Odfjell Drilling Stock

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My name is James Crothers, and I'm Investor Relations Officer at the company. I'm joined today by our Chief Executive Officer, Kjetil Gjersdal; and our Chief Financial Officer, Orjan Lunde.

Before we begin, your attention is brought to the important information slide of our presentation, which we would encourage participants to read in full. Note that this presentation is only a summary of the quarter and a more comprehensive quarterly report should be read separately. Both that report and today's presentations are available on our website, www.odfjelldrilling.com.

Today's call will follow the traditional structure, with Kjetil taking us through the key highlights before moving on to our operational review. Kjetil will then continue with an overview of the market as we see it today, before handing over to Orjan, who will go through our financial review. Kjetil will then summarize the presentation before we open up our Q&A session for analysts and investors. As always, the Q&A session will be conducted over both telephone lines and the webcast tools, and we will try to get through as many of the questions put to us as possible. However, if we don't get a chance to get through your question, I will endeavor to follow up with you directly after the call. We make an effort to answer all of the questions asked, so we do encourage you to use this feature.

With that, I'll pass over to our CEO, Kjetil Gjersdal. Kjetil?

Thanks, James, and a very good afternoon, everybody. As was quoted in our report, which was published earlier today, results emphasize the resilience and capability of our organization. Even though we've had 1 rig off-hire for much of the quarter, we still have been able to return solid financial results, deleverage our balance sheet, and we are continuing to return cash to our shareholders. From revenue of $251 million, we have recorded EBITDA of $162 million and achieved a net profit of $57 million. These numbers are positively impacted by the insurance proceeds from the Atlantic incidents.

After write-off of lost equipment and expenses incurred related to the insurance claim, there is a positive EBITDA effect of $32 million. Meanwhile, we have continued to deleverage, reducing our leverage ratio now to 1.5x net debt to EBITDA and our net debt to $863 million. At the same time, we have announced a dividend for the quarter of $0.25 per share. And while we are still seeking to increase our dividend to a long-term sustainable level, we believe that, given the incident, for this quarter, it was prudent to maintain our distribution level at $0.25 per share, and we'll touch more upon this later in the presentation.

In addition, we have also added more backlog, resulting in our own fleet now having firm contract backlog of $2.1 billion. And of course, as many of you know, we have successfully brought Deepsea Atlantic back on hire following the incident after total off-hire of 106 days, within the 3 to 4 months guidance, which we gave during our Q1 results presentation. And while the incident was a tough hit, I would say that the response of our organizations, our vendors, insurers, our clients, peers and the wider industry has just been exceptional. We did this the Odfjell way, and it speaks volumes to all involved that we were able to bring the unit back into operations within 106 days. And I would like to sincerely thank everybody who has been involved in making this happen.

And on that topic, as we move on to the operational review, we wanted to make sure we provided an update on what's been going on with the Deepsea Atlantic. Since the incident, the company has been working hard to bring the rig back on hire. This started by locating, cleaning out and recovering the BOP, which had been dropped to 1,100 meters of water depth. This was not easy, but working with various suppliers, we were able to recover the BOP by using specialist equipment and by using the Deepsea Atlantic itself. Inspections of this dropped BOP suggests that it will be likely repaired and refurbished.

Following this, the rig sailed to yard for repairs and to install a now upgraded BOP, which the company had in stock. The rig subsequently returned to site for testing and final acceptance in mid-July before going back on rate on August 2. The company has so far recognized $82 million worth of insurance proceeds related to recovery and repair following the incidents. As mentioned, the company has had a positive EBITDA effect of $32 million in Q2 related to the insurance proceeds and has had a positive EBIT effect of $4 million, following an impairment loss of $28 million relating to the damaged equipment.

As regards to cash, the estimated net impact from the incident, all effects taken into account, is negative approximately $35 million compared to what it would be if the incident had not happened. And I would like to add that, over the past couple of months, we've naturally had a lot of people asking what the cause of the incident was. And while there's still a formal investigation ongoing, I think we can, with confidence, say that the cause of the incident was equipment errors and not operating error. And then moving on to our backlog and general operations performance. And despite the incident on the Atlantic, our units performed extremely well during the quarter.

Notably, both the Deepsea Nordkapp and Deepsea Stavanger averaged a financial utilization of 99% during the period, above our 10-year average of 97%. Meanwhile, we also added another year of backlog to the Deepsea Nordkapp after Aker BP elected to exercise options to extend backlog for the unit for another year ahead of schedule. The day rates for this contract will be defined by 2 independent rig brokers before the end of this year. And with this extension, Deepsea Nordkapp's firm contract backlog is now secured until at least 2028, and all of our units are now secured until at least late '27.

The Deepsea Atlantic is the first unit with availability. However, Equinor still has priced options for the unit, which extends into early '28. Our focus over the next couple of months will be on securing more backlog in a market that we believe will continue to strengthen going forward. And on that point, I think we can have a look at our view on the market. Starting with the supply side, the story really hasn't changed that much. The average age of harsh environment units continues to increase while limited new supply is being added or is likely to materialize in the near future.

Newbuilds remain unlikely, and the high-spec unit market is increasingly tight. And when you look at the availability of Tier 1 rigs in '27 and '28, it is notably low. We consider the utilization in our sector to currently be at around 90%. And if you consider historic trends, as utilization goes above 90%, day rates tend to often follow. We believe that this tightening of the supply market is largely due to the strength of the Norwegian market, which we have been vocal about for some time now. Operators continue to reaffirm their strategy of drilling to arrest production decline, and they are looking to secure rig availability into the future.

I think this is emphasized by recent contract awards in our sector, such as for Transocean's Cat Ds as well as the Deepsea Nordkapp. In addition to this, we continue to see good interest from overseas, notably in Namibia, Suriname, Canada and the U.K. In addition to exploration work, many of these areas are looking at development opportunities, which could mean further increased utilization of rigs in our sector. And ultimately, with these conditions, we believe that the market is likely to facilitate more strong day rates for future contracts. And I think we do certainly echo comments made by our peers of a strengthening overall drilling market and particularly for the harsh environment sector.

And with that, that concludes my section, and I will pass it on to my CFO, Orjan, to go through our financial review.

Thank you, Kjetil. I'll start with a summary of the income statement. Our operating revenue continues to benefit from higher day rates, while it was negatively impacted by the off-hire time on Deepsea Atlantic in Q2. Operating revenue in Q2 2026 was $251 million compared to $219 million in Q2 2025. Operating revenue from our owned fleet was $221 million, while the external fleet generated a revenue of $29 million. The reduction in revenue from the owned fleet compared to Q1 is explained mainly by off-hire time related to the incident on Deepsea Atlantic.

Q2 EBITDA for the owned fleet segment was $160 million, representing a margin of 72%. The EBITDA and margin has been impacted by recognition of insurance proceeds, write-off of lost equipment and expenses incurred related to the insurance claim, resulting in a positive EBITDA effect of $32 million. Following an impairment loss of $28 million relating to damaged equipment, the EBIT was positively impacted by recognition of an insurance proceeds by $4 million. The EBITDA for the external fleet segment was $5 million, which is a margin of 16%.

Less corporate overhead and other adjustments, the group EBITDA was $162 million. And as was stated in the highlights section of our report, excluding insurance proceeds and other accounting impacts related to the insurance claim, the EBITDA for the quarter would have been $129 million. The company delivered a net profit of $57 million in Q2. On to our balance sheet development and status, which remains solid. Our net debt is decreasing. Following the increase in debt level in Q4 2025 related to the acquisition of Deepsea Bergen, we have, during the first half of '26, reduced our net debt to $863 million, which corresponds to a leverage ratio of 1.5x.

The equity ratio is largely flat at 55% out of total assets of approximately $2.6 billion. The available liquidity is $308 million, including undrawn RCF of $248 million. Details of the cash flow for Q2 follows on the next slide. In Q2 2026, we generated $128 million in cash from operations. The impact from insurance proceeds, as discussed in our P&L, is the main explanation of the negative change in working capital of $35 million for the quarter, as insurance proceeds remained fully unpaid to the company per quarter date. The interest paid was $6 million on facilities and leases, while tax paid was also $6 million.

Cash flow from investing activities was minus $20 million, whereof $3 million was related to the Deepsea Atlantic incident and $9 million was related to periodic maintenance. The remaining $8 million was client-specific upgrades that has or will be fully covered by our customers. Net cash outflow from financing activities was $44 million, including minor FX adjustments. We paid $14 million in scheduled installments on our bank facilities and leases. In addition, we made net repayments of $30 million on the revolving credit facilities during the quarter, increasing the available amount under the RCFs to $248 million.

