BassDrill Alpha Ltd

(a company incorporated in Bermuda with limited liability)

USD 90,000,000 [7.50]% First Lien Bond Issue 2013/2018

Issue Price: [97.50]%
BassDrill Alpha Ltd. (Bermuda) (the “Issuer”) proposes to issue USD 90,000,000, [7.50] % of first lien bonds (the “Bonds”) on or about 5
July 2013 (the “Settlement Date”) (the “Bond Issue”). The Bonds will mature 5 years after the Settlement Date on 5 July 2018 (the
“Maturity Date”).

The Bonds shall rank at least pari passu with all other senior obligations of the Issuer other than obligations which are mandatorily preferred
by law. The Bonds will at all times rank pari passu among themselves. No application has been made, or is intended to be made, for
admission of the Bonds to any official stock exchange or for listing.

Investing in the Bonds involves a high degree of risk. See section 12 “Risk Factors and Other Considerations”.

Interest on the Bonds is payable quarterly in arrears on January, April, July and October in each year commencing on October 2013 (each an
“Interest Payment Date”).

The Bonds may be redeemed before the Maturity Date at any time after the Settlement Date upon not less than 30 days’ notice, at the option
of the Issuer, in whole or in parts, at their principal amount plus a premium (as described under “Call Options” in the Term Sheet). The
Bonds are subject to redemption at 101 %, together with accrued interest, at the option of each Bondholder upon a “Change of Control
Event” (as described in the Term Sheet).

The Issuer will place the net proceeds from this offering into an escrow account held at [DNB Bank ASA]. As soon as the “Pre-
Disbursement Condition Precedents” (as described in the Term Sheet) have been satisfied, the escrowed funds will be released from the
escrow account for use set forth in “Purpose of the Bond Issue” (as described in the Term Sheet). The Bonds will be issued in denominations
of USD 1 (one) each.

The Bonds will only be offered or sold within the United States to Qualified Institutional Buyers (”QIBs”) as defined in Rule 144A under the
U.S. Securities Act.

This confidential Information Memorandum does not constitute a prospectus as defined in the Prospectus Directive (Directive 2003/71/EC),
and has not been prepared to comply with the Prospectus Directive or the EC Commission Regulation nr. 809/2004, nor with any national
rules and regulations relating to prospectuses, including but not limited to Chapter 7 of the Norwegian Securities Trading Act of 29 June
2007 no. 75. The offer contemplated in this confidential Information Memorandum is thus made in reliance upon an exemption from
prospectus requirements under the Prospectus Directive. THIS CONFIDENTIAL INFORMATION MEMORANDUM MAY NOT BE
DISTRIBUTED IN, OR TO ANY PERSON RESIDENT IN CANADA, AUSTRALIA, JAPAN OR THE UNITED STATES TO, OR
FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON (AS SUCH TERMS ARE DEFINED IN REGULATIONS), THE
BONDS HAVE NOT AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT, OR ANY STATE SECURITIES
LAW EXCEPT PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE U.S.
SECURITIES ACT AND APPROPRIATE EXEMPTIONS UNDER THE LAWS OF ANY OTHER JURISDICTION. THE BONDS
MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY
U.S. PERSON (AS SUCH TERMS ARE DEFINED IN REGULATIONS), EXCEPT PURSUANT TO AN EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT. SEE FURTHER DETAILS UNDER IMPORTANT
INFORMATION. FAILURE TO COMPLY WITH THESE RESTRICTIONS MAY CONSTITUTE A VIOLATION OF
APPLICABLE SECURITIES LEGISLATION.

Joint Lead Managers and Bookrunners

DNB Markets Swedbank First Securities

The date of this Information Memorandum is 19 June 2013

1
 Important information
This confidential Information Memorandum (the “Information Memorandum”) has been prepared by the Issuer.
The Information Memorandum is being furnished for limited distribution through the Managers, as the exclusive
authorized representative for the Issuer for informational purposes and solely for use by prospective investors
who have expressed an interest in an investment in the Bonds to be issued by the Issuer. Only the Issuer and the
Managers are entitled to provide information in respect of matters described in this Information Memorandum.
Information that might be provided by any other person is of no relevance to the contents of this Information
Memorandum and must not be relied upon.

