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DOLPHIN DRILLING ASA: DOLPHIN DRILLING ASA - COMPANY UPDATE

16:58
Reference is made to previous market communication with regards to the
refinancing efforts of Dolphin Drilling ASA (the Company) and its
subsidiaries (together the Group).

Lenders under the Companys USD 2,000 million secured credit facility
holding more than 78% of the principal amount outstanding under such
facility (the Majority Lenders) have entered into an agreement for
the reorganisation and recapitalisation of the drilling business of
the Group (the Drilling Recapitalisation). The Majority Lenders
include Danske Bank, DNB, SEB and Swedbank, as well as funds advised
by Strategic Value Partners LLC and its affiliates (SVP Global).

As agreed among the Majority Lenders, the Drilling Recapitalisation
will include the following key elements:

The drilling unit Bolette Dolphin will be sold to refocus the
Groups drilling business on its mid-water fleet. Pareto Offshore AS
and ABG Sundal Collier ASA are appointed as the Companys brokers in
the sale process. The proceeds from such sale will be used to repay
the Companys debt to the secured lenders.

The mid-water drilling business of the Group will be transferred
to a new holding company, controlled by the secured lenders
(NewCo).

In consideration of the mid-water drilling business of the Group,
NewCo will assume all secured debt of the Company that is not repaid
through the sale of Bolette Dolphin, and issue shares in NewCo to the
Company. Such shares will represent 1.5% of the share capital of
NewCo, post restructuring. The Company will have the right to sell
such shares to SVP Global for a total cash amount of approximately
USD 2 million.

All secured debt assumed by NewCo from the Company will be
converted into equity in NewCo, save for USD 30 million. As such, the
balance sheet of the drilling business will be significantly
deleveraged.

The secured lenders will also provide NewCo with new liquidity in
the form of a USD 45 million revolving credit facility.

On this basis, the Drilling Recapitalisation is expected to
provide the Groups current mid-water drilling business with a stable
platform to support its future development.

Following completion of the Drilling Recapitalisation, the key assets
of the Company will be the 1.5% shareholding in NewCo, and the assets
related to the Harland Wolff shipyard.

As set out above, the shareholding in NewCo may be sold to SVP Global
at a cash price of approximately USD 2 million. As set out in the
annual report of the Company for 2018, the financial situation of the
Harland Wolff shipyard is challenging and the Harland Wolff business
may be sold or be subject to insolvency proceedings. The board does
not expect that any of these alternatives will yield notable value to
the Company. On this background, the board may propose that the
Company is to be liquidated upon completion of the Drilling
Recapitalisation.

A solvent completion of the Drilling Recapitalisation by the Company
will require the consent of all secured lenders, a resolution by the
bondholder meeting in the Companys bond issue with ISIN NO0010704125
(supported by at least 2/3 of the voting bonds), as well as a
resolution by the Companys shareholder meeting (supported by at
least 2/3 of the voting shares). The Drilling Recapitalisation is
currently under consideration by representatives of the relevant
stakeholders.

The Majority Lenders have informed the Company that they will take
steps to implement the Drilling Recapitalisation with or without the
consent of the other stakeholders, through a solvent liquidation or
through a bankruptcy in the Company.

Contact: Ivar Brandvold, CEO, (+47) 22 34 10 00 Hjalmar Krogseth Moe,
CFO, (+47) 22 34 10 00

This information is subject of the disclosure requirements according
to the Norwegian Securities Trading Act section §5-12.