Press Release

Luxembourg, February 23^rd, 2024

• Fleet 100% contracted and operating.
• Backlog of USD 1.6 billion at the end of December 2023
• Total contract drilling revenues of USD 363 million in 2023
• Revenue efficiency: 95.4% in 2023
• Cash position of USD 141 million at the end of the year
• Low leverage, with Net Debt/ Pro Forma EBITDA ratio of 1.4*x

* Pro Forma to reflect ODN I drilling business recorded on Ocyan’s financial statements until May/23

Foresea releases its 2023 results, the first annual results following its formation on June 7^th, 2023.  The year represents an important milestone in Foresea’s history, emerging strong on both financial and operational fronts. Foresea enjoys a healthy financial position, closing the year with $141 million in cash and a leverage ratio of only 1.4x Net Debt to Pro Forma EBITDA.

On the operational side Foresea had another successful year with the maintenance of a 98.2% operational uptime, reinforcing its position as a leading offshore drilling company in Brazil, recognized by its customers for its operational excellence.

Mr. Rogerio Ibrahim, Foresea’s CEO stated “I could not be prouder of how much we achieved since the formation of Foresea. We have a team of very motivated employees that help us excel in terms of operational performance. We managed to secure another important contract for Norbe VIII last September and we just extended ODN II”s contract with Petrobras for one month to operate in the Equatorial Margin, a recognition of their confidence in our ability to deliver reliable results in a new frontier.”

“We made significant investments in our fleet in 2023. ODN I underwent its 10-year SPS, which lasted for almost 6 months and involved transporting it to a dry dock, along with Norbe VI’s SPS and preparation for its new contract in the fourth quarter. Both rigs successfully concluded their SPS by year-end and are now operating under new 3-years contracts with Petrobras.”

“The drilling market in 2023 presented us with very favorable conditions as reflected in the gradual increase in dayrates for floaters and longer contract durations. Brazil is one of the strongest markets for offshore activity with the number of UDW rigs in the region increasing from 28 in 2022 to 35 in 2023. In fact, Petrobras concluded BM-S-11, 4 Rigs and Buzios tenders during 2023, which resulted in an award of nine rigs.”

Ibrahim concluded, “Foresea has a special position, operating in the Brazilian market, and having its fleet 100% contracted until the end of 2024. We believe that our level of service excellence will enable us to take advantage of the positive market in the region, particularly since we were recognized as the best Brazilian operator at the Petrobras Operational Excellence Program 2022-2023 (PEO). We remain resolute in our goal to deliver value to all our stakeholders.”

2023 Results

Contract drilling revenues for 2023 totaled $363 million compared to $377 million in 2022. The results for 2023 were mainly impacted by ODN I being in the shipyard for its 10 year SPS from mid-April to mid-October last year (a total of 179 days) and the 67 day preparation of Norbe VI for its new 3-year contract with Petrobras. On top of that, revenues were also affected by ODN II earning a standby rate of 90% during the majority of the year, while also being moved from the Equatorial Margin to the Southeast of Brazil and subsequently back to the Equatorial Margin.

Revenue efficiency was 95.4% in 2023, compared to 101% in 2022, the result of the expiration of performance bonus payments earned by ODN I and ODN II under their 10-year contracts ending in September 2022 and also by ODN II being on standby rate or moving rate, corresponding to 90% of the contracted day rate for the majority of the year.

The total utilization rate of the fleet was 86.5% in 2023 compared to 91.8% in 2022, mainly due to the time rigs spent in the shipyard, especially the 10-years SPS taken by ODN I for a total of 179 days.

The average daily revenue, which is the drilling revenues earned by operating days per rig, was approximately $225,700 per day in 2023, compared to approximately $253,800 per day in 2022. This number was lower in 2023 as a result of the expiration of the favorable day rates with bonus payments that ODN I and ODN II received in 2022, as described above, and also due to ODN I offhire period.

Total operating costs in 2023 amounted to $262 million, a 12.6% increase versus 2022. Excluding Hunter Queen management and operational costs of $15.5 million in 2023 that did not exist in 2022, the operating cost of our own fleet was $246 million, an increase of approximately 6% compared to 2022. The main reason behind this increase was the remuneration adjustment of 8.8% to the payroll in September 2022 and 4.1% in September 2023, both in-line with accumulated inflation for the respective periods. Another factor leading to increased costs was the additional services required by Petrobras’s new contracts, first introduced in the ODN II contract awarded in December 2022, and now present in ODN I’s and Norbe VI’s contracts which started in the fourth quarter of 2023. The daily operational cost of our owned fleet was approximately $135,000 per day in 2023.

