
Note 14 | Related-parties transactions
The Group is 70.00% owned by Odfjell Partners Ltd., controlled by Helene Odfjell. The remaining 30.00 % of the shares
are owned by the Larine Trust of which Marianne Odfjell is beneficiary.
The Group had the following material transactions with related parties:
Q2 13 Q2 12 YTD 13 YTD 12 FY 12
Sales of services:
- Entities controlled by Odfjell Partners Ltd. - - - - 26
- Associates 19 275 18 281 42 713 36 780 93 191
Total 19 275 18 281 42 713 36 780 93 216
Operating expenses:
- Associates 1 161 3 468 2 363 7 011 14 068
Operating lease expenses:
- Entities controlled by Odfjell Partners Ltd. 434 1 422 1 081 1 903 1 909
Interest income
- Associates 1 634 1 040 3 234 1 040 5 198
Unaudited
C26
Note 15 - Important events occurring after the reporting period
There have not been any important events after the end of the second quarter which affects the financial statements for the
second quarter 2013.
By 1 August 2013, Statoil ASA had exercised a one year option for hire of the mobile drilling unit Deepsea Atlantic. The option
period is from 5 August 2014 to 4 August 2015.
As per 5 July 2013 Odfjell Drilling Ltd. has increased the share capital with USD 1 986 233.13. The number of shares issued in
Odfjell Drilling Ltd. as per 5 July 2013 is 200 000 000 with par value of USD 0.01.
Unaudited Unaudited
C27
Responsibility statement
We confirm, to the best of our knowledge, that the condensed set of consolidated financial statements for the period 1
January to 30 June 2013 has been prepared in accordance with IAS 34 Interim Financial Reporting, and gives a true
and fair view of the Group's assets, liabilities, financial position and profit or loss as a whole.
We also confirm, to the best of our knowledge, that the interim management report includes a fair review of important
events that have occurred during the first six months of the financial year and their impact on the condensed set of
consolidated financial statements, a description of the principal risks and uncertainties for the remaining six months of
the financial year, and major related parties transactions.
Bermuda, 19 August 2013
Board of Directors of Odfjell Drilling Ltd.
Helene Odfjell Marianne Odfjell Kirk L. Davis
Chairman Director Director
(Sign.) (Sign.) (Sign.)
Carl-Erik Haavaldsen Bengt Lie Hansen
Director Director
(Sign.) (Sign.)
Unaudited Unaudited
C28
C29

Appendix D
Application form for the Retail Offering

D1

APPLICATION FORM FOR THE RETAIL OFFERING
General information: The terms and conditions for the Retail Offering are set out in the prospectus dated 13 September 2013 (the Prospectus), which has
been issued by Odfjell Drilling Ltd (the Company) in connection with the secondary sale of shares in the Company by BCB Paragon Trust Limited, as trustee of
the Larine Trust (the Selling Shareholder) and the listing of the Companys Shares on the Oslo Stock Exchange. All capitalised terms not defined herein shall
have the meaning as assigned to them in the Prospectus.
Application procedure: Applicants in the Retail Offering who are residents of Norway with a Norwegian personal identification number may apply for Offer
Shares by using the following internet pages: www.abgsc.no, www.dnb.no/emisjoner, www.arcticsec.no and www.swedbank.no. Applications in the Retail Offering
can also be made by using this Retail Application Form (see definition in Section 18.4 of the Prospectus). Retail Application Forms must be correctly completed and
submitted by the applicable deadline to one of the following application offices (the Application Offices):