Dividends paid in Q2 were $60 million and was related to Q1 results. And then finally, despite a strong operational performance from the rest of the fleet, we are conscious that off-hire time related Deepsea Atlantic has impacted our business. While we maintain our view that we want to continue to increase our dividend to a point that we believe is sustainable in the long term, we believe that it would be financially prudent to maintain our quarterly dividend at $0.25 per share for Q2. Today's dividend translates to a total dividend payment of $60 million for the quarter and corresponds to an annualized yield of 10% based on yesterday's close. The shares will trade ex dividend on the 3rd of September and payment will be made on or around the 17th of September 2026.

I'll pass back to you, Kjetil, who will summarize our presentation.

Thank you, Orjan. So in summary, second quarter showed, for sure, the capability of our organization. I believe that our company had a solid response and recovery from the Deepsea Atlantic incident, while the rest of the fleet continued to perform very well. Putting this incident behind us, we are very excited about what's ahead of us. We continue to deleverage while strengthening our balance sheet with increased liquidity. Our market is strong now, and I think it's likely to become even stronger in the months ahead. And finally, putting the Atlantic incident behind us, we are excited about our strong backlog and the cash generation that we have ahead of us.

So thank you very much for listening. And James, please take over.

Yes. Thank you very much, Kjetil, Orjan. [Operator Instructions] So Serge, if you could open the telephone lines, we'd be very thankfull.

Sure. [Operator Instructions] We'll now take our first question from Fredrik Stene from Clarksons Securities.

Congratulations on handling the Atlantic incident faster than what I had in my model. So I had to revise that. So that's good. But that's not my question. I wanted to talk a bit about the market first. You're clearly painting a picture here about the stronger harsh environment market going forward. And I would also argue that one can read into the Nordkapp extension, for example. I think the last one before this extension was agreed in November last year, and now they're adding that in July, even before they know what the rate will be, even though that is the same for you.

It clearly shows to me at least that operators are also willing to contract new capacity further out in time than before. So with that backdrop, how should we think about potential new contract announcements on the Atlantic? And even on the Bergen, we still have 1 year plus left on their current contracts. But if the market is tight and E&Ps want high-spec rigs, can we see contract announcements already this year, you think? Or do we have to wait until 2027?

No. I think -- Fredrik, I think we can definitely see something happening this year. We do have good dialogues. We do have very exciting conversations and talks. So as you pointed out, the Atlantic still has priced options in there, which are valid, probably see something happening around that. And also on the Deepsea Bergen, yes, it's a great opportunity. The rig is free of options now, and we have good interest in that rig. And I think the likelihood of us being able to do something around that rig beyond the year of option that Equinor chose not to exercise, I think that's a fairly good chance for that.

Great. And next one, maybe for Orjan. There's a cash impact of $35 million from the incident, and apologies if I didn't catch it, but can you confirm if that includes loss of hire during the downtime? Or is that an additional cash impact? Just for clarity.

Yes. Thank you, Fredrik. Obviously, not surprised by that question on this webcast. But I can confirm that, that's also taken into account loss of hire. That's really the main effect is the loss of hire during the period. But in addition to that, insurance also covers costs incurred during recovery period and incremental rig and equipment repair costs in addition to lost and damaged equipment. So that's how we calculated the net effect is really to compare what could have been if the incident hadn't happened. And that leads us to an estimate of $35 million and the distribution, then $7 million to Q2 and the remainder in the following quarters.

All right. No, that's very helpful. And then just a final one, if I may. You kept your dividends flat this quarter to be prudent about your balance sheet. But clearly, you see potential for that to grow further in the future. Now that these 5 rigs are on contract again, is it fair to assume that you'll kind of resume the growth pace already from the next quarter? Or should we expect this being steady a bit before you potentially add to the payments?

Well, eventually, it's up to the Board to decide the level of dividend going forward. But I think we were vocal about it in both our presentation and the report that we have a long-term vision of continuing to increase dividends to find that right long-term sustainable level, and we certainly see that there's capacity in the company to do that. So -- but you won't get any promises from me here and now, Fredrik.

[Operator Instructions] There are currently no further questions over the phone. With this, I'd like to hand the call back over to James for any webcast questions. Over to you, James. James?

Sure. Thank you very much. Thank you so much for the questions submitted so far. Again, we'll try to get through as many of these as we can. We may run out of time before we can answer them all, however. So one question, can you talk about the dynamics around newbuilds? Given the global supply and demand situation and the aging global fleet, when does the time come for the industry to make a newbuild order?

Yes. That's a very good question. And I think I'll try to answer it. But as for now, I mean, we just cannot see it happening. There is no contract or market out there that supports a newbuild close to $1 billion -- or the price of a newbuild would be so high, you would need a long-term contract with day rates way beyond what we're seeing today. So there's just no basic support for that happening. And even if you sort of come to a point where somebody could find a yard that's willing to take that on, you're looking at totally different payment terms.

You're looking at at least, I would think, a 4-year lead time. So newbuilds for us is just totally out of the question for short to medium term to discuss it. So I think it's much more likely that you will see life enhancement projects around existing fleet before we see any newbuilds coming in. And certainly, with the way we operate our unit, as I said to my organization, we need to take good care of them because we're going to have them for a long time. And we also do that, take that into account in our maintenance philosophy and so on. So yes, don't see newbuilds happening. I cannot see it happening at all.

Great. Similarly then, I believe is a follow-on question. What about your own fleet? A couple of them are 15 years old plus. So what sort of lifespan do you forecast for your own fleet units?

Well, the last rig that we scrapped, I believe it was Deepsea Bergen in '21, was 37 years. It was operating all the way to the end. So I can easily see our rigs at least operating into, up till 35 years. And I think if you dive into sort of life extensions program and so on, you can probably see it work even longer. So we're going to live -- we're going to drill for many, many years with the rigs that we have in our fleet today.

Again, we've had a few questions on M&A, as we always do. So I suppose the question is, what's our thoughts on M&A? Are we still considering it? Or are we too busy with the BOP incident, as one person has asked?

No, no, no. We can handle more than one thing. But I think we did the Deepsea Bergen deal here before Christmas. I think that sort of represents a deal that we are interested in looking into, should we do something more. It needs to be a good quality asset. It needs to come with a good contract with a reputable client. And yes, it needs something to sort of fit both the fleet structure that we have and the company profile. So we're always keeping an eye out. We have a very good overview of what's out there. And yes, there are rigs in our management fleet that we know very well, and they are good rigs, and we continue to follow their situation and the opportunities out there, and I won't rule out anything. We are definitely open to expand our own fleet even more given the right circumstances.

Yes. Thank you. With net debt continuing to decrease and the balance sheet strengthening, how do you currently prioritize capital allocation between higher dividends, buybacks and investments in additional rig capacity over the next couple of years? Orjan, do you want to talk about how you see that?

Yes. I think we already covered a few of the aspects that's in that question. As Kjetil mentioned, the level of dividend is up to the Board, and we are sort of in a capacity development that we could still increase to find a sustainable level for our business, but also considering potential M&A opportunities, I feel that the Deepsea Bergen acquisition was a good proof of what we can do as our balance sheet is continuing to strengthen through deleveraging. We were able to do that acquisition based on our own balance sheet, and that could be a potential for the future as well.

Yes. Okay. Thank you very much. We've had a follow-on question about the newbuilds. So there are no newbuilds orders happening in the next 2 to 3 years. What is your expectation of day rates? And how high could they get for the next periods?

Well, as I said, we are at around -- I believe, around 90% utilization now for the rigs in our sector now, especially the Tier 1 rigs in our sector. And all history shows that, as market tightens up, day rates have a tendency to follow. To speculate on a day rate level, I won't do that. But I think we are confident. I think we have an average day rate for our fleet now of around $275 -- sorry -- $475, $480 for '27 and '28. And I think that sort of gives a level that we believe at least that we will stay on for a period, and it might be that as market tightens up further, that they will continue to increase.

Great. So we've got a question here. Once the Deepsea Nordkapp day rates are disclosed, should investors expect earnings per rig from '28 onwards to increase, decrease or remain broadly in line with current levels? We struggle to give guidance. We don't really give guidance as a standard. And maybe you want to talk just generally about how the Deepsea Nordkapp contract is structured such that we have to agree the day rates. The 2 independent brokers have to agree day rates.

Yes. So the 2 independent brokers, they set the rate based on -- and this is important. It's not only about sort of the recent day rates that fixtures that made in the market, but it's also about asset quality and capability of the certain assets. And I think Deepsea Nordkapp is one of the absolute best ones out there. So they will take all of these measures into account and eventually come up with the day rate. So I think it should indicate when that rate is set, I think it would be around -- probably around November, it sort of gives an indication of both what the market there now -- are then and how we can think about things going forward.

Great. We'll take one more question here. Which geographies are the tenders coming from for development work? And is Odfjell participating in any current development tenders? Again, we don't comment specifically on any tenders that we're operating in, but maybe you want to give a more general view of how we -- where we see opportunities coming from, which geographies we're looking at.

