Awilco Drilling PLC

Report and Financial Statements

31 December 2023

Awilco Drilling PLC

1

Directors

Sigurd Thorvildsen

Henrik Fougner

Daniel Gold

John Simpson

Synne Syrrist

Secretary

Burness Paull LLP

50 Lothian Road

Festival Square

Edinburgh

EH3 9WJ

Auditors

Ernst & Young LLP

4

th

Floor

2 Marischal Square

Broad Street

Aberdeen

AB10 1BL

Bankers

DNB Bank ASA

8

th

Floor

The Walbrook Building

25 Walbrook

London

EC4N 8AF

Registered Office

SW1H 0BL

Awilco Drilling PLC

2

Strategic report

Corporate Strategy and business model

Awilco Drilling PLC

’s

(

‘

the Group

’

) strategy is to pursue the arbitration proceedings between Keppel FELS

Shipyard and the former rig owning subsidiary companies, Awilco Rig 1 Pte. Ltd and Awilco Rig 2 Pte.

Ltd. to a conclusion. During 2020, the vessel construction contracts for two semi-submersible rigs being

built in Singapore were terminated, and the subsidiary companies entered into arbitration proceedings with

the rig construction company.

During April 2023, Awilco Rig 1 Pte Ltd received the arbitration tribunal’s

ruling which awarded in favour of Keppel FELS.

The second arbitration process between Awilco Rig 2 Pte Ltd and the shipyard continued as planned and

commenced on 2 May 2023.

In November 2023, the arbitration ruling was received in favour of Awilco

Rig 2 Pte Ltd, for the amount of US$ 43.0 million, plus interest and costs.

Following an unsuccessful

application for leave to appeal, the award, along with the associated interest and costs is now due and

payable.

No future decisions will be made until the proceeds of the award have been received.

Going Concern

The Company is no longer performing operational activities relating to rigs.

As a result of this, the financial

statements have been prepared on a basis other than going concern.

Principal activity

FELS shipyard.

Business review and future developments

The main focus during the year was on the remaining arbitration processes.

The final hearing for Nordic

Winter was held on 13 January 2023 and as noted above, the arbitration ruling was awarded in favour of

Keppel FELS.

Awilco Rig 1 Pte Ltd made no appeal against the decision and on 30 June 2023, it was

subsequently placed into liquidation.

The final hearing for Nordic Spring was held on 4 July 2023 and in November 2023 the arbitration ruling

was received in favour of Awilco Rig 2 Pte Ltd for the amount of US$ 43.0 million, plus interest and costs.

In January 2024, Keppel FELS lodged an application for leave to appeal the award of the tribunal with the

High Court and during May 2024, the application was denied.

The award, along with the associated interest

and costs is now due and payable.

No future decisions for the Group will be made until the proceeds of the

award have been received.

Performance

The Group’s financial performance during the year was as

follows:

2023

2022

US$000

US$000

Revenue

-

-

Operating profit /(loss)

111,516

(145,101)

Profit/(Loss) for the year attributable to equity shareholders

111,625

(145,357)

Operating loss margin %

n/a

n/a

Number of employees and contractors at year end

4

8

The Group had nil rig operating expenses (2022: US$ 4.9 million) relating to rig operating costs included

in cost of sales.

General and administration expenses were US$ 14.1 million (2022: US$ 20.2 million).

This included US$ 10.4 million in respect of legal fees and other costs in support of the arbitration processes.

(2022 : US$ 15.1 million).

The Group had a gain on liquidation of the subsidiaries of US$ 125.4 million

(2022 : nil).

Awilco Drilling PLC

3

Strategic report (continued)

Business review and future developments (continued)

Performance (continued)

Following the disposal of both of the Company’s drilling rigs

in the prior year, the Company is no longer

performing operational activities relating to rigs.

The principal KPIs are in respect of maintaining an

adequate cash buffer to meet the ongoing obligations of the Company.

Principal risks and uncertainties

Following the disposal of the rigs and no ongoing rig operations, the principal risks are now in respect of

liquidity and legal risks.

As described in Note 25

to the financial statements, the Group’s objective is to maintain sufficient liquidity

in order to support the needs of the business and meet liabilities as they fall due.

During May 2024, the

Group successfully signed a short-term loan with Awilhelmsen Offshore AS and QVT.

The loan is for a

total of USD two million, structured as a drawdown facility.

The Group values its reputation and aims to carry out business in a fair and open manner.

Despite this the

Group may become subject to claims during the course of its business.

During 2020, the vessel construction

contracts for two semi-submersible drilling rigs being built in Singapore, were terminated.

The Group’s

subsidiary companies entered into arbitration with the rig construction company, with the first arbitration

process now concluded.

The rig construction contracts were entered into on a non-recourse basis to the

parent company or wider group.

In order to mitigate any possible risk of cash outflow, the Group has

established a dedicated team and has engaged specialist legal advisors to support the actions taken.

Corporate Social Responsibility

The Company recognises its duty to stakeholders to operate the business in an ethical and responsible

manner.

It is committed to developing its Corporate Social Responsibility (CSR) agenda, recognising that

it can play a major part in its operations.

This report does not contain information about any policies of the

Company in relation to social community and human rights issues since it is not considered necessary for

an understanding of the development, performance or position of the Co

mpany’s business

activities.

During

the period when operational activities were being performed, the following core values were applicable:

Simple is Best

–

Our systems and procedures shall be clear, concise and effective, ensuring we deliver on

our promises.

Engagement

–

We will be a company of choice, valuing our work force, listening and responding to

employees, clients and partners.

Efficiency

–

We will consistently meet our clients

’

expectations by providing competent people, reliable

equipment and smart systems.

Flexibility

–

We will encourage challenge and creativity in order to deliver optimised performance and

continuous improvement.

Performance

–

We will get it right first time; consistently delivering success.

Awilco Drilling PLC

4

Strategic report (continued)

Corporate Social Responsibility (continued)

Environmental matters

As a result of rig disposals, the Company is no longer performing operational activities relating to rigs so

has no significant environmental matters to consider.

The responsibility for minimising environmental

impact in relation to the disposal of rigs passed to the buyers.

The Company requires its employees to observe the highest standards of business and personal ethics in the

conduct of their duties and responsibilities.

The Company has a specific Anti-Bribery and Corruption policy

to ensure compliance with all applicable anti-bribery and corruption regulations and to ensure the

Company’s business is conducted in a

socially responsible manner.

The Company’s employment policies and procedures are described in detail in

the Staff Handbook, which

is available to all employees via the Business Management System (BMS)

.

The Company’s

Code of

Conduct

–

Values and Ethics document sets out the basic principles to guide all employees and officers of

the Company on how they must conduct themselves to seek to avoid even the appearance of improper

behaviour. To help ensure compliance, the Company requires that employees, officers and directors review

the policy and acknowledge their understanding and adherence in writing on an annual basis.

The Company is committed to equal opportunities and treats all employees with respect and dignity and

ensures that decisions are taken without reference to irrelevant or discriminatory criteria.

The Company

does not tolerate any form of unlawful discrimination and is committed to promoting equality of opportunity

and diversity for all personnel and will address any unlawful discrimination in every aspect of its operations.

As at 31 December 2023, the number of directors and employees was as follows:

Male

Female

Directors

4

1

Employees:

Senior Managers

1

-

Other staff

–

onshore

-

3

It is important to the Company that it supports its employees in their health and wellbeing. The Company

operates a flexible benefit scheme that is available to all members of staff and includes benefits such as

leisure club membership, private medical and dental insurance, a health screening service and an Employee

Assistance Programme.

Absence Management

The Group has an established absence management procedure, to support employees during periods of

sickness absence whilst ensuring the efficient and effective running of the organisation.

2023

2022

Group sick leave

(as a percentage of total hours worked)

0.0%

0.6%

Awilco Drilling PLC

5

Strategic report (continued)

Section 172

The Board of Directors have taken account of stakeholder views when making key decisions that impact the

company and its stakeholders.

The following matrix provides some examples of how, during the year,

consideration was given to key stakeholders, being employees, investors, customers, suppliers, regulators

and society in general.

In the future, if activity is not increased again, many of these issues may no longer

be relevant.

Stakeholder

Strategic Issue

Engagement

Outcome

Key Decision

Employees

Fair compensation

and benefits

package for

employees

Market analysis is

performed to ensure

compensation levels

are competitive in

prevailing market.

See also

commitment

expressed by the

Board in respect of

“Health and

Wellbeing” of

employees on page

4.

Pay levels for

existing

employees were

considered to be

fair and

competitive

within the

industry.

Due to disposal of

rigs and

discontinued

operations, the

decision was

taken to make the

offshore personnel

and the majority

of onshore

personnel

redundant.

A few

key onshore

positions were

retained to

support the

ongoing

arbitration

process.

Investors

Continue to seek

growth

opportunities that

offer attractive

returns to

investors

Information is

shared with

investors in the

form of half

yearly and annual

financial reports

and press release

disclosures are

required.

Additionally, half

yearly

presentations held

and available on

the Company

website. Regular

one to one

investor meetings

are also held.

No new outcomes

in respect of

investment

opportunities at

this time.

The Company

successfully

completed a

private placement

to raise new

equity through the

issue of new

shares.

The proceeds of

the equity issue

will be used to

support the

ongoing

arbitration process

until its

conclusion.

Awilco Drilling PLC

6

Strategic report (continued)

Section 172 (continued)

Stakeholder

Strategic Issue

Engagement

Outcome

Key Decision

Customers

Customer

Satisfaction

When

the

Company was in

an

operational

phase, customers

were requested to

provide feedback

on a variety of

areas to ensure the

company

was

performing

in

accordance

with,

or

better

than,

customer

expectations.

Customer surveys

feedback

were

part

of

the

company KPIs.

Scoring

in

this

area

was

more

than

satisfactory

during prior years.

No key decisions

at this time.

Suppliers

Selection of key

suppliers and

high-level

purchases. Ensure

that vendors are

paid on a timely

manner.

Suppliers invited

to tender and

purchasing

procedures require

fair and

transparent

selection of

vendors. Refer

also paragraph on

Investment

Appraisal" on

page 18 of the

annual report.

Policies,

procedures and

scrutiny by the

Board ensures

vendor selection

criteria is a robust

process.

No key decisions

at this time

Regulators

Accreditation and

compliance with

regulatory

standards.

Details of

standards

achieved are

detailed under

"Health, Safety

and Environment"

on page 6 of the

2021 annual

report.

Achievement and

continued

certification of

compliance

through external

HSE audits

ensures company

operates at, or

above, the

standards required

by the regulatory

bodies that govern

the industry.

