NORTHERN DRILLING LTD ANNOUNCES ACQUISITION OF TWO, PLUS AN OPTION FOR A THIRD, ULTRA-DEEPWATER NEWBUILDING DRILLSHIPS AND CONTEMPLATED PRIVATE PLACEMENT

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.

Northern Drilling Ltd. (OAX: NODL) (the “Company”) has entered into agreements to purchase two newbuilding 7th generation DP3 and ultra-deepwater capable drillships from Daewoo Shipbuilding & Marine Engineering Co., Ltd (“DSME”) known as the West Aquila and the West Libra, representing some of the world’s most sophisticated high-end offshore drilling units. The acquisition price is USD 296 million per unit, whereby USD 90 million (per unit) will be paid at contract signing and the remaining at delivery. Expected delivery is January and March 2021, with flexible delivery schedule and option to take earlier delivery. In addition, the Company has received an option to acquire a third drillship, known as the Cobalt Explorer, from DSME at a purchase price of USD 350 million with the option period expiring in six months (right to exercise option subject to a defined, unaffiliated, third party not exercising a senior priority purchase right over the drillship at USD 405 million during the option period).

In connection with the acquisition of the two drillships from DSME, the Company is contemplating a private placement (the “Private Placement”) of new shares (the “Offer Shares”) for gross proceeds of NOK 2,026,800,000 (approximately USD 250,000,000). The Private Placement is directed towards investors subject to and in compliance with applicable exemptions from relevant prospectus or registration requirements. The Company has retained DNB Markets, part of DNB Bank ASA, ABN AMRO, Arctic Securities AS, Fearnley Securities AS and Pareto Securities AS as managers in the Private Placement (the “Managers”). The net proceeds from the Private Placement will be used to partially fund instalments on the acquired drilling units and for general corporate purposes.

The Company will offer 29,805,883 Offer Shares at a subscription price per Offer Share of NOK 68 (the “Subscription Price”). The application period for the Private Placement will start today, 8 May 2018 at 16:30 (CET) and will close on 9 May 2018 at 08:00 (CET). The Company reserves the right to close or extend the application period at any time at its sole discretion, at short notice. The minimum order size and allocation in the Private Placement will be the NOK equivalent of EUR 100,000, provided that the Company may, at its sole discretion, offer and allocate an amount below EUR 100,000, pursuant to any applicable exemptions from the prospectus requirement being available.

The Company’s largest shareholder, Hemen Holding Ltd. (“Hemen”), a company indirectly controlled by trusts established by Mr John Fredriksen for the benefit of his immediate family, has pre subscribed for and will be allocated Offer Shares for an aggregate amount of approximately NOK 608,040,000 (USD 75 million) in the Private Placement.

Conditional allocation of Offer Shares will be made at the discretion of the Company’s Board of Directors in consultation with the Managers, on or about 9 May 2018, subject to any shortening or extension of the application period.

Completion of the Private Placement is conditional upon the necessary corporate resolutions in the Company being made and the Offer Shares having been fully paid and validly issued. The Private Placement will be cancelled if the conditions are not fulfilled, and may be cancelled by the Company in its sole discretion for any other reason.

In order to facilitate timely delivery of already listed shares, delivery of Offer Shares allocated in the Private Placement is expected to be made by delivery of existing shares in the Company borrowed by the Managers from Hemen. The shares delivered to investors in the Private Placement will thus be tradable on Oslo Axess immediately upon settlement. The Managers will settle the share loan from Hemen with the new shares issued in connection with the Private Placement. The new shares will be registered under a separate ISIN pending approval of a listing prospectus by the Norwegian Financial Supervisory Authority (the “FSA”), and will not be listed or tradable on Oslo Axess until the listing prospectus has been approved, expected during June 2018.

The share issuance will be carried out as a private placement, which is considered by the Company to be in the best interest of the Company and its shareholders. In its assessment the Company has taken into account, among other things, that a private placement is likely to have a greater chance of success, and can be done at an attractive price, compared alternative structures.

Contacts: Gunnar W. Eliassen, CEO +44 (0) 74 6914 0012

Additional information about the Company can be found at: http://www.northerndrillingltd.com/ ***

Important information:

The release is not for publication or distribution, in whole or in part directly or indirectly, in or into Australia, Canada, Japan or the United States (including its territories and possessions, any state of the United States and the District of Columbia).

This release is an announcement issued pursuant to legal information obligations, and is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act. It is issued for information purposes only, and does not constitute or form part of any offer or solicitation to purchase or subscribe for securities, in the United States or in any other jurisdiction. The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the “US Securities Act”). The securities may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the US Securities Act. The Company does not intend to register any portion of the offering of the securities in the United States or to conduct a public offering of the securities in the United States. Copies of this announcement are not being made and may not be distributed or sent into Australia, Canada, Japan or the United States. The issue, exercise, purchase or sale of subscription rights and the subscription or purchase of shares in the Company are subject to specific legal or regulatory restrictions in certain jurisdictions. Neither the Company nor the Managers assumes any responsibility in the event there is a violation by any person of such restrictions.

The distribution of this release may in certain jurisdictions be restricted by law. Persons into whose possession this release comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. The Managers are acting for the Company and no one else in connection with the Private Placement and will not be responsible to anyone other than the Company providing the protections afforded to their respective clients or for providing advice in relation to the Private Placement and/or any other matter referred to in this release.

Forward-looking statements:

This release and any materials distributed in connection with this release may contain certain forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they reflect the Company’s current expectations and assumptions as to future events and circumstances that may not prove accurate. A number of material factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.