Absolutely. So we do have development work coming up in Canada, quite substantial, actually, with various operators. There's work in Namibia. I think that's very well known that things are progressing down there. There's also things happening in the U.K., believe it or not. So all of those sectors are currently in the market for development work.

Yes. Okay. I think we'll -- given the time, we'll close the call there. Thank you all for joining the conference call. Our next Capital Markets event will be on the 3rd of November, and we look forward to speaking to you then. Thank you all so much.

Good afternoon, everybody, and welcome to the Odfjell Drilling Q1 2026 Results Presentation Webcast. My name is James Crothers, and I'm the Investor Relations Officer of the company. I am joined today by our Chief Executive Officer, Kjetil Gjersdal; and our Chief Financial Officer, Orjan Lunde.

Before we begin, your attention is brought to the important information slide of our presentation, which we'd encourage participants to read in full. Note that this presentation is only a summary of the quarter and the more comprehensive quarterly reports should be read separately. Both that report and today's presentations are available on our website, www.odfjelldrilling.com. Today's call will follow the traditional structure with Kjetil taking us through the key highlights before moving on to our operational review. Kjetil will then continue with an overview of the market as we see it today before handing over to Orjan, who will go through our financial review. Kjetil will then summarize the presentation before we open up our Q&A session for analysts and investors. [Operator Instructions]

With that, I will pass over to our CEO, Kjetil Gjersdal. Kjetil?

Thank you, James, and a very good afternoon, everybody. Today, we are reporting what are excellent financial results driven by a really strong operational performance across our fleet. Due to this performance, we generated a particularly strong bonus contribution, which contributed to a total EBITDA of $154 million from revenue of $284 million. In addition, we have further increased our dividend whilst continuing to deleverage our balance sheet. Q1's dividends will now be $0.25, increasing from $0.23 per share.

Now this is the sixth quarter in a row that we have increased our dividend, and this highlights the capability of our fleet to generate significant cash flow. Our leverage ratio is also further reduced to 1.6x net debt to EBITDA, whilst equity ratio has increased to 55%. Further to this, we remain very comfortable about our contract backlog with our total backlog now sitting at $2.3 billion, $2 billion of which is firm. As we look at new opportunities to add backlog, we believe that the harsh environment market remains very tight and in particular for high-spec semisubmersibles in Norway and increasingly also in other regions.

And finally, as many of you will know already, post period, we experienced an equipment handling incident on Deepsea Atlantic, which resulted in the BOP and riser being dropped to the sea floor and some damage to the rig. As announced, thankfully, the incident did not result in any injury to personnel or cause any impact on the environment. However, it has resulted on the Atlantic being taken off hire.

Now this is an unprecedented incident for our company. And if we move to Slide #7, I will dive into some more details. It is of no surprise to you that we are taking this extremely serious. As soon as the incident occurred and personnel, the rig and the local environment were confirmed to be safe, my senior management team and I made sure that we were taking all steps possible to bring the rig back to full strength. Our team is now completely focused on meeting this challenge head on. Within hours of the incident occurring, we have structured multiple teams to work in parallel on progressing different solutions to bring the back -- to bring the rig back on hire. Since the incident, we have made good progress in addressing and understanding the challenge ahead of us. We have located the BOP, and we have started to work on recovering it. Our primary focus is on the safe repair of the damaged equipment, compliance to regulatory authorities and cooperating closely with clients and vendors. Investigation as to the cause of the incidents are ongoing and together with our equipment manufacturers, we will be sure to implement measures and learnings that are developed as a result.

In addition to this, we are also progressing other work streams. That includes that we have pushed the button on getting our spare BOP that we have in stock ready as a plan B. This is in case we are not successful with the recovery or repairs with the primary BOP. Another alternative is a combination of these options. And given the possible scenarios we are considering, we believe it will take 3 to 4 months in total before Deepsea Atlantic is ready for operation again. And having the spare BOP ready as an alternative is included in that estimate and is part of derisking the total timeline. Now as we move ahead, there can be further findings that improves that estimate, and there can be findings that makes it worse. It remains too early to conclusively state the total financial impact of the incidents. However, with the information that we have in hand, the 3 to 4 months is an estimate that we believe in.

It is worth noting that the company has insurance in place, which covers replacement or the repair of the damaged equipment, including some operating cost covers during the process, which we are working closely with our insurers to progress. As was stated in my quote in our press release today, this incident really has been a reminder to us all that unforeseen events can happen in our industry. Despite that, I am very pleased with the response of my team, our clients and the wider industry to the situation. In addition, I want to give credit to my fantastic colleagues -- for those who follow Odfjell Drilling, you know that I'm blessed with a highly competent and motivated team who are working day and night on this subject now. And I have full confidence that we together will resolve this challenge in the best possible manner.

Then moving on to the rest of the operational review. And despite what's happened with the Deepsea Atlantic, it's worth noting that Q1 actually was a very strong operational quarter for our business. All of our units were active in Norway and achieved a financial utilization of 96%. In addition, during Q1, our units performed ahead of expectations and delivered very strong bonuses, further bolstering our EBITDA generation for the quarter. In addition to what we achieved in Q1, it's worth bearing in mind what we have ahead of us. Currently, we retain over $2 billion of firm backlog coverage with $300 million of priced options. This backlog means that all of our units have firm contract coverage until at least mid-2027, whereafter, our units are priced and unpriced options which extend into 2030 for some units.

Then we take a look at our market review. And last quarter, we noted that we believe that the market was becoming tighter, and we maintain this view. Globally, there has been no meaningful changes to supply. And from a Norwegian contracting perspective, most units, which could work in our core area are either fully contracted, overseas or in need of significant investments to allow them to operate in the NCS. And we see no reason that this should change in the near future with operational entry barriers into the NCS remaining very high. From a demand perspective, we have also seen continued messages from our client on their intent on arresting production declines by drilling more wells than current levels. Furthermore, we believe that demand will continue to be focused on securing Tier 1 sixth-generation harsh environment rigs.

In other regions, we see outstanding tenders for work in Namibia and in the U.K. and have seen a notable increase in interest among clients for deepwater drilling, which could further reduce competitive supply. There is further incremental short-term exploration work also available with longer-term developments likely to be maturing around '27, '28, in line with our own fleet availability. And in summary, I would say that we feel the market is very well balanced between supply and demand and positions our fleet very well for contracting for the future.

And with that, I will now hand it to you, Orjan, to go through our financial review.

Thank you, Kjetil. I will start with a summary of the income statement. Our revenues continues to benefit from higher day rates as well as including the first full quarter of earnings after the acquisition of Deepsea Bergen.

Operating revenue in Q1 '26 was $284 million compared to $204 million in Q1 '25. Operating revenue from our own fleet was $254 million, while the external fleet generated revenue of $30 million. The reduction in revenue from the external fleet compared to previous quarters is explained by the transition of Deepsea Bergen from the external fleet to the own fleet segment. Q1 EBITDA for the owned fleet segment was $150 million, representing a margin of 59%, which is partly supported by a solid achievement of performance incentives in the quarter. The EBITDA for the external fleet segment was $6 million, which is a margin of 20%. Less corporate overhead and other adjustments, the group EBITDA was $154 million. The company delivered a net profit of $73 million in Q1. Before I talk about our robust balance sheet on Page 13, I would like to mention that on 17th of April, we got a positive court ruling from Gulating Court of Appeal in the Odfjell offshore tax case.

The Norwegian tax authorities have the right to appeal within 1 month from the ruling. Then to the balance sheet development and status. Our net debt is decreasing. Following the increase in debt level in Q4 '25 related to the acquisition of Deepsea Bergen, during Q1 reduced our net debt by $25 million down to $883 million, which corresponds to a leverage ratio of 1.6. The equity ratio is marginally up to 55% out of total assets of approximately $2.6 billion. The available liquidity is $295 million, including undrawn RCF of $227 million.

Details of the cash flow for Q1 follows on the next slide. In Q1 2026, we generated $123 million in cash from operations, reflective of a negative change in working capital of $27 million during the quarter. The change in working capital is partly explained by the acquisition of Deepsea Bergen, higher day rates on the other units and mainly by changes in payment terms related to personnel taxes and social security implemented through changes in Norwegian law effective from 1st of January 2026. Net interest paid was $20 million, which reflects a longer first interest period on parts of our loans due to the refinancing in early December last year. Tax paid was $8 million. Cash flow from investing activities was minus $14 million, where our $4 million was related to periodic maintenance. The remaining $10 million was purchases of fixed assets, where $5 million were client-specific upgrades covered by lump sum payments from customers in this or adjacent quarters.