The Company’s

has suspended its

ISO 14001

accredited

Environmental

Managements

System (EMS) to

reflect the sale of

its remaining

assets however

the Company

remains

committed to its

previously stated

goals with regards

to environmental

protection.

Awilco Drilling PLC

7

Strategic report (continued)

Section 172 (continued)

Stakeholder

Strategic Issue

Engagement

Outcome

Key Decision

Society

Minimising harm

to the environment

in

operational

performance

of

the fleet.

KPIs

are

established

to

measure

if

any

adverse

consequence

to

the

environment

within the control

of the company.

Achievement and

compliance

with

environmental

sustainability.

As a result of rig

disposals, the

Company is no

longer performing

operational

activities so has no

significant climate

change impact to

consider.

The

responsibility for

minimising

environmental

impact in relation to

the disposal of rigs

has passed to the

buyer.

The WilHunter was

sold for recycling

by an approved

Ships Recycling

Facility in Turkey.

The transportation

and recycling was

monitored by the

Company’s

representatives who

verified that the

process was

conducted in

accordance with all

relevant rules and

regulations.

Recycling was

concluded in

January 2023 to the

satisfaction of the

Scottish

Environmental

Protection Agency

(SEPA).

By order of the Board of Directors

Sigurd Thorvildsen

29 May 2024

Awilco Drilling PLC

8

D

irectors’ report

Registered No. 7114196

The Directors present their report and financial statements for the year ended 31 December 2023. These

financial statements have been prepared under UK-adopted International Accounting Standards (UK-

adopted IAS).

Results and dividends

The profit after taxation for the year amounted to US$ 111.6 million (2022: US$ 145.4 million loss).

There were no dividends paid during the year.

(2022: nil)

Future developments

See Strategic Report pages 2-7.

Directors

The directors who served the Company during the year were as follows:

Sigurd Thorvildsen

Henrik Fougner

Daniel Gold

John Simpson

Synne Syrrist

Financial instruments

The Group’s financial risk management objectives and policies

are discussed further in Note 25 on pages

64-66 of the financial statements.

Directors

’

liability

The Company insures its directors and officers against liability in respect of proceedings brought by third

parties, subject to the conditions set out in the UK Companies Act 2006.

Directors and their interests

None of the directors listed above had any direct interest in

the Company’s

shares.

Major interest in shares

The Company has been notified of the following interests representing 3% or more of the issued ordinary

share capital of the Company as at 29 May 2024.

No of shares

Percentage holding

Awilhelmsen Offshore AS

7,897,748

54.0%

BNP Paribas

2,569,083

17.6%

State Street Bank and Trust Comp

1,019,000

7.0%

Akastor AS

998,632

6.8%

The Bank of New York Mellon SA/NV

806,896

5.5%

Skandinaviska Enskilda Banken AB

500,000

3.4%

QVT Financial LP with affiliated and related parties owned 4,399,200 shares at 29 May 2024, a total of

30.1

% of the Company’s share capital.

Awilco Drilling PLC

9

Directors’ report

(continued)

Corporate governance

The information given in the corporate governance statement is set out on pages 13-19.

Going concern

As noted in the Strategic report, the Group is no longer performing operational activities relating to rigs.

Accordingly, the financial statements have been prepared on a basis other than going concern (Note 2).

Greenhouse gas emissions

The Company’s greenhouse gas emissions are categorised between two categories: direct

emissions (from

rig power generation and loss of refrigerants) and indirect emissions (from purchased electricity for onshore

offices).

All figures reported are in relation to energy consumed in the United Kingdom and offshore area.

All emissions from the facilities over which the Company has direct operational control were included.

The

Companies Act 2006 requires reporting on the following greenhouse gases:

•

Carbon dioxide ("CO2");

•

Methane ("CH4");

•

Nitrous Oxide ("N2O");

•

Hydrofluorocarbons ("HFCs");

•

Perfluorocarbons ("PFCs"); and

•

Sulphur Hexafluoride ("SF6").

PFCs and SF6 are not emitted, and therefore not considered in this report.

This information was collected and reported in line with the methodology set out in the UK Government’s

Environmental Reporting Guidelines, 2019. Emissions have been calculated using the latest conversion

factors provided by the UK Government. Greenhouse gas emissions are reported in tonnes (t) carbon dioxide

equivalents ("CO2e"). Calculations are performed using the emission factors and global warming potential

for each chemical compound, which are in accordance with the current guidance from the UK Government

GHG Conversion Factors for Company Reporting 2022. The 2023 annual CO2e emitted from operations

was nil.

For the year ended 31 December 2023

, the estimated carbon dioxide equivalent (“CO2e”) gas emissions

were nil compared to 1,749 tonnes for the year ended 31 December 2022. Reduction of direct emissions

reflects the sale of both rigs during 2022.

Awilco Drilling PLC

10

Directors’ report (continued)

Greenhouse gas emissions (continued)

Energy usage (kWh)

2023

2022

Indirect emissions (onshore offices)

65,867

97,641

Greenhouse Gas Emissions

Direct emissions (owned rigs)

-

1,749

Indirect emissions (onshore offices)

-

25

Refrigerant emissions (offshore only)

-

-

Total emissions (CO2c)

1,774

Direct CH

4

emissions (owned rigs)

-

0.4

Direct N

2

O emissions (owned rigs)

-

23.2

The Company’s has suspended its ISO 14001 accredited Environmental Managements System (EMS) to

reflect the sale of its remaining assets however the Company remains committed to its previously stated

goals with regards to environmental protection.

The WilHunter was sold during 2022 for recycling by an approved Ships Recycling Facility in Turkey, the

transportation and recycling was monitored by the Company’s representatives who verified that the process

was conducted in accordance with all relevant rules and regulations. Recycling was concluded in January

2023 to the satisfaction of the Scottish Environmental Protection Agency (SEPA).

Assessment of Climate Change Impact

As a result of rig disposals, the Company is currently no longer performing operational activities relating to

rigs so has no significant climate change impact to consider.

The responsibility for minimising

environmental impact in relation to the disposal of rigs has passed to the buyer.

Stakeholder relationships

The Directors recognise that business relationships with all stakeholders is beneficial to the well-being of

the organisation.

During the Company’s operational phase, f

eedback in terms of relationships with

suppliers, customers, investors was discussed with management at board meetings.

Disclosure of information to the auditors

So far as each person who was a director at the date of approving this report is aware, there is no relevant

audit information, being information needed by the auditor in connection with preparing its report, of which

the auditor is unaware. Having made en

quiries of fellow directors and the Company’s auditor, each director

has taken all the steps that they are obliged to take as a director in order to make themselves aware of any

relevant audit information and to establish that the auditor is aware of that information.

Responsibility statement

The directors confirm, to the best of their knowledge:

•

That the consolidated financial statements, prepared under UK-adopted International Accounting

Standards (UK-adopted IAS), give a true and fair view of the assets, liabilities, financial position, and

profit of the parent company and undertaking included in the consolidation taken as a whole;

•

That the annual report, including the strategic report, includes a fair review of the development and

performance of the business, and the position of the company and undertakings included in the

consolidation taken as a whole, together with a description of the principal risks and uncertainties that

they face: and,

Awilco Drilling PLC

11

Directors’ report (continued)

Responsibility statement (continued)

•

That they consider the annual report, taken as a whole, is fair, balanced and understandable and

provides the information necessary for shareholders to assess the company’s position, performance,

business model and strategy.

Subsequent events

In January 2024, Keppel FELS lodged an application for leave to appeal the award of the tribunal with the

High Court.

This was opposed by Awilco Rig 2 Pte Ltd and on 1 May 2024 the decision refusing the

application was received from the High Court.

Also during May, the Company signed a short-term shareholder loan with Awilhelmsen Offshore AS and

QVT. The loan is for a total of up to USD two million, structured as a draw-down facility, with interest rate

of 10 percent per annum on the aggregated outstanding principal amount. In addition, there is an

arrangement fee of 2 percent on the total amount. Maturity date for the loan is 30 June 2025. The loan shall

be used to support the ongoing operational costs until proceeds from the arbitration award are received.

Auditors

A resolution to reappoint Ernst & Young LLP as auditors will be put to the members at the Annual General

Meeting.

By order of the Board of Directors

Sigurd Thorvildsen

29 May 2024

Awilco Drilling PLC

12

Statement of directors’ responsibilities

The directors are responsible for preparing the annual report and the financial statement in accordance with

applicable United Kingdom law and regulation.

Company Law requires the directors to prepare financial statements for each financial year. Under that law,

the directors have prepared the Group and Company financial statements in accordance with UK adopted

international accounting standards (UK-adopted IAS) as applied in accordance with section 408 of the

Companies Act 2006.

Under Company law, the directors must not approve the financial statements unless they are satisfied that

they give a true and fair view of the state of affairs of the group and the company and of the profit or loss of

the group and the company for that period.

In preparing these financial statements, the directors are required to:

•

select suitable accounting policies in accordance with IAS 8 Accounting Policies, Changes in

Accounting Estimates and Errors and then apply them consistently;

•

make judgements and estimates that are reasonable and prudent;

•

present information, including accounting policies, in a manner that provides relevant, reliable,

comparable and understandable information;

•

provide additional disclosures when compliance with the specific requirements in IFRS is

insufficient to enable users to understand the impact of particular transactions, other events and

conditions on the group’s financial position and financial performance;

•

in respect of the group financial statements, state whether UK adopted international accounting

standards (UK-adopted IAS) have been followed, subject to any material departures disclosed and

explained in the financial statements;

•

in respect of the parent company financial statements, UK-adopted IAS, as applied in accordance

with section 408 of the Companies Act 2006 have been followed, subject to any material departures

disclosed and explained in the financial statements; and

•

prepare the financial statements on the going concern basis unless it is inappropriate to presume

that the company and / or the group will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain

the company’s and group’s

transactions and disclose with reasonable accuracy at any time the financial

position of the group and the company and enable them to ensure that its financial statements comply with

the Companies Act 2006.

They are also responsible for safeguarding the assets of the group and parent company and hence for taking

reasonable steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations, the directors are also responsible for preparing a strategic report,

directors’ report, directors’ remuneration report and corporate governance statement that comply with that

law and those regulations. The directors are responsible for the maintenance and integrity of the corporate

and financial information included on the company’s website.

Awilco Drilling PLC

13

Corporate governance

Awilco Drilling PLC is committed to maintaining high standards of corporate governance.

The Company was listed on the Oslo Bors stock exchange until 16 December 2022, when the Company

transferred its listing from the Oslo Bors to Euronext Growth Oslo.