The information contained herein has been prepared to assist interested parties in making their own evaluation of
the Issuer and its creditworthiness and does not purport to be all-inclusive or to contain all information that
prospective investors may desire or that may be required in order to properly evaluate the business, prospects or
value of the Issuer. In all cases, interested parties should conduct their own investigation and analysis of the
Issuer and the data set forth in this Information Memorandum. Neither the Managers, any of their advisors nor
any of their affiliates, make any representation or warranty (expressed or implied) as to the accuracy or
completeness of this Information Memorandum or any statements, estimates or projections contained herein, or
the legality of any prospective investor’s investment in the Bonds issued by the Issuer. Neither the Managers,
any of their advisors, nor any of their affiliates, have any liability for the recipient’s use of this Information
Memorandum or any other oral, written or other communications transmitted to the recipient in the course of its
evaluation of the Issuer.

This Information Memorandum may contain certain tables and other statistical analyses (the “Statistical
Information”). Numerous assumptions were used in preparing the Statistical Information, which may or may not
be reflected herein. As such, no assurance can be given as to the Statistical Information’s accuracy,
appropriateness or completeness in any particular context; nor as to whether the Statistical Information and/or
the assumptions upon which they are based reflect present market conditions or future market performance. The
contents of this Information Memorandum including the Statistical Information are not to be construed as legal,
credit, business or tax advice. Each prospective investor should consult with its own legal, credit, business or tax
adviser as to legal, credit, business and tax advice. By receiving this Information Memorandum you
acknowledge that you will be solely responsible for your own assessment of the market and the market position
of the Issuer and that you will conduct your own analysis and are solely responsible for forming your own
opinion of the potential future performance of the Issuer’s business. The Managers have conducted a limited due
diligence investigation of the Issuer.

In making an investment decision, investors must rely on their own examination of the Issuer, including the
merits and risks involved.

This document does not constitute an offer to sell or a solicitation of an offer to buy any securities in any
jurisdiction to any person to whom it is unlawful to make such an offer or solicitation in such jurisdiction.

In relation to the United States and U.S. securities laws, the Bonds have not and will not be approved by the
United States Securities and Exchange Commission, registered under the U.S. Securities Act or any state
securities laws. Any representation to the contrary is a criminal offence in the United States. In general, this
Information Memorandum may not be used for, or in connection with, any offer to, or solicitation by, anyone in
any jurisdiction under any circumstances in which such offer or solicitation is not authorized or is unlawful. The
Bonds will only be offered or sold within the United States to “Qualified Institutional Buyers” (”QIBs”) as
defined in Rule 144A under the U.S. Securities Act. Any purchaser of Bonds will be required to make certain

2
representations and acknowledgements, including without limitation, that the purchaser is a QIB and, with
respect to purchasers in the United States, that sellers of Bonds to be issued pursuant to this placement may be
relying on the exemption from the registration provisions of the U.S. Securities Act provided by Rule 144A.

This Information Memorandum does not constitute a prospectus as defined in the Prospectus Directive
(Directive 2003/71/EC), and has not been prepared to comply with the Prospectus Directive or the EC
Commission Regulation nr. 809/2004, nor with any national rules and regulations relating to prospectuses,
including but not limited to Chapter 7 of the Norwegian Securities Trading Act of 29 June 2007 no. 75. This
Information Memorandum has not been reviewed by or approved by any public authority including the Oslo
Stock Exchange, and is intended to be read by the addressee only.

The Bonds being offered hereby are being offered on a private basis to investors who satisfy criteria outlined in
this Information Memorandum.

