Shelf Drilling Reports First Quarter 2024 Results

PRESS RELEASE

SHELF DRILLING REPORTS FIRST QUARTER 2024 RESULTS

Dubai, UAE, May 15, 2024 - Shelf Drilling, Ltd. ("Shelf Drilling", "SDL" and,
together with its subsidiaries, the "Company", OSE: SHLF) announces results for
the first quarter of 2024 ended March 31. The results highlights will be
presented by audio conference call on May 16, 2024 at 6:00 pm Dubai time / 4:00
pm Oslo time. Dial-in details for the call are included in the press release
posted on May 7, 2024 and on page 3 of this release.

David Mullen, Chief Executive Officer, commented: "During the first quarter of
2024, Shelf Drilling continued to deliver safe, reliable, and efficient
operations to all our customers. Our EBITDA decreased 9% sequentially to $80
million, primarily due to the end of the Shelf Drilling Barsk bareboat charter
during the fourth quarter of 2023. This rig is currently in final stages of
preparation for its next long-term contract in Norway, which is expected to
start later this month."

Mullen added: "The decision by Saudi Aramco to suspend 22 jack-up rig contracts
has created some near-term uncertainty in our sector. However, the underlying
market fundamentals remain strong with a robust oil market backdrop and
incremental rig demand in nearly all other regions around the world. We are
actively marketing 3 of our 4 suspended jack-ups and are confident we will have
these rigs back in operation before the end of 2024 at attractive dayrate and
margin levels. The recently announced refinancing transaction at Shelf Drilling
North Sea further strengthens our financial position and provides long-term
flexibility. Despite the short-term challenge in the Middle East, we remain
well-positioned to generate significant free cash flow in 2025 and beyond."

First Quarter Highlights
o Q1 2024 adjusted revenues of $251.5 million.
o Q1 2024 adjusted EBITDA of $80.0 million, representing an adjusted EBITDA
margin of 32%, including $(11.3) million adjusted EBITDA from Shelf Drilling
(North Sea), Ltd. ("SDNS").
o Q1 2024 net income attributable to controlling interest of $4.4 million. 
o Q1 2024 capital	 expenditures and deferred costs totaled $48.5 million,
including $12.6 million at SDNS. 
o The Company's cash and cash equivalents balance at March 31, 2024 was $101.6
million, including $13.6 million at SDNS. 
o Contract backlog of $2.2 billion at March 31, 2024 across 35 contracted rigs
with weighted average dayrate of $83.6 thousand. 
o In April 2024, the Company received a notice of suspension of operations of
four rigs (Main Pass I, Main Pass IV, Shelf Drilling Victory and Shelf Drilling
Achiever) from Saudi Aramco. During the suspension period the rigs will be
marketed to other customers.
o In April 2024, the Shelf Drilling Barsk was awarded additional backlog with
Equinor extending the firm term through December 2025 with additional option
wells thereafter.
o In April 2024, the Shelf Drilling Fortress was awarded a new contract with an
estimated term of 400 days, scheduled to commence in August 2024 immediately
after completion of the rig's existing contract.
o On April 26, 2024, SDNS, through its subsidiary Shelf Drilling (North Sea)
Holdings, Ltd. ("SDNSH") successfully placed new $315.0 million senior secured
first lien bonds for 4.5 years with 9.875% interest, payable semi-annually. The
transaction is expected to close in May 2024. The net proceeds from the 9.875%
Senior Secured Bonds will be used to refinance the 10.25% Senior Secured Notes,
due October 2025 (the "10.25% Senior Secured Notes"), fund the previously
disclosed short-term liquidity requirement and transaction costs (including the
call premium on the 10.25% Senior Secured Notes) and for general corporate
purposes.
o Financial guidance for the full year 2024 has been revised and is included in
the "2024 Financial Guidance" section of the Q1 2024 results highlights
presentation on our website.

First Quarter Results
Adjusted revenues were $251.5 million in Q1 2024 compared to $238.8 million in
Q4 2023. The $12.7 million (5%) sequential increase in revenues was primarily
due to higher effective utilization across the fleet, as two more rigs were
fully or partially operating in Q1 2024, and higher average dayrates.