Although no longer a requirement, the

Company continued to adopt the Norwegian Code of Practice for Corporate Governance of 14 October 2021

(

‘

the Code

’

).

A copy of the code can be found at

www.nues.no

Adherence to the Code is based on a “comply or explain” principle, whereby companies are expected to

comply with the recommendations or explain why they have chosen an alternative approach.

Below is a

summary of the departures from the Code with an explanation of how the Company

’s actual practices

contribute to good corporate governance.

Code of Practice Compliance

The Company is required to state how it has applied the principles set out in Section 1 of the Code and

which relate to its directors, remuneration, accountability and audit and relations with shareholders.

As of the date of this report, the Company is in compliance with the Code, except in relation to the following

matters:

•

Business

–

the Company

’s Articles of Association do not specifically define the

Company

’s

business. The Company is incorporated in England & Wales and this is in line with standard

practice for a UK registered company.

An overview of the Company

’s business can be found in

this report.

•

Equity and dividends

–

the authorisation given to undertake share capital increases has not been

restricted to defined purposes, due to the scope of the Company

’s business.

Th

is is normal practice

for a UK registered company.

•

Auditor

–

the Auditor is not present during the Board meeting that considers the annual accounts;

but the Auditor attends all Audit Committee meetings including discussions related to the Annual

Report and financial statements.

•

Corporate Assembly

–

the Company does not have a Corporate Assembly as there are less than 200

employees.

Business

During the prior year, the Company

’s principal business

was to own offshore drilling rigs for use in offshore

drilling operations, and to provide drilling services for oil and gas companies using these rigs.

This was an

intricate business which involved complex assets and high value equipment, and which required specialised

and trained personnel to operate them efficiently and safely.

Following the disposal of both of the

Company’s drilling rigs

in the prior year, the Company is no longer performing operational activities relating

to rigs.

Further information about the Company

’s vision, mission and strategy statements is available

in the

Strategic Report.

Equity and dividends

Full details of the shares and warrants issued are detailed in Note 23. The Company considers its equity to

be at a level appropriate to the Company

’s objectives, strategies, cash flow projections and risk profile.

As the Company is no longer performing operational activities relating to rigs, there will be no dividends

distributed arising from operational activity.

Awilco Drilling PLC

Corporate governance (continued)

14

Equal treatment of shareholders

All issued shares of the Company are vested with equal shareholder rights in all respects.

There is only one

class of shares.

The Articles of Association place no restrictions on voting rights.

Each share represents

one vote at the Company

’s General Meetings.

Equal opportunities and diversity

The Company is committed to ensuring that all employees are treated with respect and dignity and to ensure

that decisions are taken without reference to irrelevant or discriminatory criteria.

The Company will not

tolerate any form of unlawful discrimination and is committed to promoting equality of opportunity and

address unlawful discrimination in every aspect of its operations.

The Company takes every possible step

to ensure that decisions on recruitment, selection, training, conditions of work, pay and benefits, promotion,

career, management, and every other aspect of employment are justifiable and based solely on objective

criteria.

During the year, there have been no incidents of non-compliance with this policy.

Transactions with close associates

The Company has entered into the agreements listed below with the following parties:

•

A management agreement with Awilhelmsen Management AS (AWM) for corporate services;

•

Management-for-hire contracts for personnel from the Awilhelmsen Group.

Awilhelmsen Offshore AS owns 54.0% of the ordinary shares in Awilco Drilling PLC.

Freely negotiable shares

The shares of the Company are freely negotiable.

Going concern

The Board regularly review the Company’s

financial projections to ensure resources are available to meet

requirements and takes appropriate action if judged necessary.

Following the cessation of operational

activity, these financial statements have been prepared on a basis other than going concern.

General Meetings

All shareholders of the Company are entitled to attend the general meetings of the Company. The Annual

General Meeting (AGM) is to be held no later than 30 June each year.

Notification for meetings are sent

out at least 21 days in advance.

The notice includes a reference to the Company’s website where the notice

for the General Meeting and other supporting documents required to allow shareholders to form a view on

all matters to be considered at the meeting are made available.

The deadline for registration is normally set

two working days before the General Meeting, to ensure shareholders have as much time as possible to

register.

If a shareholder cannot attend a meeting in person, it is possible to vote through proxy.

The minutes from the General Meetings are published on the Company

’s website

https://awilcodrilling.com

The next AGM is scheduled for 24 June 2024.

Awilco Drilling PLC

Corporate governance (continued)

15

The Board of Directors

The Board considers that it is vital to ensure that there is an appropriate range of skills, knowledge and

experience among its members, and that the objectivity and integrity of members should be exemplary.

The

Board currently consists of five non-executive Directors including the Chairman. The Board believes that

the structure and size of the Board is appropriate and that no single individual or group dominates the

decision making process.

The names, skills, experience and expertise of each Director are shown in the

Board of Directors section of the Company

’s website at

https://awilcodrilling.com

The main responsibilities of the Board include but are not limited to:

•

providing strategic direction for the Company;

•

overseeing the Company

’s systems of internal control, governance and risk management

;

•

evaluating the performance of executive management; and

•

monitoring and facilitating the activities of the Audit and Remuneration Committees.

Management is delegated the task of the detailed planning and implementation of the Company

’s strategy.

Directors receive timely, regular and appropriate management information to enable them to fulfil their

duties and have access to the advice of the Company Secretary.

The Board has agreed guidelines for

Directors to obtain independent professional advice, if they seek it, at the Company

’s expense.

The Company has in place

directors’

and

officers’

liability insurance.

The Board includes two independent non-executive directors (John Simpson and Synne Syrrist) and three

non-independent non-executive directors (Sigurd Thorvildsen, Henrik Fougner and Daniel Gold). All the

non-executive Board members are viewed as being free from any relationship with the executive

management which could result in any conflict or affect their judgement.

None of the non-executive

directors participates in the share option schemes or long-term incentive plan operated by the Company, and

none are dependent on the fees received from the Company as their primary source of income.

Board Performance

The Board completes an annual process to evaluate the effectiveness of Board Committees and individual

directors and has confirmed that it is satisfied that it and its Committees are operating effectively.

The performance of the

Chief Executive Officer (“

CEO

”)

is reviewed annually by the Remuneration

Committee in conjunction with his annual pay review and the payment of bonuses.

Directors are elected by shareholders at the first annual general meeting after their appointment and, after

that, offer themselves for re-election by a vote of shareholders at least once every two years.

Awilco Drilling PLC

Corporate governance (continued)

16

The Board of Directors (continued)

Meetings and attendance

Board meetings are scheduled to be held at least five times a year, linked to key events in the Company

’s

corporate reporting calendar.

Additional ad-hoc meetings are held when deemed necessary.

It is expected that all directors attend Board and relevant committee meetings, unless they are prevented

from doing so by prior commitments or travel restrictions.

If directors are unable to attend meetings, they

are given the opportunity to be consulted and comment in advance of the meeting.

Board Committees

The Board has established an Audit Committee, Remuneration Committee and a Nomination Committee.

The Audit Committee and Nomination Committee have formal terms of reference governing their method

of operation which reflect the provisions of the Code and which have been approved by the Board.

Audit Committee

The Audit Committee was chaired during the year by John Simpson and the other member of the Committee

is Henrik Fougner. Only John Simpson is considered to be independent by the Board, which is

acknowledged in the terms of reference of the Audit Committee.

The Board is satisfied that John Simpson

has recent and relevant financial experience, as the former CEO of Den Norske Bank (now DNB Bank) in

London and Regional Director for DNB’s Asia

-Pacific operations. Mr. Simpson is currently a director of

Marine Capital Limited, as UK asset manager and classed as an approved person by the UK FCA.

He has

chaired audit committees of UK listed companies and public bodies since 1996.

The role of the Audit Committee is to ensure the integrity of the financial statements of the Company,

including its annual and half yearly

reports, preliminary results’ announcements and any other formal

announcements relating to its financial performance.

It is responsible for reviewing the Company

’s internal

financial control and risk management systems, advising the Board on the appointment of external auditors,

overseeing the relationship with external auditors, reviewing the Company

’s whistleblowing

procedures and

considering the need for an internal audit function.

The Audit Committee monitors the relationship with the Company

’s external auditors relating to the

provision of non-audit services to ensure auditor objectivity and independence is safeguarded.

The

Company will award non-audit work to the firm which provides the best commercial solution for the work

in question taking into account the skills and experience of the firm involved and the fees payable for the

work. In considering whether to award such work to the external auditors, attention is paid to the level of

fees for non-audit services relative to the amounts of the audit fee and whether there are safeguards in place

to mitigate to an acceptable level any threat to objectivity and independence in the conduct of the audit

resulting from the provision of such services.

There is an opportunity at each meeting for the Audit Committee to discuss matters privately with the

external auditors without any members of the executive management team present.

In addition, the

Chairman of the Committee is in regular contact with the external audit partner to discuss matters relevant

to the Company.

The Audit Committee have also been extensively involved in ensuring the appropriate disclosures regarding

Going Concern have been included in the financial statements.

Remuneration Committee

The Remuneration Committee was chaired during the year by Sigurd Thorvildsen and the other members

of the Committee are Daniel Gold and Henrik Fougner.

The role of the Remuneration Committee is to establish and develop the remuneration policy for the

Company

’s execu

tives and key management and to determine a specific remuneration package for the CEO.

No director or employee is involved in deciding their own remuneration. The Committee also approves all

employee pay review proposals.

Details of the Company

’s policy on remuneration, service contracts and compensation payments are set out

in the

Director’s

remuneration report.

Awilco Drilling PLC

Corporate governance (continued)

17

The Board of Directors (continued)

Nomination

Committee

The members of the Nomination Committee are Henrik Christensen and Tom Furulund.

The role of the Nomination Committee is to present a recommendation to the general meetings concerning

directors to be elected by shareholders and the level of directors

’

fees.

The Nomination Committee shall

also present recommendations to the general meetings regarding nomination of members to the Nomination

Committee and concerning fees for the members of the Nomination Committee.

The table below shows the frequency and attendance of directors and other members at Board and

Committee meetings during 2023.

Board

Meetings

Remuneration

Committee

Audit

Committee

Nomination

Committee

No of meetings in year

Sigurd Thorvildsen

5

1

-

-

Henrik Fougner

5

1

3

-

Daniel Gold

3

1

-

-

John Simpson

5

-

3

-

Synne Syrrist

5

-

-

-

Henrik Christensen

(1)

-

-

-

1

Tom Furulund

(1)

-

-

-

1

(1)

Not members of the Board but members of the Nomination Committee only

Internal controls and risk management

The Board acknowledges its responsibility for establishing and maintaining adequate internal controls and

risk management systems to safeguard shareholders

’

investments and the Company

’s

assets and performs

an annual review of these areas.