Net cash flow from financing activities was $61 million, including minor FX adjustments. We used our revolving credit facilities to actively manage our liquidity to reduce interest costs, which resulted in making net repayments of $52 million on the RCF during the quarter. In addition, we made $12 million in scheduled installments on our bank facilities and leases. Dividends paid in Q1 were $55 million and was related to Q4 results. Finally, on the back of the strong financial results in the first quarter of '26, a robust balance sheet and cash flow position, we are continuing our upward dividend trajectory by declaring a dividend for Q1 of $0.25 per share, which translates to a total dividend payment of $60 million for the quarter. This corresponds to an annualized yield of 9.5% based on yesterday's close. The shares will trade ex dividends on 27th of May and payment will be made on or around.

I will now pass back to Kjetil, who will summarize our presentation.

Thanks, Orjan. So in summary, Q1 saw Odfjell Drilling delivering excellent financial results following a fantastic operational performance during this quarter. Our market continues to be tight, positioning our fleet well for the years ahead when our fleet comes up contracts. Our cash flow generation is well secured due to our strong backlog.

And finally, given our market position, our backlog, our results and our strong balance sheet, we are very pleased to once again increase our dividend for the sixth time in a row. In our annual report for several years now, I have always said that our focus is operations, operations, operations. And as we move ahead, this focus will not change. This is an important period to get right. As a team, we are confident that we will get the Deepsea Atlantic back in operation in the best possible way. Thank you very much.

[Operator Instructions] Our operator today is Francois. Francois, can you please open the telephone lines and open the Q&A session.

[Operator Instructions] We've got a question from Fredrik Stene from Clarksons Securities.

First, congratulations on a very strong operational quarter. You always seem to outperformed by around 5%. Hope I'll catch up to that at some point. But my question today relates to the Deepsea Atlantic and the incident in April. First, I appreciate you guys giving some guidance and information and update today. I think that's helpful even though you're kind of in a state where you don't know everything just yet. It's important for everyone to get kind of a glimpse into the process and how you're working through this.

And Kjetil, I think you said -- or you said that the best estimate for now is somewhere between 3 and 4 months base or from the time of the incident. But you also said that it may happen sooner and it may happen later depending on how things develop. So I was wondering, are you able to share a bit of light on which events or long lead items or anything that is kind of key to getting this process done. So what needs to change in a way? Is it going to be faster? And what can potentially make it take longer than your initial estimates? So any color on that would be super helpful.

Yes. Obviously, this is a complicated challenge, Fredrik, with a lot of variable factors, both technical lead times, et cetera, regulatory authorities involved and so on. We have taken all of that into account and giving our estimate based on the information that we have, and it is what we see as a likely outcome and something that we believe in.

Obviously, we're very happy that we were able to line up the spare BOP as part of that time estimate, which, as I said, I think, derisk the case a lot. Obviously, there will be further findings we find on the primary BOP that might help improve the situation, but it's too early to conclude. I hope you understand, Fredrik, to go into a detailed discussion or explanation about what could go -- help us go better and what could help us take longer. That's all we can spend time on that here.

That's totally understandable. Just wanted to get like a high-level view. And then my second question as a follow-up. Are you able to give some color on how discussions have been with the client around this? I would assume that they are also keen on getting the rig back to work as soon as possible. There aren't any really replacement rigs out there. And I would expect that kind of disregarding this particular event that they've been happy with the performance of the Atlantic. So I would assume that they're keen to get it back and drilling again.

Yes, yes, absolutely. And I want to give credit to both [ Iberia ] and Equinor in this process. We have an excellent cooperation and have received fantastic support so far. And all parties are focusing on bringing the rig back in operation as soon as possible. And yes, that's so far that's been very, very good.

All right. And then just one quick one to Orjan. The ruling from Gulating, can you just remind us what that would mean in dollars in case you -- in case that ends up being the final ruling?

We have disclosed a Norwegian krona amount, NOK 307 million that is sitting on our balance sheet as a receivable right now. So if we move forward with a potential positive outcome of the case, those NOK 307 million would be paid to us in addition to some cost coverage and interest during the period.

There are no further questions from frontline. So handing over to you, James, to take questions from webcast.

Sure. Thank you very much, Francois. Thank you for your questions so far. So we have one question here in regards to marketing opportunities. Is there enough expected demand in Norway to keep your entire owned fleet busy in Norway without having to ship them overseas and go internationally with those units?

Yes, we think there is. When we sort of do a bottom-up calculations of the opportunities that lie ahead of us, we see a very strong market, and we see a market imbalance or even perhaps lacking a few rates. So yes, that is definitely a possibility that we can keep them all in Norway. But it's also interesting alternatives elsewhere, both in the U.K. and other places. So we are watching that one closely as well.

Great. A few questions on M&A as well. So any plans to make acquisitions of more of the rigs Odfjell Drilling of?

Yes. I have to admit, M&A is not on my top of my agenda is. I have other things to think about. But yes, I will stick to what we've said. We did what is now Deepsea Bergen. I think if you can find the right quality assets with the right price and with the right backlog, we're definitely interested in pursuing those opportunities.

Great. We've had a few questions as well in regards to how we plan to progress our dividends. Orjan, do you want to talk about how we see that?

Yes. As always, we don't provide guidance on our dividend strategy. So I would like to refer to our dividend criteria, which are outlined on Slide 16, but it ultimately remains discretionary from quarter to quarter.

Great. One question here in regards to supply of rigs in our sector. Kjetil, how do you sort of see there's some rigs in other yards which are maybe finishing building, I don't know, how do you sort of see supply for rigs in our sector developing?

Well, I think supply is definitely tightening up, and this -- it's easy to have a good overview of what sort of excess or additional supply that could be entering the market. But I think sort of the -- either they are far away from here or there is a lot of work that needs to be done with them. So there was one contract announcement with Transocean Barnes coming back working for Var Energy. And I think, of course, we have the Mira in Namibia, which is a candidate. Other candidates, we evaluate that will take a lot longer time to be sort of candidates for entering the market. So [indiscernible] it a market very much in balance, but also good demand and supply that tightens up.

We've received -- I can see we've received quite a lot of questions on, obviously, the Atlantic incidents. I think it's worth reiterating the comments, we would reiterate the comments we've made in our reports and presentations are there. In general, we will update the market as appropriate and any material developments as the progress at this point. Obviously, it's hard for us to be too specific as our reports and presentation suggests.

One question here, though, I think that is worth clarifying is does the spare BOP in Atlantic meet the operator's requirements? If I recall correctly, it was replaced due to request for the operator. I think it's just worth talking about the spare BOP in our system and how -- where that's from and what that is.

Yes. So the spare BOP is the BOP that we took off the Deepsea Aberdeen when it did its SPS. So on almost all terms, it meets the requirements that is very similar to the BOP that's actually on Atlantic. It will require some modifications, but we have a full overview of that, and we have sort of implemented those modifications into the plan, which sort of adds up to the 3 to 4 months that we say. So I would say it's almost fully identical, but we will need some modifications, particularly on the control system.

Great. Thank you. Again, a few more questions in regards to the cause of the incident, which we obviously can't go into at this point as we're still doing our investigations. Any learnings that we have from those investigations would obviously be implemented on to the rigs to prevent similar scenarios. I think we'll have one more question. Do we have -- we've had a question if we have any comments on legacy Awilco rigs coming into the market? We can't cover that already.

I don't have any comments to that. You should just talk to [ Rico ] about that.

Great. I think then in that case, we will close the call for now. And if there are any further questions, anyone does come, please do get in touch. As I said, we've had -- I can see a few questions that have come through on the conference call, and I'll endeavor to contact you directly in regards to those questions as well.

Again, really appreciate everyone's continued interest in the company, and we look forward to speaking again in our Q2 results in August. Thank you very much.

Good afternoon, everybody, and welcome to the Odfjell Drilling Q4 and Financial Year-End 2025 Results Presentation. My name is James Crothers, and I'm the Investor Relations Officer at the company, and I'm joined today by our Chief Executive Officer, Kjetil Gjersdal; and our Chief Financial Officer, Orjan Lunde.

Before we begin, your attention is brought to the important information slide of our presentation, which we encourage participants to read in full. Note that the presentation is only a summary of the quarter and a more comprehensive quarterly report should be read separately. Both that reports and today's presentations are available on our website, www.odfjelldrilling.com.

Today's call will follow the traditional structure with Kjetil taking us through the key highlights, of which there have been quite a few this quarter before taking us through the operational performance of the business. Kjetil will then continue with an overview of the market as we see today before handing over to Orjan, who will go through our financial review. Kjetil will then summarize the presentation before we open up our Q&A session for analysts and investors. As always, the Q&A session will be conducted over both telephone lines and webcast tools. We will always try and get through as many of these questions as possible. However, if we don't get a chance to go through your question because of time, I will try and follow up directly with you after the call.

We make an effort to answer all of the questions asked, so we do encourage you to use this feature as much as possible. So this has certainly been the busiest quarter for the business since I joined Odfjell Drilling. So without further ado, I will pass over to Kjetil to take us through the key highlights. Kjetil?