ABG Sundal Collier
Munkedamsveien 45E, Vika Atrium
P.O. Box 1444 Vika
N-0115 OSLO
Norway
Tel: + 47 22 01 60 00
Fax: + 47 22 01 60 62
DNB Markets
Dronning Eufemias gate 30
P.O. Box 1600 Sentrum
N-0021 OSLO
Norway
Tel: + 47 23 26 81 01
Fax: +47 22 48 29 80
Arctic Securities
Haakon VIIs gate 5
P.O. Box 1833 Vika
N-0123 OSLO
Norway
Tel: +47 21 01 30 40
Fax: +47 21 01 31 36
Danske Bank Markets
Stortingsgaten 6
N-0161 OSLO
Norway
Tel: +47 85 40 90 00
Fax: +47 85 40 79 92
Swedbank First Securities
Filipstad Brygge 1
P.O. Box 1441 Vika
N-0115 OSLO
Norway
Tel: +47 23 23 80 00
Fax: +47 23 23 81 11
The applicant is responsible for the correctness of the information filled in on this Retail Application Form. Retail Application Forms that are incomplete or
incorrectly completed, electronically or physically, or that are received after expiry of the Application Period, and any application that may be unlawful, may be
disregarded without further notice to the applicant. Subject to any shortening or extension of the Application Period, applications made through the
VPS online application system must be duly registered by 12:00 hours (CET) on 27 September 2013, while applications made on Retail Application
Forms must be received by one of the Application Offices by the same time. None of the Company, the Selling Shareholder or any of the Managers may be
held responsible for postal delays, unavailable fax lines, internet lines or servers or other logistical or technical matters that may result in applications not being
received in time or at all by any of the Application Offices. All applications made in the Retail Offering will be irrevocable and binding, and cannot be withdrawn,
cancelled or modified by the applicant upon registration of the application in the VPS online application system, or in the case of applications on Retail Application
Forms, receipt of a duly completed Retail Application Form by an Application Office (the Registration), irrespective of any shortening or extension of the
Application Period.
Price of Offer Shares: The indicative price range (the Indicative Price Range) for the Offering is from NOK 37 to NOK 48 per Offer Share. The Selling
Shareholder will, in consultation with the Company and the Joint Bookrunners, determine the final Offer Price on the basis of orders received and not withdrawn in
the Institutional Offering during the bookbuilding process and the number of applications received in the Retail Offering. The Offer Price will be determined on or
about 27 September 2013. The Offer Price may be set below or above the Indicative Price Range. Each applicant in the Retail Offering will be permitted, but not
required, to indicate in the VPS online application system or on the Retail Application Form that the applicant does not wish to be allocated Offer Shares should the
Offer Price be set higher than the highest price in the Indicative Price Range. If the applicant does not expressly stipulate such reservation in the VPS online
application system or on the Retail Application Form, the application will be binding regardless of whether the Offer Price is set within or above (or below) the
Indicative Price Range. Investors in the Retail Offering will receive a discount of NOK 1,000 on their aggregate amount payable for the Offer Shares allocated to
such investors.
Allocation, payment and delivery of Offer Shares: DNB Markets, acting as settlement agent for the Retail Offering, expects to issue notifications of allocation
of Offer Shares in the Retail Offering on or about 30 September 2013 by issuing allocation notes to the applicants by mail or otherwise. Any applicant wishing to
know the precise number of Offer Shares allocated to it may contact one of the Application Offices from on or about 30 September 2013 during business hours.
Applicants who have access to investor services through an institution that operates the applicants VPS account should be able to see the number of Offer Shares
they have been allocated from on or about 30 September 2013. In registering an application through the VPS online application system or by completing and
submitting a Retail Application Form, each applicant in the Retail Offering will authorise DNB Markets (on behalf of the Managers) to debit the applicants
Norwegian bank account for the total amount due for the Offer Shares allocated to the applicant. Accounts will be debited on or about 2 October 2013 (the
Payment Date), and there must be sufficient funds in the stated bank account from and including 1 October 2013. Applicants who do not have a Norwegian
bank account must ensure that payment for the allocated Offer Shares is made on or before the Payment Date. Further details and instructions will be set out in
the allocation notes to the applicant to be issued on or about 30 September 2013, or can be obtained by contacting DNB Markets at +47 23 26 81 01. DNB
Markets (on behalf of the Managers) is only authorised to debit each account once, but reserves the right (but has no obligation) to make up to three debit
attempts through 8 October 2013 if there are insufficient funds on the account on the Payment Date. Should any applicant have insufficient funds on its account,
or should payment be delayed for any reason, or if it is not possible to debit the account, overdue interest will accrue and other terms will apply as set out under
the heading Overdue and missing payment below. Subject to timely payment by the applicant, delivery of the Offer Shares allocated in the Retail Offering is
expected to take place on or about 2 October 2013 (or such later date upon the successful debit of the relevant account).
Guidelines for the applicant: Please refer to the second page of this Retail Application Form for further application guidelines.
Applicants VPS-account (12 digits): I/we apply for shares for a total of NOK
(minimum NOK 10,500 and maximum NOK
2,499,999)
Applicants bank account to be debited (11
digits):
OFFER PRICE: My/our application is conditional upon the final Offer Price not being set above the upper end of the Indicative Price Range (insert
cross) (must only be completed if the application is conditional upon the final Offer Price not being set above the upper end of the
Indicative Price Range):
I/we hereby irrevocably (i) apply for the number of Offer Shares allocated to me/us, at the Offer Price, up to the aggregate application amount as specified
above subject to the terms and conditions set out in this Retail Application Form and in the Prospectus, (ii) authorise and instruct each of the Managers (or
someone appointed by any of them) acting jointly or severally to take all actions required to transfer the Offer Shares allocated to me/us and ensure delivery of
such Offer Shares to me/us in the VPS, on my/our behalf, (iii) authorise DNB Markets to debit my/our bank account as set out in this Retail Application Form
for the amount payable for the Offer Shares allotted to me/us, and (iv) confirm and warrant to have read the Prospectus and that I/we are eligible to apply for
and purchase Offer Shares under the terms set forth therein.
Date and place*: Binding signature**:
* Must be dated during the Application Period.
** The applicant must be of legal age. If the Retail Application Form is signed by a proxy, documentary evidence of authority to sign must be attached in the form
of a Power of Attorney or Company Registration Certificate.
DETAILS OF THE APPLICANT ALL FIELDS MUST BE COMPLETED
First name Surname/Family name/Company name
Home address (for companies: registered business address) Zip code and town
Identity number (11 digits) / business registration number (9 digits) Nationality
Telephone number (daytime) E-mail address

D2

GUIDELINES FOR THE APPLICANT
THIS RETAIL APPLICATION FORM IS NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES,
CANADA, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL. OTHER
RESTRICTIONS ARE APPLICABLE. PLEASE SEE SELLING RESTRICTIONS BELOW.