Effective utilization increased to 86% in Q1 2024 from 85% in Q4 2023, primarily
due to the commencement of new contracts for two rigs in West Africa and one rig
in India, return to operations for two rigs in Saudi Arabia, following
completion of out of service projects, partially offset by the planned shipyard
for one rig in Saudi Arabia, the contract completion for one rig in Egypt in
February 2024 and addition of a marketable rig in December 2023 that was out of
service for all of Q1 2024 preparing for a new contract in Norway. Average
earned dayrate increased to $81.7 thousand in Q1 2024 from $80.2 thousand in Q4
2023 mainly due to higher dayrates for two rigs in Nigeria and Egypt.

Total operating and maintenance expenses increased by $14.6 million (11%) in Q1
2024 to $149.5 million compared to $134.9 million in Q4 2023. The sequential
increase was primarily due to higher costs for one rig in Norway that was
previously under a bareboat charter agreement, higher maintenance costs for
certain rigs in Saudi Arabia and India, and higher expenses for fleet spares.
This was partially offset by lower shipyard and demobilization costs for two
rigs in West Africa and one rig in India that commenced operations in October
2023 and April 2024.

General and administrative expenses increased by $4.4 million in Q1 2024 to
$18.0 million as compared to $13.6 million in Q4 2023. The sequential increase
was primarily due to an increase in compensation and benefit expenses and an
increase in provision for credit losses.

Adjusted EBITDA for Q1 2024 was $80.0 million compared to $88.0 million for Q4
2023. The adjusted EBITDA margin of 32% for Q1 2024 decreased from 37% in Q4
2023. 

Capital expenditures and deferred costs of $48.5 million in Q1 2024 increased by
$0.9 million from $47.6 million in Q4 2023. This increase was primarily related
to higher contract preparation expenditures for one rig in India and one rig in
Singapore ahead of their new contract commencements in March 2024 and July 2024,
partially offset by lower spending on fleet spares.

Q1 2024 ending cash and cash equivalents balance of $101.6 million was
relatively unchanged as compared to $98.2 million at the end of Q4 2023. The Q1
2024 ending cash and cash equivalents balance for SDNS was $13.6 million down
from $27.7 million at the end of Q4 2023. The cash and cash equivalents balance
for SDL excluding SDNS increased from $70.5 million to $88.0 million during Q1
2024.

The Form 10-Q Equivalent, which includes the Condensed Consolidated Financial
Statements, and a corresponding slide presentation to address the results
highlights for Q1 2024 are available on the Company's website.

For further queries, please contact:
Greg O'Brien, Executive Vice President and Chief Financial Officer 
Shelf Drilling, Ltd. 
Tel.: [phone] 
Email : [e-mail]

Dial in Details for the Audio Conference call

Participants will	receive	conference access information only when they register
for the conference via the link below: 

Online Registration:
https://register.vevent.com/register/BI4541f66dbc134073908c8c416d5e8280

Participants must register for the call using online registration. Upon
registering, each participant will be provided with call details.

About Shelf Drilling 
Shelf Drilling is a leading international shallow water offshore drilling
contractor with rig operations across Middle East, Southeast Asia, India, West
Africa, Mediterranean and North Sea. Shelf Drilling was founded in 2012 and has
established itself as a leader within its industry through its fit-for-purpose
strategy and close working relationship with industry leading clients. The
Company is incorporated under the laws of the Cayman Islands with corporate
headquarters in Dubai, United Arab Emirates. The Company is listed on the Oslo
Stock Exchange under the ticker "SHLF".

Special Note Regarding Forward-Looking Statements
Matters discussed in this announcement may constitute forward-looking
statements. Forward-looking statements are statements that are not historical
facts and may be identified by words such as "believe", "expect", "anticipate",
"strategy", "intends", "estimate", "will", "may", "continue", "should" and
similar expressions. The forward-looking statements in this release are based
upon various assumptions, many of which are based, in turn, upon further
assumptions. Although the Company believes that these assumptions were
reasonable when made, these assumptions are inherently subject to significant
known and unknown risks, uncertainties, contingencies and other important
factors which are difficult or impossible to predict and may be beyond its
control. Such risks, uncertainties, contingencies and other important factors
could cause actual events to differ materially from the expectations expressed
or implied in this release by such forward-looking statements. Given these
factors, users of this information should not place undue reliance on the
forward-looking statements.

Additional information about Shelf Drilling can be found at
www.shelfdrilling.com.

This information is subject to the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.

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