Such systems can only be designed to manage, and not to eliminate, the

risk of failure to achieve business objectives.

They can provide reasonable, but not absolute, assurance that

the Company

’s assets are safeguarded and that the financial information used within the business fo

r external

reporting is reliable.

Operational and business activity risks

The Company

’s operational and business activity risks are controlled and mitigated by the implementation

and use of its Business Management System (BMS).

During operational activity, the Company

’s offshore

activity risk was further controlled by the implementation and use of its Safety and Environmental

Management System which is incorporated in the BMS.

Information and financial reporting systems

The Company

’s comprehensive planning and financial reporting procedures include annual detailed

operational budgets which are reviewed and approved by the Board.

Performance against budget is

monitored throughout the year, through regular reporting of management accounts and key performance

indicators.

The Board receives updated cash flow statements on a quarterly basis and at each Board meeting

and has close follow-up discussions with the management between meetings as required.

Awilco Drilling PLC

Corporate governance (continued)

18

Internal controls and risk management (continued)

With a centralised financial reporting system, transactions and balances are recognised and measured in

accordance with prescribed accounting policies, and all relevant information is appropriately reviewed and

reconciled as part of the reporting process.

There are clearly defined evaluation and approval processes for acquisitions and disposals, capital items and

major expenditure.

These include escalating levels of authority and post-completion reviews of all major

projects to compare the actual outcome with the original plan.

Certain transactions are reserved for approval

by the Board and limits of delegated responsibility and areas of authority have been identified for employees.

The Audit Committee reports to the Board on matters discussed with the auditors during the course of the

statutory audit.

Takeovers

The Company has adopted guidelines in relation to takeover bids.

The guiding principles of the Board in a

take-over situation will be to seek the best value for and the equal treatment of all shareholders.

The Board

recognises that the decision whether to accept or reject an offer lies with the shareholders and will refrain

from any actions which may deny shareholders this choice.

The Board will seek to provide shareholders

with a recommendation as to whether shareholders should or should not accept an offer.

This includes

seeking external advice on valuation when appropriate.

Any transaction that is in effect a disposal of the

Company

’s activities will be submitted

to a General Meeting for its approval. As the Company is

incorporated in England and Wales and listed in Norway, any takeover bid for the Company would be

governed by aspects of both English law and Norwegian law and regulations in accordance with the EU

Takeover Directive.

Communication with shareholders

The Company is committed to maintaining the highest of standards of disclosure ensuring that all investors

and potential investors have the same access to high quality, relevant information in an accessible and timely

manner to assist them in making informed decisions.

The Investor Relations Department manages the flow

of information to all investors and potential investors and regular presentations take place at the time of the

quarterly results as well as during the rest of the year.

Any concerns raised by a shareholder in relation to the Company and its affairs are communicated to the

Board.

The Company maintains a website which provides up-to-date, detailed information on the Company

’s

operations, which includes a dedicated investor relations section.

All Company announcements are

available on the website, as are copies of slides used for presentations to investment analysts.

Shareholders will have the opportunity at the forthcoming AGM to put questions to the Board, including the

Chairmen of the various Committees.

Remuneration of the Board of Directors

The Company operates in a highly competitive market and must attract, motivate and retain high quality

directors capable of achieving the Company

’s objectives and thereby enhancing shareholder value.

The non-executive Board members receive annual remuneration,

based on the Board’s responsibilities,

expertise, time invested and the complexity of the business. Their remuneration is not linked to the

Company

’s performance.

The remuneration of the Board is disclosed in the

Director’s Remuneration Report on pages

20-33 of this

report.

None of the Board members have had any additional assignments for the Company and none of the

non-executives participate in any incentive or share option programme.

Awilco Drilling PLC

Corporate governance (continued)

19

Remuneration of executive personnel

The Remuneration Committee reviews and advises on proposals made by the CEO with regard to the

remuneration payable to executive personnel and presents them to the Board.

The remuneration payable to

executive personnel is determined on the basis of competence, experience and achieved results.

The Board decides the salary and other compensation for the CEO in a meeting.

The remuneration and

other compensation to the CEO and other executive employees are disclosed in the notes to the financial

statements.

Auditor

In line with standard practice for a UK company, the auditor is not present during the Board meeting that

deals with the annual accounts.

The auditor attends all meetings of the Audit Committee and presents to the Committee reviews of the

Company

’s accounting principles, risk areas, internal control procedures, including identified weaknesses

and proposals for improvement.

The auditor has a private meeting with the Audit Committee at the end of each of its meetings at which

neither the CEO nor any other member from the management team is present.

By order of the Board of Directors

Sigurd Thorvildsen

29 May 2024

Awilco Drilling PLC

20

Directors’ remuneration report

Information not subject to audit

Chairman of the Remuneration

Committee’s Annual Statement

Dear Shareholders,

I am pleased to present the directors

’

remuneration report for the financial year ended 31 December 2023,

prepared in accordance with the Schedule 8 to the Large and Medium-sized Companies and Groups

(Accounts and Reports) Regulations 2008.

This report explains the Company’s remuneration policy and provides details of the remuneration paid to

executive and non-executive directors for services to the Company during the year.

There have been no

significant changes to the remuneration policy this year.

In determining remuneration levels, the Committee has taken account of market conditions, the performance

of the Company, responsibility to shareholders and good corporate governance.

A resolution to approve the Directors remuneration report will be proposed at the AGM which is scheduled

to be held on 24 June 2024.

Sigurd Thorvildsen

Chairman, Remuneration Committee

29 May 2024

Awilco Drilling PLC

Directors’ remuneration report

(continued)

21

The Company’s CEO is not an Executive Director of the Company but

under UK company law, there is a

requirement for quoted companies to treat the Chief Executive Officer, for the purposes of certain

remuneration-related requirements, as if that person were a director of that quoted company.

The current

CEO was appointed following a proposal from the Board of Directors after the resignation of the previous

CEO, acting on an interim basis. His services are provided to the Company under a management on hire

agreement from a related party. The rates are per the management on hire agreement, which is currently

NOK 3,038 per hour, and billing is based on an hours worked basis. This rate was not subject to review by

the renumeration committee or approval by shareholders.

The following remuneration report sets out the

policy in respect of the components of remuneration which any future CEO employed directly by the

company would receive.

The Remuneration Committee (the “Committee”) sets the remuneration policy based on the principles and

framework outlined below.

The Committee is briefed on and considers prevailing market conditions, the

competitive environments and the positioning and relativities of pay and employment conditions across the

wider Company workforce.

Following each meeting of the Committee, the Chair provides an update to the Board.

Although the Committee does not consult directly with employees on CEO or director remuneration, during

its operational phase, the Company conducted periodic employee engagement surveys that gave employees

an opportunity to provide feedback on a wide range of employee matters.

As part of the Company’s commitment to good governance, the Committee also considers shareholder views

when setting the remuneration policy.

Feedback from shareholders and investors is shared with, and used

as input into decision-making by, the Board and Committee in respect of the remuneration policy and its

application.

The Committee considers that this approach provides a robust mechanism to ensure its

members are aware of matters raised, have a good understanding of current shareholders views, and can

determine the Company’s remuneration policy and make decisions as appropriate.

The remuneration policy is designed to avoid conflicts of interests between the Company and the interests

of shareholders.

In setting the remuneration policy, Committee members are subject to provisions designed

to avoid or manage conflicts of interest, which are documented

separately in the Company’s compliance

policies.

None of the directors or CEO makes a decision relating to their own remuneration.

Individual

directors leave the meeting when their own remuneration is being discussed.

The Company operates in a highly competitive market and must attract, motivate and retain high quality

directors and senior executives

capable of achieving the Company’s objectives and thereby enhancing

shareholder value.

A significant proportion of the potential remuneration of the CEO and senior executives is performance-

related with appropriately stretching targets, thus aligning their interests with those of shareholders and

encouraging performance at the highest levels.

The Committee has considered whether there are any aspects of the remuneration policy which could

inadvertently encourage the executives to take inappropriate risk and has concluded that the policy remains

appropriate in this regard.

As referred to above, the Company, in line with market practice, does not actively consult with employees

on executive remuneration.

The Committee is made aware of overall pay and employment conditions in

the wider work force when it sets the executive remuneration policy.

As referred to above, the Committee takes into account the view of the shareholders through open and

transparent communication with shareholders.

If there are significant changes proposed to the remuneration

policy, the Committee will consult with major shareholders.

Awilco Drilling PLC

Directors’ remuneration report

(continued)

22

The table below summarises the remuneration policy for any Executive Directors and any future CEO

employed directly by the Company.

Element

Purpose

Operation

Opportunity

Performance

Measure

Annual Salary

To attract and retain

key individuals and

reflect their

responsibilities,

market value and

expected performance

level

Reviewed annually or

when a change in

responsibility occurs

There is no

maximum salary

opportunity

Not applicable

Benefits

To provide a market

competitive reward

package to the

employee

Benefits to be provided

to Executive Directors

or the CEO will be

determined by the

Committee taking into

account such factors as

it determines to be

necessary, with the aim

of creating a competitive

overall package.

The

provision of benefits

would not be expected

to be performance

related.

Benefits may include,

but are not limited to:

➢

Car allowance

➢

Private health

care

➢

Travel and

housing

allowance

Benefits may also be

provided to reflect the

jurisdiction in which an

Executive Director or

the CEO is recruited or

to which an Executive

Director or CEO is

relocated for business

reasons, including

relocation costs, tax

equalisation

arrangements and

arrangements to take

into account exchange

rates.

Benefits may also

include participation in

any broad-based

incentive plan operated

by the Company from

time to time, up to the

relevant limit for

participation as applies

to such arrangement

Car allowance is a

fixed annual

amount.

There is

no maximum for

health/dental

insurance as it will

depend on the value

of premiums paid

in the year

Not applicable

Awilco Drilling PLC

Directors’ remuneration report

(continued)

23

Element

Purpose

Operation

Opportunity

Performance

Measure

Performance-

related bonus

To provide an

incentive for superior

work and to motivate

executives toward

even higher

achievement and

business results, to tie

their goals and

interests to those of

the Company and its

shareholders and to

enable the Company

to attract and retain

highly qualified

executives

Bonus payments are

determined by the

Remuneration

Committee and awarded

where justified by

performance

The amount of

bonus increases

with the level of

performance

achieved, up to a

maximum of 100%

of salary

Annual bonuses

will be

determined by

reference to

performance, in

the normal

course

measured over

one financial

year.

