Shelf Drilling Reports Fourth Quarter 2023 Results

PRESS RELEASE

SHELF DRILLING REPORTS FOURTH QUARTER 2023 RESULTS

Dubai, UAE, March 4, 2024 - Shelf Drilling, Ltd. ("Shelf Drilling", "SDL" and,together with its subsidiaries, the "Company", OSE: SHLF) announces resultsforthe fourth quarter and full year of 2023 ended December 31. The resultshighlights will be presented by audio conference call on March 4, 2024 at 6:00pm Dubai time / 3:00 pm Oslo time. Dial-in details for the call are includedinthe press release posted on February 27, 2024 and on page 3 of this release.

David Mullen, Chief Executive Officer, commented: "The fourth quarter of 2023concluded a very positive year for Shelf Drilling. We generated EBITDA of $88million, bringing the full year total to $311 million, in line with theguidancewe provided at the beginning of 2023. We delivered the best safety performancein our company's history, and we completed our most intense period of majoroutof service projects, in aggregate on time and on budget. The execution of ourrefinancing transaction late in the year has resulted in a significantlyimproved capital structure with a clear runway until 2029."

Mullen added: "Oil and gas consumption has reached record levels and isexpectedto increase for many years to come with shallow water activity in our marketsplaying a critical role. Global jack-up utilization has reached 94%, anddayratemomentum has accelerated over the past 18 months. There may possibly be somereduction in Saudi Arabia in the quarters ahead, but we expect incrementaldemand in other regions to sustain strong level of jack-up activity andutilization for the foreseeable future. As of December 31, 2023, our backlogwas$2.3 billion, with 35 of our 36 rigs under contract, and we have a solidpipeline of new marketing opportunities for uncontracted days in 2024 and2025.Our long-term track record of diligent cost management and financialdiscipline,combined with our operational execution capabilities and streamlined capitalstructure, will position Shelf Drilling very well to create long-term valueforall our stakeholders."

Fourth Quarter Highlightso Q4 2023 adjusted revenues of $238.8 million.o Q4 2023 adjusted EBITDA of $88.0 million, representing an adjusted EBITDAmargin of 37%, including $(3.0) million adjusted EBITDA from Shelf Drilling(North Sea), Ltd. ("SDNS").o Full year 2023 adjusted revenues of $893.8 million, adjusted EBITDA of$311.5million and adjusted EBITDA margin of 35%.o Q4 2023 net loss attributable to controlling interest of $16.8 million. Thisincludes $27.7 million loss on debt extinguishment related to our debtrefinancing transaction in October 2023.o FY 2023 capital expenditures and deferred costs totaled $225.8 million,including $11.5 million at SDNS.o The Company's cash and cash equivalents balance at December 31, 2023 was$98.2million, including $27.7 million at SDNS. o Contract backlog of $2.3 billion at December 31, 2023 across 35 contractedrigs with weighted average dayrate of $83.4 thousand.o In December 2023, the Shelf Drilling Perseverance secured a new contractwithPetroVietnam Domestic Exploration Production Operating Company Limited whichisexpected to start in Vietnam in July 2024 for a firm term of approximately 16months.o In February 2024, the Baltic secured a new contract expected to start inApril2024 in Nigeria for a firm term of approximately 70 days.o On March 1, 2024, the Company executed an agreement related to the revolvingcredit facility that increases the total facility size from $125.0 million to$150.0 million.o Financial guidance for full year 2024 is included in "2024 FinancialGuidance"section of the Q4 2023 results highlights presentation on our website.

Fourth Quarter Results

Adjusted revenues were $238.8 million in Q4 2023 compared to $264.2 million inQ3 2023. The $25.4 million (10%) sequential decrease in revenues was primarilydue to lower effective utilization across the fleet, as four fewer rigs wereoperating for the full quarter of Q4 2023, as well as a decline in otherrevenues as one rig in Norway completed its bareboat charter contract in Q42023.

Effective utilization decreased to 85% in Q4 2023 from 90% in Q3 2023,primarilydue to the contract preparation project for one rig in India, the contractcompletion of one rig in West Africa in September 2023 and planned out ofservice for two rigs in Saudi Arabia, partially offset by the commencement ofnew contracts for three rigs in mid-Q3 2023 in West Africa, United Kingdom andItaly, and for one rig in India in Q4 2023. Average earned dayrate decreasedto$80.2 thousand in Q4 2023 from $81.5 thousand in Q3 2023 mainly due to lowerrevenue contribution for two rigs in West Africa.