Thank you, James, and a very good afternoon, everybody. As James said, it's been a very busy quarter for our company. Unsurprisingly, one of the most important achievements during the quarter was the successful completion of the Deepsea Bollsta and the accompanying refinancing of the company. This has had a significant impact on our business, and I am delighted to now call the Deepsea Bollsta one of our own units. I'll talk more about that on the next slide.

In addition to this, the company secured 3 new contracts during the quarter, which in addition to the Bollsta acquisition, added nearly $1 billion of firm order backlog. Our backlog now sits at $2.5 billion, including priced options, significantly increased from Q3. Once again, our operational performance has facilitated record-breaking financial results with an average financial utilization of 98%. We were able to deliver revenue of $245 million and an EBITDA of $124 million. We were also able to deliver net profit of $45 million, reduced by $18 million due to costs associated with our refinancing.

And last but not least, we have once again increased our dividends, moving from $0.20 in Q3 2025 to $0.23 in Q4, equaling a total dividend of $55 million. And given today's share price, this is equal to an annualized yield of around 8%. Before I begin with the operational review, I briefly wanted to touch on the acquisition of Bollsta. As many of you know, we've been looking to expand the size of our fleet for some time. We have to be cautious when doing this. Our see-through backlog we secured on our 4 owned units created a fantastic cash flow generation for our business and any deal we consider had to be accretive to that story. With the Bollsta acquisition, we believe we found that deal. For the total cost of $480 million, significantly below the implied value of our own rigs and way below new build cost, we have acquired one of the high spec units in our sector with a $355 million in firm backlog already secured.

The deal is anticipated to add $100 million in annual EBITDA with limited CapEx expected going forward and an SPS schedule, which is aligned with our own fleet. The beauty of adding a rig from our managed fleet has meant that the transition of owners has been seamless with the crew on board Bollsta barely noticing a change. And we are absolutely delighted to add this unit to our fleet. And as some of you may have noted across our social media, we have decided to rename the Deepsea Bollsta to Deepsea Aberdeen. The Deepsea Aberdeen was a unit that we retired in 2022, after it serviced clients faithfully over 37 years. The unit had a fantastic reputation and standing in the industry. And we hope that with this name change, we can continue to build upon that legacy.

So I will then move on to our operational review. Beginning with our new contract announcement. As many of you know, we agreed 3 new contracts on our rigs. Firstly, the Deepsea Bollsta secured a 5-month extension to its existing contract with Equinor, which will see a drilling on the Johan Sverdrup Phase III project. This has extended the Deepsea Bollsta's firm backlog to first quarter in 2028. The contract also includes five 1-year options following the firm period, which extends until 2032.

Also during the quarter, we secured over 2 years of firm contract for the use of Deepsea Aberdeen with Equinor, which extend the contract backlog for that unit until second quarter of 2029. The contract will see the drilling unit drilling [indiscernible] project for Equinor and will continue in direct continuation of the existing contract.

And finally, we also secured a 1-year contract extension with Aker BP for the use of Deepsea Nordkapp. And that extension takes the firm contract backlog until the end of 2027. And Aker BP retains further options, which extend until second quarter of '29. Overall, and with the acquisition of Bollsta, the company added nearly $1 billion of total order backlog to the group during Q4, with all of the new contracts being secured at industry-leading day rates. And with these new contracts in place, our contract backlog is strong -- is in a strongest position as ever with all of our own fleet fully booked until at least 2027. In total, we have $2.5 billion of contract backlog, out of which $2.3 billion is firm. And as you can see from the chart, our first contracting opportunity is now the Deepsea Atlantic, which has priced options in place which lasts the majority of '27 and unpriced options, which continues past 2030.

All 5 of our own units are operating in Norway for the length of the firm contracts, except Deepsea Atlantic, which will begin its operations in U.K. on the Rosebank project shortly. If we transition that forward revenue into annual revenue, you can see that our track record on a year-on-year revenue growth is set to continue in 2026, particularly after the acquisition of Deepsea Bollsta.

Now bear in mind, on top of the revenue figures that you see on this slide, we also received bonuses and fuel incentives on our contracts except for the Deepsea Bollsta contract, which does not have arrangements for that. Also worth noting on this chart, the green line indicates our average day rate for our rigs, which are secured in the mid- to high $400,000 range, while nearly straight black line is an illustration of how our OpEx is expected to develop. Due to our strong cost focus and escalation clauses in the contract, this line is nearly flat between now and 2030. And when you put all this together, our business has some highly attractive economics going forward for consistent and robust future EBITDA generation.

And I'm going to talk a little bit about the market. The way we see it, the market is getting tighter. In Norway, we already know that the market is good with the company securing 3 new contracts at leading day rates recently. As we look ahead, we think that this will continue. Clients have been vocal about their goals and interest in drilling exploration and production wells to arrest production declines. And based on Norwegian Petroleum Directorate's forecast, they will have to elevate from current levels of drilling to achieve those goals. We do believe that we will get our fair share of that work.

Further to this, we have seen an increased interest in securing Tier 1 sixth-generation units in Norway while supply remains tight for these types of vessels. Most units which could be brought into Norway are either sold out overseas or in need of significant CapEx to bring it back into supply. It was no surprise, therefore, to hear about the contract award for the -- to Noble for the Ocean GreatWhite with Aker BP. We see that award as evidence of clients' interest in securing capacity into the sector. We believe that there is going to be a lot of drilling going on [ of ] the NCS in the coming years.

Further to Norway, international demand has increased from prior quarters with tenders outstanding in both Namibia, Canada and U.K. This is in addition to short-term exploration work, which could also suit semisubmersibles quite well. Ultimately, as international projects mature into development, this could align with ongoing supply constraints issue in Norway, potentially leading to an even stronger market for our units to operate in.

And with that, I will now pass on to Orjan to go through our financial review.

Thank you, Kjetil. I will begin with a summary of the income statement, which continues to benefit from higher day rates, as you can see from the top left chart. Operating revenue in Q4 2025 was $245 million compared to $203 million in Q4 last year. Operating revenue from our own fleet was $201 million, while the external fleet generated a revenue of $43 million. Q4 EBITDA for the owned fleet segment was $118 million, which is a margin of 59%. The EBITDA for the external fleet segment was $9 million, which is a margin of 21%. Less corporate overhead and other adjustments, the group EBITDA was $124 million. The company delivered a net profit of $45 million in Q4, slightly reduced due to costs associated with the refinancing. Overall, our net profit is substantially higher for the year, finishing at $173 million in comparison to $65 million in 2024.

Turning to Page 15, and you will notice that we've included details on the refinancing in Q4 last year. The refinancing that we completed in tandem with the acquisition of the Deepsea Bollsta was a turning point for our business. Thanks to our banks and bondholders, we were able to secure a credit solution, which has reduced our financing costs, extended our debt maturities and given us substantial flexibility for free cash flow generation. We were particularly delighted to have secured $650 million by way of a listed bond with a [ coupon of ] 7.25%. The interest and feedback we received during the refinancing was fantastic and also very humbling. Our new debt repayment structure is shown on the top slide on Page 15 and is also available on our website.

Moving on to the balance sheet. As you can see, our net debt and leverage ratio are both increased from prior quarters due to the refinancing. At year-end, our net debt-to-EBITDA ratio was 1.7, whilst our net debt was $908 million. Similarly, our equity ratio has decreased from prior quarters to 54%, and our total assets increased to $2.7 billion, largely as a result of the acquisition of Deepsea Bollsta. Available liquidity was $283 million, including undrawn RCF of $103 million.

Details of the cash flow for Q4 follows on the next slide. In Q4 2025, we generated $140 million in cash from operations. Net interest paid was $22 million, while tax paid was $4 million. Net cash flow from financing activities was $442 million. Cash flow from investment activities was $501 million, which mainly comprised the Deepsea Bollsta acquisition. Also included in that figure was CapEx of $21 million, which mainly related to periodic maintenance and purchases of fixed assets, whereof $6 million were client-specific upgrades covered by lump sum payments from customers in this or adjacent quarters. Dividends paid in Q4 were $48 million and was related to Q3 results.

Finally, we are continuing our upward dividend trajectory by declaring a dividend for Q4 of $0.23 per share, which translates into a total dividend payment of $55 million. This corresponds to an annualized yield of approximately 8% based on yesterday's close. The shares will trade ex dividend 3rd of March 2026 and payment will be made 19th of March.

I will now pass back to Kjetil, who will summarize our presentation.

Thanks, Orjan. Fourth quarter was a very important and busy quarter for everybody in Odfjell Drilling. We completed the acquisition of Deepsea Bollsta. We refinanced the business, giving us a long runway for free cash flow generation. We secured nearly NOK 1 billion of new firm order backlog during the quarter. And operationally, our units and teams delivered fantastically, resulting in a 98% financial utilization and record quarterly and year-end financial results. So this is the best quarter the company has ever delivered and it's also the best full year that the company has ever delivered.

