Statement in connection with mandatory offer on shares in Northern Drilling Ltd.

23 March 2022 – Hamilton, Bermuda

This statement (the “Statement”) is made by the board of directors (the “Board”) of Northern Drilling Ltd. (the “Company”) pursuant to section 6-16 of the Norwegian Securities Trading Act (the “NSTA”) in connection with the mandatory offer from Hemen Holding Ltd. (“Hemen Holding” or the “Offeror”) to acquire all issued shares in the Company (the “Shares”) not already owned by the Offeror against a cash consideration of NOK 17 per Share (the “Offer Price”) on the terms and conditions set out in the offer document dated 1 March 2022 (the “Offer Document”). The Board has decided that board member Marius Hermansen is disqualified to participate in the discussions and decision relating to this Statement. The remaining directors are not disqualified and thus form a quorum. Oslo Stock Exchange, in its capacity as takeover authority in Norway, has decided that the remaining three directors shall issue this Statement on behalf of the Company.

1.                      Introduction

On 7 February 2022, Hemen Holding announced that it had acquired in total 9,300 shares in the Company and subsequent to such acquisition, Hemen Holding held 6,453,826 shares in the Company, representing approx. 40% of the shares and votes in the Company. The transaction hence triggered an obligation for Hemen Holding to make a mandatory offer pursuant to section 6-6 (1) of the NSTA. Subsequent to triggering the mandatory offer obligation, Hemen acquired additional shares in the market. As at the date of the Offer Document, Hemen Holding holds 6,470,854 shares in the Company, representing 40.10% of the total number of outstanding shares and votes in the Company.

On 1 March 2022, Hemen Holding launched the offer to acquire all remaining shares in the Company that is not already owned by Hemen Holding, pursuant to and in accordance with the Offer Document.

2.                     The offer

The Offer is a mandatory offer made pursuant to Chapter 6 of the Norwegian Securities Trading Act, which, inter alia, means that there are no conditions for completion of the Offer. The acceptance period for the Offer is from and including 2 March 2022 until 16:30 (CEST) on 30 March 2022. The Board notes that Hemen Holding, subject to approval by the Oslo Stock Exchange, has reserved the right to amend the offer. The Offeror may consequently, subject to approval by the Oslo Stock Exchange, extend the acceptance period, one or more times, so that the aggregate acceptance period amounts to a total of up to six weeks. Shareholders in the Company should take note that their acceptance of the Offer must be submitted during the acceptance period, and that an acceptance of the Offer is, according to the acceptance form provided with the Offer Document, binding, and cannot be withdrawn or amended after receipt of the acceptance by the receiving agent on behalf of the Offeror. The Offer Price will be settled through cash payment in NOK from the Offeror to the accepting shareholders. The Offer of NOK 17 per Share values the total share capital of the Company to NOK 274,261,289 (based on 16,133,017 Shares outstanding in the Company as of the date of this Statement).

The Offer Price represents a premium of:

• 24 % over the last closing price of the Shares on 4 February 2022 (last trading date before announcement of the Transaction).
• 19 % over the average volume-weighted share price during the 30 day period ending on 4 February 2022.
• 25 % over the average volume-weighted share price during the three-month period ending on 4 February 2022.
• 31 % over the average volume-weighted share price during the six-month period ending on 4 February 2022.
• 33 % over the average volume-weighted share price during the 12-month period ending on 4 February 2022.