Reported EBITDA for 2023 was $79.6 million. Pro forma EBITDA, which reflects the totality of the drilling activities’ during 2023, was $96.5 million, generating an associated margin of 26.6%. The primary reason for this adjustment is that results related to ODN I’s drilling rig were reflected in Ocyan´s financial statements until May 23^rd, 2023 but not those for Foresea.  Pro forma EBITDA was approximately 30% lower than 2022, mainly impacted by ODN I being on SPS for almost half of the year, as explained before. To a smaller account, Norbe VI was also on an off-hire period from mid-September to end of November, for a total of 67 days.

Total Capex for 2023 was approximately $100 million, which is higher than the $78 million spent in 2022. The increase in Capex was mainly due to ODN I’s 10-year SPS and dry dockage and adequation to the new contract requirements and Norbe VI’s preparation for its new contract. There will be some carryover costs associated with these investments to be paid in 2024.

Foresea ended 2023 with a $141 million cash position as a result of the financial restructuring that was finalized in June 2023.  This enabled the company to make the necessary SPS and investments to perform under its new contracts with the same operational excellence. In the fourth quarter of 2023, ODN I and Norbe VI started their new contracts and Foresea received the associated mobilization fees.

Foresea’s only debt is the $300 million Secured Notes due 2030 issued in June 2023, and recorded on the company’s balance sheet as $274.5 million as of December 31^st, 2023, due to the related transaction costs. The Notes bear an annual interest rate of 7.5%, paid quarterly. The latest payment, of $ 5.6 million, was made on December 15^th last year. Net Debt/ pro forma EBITDA was 1.4x in December, a dramatic reduction from 18x a year before.

Also, as part of the restructuring process, some of the legacy bondholders chose to convert their bonds into convertible notes issued by Ohio ConvertCo. The convertible notes can be exchanged into equity upon request by the bondholder or can be mandatory exchanged upon the occurrence of a change of control or in case of a liquidity event.

Operational Highlights

Foresea’s rigs produced excellent operational results, with operational uptime of 98.2% in 2023, in line with last year’s performance. The rig utilization in 2023, which takes into account the time the rigs were offhire undergoing SPS, was 86.5%, in comparison to 91.8% in 2022.

In 2024 ODN II is scheduled to undergo SPS in preparation for its new contract, and Norbe VIII has its preparation for the new contract and anticipated 15-year SPS scheduled for the third quarter of 2024.

For additional information, visit www.investors.foresea.com or email investor.relations@foresea.com.

Conference Call

A conference call to discuss Foresea’s 2023 earnings results is scheduled for Thursday, March 12^th at 9am EST/ 6pm GMT/ 11am Brazil time. A live webcast of the call will be available online on the Company´s investors website, www.investors.foresea.com. Participants who want to join the call via webcast may register clicking here. An online replay will also be available on www.investors.foresea.com following the call.

For additional information, visit www.investors.foresea.com or email investor.relations@foresea.com.

About Foresea

Foresea is a leading offshore drilling company, focusing on offering solutions in offshore drilling, with expertise and excellence in chartering and operating rigs for ultra-deep waters. Foresea operates a high-quality rig fleet of four UDW drillships, a semisubmersible and provides operation and management services to third parties’ fleet.

With experience, state-of-the-art technology and a commitment to safety and sustainability, we are always innovating when chartering and operating platforms and ships. Additional information on Foresea is available at www.foresea.com.

Forward-Looking Statements

This document contains forward-looking financial projections for Foresea Holding S.A. as of December 31, 2023. These statements could contain words such as terms “assumes”, “projects”, “forecasts”, “estimates”, “expects”, “anticipates”, “believes”, “plans”, “intends”, “may”, “might”, “will”, “would”, “can”, “could”, “should”, “possible”, “if,” or other similar expressions. Forward-looking statements are based on management’s current expectations and assumptions regarding future economic conditions, market trends, and the execution of our business strategy, including, but not limited to, any statement that may project, indicate or imply performance or achievements; future recovery in the offshore contract drilling industry; expectations regarding the Company’s plans, strategies and opportunities; expectations regarding the Company’s business or financial outlook; future borrowing capacity and liquidity; expected utilization, dayrates, revenues, operating expenses, rig commitments and availability, cash flows, tax rates and accounting treatment, contract status, terms and duration, contract backlog, capital expenditures, insurance, financing and funding. Please be aware that these forward-looking financial projections are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict, and factors beyond our control, which may cause actual results to differ materially from what is projected and should be considered as estimates only.

All subsequent written and oral forward-looking statements attributable to the company or to persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. We undertake no obligation to update or revise these forward-looking financial projections, whether as a result of new information, future events, or otherwise.

Investors and stakeholders are advised to exercise caution and not to place undue reliance on these forward-looking statements. Actual results may vary, and the company assumes no obligation to provide updates or revisions beyond what is legally required.