Odfjell Drilling (ODL) Pareto Securities' 31st annual Energy Conference Presentation summary

Company overview and market position

• Over 51 years of experience in harsh environment drilling, operating a modern and flexible fleet with both owned and managed rigs.

• Market leader with a fully sold-out fleet, strong client relationships, and a robust secured backlog of USD 2.1bn.

• Operational excellence demonstrated by a 97.5% financial utilization rate over seven years and industry-leading well delivery performance.

• Supply and demand in the harsh environment segment are well balanced, supporting a long-term upcycle.

• No newbuilds expected in the near term, with high barriers to entry due to long lead times and high capital requirements for new rigs.

Financial performance and outlook

• Q2 LTM EBITDA reached USD 341m, with a leverage ratio of 1.8x and available liquidity of USD 226m.

• Revenue and EBITDA have shown positive growth through 2023 and into 2024, with net profit remaining strong.

• Balance sheet remains robust, with prudent leverage and no significant debt maturities until 2028.

• Cash flow visibility is high, supported by a strong contract backlog and increasing day rates.

• Analyst forecasts indicate compelling upside in cash flow to equity for 2025 and 2026 compared to peers.

Fleet, contracts, and operations

• Fleet consists of advanced harsh environment semi-submersibles and managed rigs, with flexibility across water depths and regions.

• All rigs are moving from legacy day rates to higher value contracts, with day rates for key assets rising significantly through 2030.

• Backlog revenue is set to increase from 2025 onwards, driven by firm contracts and options with major operators like Equinor and Aker BP.

• Special Periodic Surveys (SPS) are on track, with two completed and two more scheduled for 2025, maintaining fleet readiness.

• Tier 1 harsh environment semi availability remains tight, supporting strong pricing and utilization.