And finally, we once again have increased our dividend this time to $0.23 per share, continuing our trend of increasing our dividends. And on the dividend subject, I would say that we are building stone by stone. That is our philosophy, and we have very good capacity to follow this trend going forward. Looking ahead to 2026, it is my pleasure as CEO to state that Odfjell Drilling has entered the year in a strong position -- stronger position as ever, and we are very excited for what comes next. Thank you.

Thank you Kjetil. So as a reminder, if you like to ask a question, you can do [indiscernible] by the telephone line controls or via the webcast tools. So I will now hand over to Laura, our operator on the telephone lines to begin that.

[Operator Instructions] We'll now take our first question from Fredrik Stene of Clarksons Securities.

Kjetil, Orjan, James; I hope you are all well. And once again, congratulations on both the post acquisition and the refinancing. I think the market has appreciated that very much. I wanted to talk a bit about the market today and both in your written report and the prepared remarks, you seem to be very positive towards the NCS and the opportunities for high-spec units in particular. And it seems to me like you saw a change with operators through 2025 on being more willing to address the decline, et cetera. And I also got the impression that you expect there to be incremental rigs to meet -- or there's a need for incremental rigs to meet this demand. So I was hoping that maybe you could elaborate a bit on how you can capitalize on that.

And I think there are 2 facets to that question. One, rates repricing of your own fleet, but also if there are more and similar opportunities as the Bollsta acquisition that could potentially have you grow market share as well and what seems to be a growing market?

Okay. So to start with how we view the market. I think this is -- we establish our position and view on the market based on what we see our clients say and what their ambitions are and also, of course, with talks that we have with them. So what we see is that we see a client base that are setting themselves up for a busy next 5 years. As you all know, they have been very vocal about their ambitions for the coming period. And they're also been clear that there are less elephant finds out there. So we will be looking at more subsea tiebacks, more marginal field developments, more tight reservoirs, et cetera, all of which means that there's going to be drilled more than we've seen before.

On top of that comes exploration. Norwegian continental shelf is mature for sure, but there are still significant resources out there. And in order to meet the decline that we know will happen, we need to find more. So we're also pleased to see that clients' ambitions on explorations are -- have been raised. In terms of additional supply, I -- from our side, one of the big workhorses for Equinor, for instance, the Deepsea Atlantic is actually now leaving the Norwegian sector to work in the U.K. for a couple of years. So that takes -- this is a rig that easily delivers 10 to 12 wells per year. That will make an impact. And you combine that with the rest of the requirements that are out there for clients, which I think it's quite encouraging.

We also see other regions coming in. There's going to be work in Canada next year. We think there's going to be more work in Canada as we move along. We also have received tenders now interesting tenders, West of Shetland, deepwater work West of Shetland, work starting in '28, which is very interesting. And we do believe that the other regions such as South Africa and Namibia also will come along as we go along. All of this summed up, Fredrik, gives us quite a confident picture in sort of being able to add more valuable backlog to our fleet as we move along.

And as you all know, there's very limited site capacity. And if we can call this an up cycle, I guess we can or at least we can sort of expect that we can come into a period that we could call an up cycle. I want to remind everybody, this is the first time that we have an up cycle in an industry that is not followed by new builds. There are absolutely no new builds in the pipeline. And I think that calls for some interesting thoughts around that picture. Further, I think to your last question, Fredrik, are we looking to do more -- add more capacity? I think Bollsta obviously was a big deal for us. We now have a super fleet. I won't rule anything out. But again, it needs to be the right asset quality. It needs to come with the contract and the price needs to be right, and it sort of needs to fit into all of those parameters.

So we're very happy with how we look today. It could be that we could do something, but we definitely don't have to. So we're sort of open to what comes out. So we follow everything very closely. Was that okay, Fredrik?

Yes. No, that was super helpful. A lot of color. I have one more follow-up that also relates to the market. And maybe it's a bit premature to ask that question, but I noticed this morning on upstream that the headline there, continues to be the headline is that the U.K. government is actively discussing an early end to the windfall tax. If they phase that out much quicker than the 2030 that has kind of been in place for some time. Do you have any kind of initial thinking back on how you think that could impact the rig market because if the U.K. starts to accelerate again, obviously, could be positive spillover effect for Norway too. So any commentary if you have.

Yes. I saw that article too. And of course, this is kind of what we've been waiting for and sort of also picked up through unofficial channels. I guess the comment is obvious, should we move in that direction. I think to keep in mind, you're at an all-time low with active rig level now in U.K. I think it's 2 or 3 semis working over there at the moment, quite horrible actually. So if we are to get a shift on that, and we all know U.K. is a harsh environment, that could lead to some very interesting scenarios.

All right. Let's cross our fingers.

[Operator Instructions] We have no further questions coming on the line. I'll now hand over to James for webcast questions.

Great. Thank you very much, Laura. And yes, I absolutely echo the sentiments on the U.K. government. I really hope that does change as the British person in the room. We've had a few questions come through in the Q&A system. So really appreciate that. First question, do you have projections for 2026 free cash flow and dividend distribution metrics. I suppose the question more hints that, do we have any sort of guidance that we can give and I suppose our strategy around how we intend to guide?

No. We don't guide not on results and not on dividends either. I think my only comment is look at the history on dividends, look at what we've done. And you all know we have great capacity going forward. So I think that is my response to that.

Yes. And again, unfortunately, we have to be relatively tight on time today. So I won't be able to answer too many questions, but any -- that do come through, I will certainly answer today. I think we have time for maybe 1 or 2 more, but do you consider a risk for the future that Odfjell Drilling operates primarily in the Norwegian continental shelf if regional regulations tighten?

If I see that as a risk, okay. I'm not sure I follow that because, I mean, all our rigs are Norway compatible and are working in Norway. What I would like to say is also all of our own units has deepwater capacity, meaning that we could go other places to work if we find that more attractive. And we have also done that in the past. We worked in South Africa. We have worked in Namibia. We worked in West Africa. We worked in Canada. So I think that's really the beauty of our fleet is the flexibility that we can move around to the most attractive contracts out there.

And I suppose it's not something we can necessarily answer this question. There have been a few recent fixtures in the sector recently in Norway recently. I suppose the hint is Ocean GreatWhite and Transocean Norway. How do your rigs compare to that, what day rates do you think your rigs could achieve in comparison to that? That's obviously a hard question to answer.

And of course, I might be the best. But we noticed those pictures. I think they all come with a story and background behind it. That being said, we do view our rigs as the best ones out there. And when we look at the product and the performance that we are able to deliver to our clients, we are in a position to claim a premium on top of market day rates.

Great. I think we can have one more question. Do you employ artificial intelligence technologies in your day-to-day operations? And/or do you expect to do so in 2026?

I would say -- we -- in the company as general, we -- I think we've sort of adopted general AI technology along our work processes. However, we do not drill our wells using AI, I can say that. We work in a highly operational and with the highest demand on security. So offshore, when we do our day-to-day work there, we do not use AI in any form. However, there is AI used by our clients, I know for planning, et cetera. But operationally, we are taking a cautious approach to that.

And we really are quite fast on time today. So I think we'll hold -- we'll stop the call from there. But just to finish up by just saying to thank you all again for joining and for your questions and interest in the company. Our next conference call will be in regards to our Q1 results, and that will be on the 12th of May. As always, if you'd like any more color on today's results or have any other questions, please do just get in touch. There's a few Q&As on the webcast, which I haven't answered, but I'll get back to today. In the meantime, thank you, Laura, and BRR Media for hosting the call. You can close the webcast.

Good afternoon, everybody, and welcome to the Odfjell Drilling Q3 2025 Results Presentation. My name is James Crothers, and I am the Investor Relations Officer of the company. I'm joined today by our Chief Executive Officer, Kjetil Gjersdal; and our Chief Financial Officer, Orjan Lunde.

Before we begin, your attention is has brought to an important information slide of our presentation, which we'd encourage participants to read in full. Note that this presentation is only a summary of the quarter and a more comprehensive quarterly report should be read separately. Both that report and today's presentation are available on our website, www.odfjelldrilling.com.

Our call today will begin with Kjetil taking us through the key highlights from the quarter before moving on to discuss our operational performance. Kjetil will then hand over to Orjan, who will go through our financial review before Kjetil summarizes the presentation and closes the call. We will then hold a Q&A session and invite all participants to submit either the telephone or electronic the webcast tools. We, as ever, we'll try and get through as many of those questions as possible. However, if we don't get a chance to answer your question live, I'll have a record of the question, and I'll follow up with you directly after the call.