Regulatory issues: Legislation passed throughout the EEA pursuant to the Markets and Financial Instruments Directive (MiFID) implemented in the Norwegian
Securities Trading Act, imposes requirements in relation to business investment. In this respect the Managers must categorise all new clients in one of three
categories: Eligible counterparties, Professional and Non-professional clients. All applicants applying for Offer Shares in the Offering who/which are not existing
clients of one of the Managers will be categorised as Non-professional clients. The applicant can by written request to the Managers ask to be categorised as a
Professional client if the applicant fulfils the provisions of the Norwegian Securities Trading Act. For further information about the categorisation the applicant may
contact the Managers. The applicant represents that it has sufficient knowledge, sophistication and experience in financial and business matters to be capable of
evaluating the merits and risks of an investment decision to invest in the Company by applying for Offer Shares, and the applicant is able to bear the economic
risk, and to withstand a complete loss of an investment in the Company.
Execution only: As the Managers are not in the position to determine whether the application for Offer Shares is suitable for the applicant, the Managers will
treat the application as an execution only instruction from the applicant to apply for Offer Shares in the Offering. Hence, the applicant will not benefit from the
corresponding protection of the relevant conduct of business rules in accordance with the Norwegian Securities Trading Act.
Information barriers: The Managers are securities firms, offering a broad range of investment services. In order to ensure that assignments undertaken in the
Managers corporate finance departments are kept confidential, the Managers other activities, including analysis and stock broking, are separated from their
corporate finance departments by information barriers known as Chinese walls. The applicant acknowledges that the Managers analysis and stock broking
activity may act in conflict with the applicants interests with regard to transactions in the Offer Shares as a consequence of such Chinese walls.
VPS account and anti-money laundering procedures: The Offering is subject to applicable anti-money laundering legislation, including the Norwegian Money
Laundering Act No. 11 of 6 March 2009 and the Norwegian Money Laundering Regulation No. 302 of 13 March 2009 (collectively the Anti-Money Laundering
Legislation). Applicants who are not registered as existing customers of one of the Managers must verify their identity to one of the Managers in accordance
with requirements of the Anti-Money Laundering Legislation, unless an exemption is available. Applicants who have designated an existing Norwegian bank
account and an existing VPS account on the Retail Application Form are exempted, unless verification of identity is requested by a Manager. Applicants who have
not completed the required verification of identity prior to the expiry of the Application Period will not be allocated Offer Shares. Participation in the Offering is
conditional upon the applicant holding a VPS account. The VPS account number must be stated in the Retail Application Form. VPS accounts can be established
with authorised VPS registrars, who can be Norwegian banks, authorised securities brokers in Norway and Norwegian branches of credit institutions established
within the EEA. Establishment of a VPS account requires verification of identity to the VPS registrar in accordance with the Anti-Money Laundering Legislation.
However, non-Norwegian investors may use nominee VPS accounts registered in the name of a nominee. The nominee must be authorised by the Norwegian FSA.
Selling restrictions: The Offering is subject to specific legal or regulatory restrictions in certain jurisdictions, see Section 19 Selling and transfer restrictions in
the Prospectus. Neither the Company nor the Selling Shareholder assumes any responsibility in the event there is a violation by any person of such restrictions.
The Offer Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the U.S. Securities Act) or under any
securities laws of any state or other jurisdiction of the United States and may not be taken up, offered, sold, resold, transferred, delivered or distributed, directly
or indirectly, within, into or from the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration
requirements of the U.S. Securities Act and in compliance with the securities laws of any state or other jurisdiction of the United States. There will be no public
offer in the United States. The Offer Shares will, and may, not be offered, sold, resold, transferred, delivered or distributed, directly or indirectly, within, into or
from any jurisdiction where the offer or sale of the Offer Shares is not permitted, or to, or for the account or benefit of, any person with a registered address in, or
who is resident or ordinarily resident in, or a citizen of, any jurisdiction where the offer or sale is not permitted, except pursuant to an applicable exemption. In
the Retail Offering, the Offer Shares are being offered and sold to certain persons outside the United States in offshore transactions within the meaning of and in
compliance with Rule 903 of Regulation S under the U.S. Securities Act.
The Company has not authorised any offer to the public of its securities in any Member State of the EEA other than Norway. With respect to each Member State of
the EEA other than Norway and which has implemented the EU Prospectus Directive (each, a Relevant Member State), no action has been undertaken or will
be undertaken to make an offer to the public of the Offer Shares requiring a publication of a prospectus in any Relevant Member State. Any offers outside Norway
will only be made in circumstances where there is no obligation to produce a prospectus.
Stabilisation: In connection with the Offering, DNB Markets (as the Stabilisation Manager) (or persons acting on behalf of the Stabilisation Manager) may
over-allot shares or effect transactions with a view to supporting the market price of the shares at a level higher than that which might otherwise prevail.
However, there is no assurance that the Stabilisation Manager (or persons acting on behalf of the Stabilisation Manager) will undertake stabilisation action. Any
stabilisation action may begin on or after the date on which adequate public disclosure of the final price of the Offer Shares is made and, if begun, may be ended
at any time, but it must end no later than 30 days after allotment of the Offer Shares.
Investment decisions based on full Prospectus: Investors must neither accept any offer for, nor acquire any Offer Shares, on any other basis than on the
complete Prospectus.
Terms and conditions for payment by direct debiting - securities trading: Payment by direct debiting is a service provided by cooperating banks in Norway.
In the relationship between the payer and the payers bank the following standard terms and conditions apply.