The

performance

measures,

weightings and

targets for the

annual bonus

will be set by

the Committee

on an annual

basis

The Committee

shall have

discretion to

determine the

terms and level

at which annual

bonuses may be

granted,

including the

minimum

performance

required for an

annual bonus to

be payable

In respect of an

Executive

Directors' or

CEO's

participation in

annual bonus

arrangements in

any year, the

Committee will

have power to

amend

performance

measures and

targets after

they have been

set if events

happen that

mean they are

no longer a fair

test of

performance

Awilco Drilling PLC

Directors’ remuneration report

(continued)

24

Element

Purpose

Operation

Opportunity

Performance

Measure

Pension

To provide a market

competitive

long-term

retirement benefit

Eligibility to participate

in a Defined

Contribution scheme

which has a maximum

employer contribution of

12%

Up to 12% of salary

Not applicable

Long Term

Incentive Plan

(LTIP)

To motivate and

incentivise executives

to achieve key long-

term incentives

The Company has

operated a historic LTIP

arrangement for the

former CEO with all

awards being synthetic

share options which are

cash-settled

In the event that the

Company adopts a new

long-term incentive plan

(which may involve

synthetic share options,

cash or actual shares),

the CEO would be

eligible to participate in

such plan, subject to the

terms of, and the

maximum levels of

participation provided

in, the rules of such

plan.

In respect of any

performance-related

long-term awards

granted to the CEO,

performance measures,

weightings and targets

would be set by the

Committee

Following grant of an

award, the Committee

would have power to

amend performance

measures and targets if

events happen that mean

they are no longer a fair

test of performance

The 2020

plan “vests” in

25% tranches linked to

rig contract dates and

expires after five years.

Award of up to

100% of salary

each calendar year

The awards are

made at the

discretion of the

Board of

Directors and

are not

guaranteed to be

awarded each

year

In considering the appropriate measures to apply to any performance-based awards, the Committee will seek

to incentivise and reinforce delivery of the Company's strategic objectives achieving a balance between

delivering annual returns to shareholders and ensuring long-term profitability and growth.

The performance targets set would be stretching and achievable, taking into account the Company's strategic

priorities and the economic environment in which the Company operates.

Awilco Drilling PLC

Directors’ remuneration report

(continued)

25

The Company’s remuneration policies and practices are founded on a high degree of alignment and

consistency across the organisation. Accordingly, remuneration for senior management is determined by

taking into account the remuneration principles that would apply to a future CEO employed directly by the

Company, and similar principles also form the basis of the remuneration arrangements for the wider

workforce.

The approach to salary reviews is consistent across the Company, with consideration given to the scope of

the role, responsibility, individual performance and pay levels in the selected peer group. Retirement

benefits, typically in the form of a pension, are provided based on local market practice. Other benefits

provided to the wider employee population reflect local market practice and legislative requirements.

A high proportion of the wider employee population are eligible to participate in annual bonus arrangements.

Opportunities and metrics which apply to these arrangements may vary by organisational level with

functional performance indicators incorporated where appropriate.

Senior managers are eligible to participate in the LTIP, with opportunities varying across levels with the

most senior managers having a bigger portion of their pay delivered under the LTIP.

The key difference between remuneration for any future employed CEO and the wider employee population

is the increased emphasis on long-term performance in respect of the CEO, with a greater percentage of

their total remuneration being performance-related.

The Committee is regularly updated on the pay principles and practices in operation across the Company,

in order to take these into account in setting the remuneration policy.

In addition to the above, the Company is obliged to honour any contractual entitlement to compensation or

benefits, and any incentive awards, which are held by: (i) any current or former Executive Director or CEO

on the effective date of this policy; or (ii) an employee or officer of the Group on the date they are promoted

to the role of Executive Director or CEO. Appropriate disclosure will be made of any compensation paid

(or similar) to an Executive Director or CEO pursuant to any such arrangements.

The Company may reimburse all reasonable expenses incurred by an Executive Director or CEO in

connection with their role. This will include expenses in attending Board or Board-committee meetings, or

the Company may alternatively provide a travel allowance for such purpose.

This may also include items

which, for tax purposes, are treated as a taxable benefit, and in which case the Company may also pay any

such tax on behalf of the Executive Director or CEO.

In recruiting an Executive Director or CEO, including on promotion of an employee or officer from within

the Group to the role of CEO, the Committee will offer the recruit a remuneration package that it believes

is appropriate, taking into account the skills and experience of the individual and the need to recruit, retain

and motivate individuals of the appropriate calibre.

The remuneration package offered may include the

components of remuneration described above in the Remuneration Policy Table.

For external hires, the Committee may determine that it would be appropriate to buy-out any existing

incentive awards held by the individual that are forfeited as a result of the individual leaving their former

employer.

The Committee may also determine that it would be appropriate to grant recruitment-related

awards.

In the case of any buy-out of an equity based award, or the grant of any recruitment-related award,

the award would normally be subject to such vesting and/or performance conditions as the Committee

determines to be appropriate, either under a one-

off arrangement or under the terms of the Company’s

incentive arrangements. In determining the terms of such awards, the Committee will take account of the

vesting schedule and conditions attached to the forfeited awards (in the case of buy-out awards), but also

other factors that it determines to be relevant, including the need to incentivise suitably and retain the

individual during the initial years of their office.

The maximum level of variable remuneration (excluding any buy-out awards) that may be granted to any

new Executive Director or CEO is 250% per annum of their salary.

Awilco Drilling PLC

Directors’ remuneration report

(continued)

26

The current interim CEO is supplied to the Company under the terms of a management on hire agreement.

Any future CEO employed directly by the Company would be subject to the details as explained below.

The employment contract of a future CEO would not be of a fixed duration and therefore would have no

unexpired terms.

The notice period of the CEO's contract of employment would be six months with the same notice period

for the Company. The CEO's employment could be terminated in the six-month probationary period without

notice in the case of wilful misconduct or gross negligence.

In the event of termination by the Company, where there is no basis for dismissal as a result of gross breach

of duty or other material breach of the employment contract by the CEO, or as a result of mutual agreement,

the CEO shall be entitled to twelve months' severance pay.

In the event of a change of control of the Company, the CEO can terminate the employment contract and

would be entitled to twelve months' severance pay.

The CEO's service contract would be

available for inspection at the Company’s registered office during

normal hours of business.

The non-executive directors do not have service contracts but instead have letters of appointment.

Contractual entitlements

A departing Executive Director’s or CEO's rights in respect of salary, retirement benefits and contractual

benefits will be determined in accordance with his service contract.

Incentive plans

The terms of a departing Executive Director’s or CEO's participation in any annual bonus or long

-term

incentive plans will be governed by the terms of such arrangements.

Corporate actions

The treatment of incentive awards in the event of a corporate action affecting the Company will be

determined in accordance with the terms of such awards.

The Company may agree to pay reasonable legal fees on behalf of an Executive Director or CEO in respect

of the effect of any corporate action on their personal position.

Other

The Company may enter into new contractual arrangements with a departing Executive Director or CEO in

connection with the cessation of office or employment, including (but not limited to) in respect of settlement

of claims, confidentiality, restrictive covenants and/or consultancy arrangements, where the Committee

determines it necessary or appropriate to do so. The Company may pay reasonable legal fees on behalf of

an Executive Director or CEO in connection with their cessation of office and employment. The Company

may agree to provide other ancillary or non-material benefits, payments or similar to a departing Executive

Director or CEO.

Awilco Drilling PLC

Directors’ remuneration report

(continued)

27

The graph below shows how the total pay opportunities for any future CEO would vary under four

performance scenarios.

These have been prepared on the assumptions detailed below. The current interim

CEO is on a fixed rate in accordance with a management on hire agreement and as a result no performance

scenarios are applicable.

Below target = fixed pay only (base salary, benefits and pension)

On target = 50% payable of annual bonus, 0% LTIP award

Maximum = 100% payable of annual bonus, 100% LTIP award

Maximum 2 = 100% payable of annual bonus, 100% LTIP award and 50% share price increase over the

performance period

The chart illustrates the potential rewards available under the remuneration policy on an annualised basis

for the financial year 2023. The values (other than the Maximum 2 illustration) assume a constant share

price and do not take into account dividend adjustments that may be received on the share awards. The

potential awards available for "on-target" performance under the annual bonus and LTIP are provided for

illustration only and do not reflect formal policy decisions that these amounts will be received.

Maximum

2 illustration assumes a share price increase of 50% over the performance period but in all other respects is

the same as the Maximum illustration. The figures used in the chart are provided for illustration only based

on a theoretical grant over 100% of salary, being the maximum permitted under the policy table.

The salary level (on which the bonus and LTIP elements of the package are calculated) are based on the

previous salary level of GBP 325,000 based on the GBP/NOK year end exchange rate.

Awilco Drilling PLC

Directors’ remuneration report

(continued)

28

The remuneration policy for non-executive directors is set out in the table below.

No non-executive

directors participate in the Company’s

incentive arrangements or pension plan.

Component

Purpose

Operation

Fees

The basic fee is a fixed annual fee agreed after

taking external advice and making market

comparisons, and relate to the service of the

directors in connection with the Company’s

business.

The additional fees payable to the

Chairman and members of the Board Committees

reflects the additional time commitment in

preparing and attending additional meetings.

The fees for non-executive

directors (including the

Chairman) are reviewed

annually and approved in

aggregate at the annual general

meeting.

The current level of

fees is detailed below.

The same principles as described above will be applied in setting the remuneration of a new non-executive

director.

Remuneration will comprise fees only and be paid in accordance with the prevailing rate at the

time of the appointment.

No variable remuneration will be paid and there will be no compensation for any

loss of remuneration in a previous employment.

The Non-executive Directors

’

Letters of Appointment are available for inspection at the Company’s

registered office during normal hours of business.

In addition to the above, the Company is entitled to honour any contractual entitlement to compensation or

benefits, and any incentive awards, which are held by any current or former Non-Executive Director on the

effective date of this policy.

Appropriate disclosure will be made of any compensation paid (or similar) to

a Non-Executive Director pursuant to any such arrangements.

The Company may reimburse all reasonable expenses incurred by a Non-Executive Director in connection

with their role. This will include expenses in attending Board or Board-committee meetings, or the Company

may alternatively provide a travel allowance for such purpose.

This may also include items which, for tax

purposes, are treated as a taxable benefit, and in which case the Company may also pay any such tax on

behalf of the Non-Executive Director.