Q3 has been an excellent quarter for our business. So I'm delighted to now hand you over to our Chief Executive Officer, Kjetel.

Thank you, James, and good afternoon, everybody. I am very pleased to report another period of record financial and operational results. Because of an excellent performance across our business, we have delivered a revenue of $234 million and EBITDA of $119 million, resulting in net profit of $55 million. Financial utilization was at an outstanding 99%, adding to the company's long history of excellent financial utilization, which now stands at an impressive average of 97% over the last -- over the past 10 years. As a result, we have once again declared an increase in dividend to $0.20 per share, up from $0.18, resulting in total dividend of $48 million being issued to shareholders. Whilst increasing our dividend, we have continued to reduce our leverage, ending the quarter at 1.2x net-debt to EBITDA and an equity ratio of 66%.

And finally, our fleet remains sold out until the end of '26, and we remain positive about the market appetite to secure our fantastic Tier 1 units. Our total order backlog is at $1.5 billion at the moment, and we are in advanced discussions with several clients with a view to adding backlog in near future.

And then we move on to our operation. As for previous quarters, the company's own fleet has been active on the Norwegian continental shelf, working for Aker BP and Equinor. The Atlantic and the Aberdeen continued to operate for Equinor with the Atlantic engaged in exploration drilling, which included a high-pressure, high-temperature campaign. The unit achieved a financial utilization of 99% and set several drilling performance records during the quarter. The Aberdeen continued to drill at the Breidablikk field development and achieved a financial utilization of 98%. And meanwhile, the Nordkapp worked for Aker BP, drilling the Bøyla and Symra production wells, which will support the Edvard Grieg field. The Nordkapp achieved a financial utilization of 99.7%. And then finally, the Stavanger, while also on contract with Aker BP, completed the Omega Alpha project, which we -- you might have picked up in the media. This was an outstanding achievement, which showed Deepsea Stavanger drilling through 40,000 meters of reservoir, setting a world record for the longest exploration well at a total length of 45,000 meters of drilling. The units have achieved a financial utilization of 99.8% during Q3.

In our external fleet, the Deepsea Yantai and Deepsea Bollsta were working in Norway for ConocoPhillips and Equinor, respectively, during Q3. The Mira began operations for Rhino Resources, supporting the discovery of the Volans-1X condensate discovery before it began work for BW Energy. And finally, Hercules was warm-stacked in yard in Norway for the entire quarter.

In summary, our own fleet performed really, really well this quarter and with an overall financial utilization of 99%. The operations teams at Odfjell Drilling can be really proud of what they have achieved this quarter.

And then before I move on from operations, we wanted to highlight that in line with our ambitions to be at the forefront of efficiency, all units in our own fleet have now achieved DNV's ABATE Power+ class notation. This is a notation awarded to units which implement technologies and systems that improve energy efficiency and reduce greenhouse gas emissions from power generation as well as implement comprehensive energy and emission management systems. I would say achieving this notation for our entire fleet speaks volumes about the capability of our own units and places Odfjell Drilling to our knowledge as the only rig owner whose entire fleet has this notation.

And here at Odfjell, we pride ourselves of being at the forefront of technological innovation and drilling capability. And I think achieving this notation is a strong reflection of this. I am very pleased to have this in place.

Then we move on to our backlog. And as noted earlier, our backlog now sits at [ $1.5 Billion ]. Our forward schedule is largely unchanged from previous quarter with our units having nearly 9 years of work secured with the Deepsea Stavanger as you see, booked out until 2030.

As also can be seen, the first contracting opportunity is with the Deepsea Aberdeen and Deepsea Nordkapp. And for both these units, we are in advanced discussions for adding new valuable backlog. We do experience broad interest in both rigs and are confident about securing further valuable backlog, and we expect to conclude on these opportunities in the near future. Transitioning this backlog into yearly revenue, we continue to maintain year-on-year revenue growth based on firmly secured contracts alone. Our average day rate per rig continues to increase quarter-on-quarter, and our average OpEx per rig is anticipated to only marginally increase. And as a reminder, on top of these day rates, comes a historic average of around $25,000 to $30,000 per day per rig in bonuses and add-on sales.

And just a reminder, going forward, we will not have the CapEx that we have experienced in '24 and '25 associated with the SPS projects.

And finally, before I hand over to Orjan, let's talk a bit about the market. We do maintain our view that the market that we operate in remains well balanced. As mentioned, our fleet is largely booked until '27 and we see good opportunities to secure more work for our rigs. We are in constant dialogue with existing and new clients for our rigs and are involved in ongoing tenders in the basin. Ultimately, we see the Norwegian market is likely to continue to need more supply of Tier 1 harsh environment units, particularly as our clients try to maintain Norwegian production levels from smaller, more complicated exploration targets and infield developments. And also, as you might have noticed, our clients are united in their messaging around this, and we expect that this focus on maintaining production will require a lot of drilling, more wells for ultimately less barrels of production, which is likely favorable to our business. And to meet our client messaging, there must be a high volume of drilling activity on the Norwegian continental shelf in the coming years, and we do have the tools that they need to meet that demand.

Day rates for work in '27 have remained in line with previous contracts with the recent award on Deepsea Bollsta emphasizing this. Internationally, we have seen a more cautiously but optimistic view. Contracting remains by short-term exploration -- is dominated by short-term exploration, but recent success in Namibia has been positive for that basin. And Namibia remains a very exciting opportunity for our sector, particularly as it will enter into a development phase. And we also maintain our view that additional demand can come from areas such as Canada, South Africa, Australia and the U.K.

Our view of supply remains unchanged. We expect supply likely to reduce with some retirements of vessel. And as you all know, no new build is likely at all. There are a few stranded or incomplete vessels in our sector also, which we do not believe is likely to create meaningful competition in the near to medium term. And for additional capacity to enter our sector, it will require both significant time and significant capital. That could, of course, happen, but we view this as not likely in the near to medium term. Ultimately, we see very good interest from clients seeking to secure Tier 1 assets in this period, and we reiterate that we are confident of securing additional backlog for our units for work in '27 and onwards.

And with that, I will now pass on to Orjan to go through our financial review.

Thank you, Kjetil. I'm pleased to begin with a summary of the income statement, which continues to go from strength to strength.

Operating revenue in Q3 was $234 million compared to $186 million in Q3 last year. Operating revenue from our own fleet was $189 million, while the external fleet generated a revenue of $44 million. The positive development of higher day rates continues to impact us with Q3 EBITDA for the owned fleet segment of $119 million, which is a margin of 59%. The EBITDA for the external fleet segment was $9 million, which is a margin of 20%. Less corporate overhead and other adjustments, the group EBITDA was $119 million. The company delivered a net profit of $55 million in Q3, another significant improvement compared to previous quarters. This takes our last 12 months EBITDA to $420 million.

Let's move on to the balance sheet on Page 14. Net debt has marginally increased from previous quarters, partly due to higher accrued unpaid interest compared to Q2. Despite this, our leverage ratio continues to reduce, now standing at 1.2x net-debt to EBITDA. Equity ratio is 65% out of a total asset base of approximately $2.2 billion. The available liquidity is $209 million, including undrawn RCF of $112 million.

Details of the cash flow for Q3 follows on the next slide. In Q3, we generated $95 million in cash from operations, which was somewhat influenced by changes in working capital due to timing and increase in day rates. Net interest paid was $5 million, while tax paid was under $1 million. CapEx for the quarter was $37 million, which mainly relates to purchases of fixed assets, whereof $10 million were client-specific upgrades covered by lump sum payments from customers in this or adjacent quarters.

Net cash flow from financing activities was $37 million, of which $17 million was repaid on the RCF and $12 million were for installments on other facilities and leases.

Dividends paid in Q3 were $43 million and related to Q2 results. We are continuing our upward dividend trajectory by declaring a dividend for Q3 of $0.20 per share, which translates into a total dividend payment of $48 million. This corresponds to an annualized yield of approximately 10% based on yesterday's close. The shares will trade ex dividends 12th of November and payments will be made on 26th of November.

With that, I'll pass back to Kjetil, who will summarize our presentation.

All right. So then Q3 summary. And I suspect for many of you, our Q3 numbers are not a massive surprise. We have done what we said we would do, and that has resulted in yet more record results for our business. Despite this, I would like to emphasize that this quarter has seen our units operating in a really strong level, 99% financial utilization is very hard to beat. But I think it says a lot about the intelligence and capability of our team who enable these great financial results.

So to summarize it all, we have achieved record financial results. We have increased our dividend while reducing our leverage ratio. And I just want to make this clear. Our financial strength gives us great capacity and allows for further increased distributions to our shareholders going forward.

Our fleet remains fully sold out until the end of '26, and we are in advanced discussions with several clients to add backlog in the near future. And I'm -- to say, I'm delighted with the performance of our business during Q3. And I would like to thank you all for tuning in and listening into our presentation. I will leave it to you, James, to take over now from here.