1. The service Payment by direct debiting securities trading is supplemented by the account agreement between the payer and the payers bank, in particular
Section C of the account agreement, General terms and conditions for deposit and payment instructions.
2. Costs related to the use of Payment by direct debiting securities trading appear from the banks prevailing price list, account information and/or information
is given by other appropriate manner. The bank will charge the indicated account for incurred costs.
3. The authorisation for direct debiting is signed by the payer and delivered to the beneficiary. The beneficiary will deliver the instructions to its bank who in turn
will charge the payers bank account.
4. In case of withdrawal of the authorisation for direct debiting the payer shall address this issue with the beneficiary. Pursuant to the Financial Contracts Act, the
payers bank shall assist if payer withdraws a payment instruction which has not been completed. Such withdrawal may be regarded as a breach of the agreement
between the payer and the beneficiary.
5. The payer cannot authorise for payment a higher amount than the funds available at the payers account at the time of payment. The payers bank will normally
perform a verification of available funds prior to the account being charged. If the account has been charged with an amount higher than the funds available, the
difference shall be covered by the payer immediately.
6. The payers account will be charged on the indicated date of payment. If the date of payment has not been indicated in the authorisation for direct debiting, the
account will be charged as soon as possible after the beneficiary has delivered the instructions to its bank. The charge will not, however, take place after the
authorisation has expired as indicated above. Payment will normally be credited the beneficiarys account between one and three working days after the indicated
date of payment/delivery.
7. If the payers account is wrongfully charged after direct debiting, the payers right to repayment of the charged amount will be governed by the account
agreement and the Financial Contracts Act.
Overdue and missing payments: Overdue payments will be charged with interest at the applicable rate under the Norwegian Act on Interest on Overdue
Payments of 17 December 1976, No. 100, which at the date of the Prospectus is 9.50% per annum. Should payment not be made when due, the Offer Shares
allocated will not be delivered to the applicant, and the Managers reserve the right, at the risk and cost of the applicant, to cancel at any time thereafter the
application and to re-allot or otherwise dispose of the allocated Offer Shares, on such terms and in such manner as the Managers may decide (and that the
applicant will not be entitled to any profit therefrom). The original applicant will remain liable for payment of the Offer Price for the Offer Shares allocated to the
applicant, together with any interest, costs, charges and expenses accrued, and the Selling Shareholder and/or the Managers may enforce payment of any such
amount outstanding.
D3

Appendix E
Application form for the Retail Offering in Norwegian

E1

BESTILLINGSBLANKETT FOR DET OFFENTLIGE TILBUDET
Generell informasjon: Vilkrene og betingelsene for det Offentlige Tilbudet fremgr av prospektet datert 13. september 2013 (Prospektet), som er
utarbeidet av Odfjell Drilling Ltd (Selskapet) i forbindelse med BCB Paragon Trust Limiteds, som forvalter for Larine Trust, (Selgende Aksjonr) salg av
aksjer og noteringen av Selskapets Aksjer p Oslo Brs. Prospektet inneholder ogs et norsk sammendrag. Alle definerte ord og uttrykk (angitt med stor bokstav)
som ikke er definert i denne bestillingsblanketten, skal ha samme innhold som i Prospektet.

Bestillingsprosedyre: Bestillere i det Offentlige Tilbudet som er norske statsborgere med et norsk personnummer kan foreta bestilling av Tilbudsaksjer gjennom
flgende internettsider: www.abgsc.no, www.dnb.no/emisjoner, www.arcticsec.no og www.swedbank.no. Bestillinger i det Offentlige Tilbudet kan ogs foretas ved
bruke denne bestillingsblanketten som er vedlagt Prospektet som Appendix E (Application Form for the Retail Offering in Norwegian) eller Appendix D
(Application form for the Retail Offering). Korrekt utfylt bestillingsblankett m vre mottatt av en av de flgende bestillingskontorer fr utlpet av den relevante
fristen (Bestillingskontorene):

ABG Sundal Collier
Munkedamsveien 45E, Vika Atrium
Postboks 1444 Vika
N-0115 OSLO
Norge
Tel: + 47 22 01 60 00
Faks: + 47 22 01 60 62
DNB Markets
Postboks 1600 Sentrum
N-0021 OSLO
Norge
Tel: + 47 23 26 81 01
Faks: +47 22 48 29 80
Arctic Securities
Haakon VIIs gate 5
Postboks 1833 Vika
N-0123 OSLO
Norge
Tel: +47 21 01 30 40
Faks: +47 21 01 31 36
Danske Bank Markets
Stortingsgaten 6
Postboks 1170 Sentrum
N-0161 OSLO
Norge
Tel: +47 85 40 90 00
Faks: +47 85 40 79 92
Filipstad Brygge 1
Postboks 1441 Vika
N-0115 OSLO
Norge
Tel: +47 23 23 80 00
Faks: +47 23 23 81 11