The current level of fees paid for 2022 and those proposed for 2023 are as follows:

2023

2022

GBP

GBP

Chairman

46,375

46,375

Basic Fee

33,125

33,125

Chair of Audit Committee

5,000

5,000

Member of Audit, Remuneration or Nomination Committee

3,000

3,000

Fees to be paid in respect of 2023 will be decided at the next AGM which is scheduled for 24th June 2024.

All directors were required, under the Articles of Association of the Company, to retire at the first AGM.

At each subsequent AGM, any directors who have been appointed by ordinary resolution or by the directors

since the last AGM or who were not appointed or reappointed at one of the preceding two AGMs must retire

from office and may offer themselves for reappointment by the members. After recommendation by the

Nomination Committee, all directors were re-appointed at the AGM on 26

th

June 2023 and will be due for

re-appointment at the AGM held during 2025.

Awilco Drilling PLC

Directors’ remuneration report

(continued)

29

Audited information

Single total figure of remuneration table

2023

Basic

Salary and

Fees

Benefits

(1)

Pension

related

benefits (2)

Total Fixed

Remuneration

Performance

Related bonus

Other (3)

Total Variable

Remuneration

GBP

GBP

GBP

GBP

GBP

GBP

GBP

Chief Executive

Officer:

E D Jacobs

78,029

-

-

78,029

-

-

-

78,029

-

-

78,029

-

-

-

Non-executive

Directors:

S E Thorvildsen

49,375

-

-

49,375

-

-

-

H Fougner

39,125

-

-

39,125

-

-

-

D A Gold

36,125

-

-

36,125

-

-

-

J N Simpson

38,125

-

-

38,125

-

-

-

S Syrrist

33,125

-

-

33,125

-

-

-

195,875

-

-

195,875

-

-

-

2022

Basic

Salary and

Fees

Benefits

(1)

Pension

related

benefits (2)

Total Fixed

Remuneration

Performance

Related bonus

Other (3)

Total Variable

Remuneration

GBP

GBP

GBP

GBP

GBP

GBP

GBP

Chief Executive

Officer:

E D Jacobs

213,225

-

-

213,225

213,225

-

-

213,225

Non-executive

Directors:

S E Thorvildsen

49,375

-

-

49,375

-

-

-

H Fougner

39,125

-

-

39,125

-

-

-

D A Gold

36,125

-

-

36,125

-

-

-

J N Simpson

38,125

-

-

38,125

-

-

-

S Syrrist

33,125

-

-

33,125

-

-

-

195,875

-

-

195,875

(1)

Includes non-cash benefits comprising car allowance and private health and dental care

(2)

Contributions made during the year to the defined contribution scheme

(3)

Cash-settled value of synthetic share options exercised during the year

(4)

Interim CEO, not employed by Company but provided under a management on hire agreement

from a related party

Awilco Drilling PLC

Directors’ remuneration report

(continued)

30

The Chief Executive Officer received no taxable benefits.

For the year under review, there was no bonus awarded to the Chief Executive Officer.

The criteria for the 2024 bonus has yet to be finalised by the Remuneration Committee but it is considered

unlikely that a bonus for 2024 will be awarded.

A long term incentive plan for the CEO and other key management personnel, with a total limit of up to up

to 4,000,000 shares was approved at the general meeting on 11 November 2019.

The 2020 plan “vests” in 25% tranches

.

The vesting dates for the plan are linked to the contract that was

signed with Keppel FELS shipyard in Singapore to build up to four new CS60 semi-submersible drilling

rigs, with each contract option being independent of each other.

Each 25% tranche “vests” on the date

each

of the four the rig option contracts commence, and day rate revenue is earned.

In the event that the rig

building contract is terminated, as is the case for Rig 1 and Rig 2, the shares will lapse.

In the event that the

build option is not exercised, as is the case with Rig 3 and Rig 4, specific vesting dates in 2023 and 2024

are stipulated.

No shares were exercised during the year.

There are no directors who have any interests in shares.

Awilco Drilling PLC

Directors’ remuneration report

(continued)

31

Information not subject to audit:

The graph below shows the relative importance of the spend on pay (for all employees) compared with the

returns distributed to shareholders (Note no dividends paid in 2022 or 2023).

The graph below shows the total shareholder return in terms of change in value of an initial investment of

£100 on 10 June 2011 (and assuming dividends are re-

invested) in a holding of the Company’s shares against

the corresponding total shareholder return in a hypothetical holding of shares in the OBX (an index on the

Oslo Bors stock exchange).

This was selected as it represents a broad equity market index in which the

Company is a constituent member. The graph is a reporting requirement, however, the LTIP awards that are

made to the Executive Director are not based on share performance.

Awilco Drilling PLC

Directors’ remuneration report

(continued)

32

Five-year comparison

The table below summarises the Chief Executive Officer

(the Executive Director)’s

single total figure of

remuneration, annual and long-term variable performance-related remuneration (and the percentage of the

maximum opportunity that these represent) in relation to the past five years.

Year

Chief Executive

Officer

Single total figure

of remuneration

Annual variable element (actual

award versus opportunity)

GBP

GBP

%

2023

E Jacobs

(4)

78,029

-

-

2022

E Jacobs

(4)

213,255

-

-

2021

E Jacobs

(4)

170,337

-

-

2021

J E O Berge

(3)

557,625

-

-

2020

J E O Berge

380,341

-

-

2019

J E O Berge

(1)

417,591

162,500

50%

2019

J O S Bryce

(2)

719,207

-

-

2023

2022

Change

%

Employee

remuneration

change

GBP

GBP

Salary and fees

78,029

213,255

(63)%

14%

Annual variable performance related

remuneration

-

-

0%

0%

Total Annual figure

78,029

213,255

(63)%

64.5%

Single total figure of remuneration

78,029

213,255

(63)%

64.5%

The above table shows the movement in remuneration for the Chief Executive Officer between the current

and previous financial year compared with movement of the average remuneration (per head) for all

Company employees.

2023

2022

2021

2020

2019

Change

%

Change

%

Change

%

Change

%

Change

%

S E Thorvildsen

0%

0%

0%

0%

0%

H Fougner

0%

0%

0%

0%

0%

D A Gold

0%

0%

0%

0%

0%

J N Simpson

0%

0%

0%

0%

0%

S Syrrist

0%

0%

0%

0%

0%

14%

(10.3)%

1.5%

2%

(3.8)%

The above table shows the movement in remuneration for the Directors for the past five years compared

with the average movement in remuneration (per head) for all Company employees.

Awilco Drilling PLC

Directors’ remuneration report

(continued)

33

Base salaries

Any future

CEO’s base salary will continue to be reviewed annually by the

Remuneration Committee, based

on performance and current market conditions.

The Remuneration Committee will then make a

recommendation to the Board of Directors.

There is no change from the previous year.

Pension and benefits

The CEO would be eligible to participate in a defined contribution arrangement which the Company

contributes a maximum of 12% of base salary.

Additional benefits include private medical and dental

insurance and company car allowance.

Annual performance related remuneration

The maximum bonus opportunity for the CEO would remain unchanged at 100% of base salary. The bonus

opportunity will be set by the Committee with targets aligned with creating shareholder value.

The table below sets out the voting by the Company’s shareholders on the resolution to approve the

Directors’ remuneration report at the AGM held on

26 June 2023.

Total number of votes

% of votes cast

For

3,281,309

99.9%

Total votes cast

3,281,626

100.0%

The Remuneration Committee is pleased to note that 99.9% of shareholders approved the 2022 Directors

’

remuneration report.

By order of the Board of Directors

Sigurd Thorvildsen

29 May 2024

34

Independent auditors’ report

to the members of Awilco Drilling PLC

Opinion

In our opinion:



Awilco Drilling PLC

’s group financial statements and parent company financial statements (the

“financial statements”) give a true and fair view of the state of the group’s and of the parent

company’s affairs as at 31 December 202

3

and of the group’s

profit for the year then ended;



the group financial statements have been properly prepared in accordance with UK adopted

international accounting standards;



the parent company financial statements have been properly prepared in accordance with UK

adopted international accounting standards as applied in accordance with section 408 of the

Companies Act; and



the financial statements have been prepared in accordance with the requirements of the Companies

Act 2006.

We have audited the financial statements of Awilco Drilling PLC

(the ‘parent company’) and its

subsidiaries (the ‘group’) for the year ended 31 December 202

3 which comprise:

Group

Parent company

Group statement of financial position at 31 December 2023

Company statement of financial position as

at 31 December 2023

Group statement of comprehensive income for the year then

ended

Company statement of changes in equity for

the year then ended

Group statement of changes in equity for the year then ended

Company statement of cash flows for the

year then ended

Group statement of cash flows for the year then ended

Related notes 1 to 27 to the financial

statements including a summary of

significant accounting policies

Related notes 1 to 27 to the financial statements, including a

summary of significant accounting policies

The financial reporting framework that has been applied in their preparation is applicable law and UK

adopted International Accounting Standards and, as regards to the parent company financial statements, as

applied in accordance with section 408 of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and

applicable law. Our responsibilities under those standards are further described in the Auditor’s

responsibilities for the audit of the financial statements section of our report. We are independent of the

group and parent company in accordance with the ethical requirements that are relevant to our audit of the

financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we

have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the

audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independent auditors’ report

to the members of Awilco Drilling PLC

35

Emphasis of Matter - financial statements prepared on a basis other than going concern

We draw attention to Note 2 in the financial statements which explains the Company and Group are currently

no longer performing operational activities relating to rigs and therefore the Directors do not consider it to

be appropriate to adopt the going concern basis of accounting in preparing the financial statements.

Accordingly, the financial statements have been prepared on a basis other than going concern as described

in Note 2.

Our opinion is not modified in respect of this matter.

Overview of our audit approach

Audit scope

•

We performed an audit of the complete financial information of two

components and audit procedures on specific balances for a further two

components.

•

The components where we performed full or specific audit procedures

accounted for 100% of operating expenses.

Key audit

matters

•

Assessment of the status of the arbitration process and required accounting

and disclosures.

Materiality

•

Overall group materiality of $100k which represents 0.75% of operating

expenses.

An overview of the scope of the parent company and group audits

Tailoring the scope

Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality

determine our audit scope for each company within the Group.

Taken together, this enables us to form an

opinion on the consolidated financial statements. We take into account size, risk profile, the organisation of

the group and effectiveness of group wide controls, changes in the business environment, the potential

impact of climate change and other factors when assessing the level of work to be performed at each

company.

In assessing the risk of material misstatement to the Group financial statements, and to ensure we had

adequate quantitative coverage of significant accounts in the financial statements, of the four reporting

components of the Group, we selected four components covering entities within Singapore and the United

Kingdom, which represent the principal business units within the Group.

