NODL: Extension of Cobalt Explorer option

Northern Drilling Limited (OSE: NODL) (together with its subsidiaries, the “Company”) is pleased to announce that it has agreed to extend the Cobalt Explorer option for approximately four months against a down-payment of $12 million. The $12 million will be deducted against the first instalment of $105 million should the option be exercised. Following this amended agreement the Cobalt Explorer option is summarised as follows:

The total price for Cobalt Explorer is unchanged of $350 million ($325 million + $25 million for a second BOP).

Through the amended agreement the Company has effectively improved its payment terms if the option is exercised, while maintaining full optionality. The $12 million down-payment will be paid with existing cash on the balance sheet. Should the option be exercised, the Company is in a position to finance the $93 million down-payment through a combination of leverage on its existing assets and cash on the balance sheet. An affiliate of Hemen Holding Limited, the Company’s largest shareholder, has expressed interest in providing such financing at competitive terms, if needed.

The Company continues to view the option for Cobalt Explorer as attractive and being in the money. Asset values for 7th generation drillships have strengthened since the Company’s entrance into the deep water market six months ago. Flexible delivery schedule until 2021 from reputable yards for similar assets is also becoming increasingly challenging to replicate.

Matters discussed in this release may contain certain forward-looking statements relating to the business, financial performance and results of the Company and/or the industry in which it operates, sometimes identified by the words “believes”, “expects”, “intends”, “plans”, “estimates” and similar expressions. The forward-looking statements contained in this release, including assumptions, opinions and views of the Company or cited from third-party sources, are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. The Company does not provide any assurance that that the assumptions underlying such forward-looking statements are free from errors, nor does the Company accept any responsibility for the future accuracy of the opinions expressed in the presentation or the actual occurrence of the forecasted developments. No obligations are assumed to update any forward-looking statements or to conform to these forward-looking statements to actual results.