Bestilleren er ansvarlig for riktigheten av informasjonen som er fylt inn i bestillingsblanketten. Bestillingsblanketter som er ufullstendige eller uriktig utfylt,
elektronisk eller p papir, eller som mottas etter utlpet av Bestillingsperioden, og enhver bestilling som kan vre ulovlig, kan bli avvist uten nrmere varsel til
bestilleren. Bestillinger som gjres gjennom det VPS nettbaserte bestillingssystemet m vre registrert, og bestillinger som gjres p
bestillingsblanketter m vre mottatt av en av Bestillingskontorene, innen kl 12.00 norsk tid den 27. september 2013, med mindre
Bestillingsperioden forkortes eller forlenges. Verken Selskapet, Selgende Aksjonr eller noen av Tilretteleggerne kan holdes ansvarlig for forsinkelser i
postgang, utilgjengelige fakslinjer, internettlinjer eller servere eller andre logistikk- eller tekniske problemer som kan resultere i at bestillinger ikke blir mottatt i
tide, eller i det hele tatt, av noen av Bestillingskontorene. Alle bestillinger i det Offentlige Tilbudet er ugjenkallelige og bindende og kan ikke trekkes, kanselleres
eller endres av bestilleren etter at bestillingen er registrert i VPS nettbaserte bestillingssystem eller hvis bestilling gjres p bestillingsblankett, nr komplett utfylt
bestillingsblankett er mottatt av et av Bestillingskontorene (Registreringen), uavhengig av en eventuell forkortelse eller forlengelse av Bestillingsperioden.

Pris p Tilbudsaksjene: Det indikative prisintervallet (det Indikative Prisintervallet) i Tilbudet er fra NOK 37 til NOK 48 per Tilbudsaksje. Den endelige
prisen per Tilbudsaksje vil bli fastsatt av Selgende Aksjonr, i samrd med Selskapet og Tilretteleggerne, p basis av ordre som mottas og ikke trekkes tilbake i
det Institusjonelle Tilbudet gjennom bookbuilding-prosessen og antallet bestillinger mottatt i det Offentlige Tilbudet. Tilbudsprisen vil fastsettes rundt den 27.
september 2013. Prisen per Tilbudsaksje kan fastsettes over eller under det Indikative Prisintervallet. Hver bestiller i det Offentlige Tilbudet kan, men m ikke,
indikere i VPS nettbaserte bestillingssystem eller p bestillingsblanketten at bestilleren ikke nsker bli tildelt Tilbudsaksjer dersom prisen per Tilbudsaksje blir
fastsatt hyere enn den hyeste prisen i det Indikative Prisintervallet. Dersom bestilleren ikke uttrykkelig gir uttrykk for en slik reservasjon i VPS nettbaserte
bestillingssystem eller p bestillingsblanketten, vil bestillingen vre bindende uavhengig av om prisen per Tilbudsaksje fastsettes innenfor eller over (eller under)
det Indikative Prisintervallet. Investorer i det Offentlige Tilbudet vil f en rabatt p NOK 1 000 p den samlede kjpesummen for Tilbudsaksjene tildelt slike
investorer.

Allokering, betaling og levering av Tilbudsaksjer: DNB Markets, som oppgjrsagent for det Offentlige Tilbudet, forventer gi beskjed om tildeling av
Tilbudsaksjer i det Offentlige Tilbudet rundt 30. september 2013 per post eller p annen mte. Bestillere som nsker f opplyst det eksakte antallet
Tilbudsaksjer som denne er tildelt, kan kontakte et av Bestillingskontorene fra rundt den 30. september 2013 innenfor ordinr pningstid. Bestillere som har
tilgang til investorservice gjennom en institusjon som er kontofrer for bestillerens VPS-konto, skal fra rundt den 30. september 2013 kunne se antall
Tilbudsaksjer de er tildelt. Ved registrere en bestilling i VPS nettbaserte bestillingssystem eller ved fylle ut og sende inn en bestillingsblankett, gir hver
bestiller i det Offentlige Tilbudet fullmakt til DNB Markets (p vegne av Tilretteleggerne) til debitere bestillerens norske bankkonto for et belp som tilsvarer den
samlede kjpesummen for de Tilbudsaksjene som bestilleren blir tildelt. Bankkontoen vil debiteres p eller rundt den 2. oktober 2013 (Betalingsdatoen), og
det m vre tilstrekkelige innestende p den aktuelle kontoen fra og med 1. oktober 2013. Bestillere som ikke har en norsk bankkonto m forsikre seg om at
betaling for tildelte Aksjer foretas senest p Betalingsdatoen. Ytterligere betalingsdetaljer og instruksjoner vil fremg av tildelingsbrevet som sendes ut rundt den
30. september 2013, og kan ogs fs ved kontakte DNB Markets p +47 23 26 81 01. DnB Markets (p vegne av Tilretteleggerne) er bare berettiget til belaste
kontoen n gang, men forbeholder seg retten (men har ingen forpliktelse) til gjre inntil tre debiteringsforsk frem til og med 8. oktober 2013 dersom det er
utilstrekkelig med midler p kontoen p Betalingsdatoen. Dersom en bestiller ikke har tilstrekkelig innestende p den aktuelle bankkontoen, eller betaling er
forsinket av en eller annen rsak, eller dersom det ikke er mulig debitere kontoen, vil det plpe forsinkelsesrente og andre vilkr vil gjelde som fastsatt under
overskriften Forsinket og manglende betaling under. Dersom betaling for tildelte Tilbudsaksjer er mottatt rettidig, vil levering av tildelte Tilbudsaksjer i det
Offentlige Tilbudet foretas rundt den 2. oktober 2013 (eller p slik senere dato ved vellykket debitering av den relevante kontoen).