Total operating and maintenance expenses increased by $6.0 million (5%) in Q42023 to $134.9 million compared to $128.9 million in Q3 2023. The sequentialincrease was primarily due to higher shipyard costs for one rig in India aheadof its new contract commencement expected in March 2024, higher demobilizationcosts for two rigs in West Africa, one that completed its contract inSeptember2023 and one rig that commenced a new contract in October 2023, and higherdemobilization and maintenance costs for one rig in Norway which completed itscontract in Q4 2023. This was partially offset by lower maintenance costs forone rig in the United Kingdom that started a new contract in Q3 2023 and lowerexpenses for fleet spares.

General and administrative expenses decreased by $6.6 million in Q4 2023 to$13.6 million as compared to $20.2 million in Q3 2023. The sequential decreasewas primarily due to the $5.7 million provision for credit losses recorded inQ32023, primarily at SDNS.

Adjusted EBITDA for Q4 2023 was $88.0 million compared to $114.8 million forQ32023. The adjusted EBITDA margin of 37% for Q4 2023 decreased from 43% in Q32023.

Capital expenditures and deferred costs of $47.6 million in Q4 2023 increasedby$12.8 million from $34.8 million in Q3 2023. This increase was primarilyrelatedto higher spending for two rigs in Saudi Arabia undergoing out of serviceprojects in Q4 2023, one rig in India preparing for a new contract and higherspending on fleet spares. This was partially offset by lower spending for onerig each in Italy and India which started their new contracts in Q3 2023 andearly Q4 2023.

Q4 2023 ending cash and cash equivalents balance of $98.2 million decreased by$46.5 million from $144.7 million at the end of Q3 2023. The Q4 2023 endingcashand cash equivalents balance for SDNS was $27.7 million, leaving $70.5 millionof cash and cash equivalents for SDL excluding SDNS. The decrease in cash andcash equivalents was primarily due to the successful completion of thecomprehensive debt refinancing transaction and a sequential decrease inEBITDA,partially offset by a favorable impact from changes in net working capital.

The Form 10-K Equivalent, which includes the Consolidated FinancialStatements,and a corresponding slide presentation to address the results highlights forQ42023 are available on the Company's website.

For further queries, please contact:Greg O'Brien, Executive Vice President and Chief Financial Officer Shelf Drilling, Ltd. Tel.: +971 4567 3616 Email : greg.obrien@shelfdrilling.com

Dial in Details for the Audio Conference call

Participants will receive conference access information only when theyregisterfor the conference via the link below:

Online Registration:https://register.vevent.com/register/BI43ae74b1965c44669e3ce1b0d96e3ed9

Participants must register for the call using online registration. Uponregistering, each participant will be provided with call details.

About Shelf Drilling Shelf Drilling is a leading international shallow water offshore drillingcontractor with rig operations across Middle East, Southeast Asia, India, WestAfrica, Mediterranean and North Sea. Shelf Drilling was founded in 2012 andhasestablished itself as a leader within its industry through its fit-for-purposestrategy and close working relationship with industry leading clients. TheCompany is incorporated under the laws of the Cayman Islands with corporateheadquarters in Dubai, United Arab Emirates. The Company is listed on the OsloStock Exchange under the ticker "SHLF".

Special Note Regarding Forward-Looking StatementsMatters discussed in this announcement may constitute forward-lookingstatements. Forward-looking statements are statements that are not historicalfacts and may be identified by words such as "believe", "expect","anticipate","strategy", "intends", "estimate", "will", "may", "continue", "should" andsimilar expressions. The forward-looking statements in this release are basedupon various assumptions, many of which are based, in turn, upon furtherassumptions. Although the Company believes that these assumptions werereasonable when made, these assumptions are inherently subject to significantknown and unknown risks, uncertainties, contingencies and other importantfactors which are difficult or impossible to predict and may be beyond itscontrol. Such risks, uncertainties, contingencies and other important factorscould cause actual events to differ materially from the expectations expressedor implied in this release by such forward-looking statements. Given thesefactors, users of this information should not place undue reliance on theforward-looking statements.

Additional information about Shelf Drilling can be found atwww.shelfdrilling.com.

This information is subject to the disclosure requirements pursuant to section5-12 of the Norwegian Securities Trading Act.

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