Of the four components selected, we performed an audit of the complete financial information of two

components (“full scope components”) which were selected based on their size or risk characteristics. For

the remaining two components (“specific scope components”), we performed audit procedures on specific

accounts within that component that we considered had the potential for the greatest impact on the

significant accounts in the financial statements either because of the size of these accounts or their risk

profile.

The reporting components where we performed audit procedures accounted for 100% of the Group’s Profit

before tax (2022: 100% of Group’s Loss before tax), 100% (2022: 100%) of the Group’s Operating expenses

and 100% (2022: 100%) of the Group’s Total assets.

For the current year, the full scope components

contributed 100% of the Group’s Profit before tax (2022: 100% Group’s Loss before tax), 100% (2022:

88%) of the Group’s Operating Expenses and

100

% (2022: 100%) of the Group’s Total assets. The specific

scope component contributed 0% of the Group’s Profit before tax (2022: 0% of the Groups Loss before tax),

0% (2022: 12%) of the Group’s Operating Expenses and

0

% (2022: 9%) of the Group’s Total assets.

Independent auditors’ report

to the members of Awilco Drilling PLC

36

Tailoring the scope (continued)

The audit scope of these components may not have included testing of all significant accounts of the

component but will have contributed to the coverage of significant accounts tested for the Group.

All audit

testing was performed by the Primary audit team.

Changes from the prior year

We have classified two entities as full scope and two as specific scope in the current year, compared to four

entities as full scope and one as specific scope in the prior year. This is as a result of the liquidation of a

subsidiary during the year

.

Involvement with component teams

All audit work performed for the purposes of the audit was undertaken by the Group audit team.

Climate change

Stakeholders are increasingly interested in how climate change will impact Awilco Drilling PLC. The Group

has determined it does not expect material future impacts from climate change on their operations. This is

explained on page 10 in the Directors Report and on page 49 in the significant accounting policies. These

disclosures form part of the “Other information,” rather than the audited financial statements. Our

procedures on these unaudited disclosures therefore consisted solely of considering whether they are

materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or

otherwise appear to be materially misstated, in line with our responsibilities on “Other information”.

In planning and performing our audit we assessed the potential impacts of climate change on the Group’s

business and any consequential material impact on its financial statements.

As explained in the Basis of Preparation in note 2, management have considered the impact of climate

change on its operations when preparing the financial statements and concluded that it does not have a

material impact on the financial statements as at 31 December 2023. Our audit effort in considering the

impact of climate change on the financial statements was focused on evaluating management’s assessment

of the impact of climate risk, physical and transition risks, and ensuring that the effects of climate risks

disclosed on page 10 have been appropriately reflected by management in reaching areas of judgement in

the financial statements. As part of this evaluation, we performed our own risk assessment to determine the

risks of material misstatement in the financial statements from climate change which needed to be

considered in our audit.

We also challenged the directors’ considerations of climate change risks in their assessment of going concern

and associated disclosures. Where considerations of climate change were relevant to our assessment of going

concern, these are described above.

Based on our work we have not identified the impact of climate change on the financial statements to be a

key audit matter or to impact a key audit matter

.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit

of the financial statements of the current period and include the most significant assessed risks of material

misstatement (whether or not due to fraud) that we identified. These matters included those which had the

greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts

of the engagement team. These matters were addressed in the context of our audit of the financial statements

as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.

Independent auditors’ report

to the members of Awilco Drilling PLC

37

Risk

Our response to the risk

Key observations

communicated to the Audit

Committee

Assessment of the status of the

arbitration process and

required accounting and

disclosures

Refer to the Audit Committee

Report (page 16); Accounting

policies (page 50); and Note 22

of the Consolidated Financial

Statements (page 61)

In 2020 two construction

contracts for new build rigs

were cancelled between the

subsidiary companies, Awilco

Rig 1 Pte Ltd and Awilco Rig 2

Pte Ltd and Keppel Fels Limited

(Keppel).

Two arbitration

processes were initiated. Claims

were received from Keppel Fels

Limited for liabilities relating to

the cancellation of the contracts,

whilst Awilco Rig 1 Pte Ltd and

Awilco Rig 2 Pte Ltd, counter

claimed for recovery of deposits

and variation order payments.

The Commercial Court issued

its decision on both arbitration

cases during the financial year;

i/ Awilco Rig 1 Pte -

found in

favour Keppel Fels Limited, and

ii/ Awilco Rig 2 Pte Ltd - found

in favour of Awilco Rig 2 Pte

Ltd.

Under IAS 37 (“Provisions,

Contingent Liabilities and

Contingent Assets”) the Group

is required to assess whether the

probability of an outflow of

resources is more likely than not

to occur.

Similarly, they also

need to assess whether there is

the possibility of an inflow of

economic benefits to the group.

We obtained an update from

management and in-house legal

counsel regarding the current year

developments of the two

arbitration cases.

We wrote to and held discussions

with the external legal advisors to

understand the status and

arbitration rulings of the two

arbitration cases. In doing so we

also confirmed the legal status of

the entities involved in these

arbitrations and the possible

impact on the group.

We updated the audit evidence

from previous financial periods.

We assessed the impact of the

Arbitration ruling on the Awilco

Rig 1 PTE Ltd case issued on 21

April 2023 and subsequent

placement of the company into

liquidation.

We considered the impact of the

Arbitration ruling on the Awilco

Rig 2 Pte Ltd case and whether an

asset should be recognised in

accordance with IAS37.

We assessed the completeness

and accuracy of the Group’s

accounting entries and disclosures

relating to this matter in Note 3

and 22 to the Group financial

statements.

All procedures were conducted

by the Primary audit team.

We concluded that the

disclosures in the financial

statements are adequate and

appropriate.

Independent auditors’ report

to the members of Awilco Drilling PLC

38

Key Audit Matters (continued)

Risk

Our response to the risk

Key observations

communicated to the Audit

Committee

Judgement is required to assess

whether the matter satisfies the

recognition criteria for a

provision or receivable or

whether the amounts should

continue to be disclosed as a

contingent liabilities and

contingent assets.

Our application of materiality

We apply the concept of materiality in planning and performing the audit, in evaluating the effect of

identified misstatements on the audit and in forming our audit opinion.

Materiality

The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be

expected to influence the economic decisions of the users of the financial statements. Materiality provides a

basis for determining the nature and extent of our audit procedures.

We determined materiality for the Group to be $100k (2022: $190k), which is 0.75% (2022: 0.75%) of

Operating Expenses. We believe that Operating Expenses provides us with the most appropriate bases

considering the activities of the group.

We determined materiality for the Parent Company to be $117k (2022: $900k), which is 3% (2022: 3%) of

Operating Expenses.

During the course of our audit, we reassessed initial materiality and no changes were required.

Performance materiality

The application of materiality at the individual account or balance level.

It is set at an amount to reduce to

an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements

exceeds materiality.

On the basis of our risk assessments, together with our assessment of the Group’s overall control

environment, our judgement was that performance materiality was 75% (2022: 75%) of our planning

materiality, namely $75k (2022: $140k).

We have set performance materiality at this percentage due to the

history of past misstatements and lack thereof, our ability to assess the likelihood of misstatements and the

effectiveness of the internal control environment.

Audit work at component locations for the purpose of obtaining audit coverage over significant financial

statement accounts is undertaken based on a percentage of total performance materiality. The performance

materiality set for each component is based on the relative scale and risk of the component to the Group as

a whole and our assessment of the risk of misstatement at that component.

In the current year, the range of

performance materiality allocated to components was $16k to $70k (2022: $63k to $140k).

Independent auditors’ report

to the members of Awilco Drilling PLC

39

Reporting threshold

An amount below which identified misstatements are considered as being clearly trivial.

We agreed with the Audit Committee that we would report to them all uncorrected audit differences in

excess of $5k (2022: $9k), which is set at 5% of planning materiality, as well as differences below that

threshold that, in our view, warranted reporting on qualitative grounds,

We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed

above and in light of other relevant qualitative considerations in forming our opinion

.

Other information

The other information comprises the information included in the annual report set out on page 2, other than

the financial statements and our auditor’s report thereon.

The directors are responsible for the other

information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent

otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information

is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit

or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent

material misstatements, we are required to determine whether this gives rise to a material misstatement in

the financial statements themselves. If, based on the work we have performed, we conclude that there is a

material misstatement of the other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

•

the information given in the strategic report and the directors’ report for the financial year for which

the financial statements are prepared is consistent with the financial statements; and

•

the strategic report and directors’ report have been prepared in accordance with applicable legal

requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment

obtained in the course of the audit, we have not identified material misstatements in the strategic report or

the directors’ report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006

requires us to report to you if, in our opinion:

•

adequate accounting records have not been kept by the parent company, or returns adequate for our

audit have not been received from branches not visited by us; or

•

the parent company financial statements are not in agreement with the accounting records and returns;

or

•

certain disclosures of directors’ remuneration specified by law are not made; or

•

we have not received all the information and explanations we require for our audit.

Independent auditors’ report

to the members of Awilco Drilling PLC

40

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement set out on page

12, the directors are

responsible for the preparation of the financial statements and for being satisfied that they give a true and

fair view, and for such internal control as the directors determine is necessary to enable the preparation of

financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group and parent

company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern

and using the going concern basis of accounting unless the directors either intend to liquidate the group or

the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free

from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our

opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in

accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can

arise from fraud or error and are considered material if, individually or in the aggregate, they could

reasonably be expected to influence the economic decisions of users taken on the basis of these financial

statements.

Explanation as to what extent the audit was considered capable of detecting

irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The

risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one

resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional

misrepresentations, or through collusion.

The extent to which our procedures are capable of detecting

irregularities, including fraud is detailed below.

However, the primary responsibility for the prevention

and detection of fraud rests with both those charged with governance of the company and management.

•

We obtained an understanding of the legal and regulatory frameworks that are applicable to the

group and determined that the most significant are those that relate to the reporting framework

(IFRS and the Companies Act 2006).

In addition, we concluded that there are certain significant

laws and regulations that may have an effect on the determination of the amounts and disclosures

in the financial statements and those laws and regulations relating to health and safety, employee

matters, environmental, and bribery and corruption practices;

•

We understood how Awilco Drilling PLC is complying with those frameworks by making enquiries

of management and those responsible for legal and compliance procedures. We corroborated our

enquiries through our review of Board minutes, papers provided to the Audit Committee and

correspondence received from regulatory bodies and noted that there was no contradictory

evidence;

•

We assessed the susceptibility of the group’s financial statements to material misstatement,

including how fraud might occur by considering the risk of fraud through management override

and, in response, we carried out procedures such as testing of transactions back to source

information, which were designed to provide reasonable assurance that the financial statements

were free from fraud or error; and

•

Based on this understanding we designed our audit procedures to identify non-compliance with

such laws and regulations. Our procedures involved journal entry testing, with a focus on journals

meeting our defined risk criteria based on our understanding of the business.