Retningslinjer for bestilleren: Vennligst se side 2 av denne bestillingsblanketten for ytterligere retningslinjer for bestillingen.

Bestillerens VPS-konto
(12 siffer):

Jeg/vi bestiller herved aksjer for
totalt NOK (minimum NOK 10 500 og
maksimum NOK 2 499 999):

Bestillerens bankkonto som skal
debiteres (11 siffer):

TILBUDSPRISEN: Min/vr bestilling er betinget av at den endelige prisen for Tilbudsaksjene ikke fastsettes over det vre nivet i det Indikative
Prisintervallet (kryss av) (Dette feltet skal kun fylles ut dersom bestillingen er betinget av at den endelige Tilbudsprisen ikke fastsettes
over den vre prisen i det Indikative Prisintervallet):

Herved (i) foretar jeg/vi, i henhold til vilkrene og betingelsene som fremgr av denne bestillingsblanketten og av Prospektet, en ugjenkallelig bestilling av det
antall Tilbudsaksjer tildelt meg/oss til Tilbudsprisen, opp til det samlede bestillingsbelpet angitt ovenfor, (ii) gir jeg/vi hver av Tilretteleggerne (eller noen
utpekt av dem) ugjenkallelig fullmakt og instruerer hver av dem til, sammen eller hver for seg, gjennomfre enhver handling som er ndvendig for overfre
Tilbudsaksjene som tildeles meg/oss og sikre levering av disse Tilbudsaksjene i VPS p mine/vre vegne, (iii) gir jeg/vi DNB Market ugjenkallelig fullmakt til
debitere min/vr bankkonto som angitt i bestillingsblanketten for den samlede kjpesummen for de Tilbudsaksjene som jeg/vi fr tildelt, og (iv) bekrefter og
garanterer jeg/vi ugjenkallelig ha lest Prospektet og at jeg/vi er kvalifiserte til bestille og kjpe Tilbudsaksjer p de vilkr som der fremgr.

Dato og sted*:

Bindende signatur**:

* M vre datert i Bestillingsperioden.
**Undertegneren m vre myndig. Dersom bestillingsblanketten undertegnes p vegne av bestilleren, m det vedlegges dokumentasjon i form av firmaattest
eller fullmakt for at undertegner har slik kompetanse.

INFORMASJON OM BESTILLEREN ALLE FELT M FYLLES UT

Fornavn Etternavn/Foretaksnavn
Adresse (for foretak: registrert forretningsadresse) Postnummer og sted
Fdselsnummer (11 siffer) / organisasjonsnummer (9 siffer) Nasjonalitet
Telefonnr (dagtid) E-postadresse