Thank you very much, Kjetil and Orjan. So as a reminder, if you like to ask a question, you can do so by the telephone line controls or via the webcast tool. Our operator is Laura. Laura, can you open the Q&A session on the telephone lines?

[Operator Instructions] We'll now take our first question from Fredrik Stene of Clarksons Securities.

I have 2 questions for you today. And the first one relates to the Aberdeen and Nordkapp, which I think is key events going forward now that your SPSs are behind you. You seem to be quite confident that these rigs will get contracts. But I think maybe it was the second quarter call, you said that typically the options that you have with Equinor, Aker BP would be kind of negotiated around 15 months ahead of the end of the firm contract and now we're past that date in a way. So I was wondering, should we read anything particular into that specifically? There is a good chunk of rigs on the NCS that rolls off in '26, beyond your 2 owned units. Is this like a [ dance ] to press day rates down? Or do you think kind of in line with the commentary that you'll get both utilization and rate on these 2? Any color you could give would be very helpful.

Yes. No, I can just fill out a bit more. I could probably start with the easiest one, with Nordkapp, which is, as you all know, in the semi alliance with Aker BP. And the way that we've operated that cooperation is by adding a year-on-year basis. And the way that this is, they have until the end of the year to declare this option and the most likely scenario is that Nordkapp is extended into the Aker BP semi alliance. But they do have formally until the end of the year to do this. I'm not saying it could not happen sooner, but formally, they have that. So that is the case with Nordkapp. With the Aberdeen, yes, we are in the middle of the negotiations as you talk. But I think I will sort of out of respect of the processes ongoing, just say that we are very confident about securing new backlog for Aberdeen. This is probably the best harsh environment rig out there, and we experienced great interest from -- on the rig, both from the existing client and also other clients. So we are confident that we will add new backlog to the Aberdeen as well.

And just a side question, just remind us the price option on the Atlantic, when is that due to the potential exercise? What's the late stage that Equinor can take that one?

The price options on Atlantic, right?

[indiscernible] Price option on Atlantic.

I don't have those details. I don't remember it. But we will -- I'll get James to revert back with those details to you. I don't have that. Was that okay, Fredrik?

Yes. No, super helpful. And then the second question, and I did speak briefly spoke to James about this earlier today. But in your second quarter report, you said that you were well placed to continue to increase shareholder distributions with the fleet moving to continually higher day rates. And you are no longer saying that in the third quarter report. So in my model, there's definitely room to increase dividends by maybe 25% more or something. But just wanted to kind of hear your comments around that. Does this mean that we're approaching, call it a ceiling or that we should expect maybe a slower pace of increase when you go forward?

No, no. Just -- it might not be in the report, but I think I was very clear when I commented the presentation about this. We absolutely see great capacity and to continue with dividends. But I think one key here is that we want to see -- to add valuable backlog. That's what it's all about, market outlook and add valuable backlog. And as long as we continue to do that, which I think I've been very clear that we have great faith in, we definitely intend to continue with our plan to increase the dividends going forward.

We now take our next question from Mathias Carlson of DNB.

Just a quick question following up on the question just asked on the Aberdeen. You're clearly sending a strong message that you're confident in getting new work for the rig. At the same time, it's more available rigs on the Norwegian continental shelf also looking for probably some of the same jobs. Could you help us how we should think about the different scenarios for the rig and whether or not it's most likely to get back to back work or whether or not there is risk for gaps, both small, shorter and longer between the current contract and any new contract?

Yes. No, you're right. And you -- it's well known that Equinor is out there with a tender, which is still not be concluded. But what I can say about gaps is that all the scenarios that we are working on does not include any white space or gaps at all. That is very important for us to secure back-to-back operations and all the scenarios that we are discussing with all our potential clients is in a back-to-back scenario. Was that [indiscernible].

That was clear. Another question on pricing and day rates. I think it's becoming more obvious that there is a relatively large spread in the technical capabilities and performance of the rigs in Norway and also for some of the rigs outside Norway looking to get in. Could you say something about how clients value performance and how you think about, call it, bifurcation in day rates in Norway ahead on high-performing units like your own and some of the lower spec units?

Yes. No, I think in negotiations, all parties use the best cards they have on their hand. I think clients are asked us to look internationally and see how day rates are playing out on the 7G market -- deepwater market and so on. However, it is a totally different situation in the harsh environment market where, where it's pretty much a balanced market. We do see that clients are willing to pay a premium day rate for highly efficient units. We do see that. And we have a fantastic track record. These are well factories as we like to call them, and they -- when they sign a contract with a rig like Deepsea Aberdeen, they know they're going to get great value for money. So we still see that there's a strong willingness to pay extra for a highly efficient unit. And I think you probably see some spread around various units depending on capabilities and so on. I think that is as specific as I can get at this stage, Mathias.

And then last question, expanding on the dividend question just asked by Fredrik. A natural follow-up would be in terms of doing a refinancing and reduce the debt amortization burden that you're currently having. Could you talk a little bit to timing of potential refinancing and what type of sources of capital you have looked into?

Well, I guess that question is for me, Martin. Thank you. We're conscious that our bond is now callable, first call by end of November this year. And to your question, we are continuously evaluating ways to reduce costs, flattening the amortization and potentially increasing cash flow available for our equity holders. If we decide to refinance and when we decide to refinance, it will be as a consequence of trying to achieve an overall benefit of all of these objectives, even taking into account specific cost elements, which comes from calling bonds at an early stage.

We have no further questions in queue. I will now hand it over to James for webcast questions.

Thank you very much, Laura. Again, thank you, everyone, who has submitted questions. We will try and get through these as fast as possible. As always, I'll answer the questions in separate e-mails if we don't have enough time to get through them all.

So first question, how do you approach contracting on your open rigs? Are you looking to push the fleet day rate north of 470,000? Or would you be willing to set up for these levels in exchange for terms that keep your rigs working like Stavanger?

So I suppose it's a question how we consider length of contract versus day rate?

Well, I don't want to sort of be public about the negotiation strategy. But as a general rule, I can say that longer-term work normally comes with a discount. and shorter-term work requires a higher day rate. That goes for -- that is the way we think.

Brilliant. When do you expect to mobilize Deepsea Atlantic to the U.K.? And are you able to reduce daily OpEx whilst operating in the U.K.?

So as for now, the Atlantic is likely to start up in U.K. in the first half -- first quarter in '26, as for now. That may change, but that is what we're working towards now. As for OpEx, we -- as the duration of the work in -- is not that long, we have decided to bring our Norwegian crews with us and have arranged with certain arrangements around that, if I can say that. So we expect a pretty same OpEx in the U.K. as we have here in Norway for the Atlantic. It's very important for us that we -- when we go to Rosebank that we perform at the same high performing level that our client is used to and to start sort of with a fresh crew and so on is not an option for us.

With the recent upgrade by Moody's to a B1 rating and your leverage decreased, does Odfjell Drilling now view M&A as a viable strategic lever for growth? And if so, what type of targets would you consider if you consider any at all? Would you look at fleet acquisitions, geographic expansion or complementary services?

Well, I think I've commented on M&A on all our Q&As that I participated in. For us, it's all about fleet rig quality, it's about backlog and of course, it's about price. We have -- we are extremely pleased with the situation that Odfjell Drilling is in now. We -- if we are to do something, it sort of needs to fit into that story. It needs to be accretive, as I've mentioned many times before. So we still keep our same view there. No news. And yes, it might come as a surprise, but we're not going to announce any M&A during the Q&A for a quarterly presentation. So I'm going to be a bit boring here.

A question more generally here. Can you elaborate on the tendering situation in Norway and your expectation around the requirements for additional rigs? I suppose this question is more framed in the context of some commentary of how much more rigs we anticipate for Norway in '27 and onwards, how we see that developing perhaps?

Yes. So I think -- well, as I mentioned, it's well known that Equinor is in the market for the -- from [indiscernible] development program. That has not been concluded yet. But we also experienced quite a lot of direct negotiations, both for shorter-term work and for longer term. And also, there are some tender activities around shorter-term work with smaller clients as well. So it is very much a mix. of public tendering, direct negotiations that's going on. And for additional rigs, so when we sort of look into the crystal ball and align that with what our clients say and what we see about the market, we see that it's likely that we are looking at an increase of maybe 1 to 2 rigs from '27 and onwards.

Great. Thank you very much. We don't have any more questions actually today on the webcast, which -- so I guess at that point, we'll close the call.

Thank you very much for listening into the conference call. We are -- I think our next quarterly results will be in the new year. So if you'd like any more color on today's results or have any further questions, in the meantime, please do just get in contact with me directly. My e-mail address is on the back of the presentation and on the website as well. Thank you to all the operators and to BRR Media for sitting on the call. I think we can close the call now. Thank you.