Further detailed information about the Offer is set out in the Offer Document. The Offer Document states in section 1.10 that the Offer will be financed by existing funds available to the Offeror, and that the Offeror may also choose to draw on existing loan facilities in connection with settlement of the Offer. The Offeror has provided a bank guarantee issued by DNB Bank ASA in the amount of NOK 164,256,771, as required under section 6-10 (7) of the NSTA. If the Offeror as a result of the offer acquires more than 90% of the total amount of shares and votes in the Company, it will have the right to resolve (and the remaining shareholders in the Company will have a right to require) a compulsory acquisition of the remaining Shares in the Company not owned by the Offeror (squeeze-out). The Board notes that the Offer Document states in section 1.22 that “the Offeror may complete a compulsory acquisition (squeeze-out) of the remaining Shares (if any) following completion of the Offer and that any compulsory acquisition initiated by the Offeror following completion of the Offer will be initiated on the same terms and conditions as the Offer, subject to compliance with Bermuda law. According to section 1.23 of the Offer Document, the Offeror has reserved its right to propose that the general meeting of the Company resolves to apply to Oslo Stock Exchange for a de-listing of the Shares. The passing of such resolution will require that shareholders representing not less than 2/3 majority votes in favour of the resolution. The final decision on whether to approve an application for de-listing lies with Oslo Stock Exchange pursuant to the provisions set out in Oslo Stock Exchange Rule book II.

3.                     CONSEQUENCES/EFFECTS OF THE OFFER FOR THE COMPANY AND ITS EMPLOYEES

As stated in section 1.4 of the Offer Document, the Offeror has no specific plans for any reorganisation or similar process involving the Company or any of its subsidiaries. Furthermore, as stated in section 1.16 of the Offer Document, Hemen Holding does not have any specific plans, and is not aware of any other circumstances relating to completion of the Offer, that will have any legal, financial or work related consequences for the Company’s employees. The Company only has one employee, and has not received any statement from this employee concerning the Offer.

4.                     THE BOARD’S ASSESSMENT

The Board has reviewed the Offer and considered factors that the Board deems material and relevant for the assessment of whether the Offer should be accepted by the shareholders of the Company. For the purposes of the preparation of this Statement, the Board has consulted with SpareBank 1 Markets (“SpareBank 1 Markets”) as financial advisor. SpareBank 1 Markets has provided a fairness opinion dated 22 March 2022 in accordance with the recommendation in the Norwegian Code of Practice for Corporate Governance (the “Fairness Opinion”). The Fairness Opinion is based, inter alia, on various generally accepted valuation methods and provides that the Offer Price is not fair from a financial point of view. The Fairness Opinion is attached to this Statement.

The Board has noted that the Offer Price represents a premium of 19%, 25%, 31% and 33%, respectively, over the 30 day, 3-month, 6-month and 12-month volume-weighted average price of the Share. The Offer Price represents a premium to historical trading, however as supported by SpareBank 1 Markets, the Board is of the view that the fundamental expected value of the Company taking into account the expected value of the ongoing disputes of its subsidiary buying companies (the “Buyers”), is significantly higher than the value supported by the Offer Price. In order for the value of the Company to be lower than the Offer Price, the Buyers must do less well in the disputes than the Board’s current expected value. The Board notes that shareholders who want or need liquidity, or do not want to contribute additional capital towards expected litigation costs, may still have an interest in accepting the Offer.

All in all, and taking into account the uncertainty relating to the value of the Offer compared to the underlying assets of the Group, the Board finds that it cannot make a recommendation as to whether or not shareholders should accept the offer. The assessment by the Board in this Statement is unanimous. The Board recommends each shareholder to consider the Offer considering the factors set out herein and other relevant information, and on this basis and in accordance with its own judgment and preferences to make an independent evaluation of whether or not to accept the Offer with respect to its Shares. The Board retains the right to amend, qualify or withdraw its Statement to the extent that any amendments are made by the Offeror in respect of the Offer or if an amended offer is made, cf. section 1.5 of the Offer Document.

5.                     MEMBERS OF THE BOARD AND THE CEO OF THE COMPANY

Other than board member Marius Hermansen who does not participate in giving this statement, none of the remaining members of the Board of Directors, nor the CEO of the Company hold any shares in the Company. The board has been informed that Marius Hermansen does not intend to accept the offer in his capacity as shareholder.

The undersigned members of the Board and the members of the executive management of the Company, including any close associates, do not have any current or recent affiliation with the Offeror.

The Board of Directors of Northern Drilling Ltd.