E2

RETNINGSLINJER FOR BESTILLEREN
DENNE BESTILLINGSBLANKETTEN SKAL IKKE DISTRIBUERES ELLER OFFENTLIGGJRES, VERKEN DIREKTE ELLER INDIREKTE, I ELLER TIL USA,
CANADA, AUSTRALIA ELLER JAPAN ELLER NOEN ANNEN JURISDIKSJON DER SLIK DISTRIBUSJON ELLER OFFENTLIGGJRING VIL VRE ULOVLIG.
ANDRE RESTRIKSJONER GJELDER OGS, SE PUNKTET SALGSRESTRIKSJONER NEDENFOR.
Regulatoriske forhold: I overensstemmelse med EU-direktivet Markets in Financial Instruments (MiFID), oppstiller lov 29. juni 2007 nr 75 om
verdipapirhandel (Verdipapirhandelloven) med tilhrende forskrifter, krav relatert til finansielle investeringer. I den forbindelse m Tilretteleggerne
kategorisere alle nye kunder i en av tre kategorier; kvalifiserte motparter, profesjonelle og ikke-profesjonelle kunder. Alle bestillere som bestiller Tilbudsaksjer i
det Offentlige Tilbudet og som ikke allerede er kunde hos en av Tilretteleggerne, vil bli kategorisert som ikke-profesjonell kunde. Bestilleren kan ved skriftlig
henvendelse til Tilretteleggerne anmode om bli kategorisert som profesjonell kunde dersom Verdipapirhandellovens vilkr for dette er oppfylt. For ytterligere
informasjon om kundekategorisering kan bestilleren kontakte Tilretteleggerne. Bestilleren bekrefter herved inneha tilstrekkelig kunnskap og erfaring om
finansielle og forretningsmessige forhold for kunne evaluere risikoen ved investere i Selskapet gjennom bestille Tilbudsaksjer i det Offentlige Tilbudet, og
bestilleren bekrefter vre i stand til ta den konomiske risikoen og tle et fullstendig tap av sin investering i Selskapet.
Kun ordreutfrelse: Tilretteleggerne vil behandle bestillingen av Tilbudsaksjer som en instruksjon om utfrelse av ordre (execution only) fra bestilleren,
ettersom Tilretteleggerne ikke vil vre i stand til avgjre om bestillingen er hensiktsmessig for bestilleren. Bestilleren vil derfor ikke kunne pberope seg
Verdipapirhandellovens regler om investorbeskyttelse.
Informasjonsbarrierer: Tilretteleggerne er verdipapirforetak som tilbyr et bredt spekter av investeringstjenester. For sikre at oppdrag som gjennomfres av
Tilretteleggernes corporate finance-avdelinger holdes konfidensielle, er disse avdelingene adskilt fra Tilretteleggernes andre avdelinger, herunder avdelinger for
analyse og aksjemegling, gjennom bruk av informasjonsbarrierer ogs kjent som chinese walls. Bestilleren erkjenner at som en konsekvens av dette kan
Tilretteleggernes analyse- og aksjemeglingsavdelinger komme til opptre i strid med bestillerens interesser i forbindelse med transaksjoner i Aksjene.
VPS-konto og plagte hvitvaskingingsprosedyrer: Det Offentlige Tilbudet er underlagt gjeldende hvitvaskingslovgivning, herunder kravene i lov 6. mars 2009
nr 11 om tiltak mot hvitvasking og terrorfinansiering samt hvitvaskingsforskriften av 13. mars 2009 nr. 302 (Hvitvaskingslovgivningen). Bestillere som ikke
er registrert som kunde hos en av Tilretteleggerne m bekrefte sin identitet til en av Tilretteleggerne, i samsvar med Hvitvaskingslovgivningen, med mindre det
gjelder spesielle unntak. Bestillere som har oppgitt en eksisterende norsk bankkonto og en eksisterende VPS-konto p bestillingsblanketten er unntatt med mindre
verifikasjon av bestillerens identitet blir krevet av en av Tilretteleggerne. Bestillere som ikke har gjennomfrt tilstrekkelig verifikasjon av identitet fr utlpet av
Bestillingsperioden vil ikke bli tildelt Tilbudsaksjer. Deltakelse i Tilbudet er beting av at bestilleren har en VPS konto. VPS kontonummeret m vre angitt i
bestillingsblanketten. En VPS- konto kan etableres ved en autorisert VPS-kontofrer som kan vre en norsk bank, autorisert verdipapirforetak i Norge og norske
avdelinger av finansinstitusjoner i ES. Etablering av en VPS-konto krever bekreftelse p identitet overfor kontofreren i henhold til Hvitvaskingslovgivningen.
Utlandske investorer kan imidlertid benytte en forvalterkonto registrert i VPS i forvalterens navn. Forvalteren m vre autorisert av Finanstilsynet.
Salgsrestriksjoner: Tilbudet er underlagt salgsrestriksjoner i enkelte jurisdiksjoner, se kapittel 19 Selling and transfer restrictions i Prospektet. Verken
Selgende Aksjonr eller Selskapet ptar seg noe ansvar dersom noen bryter disse restriksjonene. Tilbudsaksjene har ikke vrt, og vil ikke bli, registrert i henhold
til United States Securities Act av 1933 som endret (U.S. Securities Act) eller i henhold til noen verdipapirlovgivning i noen stat eller annen jurisdiksjon i USA
og kan ikke tas opp, tilbys, selges, videreselges, overfres, leveres eller distribueres, verken direkte eller indirekte, innenfor, til eller fra USA bortsett fra i henhold
til et gjeldende unntak fra, eller i en transaksjon som ikke er underlagt, registreringsbestemmelsene i U.S. Securities Act og i overensstemmelse med
verdipapirlovgivningen i enhver stat eller annen jurisdiksjon i USA. Det vil ikke forekomme noe offentlig tilbud i USA. Tilbudsaksjene vil, og kan ikke, tilbys, selges,
videreselges, overfres, leveres eller distribueres, verken direkte eller indirekte, innenfor, til eller fra noen jurisdiksjon der tilbud eller salg av Tilbudsaksjer ikke er
tillatt, eller til, eller p vegne av eller til fordel for, enhver person med registrert adresse i, eller som bor eller vanligvis bor i, eller er innbygger i, noen jurisdiksjon
der tilbud eller salg ikke er tillatt, bortsatt fra i henhold til et gjeldende unntak. I det Offentlige Tilbudet tilbys og selges Tilbudsaksjene til enkelte personer utenfor
USA i offshore transactions innenfor betydningen av og i overensstemmelse med Rule 903 i Regulation S i U.S. Securities Act.
Selskapet har ikke gitt tillatelse til noe offentlig tilbud av dets verdipapirer i noe medlemsland av ES bortsett fra Norge. Nr det gjelder andre medlemsland i ES
enn Norge som har implementert Prospektdirektivet (Aktuelle Medlemsland), har det og vil det ikke bli gjort noe for fremsette et offentlig tilbud av
Tilbudsaksjene som krever publisering av et prospekt i noen Aktuelle Medlemsland. Alle tilbud utenfor Norge vil derfor skje i henhold til unntak fra krav om
prospekt.
Stabilisering: I forbindelse med Tilbudet kan DNB Markets (som Stabiliserende Tilrettelegger) (eller personer som opptrer p vegne av Stabiliserende
Tilrettelegger) overtildele aksjer eller utfre transaksjoner med tanke p sttte markedskursen p aksjene til et hyere niv enn det som ellers kan tenkes ville
gjelde. Det er imidlertid ingen sikkerhet for at Stabiliserende Tilrettelegger (eller personer som opptrer p vegne av Stabiliserende Tilrettelegger) vil foreta
stabiliserende handlinger. Stabilisering kan begynne p eller etter datoen for nr informasjon om den endelige tilbudsprisen er tilfredsstillende offentliggjort og,
hvis stabilisering begynner, kan den avsluttes nr som helst, men senest innen 30 dager fra allokering av Tilbudsaksjene.
Investeringsbeslutninger m baseres p Prospektet: Investorer m verken akseptere noe tilbud om, eller erverv av, verdipapirer i Selskapet p annet
grunnlag enn det fullstendige Prospektet.