.

Independent auditors’ report

to the members of Awilco Drilling PLC

41

A further description of our responsibilities for the audit of the financial statements is located on the

Financial Reporting Council’s website at https://www.frc.org.uk/auditorsresponsibilities.

This description

forms part of our auditor’s report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of

the Companies Act 2006.

Our audit work has been undertaken so that we might state to the company’s

members those matters we are required to state to them in an auditor’s report and for no other purpose.

To

the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the

company and the company’s members as a body, for our audit work, for this report, or for the opinions we

have formed.

Kevin Weston (Senior Statutory Auditor)

For and on behalf of Ernst & Young LLP (Statutory Auditor)

Aberdeen

29 May 2024

Notes:

1.

The maintenance and integrity of the Awilco Drilling PLC web site is the responsibility of the

directors; the work carried out by the auditors does not involve consideration of these matters and,

accordingly, the auditors accept no responsibility for any changes that may have occurred to the

financial statements since they were initially presented on the web site.

2.

Legislation in the United Kingdom governing the preparation and dissemination of financial

statements may differ from legislation in other jurisdictions.

Awilco Drilling PLC

42

Group statement of comprehensive income

for the year ended 31 December 2023

2023

2022

Notes

US$000

US$000

Cost of sales

19

(5,363)

Impairment

15

-

(205)

Gain on deconsolidation of subsidiaries

5

125,353

-

(Loss)/Gain on sale of drilling rigs and other equipment

(12)

3,188

Gross Profit/(Loss)

125,360

(2,380)

General and administrative expenses

(14,146)

(20,153)

Other income /(expense)

7

302

(122,568)

Operating Profit / (Loss)

6

111,516

(145,101)

Finance income

10

139

53

Finance expense

11

(133)

(168)

Net loss on foreign exchange transactions

12

103

(119)

Profit /(Loss) before taxation

111,625

(145,335)

Income tax expense

13

-

(21)

Profit/(Loss) for the year attributable to equity shareholders

111,625

(145,356)

There is no comprehensive income other than the results for the year.

Basic and diluted profit / (loss) per share (US$ per share)

14

12.1

(228.2)

Total comprehensive income for the year is attributable to the owners of the Company, as there is no

minority interest.

Awilco Drilling PLC

43

Group statement of financial position

as at 31 December 2023

2023

2022

Notes

US$000

US$000

Non-current assets

Property, plant and equipment

15

-

-

Right-of-use asset

21

-

-

-

-

Current assets

Trade and other receivables

17

54

2,635

Cash and cash equivalents

18

1,850

8,880

1,904

11,515

Total assets

1,904

11,515

Current liabilities

Trade and other payables

19

8,904

118,372

Provisions

20

-

9,278

Loans

-

1,500

Current tax payable

-

9,174

8,904

138,324

Non-current liabilities

Trade and other payables

19

-

146

-

146

Total liabilities

8,904

138,470

Net (Liabilities)Assets

(7,000)

(126,955)

Shareholders’ Equity

Called up share capital

23

736

3,581

Share premium account

23

222,827

222,827

Retained deficit

(230,563)

(353,363)

Total Shareholders’ equity

(7,000)

(126,955)

29 May 2024

Awilco Drilling PLC

44

Company statement of financial position

as at 31 December 2023

2023

2022

Notes

US$000

US$000

Non-current assets

Property, plant and equipment

15

-

-

Right of use assets

21

-

-

Investment in subsidiaries

16

-

-

Amount due from subsidiary undertakings

24

-

-

-

-

Current assets

Trade and other receivables

17

54

2,635

Cash and cash equivalents

18

1,850

8,539

1,904

11,174

Total assets

1,904

11,174

Current liabilities

Trade and other payables

19

1,102

1,380

Loans

-

1,500

1,102

2,880

Non-current liabilities

Trade and other payables

19

-

146

Total liabilities

1,102

3,026

Net assets

802

8,148

Shareholders’ Equity

Called up share capital

23

736

3,581

Share premium account

23

222,827

222,827

Retained deficit

(222,761)

(218,260)

Total Shareholders’ equity

802

8,148

The loss recorded by the Company for the year was US$ 15.7 million (2022: US$ 23.9 million loss).

Signed on behalf of the Board of Directors

Sigurd Thorvildsen

Director

29 May 2024

Awilco Drilling PLC

45

Group statement of changes in equity

for the year ended 31 December 2023

Called Up

Share

Capital

Share

Premium

account

Retained

Earnings/(deficit)

Total

shareholders

equity

US$000

US$000

US$000

US$000

At 1 January 2022

525

218,381

(208,007)

10,899

Equity issue as at 22 December 2022

3,056

4,796

-

7,852

Equity issue costs as at 22 December 2022

-

(350)

-

(350)

Total comprehensive loss for the year

-

-

(145,356)

(145,356)

At 31 December 2022

3,581

222,827

(353,363)

(126,955)

Equity issue as at 4 July 2023

5,618

94

-

5,712

Equity issue costs 2023

(144)

-

(144)

Equity issue as at 26 July 2023

2,325

39

-

2,364

Equity issue as at 14 September 2023

388

11

-

399

Capital reduction

(11,175)

-

11,175

-

Total comprehensive profit for the year

-

-

111,625

111,625

At 31 December 2023

737

222,827

(230,563)

(7,000)

Awilco Drilling PLC

46

Company statement of changes in equity

for the year ended 31 December 2023

Called Up

Share

capital

Share

Premium

account

Retained

Earnings/(deficit)

Total

shareholders

equity

US$000

US$000

US$000

US$000

At 1 January 2022

525

218,381

(194,377)

24,529

Equity issue as at 22 December 2022

3,056

4,796

-

7,852

Equity issue costs as at 22 December 2022

-

(350)

-

(350)

Total comprehensive loss for the year

-

-

(23,883)

(23,883)

At 31 December 2022

3,581

222,827

(218,260)

8,148

Equity issue as at 4 July 2023

5,618

94

-

5,712

Equity issue costs 2023

(144)

-

(144)

Equity issue as at 26 July 2023

2,325

39

-

2,364

Equity issue as at 14 September 2023

388

11

-

399

Capital reduction

(11,175)

-

11,175

-

Total comprehensive loss for the year

-

-

(15,677)

(15,677)

At 31 December 2023

737

222,827

(222,762)

802

Awilco Drilling PLC

47

Group statement of cash flows

for the year ended 31 December 2023

2023

2022

Notes

US$000

US$000

Operating activities

Profit / (loss) before taxation

111,625

(145,336)

Adjustments to reconcile loss before tax to net cash flows:

Depreciation of fixed assets and right of use assets

15

-

419

Impairment of fixed assets and right of use assets

15, 21

-

205

Net finance (income)/expense

(6)

115

Share-based payment

-

-

Loss/(Gain) on sale of property, plant and equipment

12

(3,188)

Working capital adjustments:

Decrease in trade receivables

3

34

Decrease / (increase) in inventory

-

115

(Increase) / decrease in prepayments and other receivables

2,577

(2,006)

(Decrease)/increase in trade and other payables

(127,631)

122,098

Interest paid

11

(133)

(168)

Interest received

10

139

53

Taxation paid

(21)

(98)

Net cash flows used in operating activities

(13,435)

(27,757)

Investing activities

Purchase of property, plant and equipment

15

-

(205)

Proceeds from disposal of property, plant and equipment

(12)

18,533

Net cash flow (used in)/from investing activities

(12)

18,328

Financing activities

Proceeds from issue of share capital

8,475

7,852

Equity issue costs

(144)

(350)

Issue of loans

-

1,500

Repayment of loans

(1,500)

-

Payment of principal portion of lease liabilities

21

(192)

(244)

Net cash flows generated from financing activities

6,639

8,758

Net decrease in cash and cash equivalents

(6,808)

(671)

Net foreign exchange difference

(222)

(134)

Cash and cash equivalents at beginning of year

8,880

9,685

Cash and cash equivalents at end of year

18

1,850

8,880

Awilco Drilling PLC

48

Company statement of cash flows

for the year ended 31 December 2023

2023

2022

Notes

US$000

US$000

Operating activities

Loss before taxation

(15,676)

(23,884)

Adjustments to reconcile loss before tax to net cash flows:

Depreciation of fixed assets and right of use assets

15

-

419

Impairment of fixed assets and investments

15, 21

-

75

Net finance cost / (income)

8,751

(6,686)

Share based payment

-

-

Working capital adjustments:

(Increase) /Decrease in prepayments

(6,176)

6,440

Decrease in trade and subsidiary receivables

24

3

15,278

(Decrease) in trade and other payables

(232)

(1,089)

Interest paid

(133)

(168)

Interest received

135

50

Net cash flows used in operating activities

(13,328)

(9,565)

Financing activities

Proceeds from issue of share capital

8,475

7,852

Equity issue costs

(144)

(350)

Issue of loans

-

1,500

Repayment of loans

(1,500)

-

Payment of principal portion of lease liabilities

21

(192)

(244)

Net cash flows generated from financing activities

6,639

8,758

Net decrease in cash and cash equivalents

(6,689)

(807)

Cash and cash equivalents at beginning of year

8,539

9,346

Cash and cash equivalents at end of year

18

1,850

8,539

Notes to the financial statements

At 31 December 2023

49

Awilco Drilling PLC

operations and its principal activities are set out in the Strategic report.

2023.

Notes to the financial statements (continued)

The Group has applied judgment in evaluating it as a contingent asset.

contributions have been paid, there are no further payment obligations.

Notes to the financial statements (continued)

of future profits being at this level.

During the year, a further 10,149,440 shares were issued.

Notes to the financial statements (continued)

57

Awilco Drilling PLC

have been deconsolidated.

impaired.

There are no funds held by any other entities in the Group.

Awilco Drilling PLC

60

Notes to the financial statements (continued)

Pte. Ltd. to Awilco Rig 1 Pte. Ltd. (an entity which is no longer part of the Group).

consolidated in the Group financial statements and no longer a liability of the Group.

The Group has total cash outflows for leases of less than US$ 0.1 million (2022: US$ 0.1 million).

statement of financial position because the asset is no longer considered to be contingent.

Notes to the financial statements (continued)

Notes to the financial statements (continued)

be used to support the ongoing operational costs until proceeds from the arbitration award are received.