NODL: Exercise of the Cobalt Explorer option, $100 million revolving credit facility and early commencement of West Mira

Northern Drilling Ltd (the “Company” or “Northern Drilling”) today announces it has exercised the option for Cobalt Explorer, a 7^th generation DP3 and ultra-deepwater drillship from Daewoo Shipbuilding & Marine Engineering Co. Ltd (“DSME”) for a total consideration of $350 million and flexible delivery until end Q1 2021. Cobalt Explorer is a high-spec Tier 1 UDW drilling ship being purchased at close to 50% discount to the pervious owner’s estimated total project cost of $660 million. Cobalt Explorer is the only stranded UDW drillship from Korean yards that comes with additional spare parts including two blow out preventers, which are conservatively estimated to have an additional value of $25 million each.

With back-end loaded payment terms and flexible delivery schedule, the Company can comfortably wait for further market improvements in the benign deep water market before electing to take delivery. The market for Tier 1 drillships continues to strengthen with several data-points of day rates approaching $300,000 per day for start-up in 2020 and beyond. The Company believes the fundamentals will continue to tighten and is ideally positioning itself with three high-spec drillships due for delivery in 2021.

“With the Cobalt Explorer acquisition, Northern Drilling continues to execute on our strategy and adds to our premium fleet of Tier 1 drillships, all acquired at a substantial discount to replacement cost. The Company’s two harsh environment rigs were acquired on a similar forward delivery basis and we have successfully secured contracts with premium operators at leading day rates in the North Sea. The deepwater market is showing clear signs of a recovery providing increased confidence our drillships will continue to appreciate in value and secure attractive contracts by their delivery in 2021.”

The Company is pleased to announce it has agreed a $100 million Revolving Credit Facility (“RCF”) with Sterna Finance, an affiliate of the Company’s largest shareholder Hemen Holding Limited. The RCF shall have a tenor of three years and bears an all-in interest cost of 6.75% p.a. reflecting commitment and continued support from the Company’s largest shareholder.

Finally, Wintershall has elected to exercise the fourth and final front end option for West Mira, bringing the commencement of operations forward into mid Q3 2019.

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

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.