Vilkr for betaling med engangsfullmakt verdipapirhandel: Betaling med engangsfullmakt er en banktjeneste tilbudt av samarbeidende banker i Norge. I
forholdet mellom betaler og betalers bank gjelder flgende standard vilkr:
1. Tjenesten Betaling med engangsfullmakt verdipapirhandel suppleres av kontoavtalen mellom betaler og betalers bank, se srlig kontoavtalen del C,
Generelle vilkr for innskudd og betalingsoppdrag.
2. Kostnader ved bruke Betaling med engangsfullmakt verdipapirhandel fremgr av bankens gjeldende prisliste, kontoinformasjon og/eller opplyses p
annen egnet mte. Banken vil belaste oppgitt konto for plpte kostnader.
3. Engangsfullmakten signeres av betaler og leveres til betalingsmottaker. Betalingsmottaker vil levere belastningsoppdraget til sin bank som igjen kan belaste
betalers bank.
4. Ved et eventuelt tilbakekall av engangsfullmakten skal betaler frst ta forholdet opp med betalingsmottaker. Etter finansavtaleloven skal betalers bank
medvirke hvis betaler tilbakekaller et betalingsoppdrag som ikke er gjennomfrt. Slikt tilbakekall kan imidlertid anses som brudd p avtalen mellom betaler og
betalingsmottaker.
5. Betaler kan ikke angi et strre belp p engangsfullmakten enn det som p belastningstidspunktet er disponibelt p konto. Betalers bank vil normalt
gjennomfre dekningskontroll fr belastning. Belastning ut over disponibelt belp skal betaler dekke inn umiddelbart.
6. Betalers konto vil bli belastet p angitt belastningsdag. Dersom belastningsdag ikke er angitt i engangsfullmakten vil kontobelastning skje snarest mulig etter at
betalingsmottaker har levert oppdraget til sin bank. Belastningen vil likevel ikke skje etter engangsfullmaktens gyldighetsperiode som er angitt foran. Betaling vil
normalt vre godskrevet betalingsmottaker n til tre virkedager etter angitt belastningsdag/innleveringsdag.
7. Dersom betalers konto blir urettmessig belastet p grunnlag av en engangsfullmakt, vil betalers rett til tilbakefring av belastet belp bli regulert av
kontoavtalen og finansavtaleloven.

Forsinket og manglende betaling: Forsinket betaling belastes med gjeldende forsinkelsesrente i henhold til forsinkelsesrenteloven av 17. desember 1976 nr.
100, som per dato for Prospektet er 9,50 % p.a. Dersom betaling ikke skjer ved forfall, vil Tilbudsaksjene ikke bli levert til bestilleren, og Tilretteleggerne
forbeholder seg retten til , for tegnerens regning og risiko, nr som helst kansellere og reallokere eller p annen mte disponere over de allokerte Tilbudsaksjene,
p de vilkr og p den mten Tilretteleggerne bestemmer (og bestilleren ikke vil vre berettiget til noe overskudd derfra). Den opprinnelige bestilleren vil
fortsette vre ansvarlig for betaling av Tilbudsprisen for Tilbudsaksjene tildelt bestilleren, sammen med enhver rente, kostnader, gebyrer og utgifter plpt, og
Selgende Aksjonr og/eller Tilretteleggerne kan inndrive betaling for alle utestende belp.
E3

Clarendon House
2 Church Street
Hamilton HM11
Bermuda

Joint Global Coordinators

ABG Sundal Collier
Munkedamsveien 45 E, Vika Atrium
P.O. Box 1444 Vika
N-0115 OSLO
Norway
DNB Markets
N-0021 OSLO
Norway
Goldman Sachs International
Peterborough Court, 133 Fleet Street
London EC4A 2BB
United Kingdom

Co-Lead Managers

Arctic Securities
Haakon VIIs gate 5
P.O. Box 1833 Vika
N-0123 OSLO
Norway
Danske Bank Markets
Stortingsgaten 6
N-0161 OSLO
Norway
Filipstad Brygge 1
P.O. Box 1441 Vika
N-0115 OSLO
Norway

Legal Adviser to the Company
(as to Norwegian law)
Advokatfirmaet Thommessen AS
Haakon VIIs gate 10
N-0161 OSLO
Norway
Legal Adviser to the Joint Global Coordinators
Advokatfirmaet BA-HR DA
Tjuvholmen all 16
N-0117 OSLO
Norway

(as to US and English law)
Linklaters LLP
One Silk Street
London EC2Y 8HQ
United Kingdom
Legal Adviser to the Joint Global Coordinators
(as to US and English law)
Cleary Gottlieb Steen & Hamilton LLP
City Place House
55 Basinghall Street
London EC2V 5EH
United Kingdom

(as to Bermuda law)
Conyers Dill & Pearman Limited
Clarendon House
2 Church Street
Hamilton HM11
Bermuda
Legal Adviser to the Selling Shareholder
Advokatfirmaet Wiersholm AS
Ruselkkveien 26
N-0251 OSLO
Norway

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