This Information Memorandum was prepared solely for the recipient and other selected potential investors
interested. This Information Memorandum is personal to the recipient to whom it has been delivered by the
Managers and does not constitute an offer to any other person or a solicitation of the public in general to
subscribe for, or otherwise acquire, the Bonds. This Information Memorandum may not be distributed by the
recipient to anyone other than (i) the recipient's legal, credit, business or tax advisors, nor may the recipient make
copies of this Information Memorandum or any other document the recipient may receive in connection with the
Bond Issue, except to the extent necessary to consult with his, her or its legal, credit, business or tax advisors
(and only so long as such legal, credit, business or tax advisors agree to hold all information contained in this
Information Memorandum confidential and not use it for purposes other than for providing advice in connection
herewith); or (ii) persons approved in writing by the Managers and the Issuer.

The Bond Agreement will be made available upon written request. By accepting receipt of this Information
Memorandum, each recipient acknowledges that they have received the information set out herein and that they
accept the terms of the Bond Issue as set out herein, as well as in the Term Sheet and/or the Bond Agreement. In
case of any discrepancy between the Bond Agreement and the Term Sheet, the provisions of the Bond
Agreement shall prevail.

This Information Memorandum is subject to Norwegian law, unless otherwise explicitly stated. Any dispute
arising in respect of this Information Memorandum is subject to the exclusive jurisdiction of the Norwegian
courts.

Certain statements in this Information Memorandum are forward-looking. Such forward-looking statements and
information are based on the beliefs of the Issuer's management or assumptions based on information available
to the Issuer. When used in this document, the words "anticipate", "believe", "estimate" and "expect" and similar
expressions, as they relate to the Issuer or its management, are intended to identify forward-looking statements.
Such forward-looking statements reflect the current views of the Issuer or its management with respect to future
events and are subject to certain risks, uncertainties and assumptions. The Issuer can give no assurance as to the
correctness of such forward-looking statements. Many factors could cause the actual results, performance and
achievements of the Issuer to be materially different from any future results, performance or achievements that
may be expressed or implied by such forward-looking statements, including among others, risks or uncertainties
associated with the Issuer's products, technological development, growth management, relations with customers
and, more generally economic and business conditions, changes in domestic and foreign laws and regulations
(including those of the European Union), taxes, changes in competition and pricing environments, and other
factors whether referenced in this document or not. Some of these factors are discussed in more detail under

3
section 12 (Risk factors and other considerations). Should one or more of these or other risks or uncertainties
materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those
described in this document as anticipated, believed, estimated or expected. Except as required by applicable law
and as provided for in section 4 related to the period up to the completion of the Bond Issue, the Issuer does not
intend, and does not assume any obligation, to update the forward-looking statements included in this
Information Memorandum as at the date hereof.

4
TABLE OF CONTENTS

1. Definitions and glossary of terms ....................................................................................................................... 8

2. Responsibility Statement .................................................................................................................................... 10

3. Executive Summary ............................................................................................................................................... 11

3.1 The Issuer ............................................................................................................................................................................. 11

3.2 The Tender Barge .............................................................................................................................................................. 11

3.3 Contract Coverage ............................................................................................................................................................ 11

3.4 The Bond Issue .................................................................................................................................................................... 11

3.5 Refinancing objective....................................................................................................................................................... 11

4. The Bond Issue and the Bonds .......................................................................................................................... 12

4.1 Purpose for the Bond Issue ............................................................................................................................................ 12

4.2 The Issuer ............................................................................................................................................................................. 12

4.3 Managers .............................................................................................................................................................................. 12

4.4 Use of proceeds ................................................................................................................................................................... 12

4.5 Initial Dividend................................................................................................................................................................... 12

4.6 Eligible subscribers and minimum subscription ................................................................................................... 13

4.7 Subscription period .......................................................................................................................................................... 13

4.8 Allocation ............................................................................................................................................................................. 13

4.9 Issuance of the Bonds....................................................................................................................................................... 13

4.10 Regulation of registration ............................................................................................................................................. 13

4.11 Summary of the terms ..................................................................................................................................................... 14

5. Presentation of the Issuer ................................................................................................................................... 21

5.1 The Issuer - Overview ....................................................................................................................................................... 21

5.2 Legal structure ................................................................................................................................................................... 21

5.3 Share capital ....................................................................................................................................................................... 21

5.4 Board of Directors ............................................................................................................................................................. 22

5.5 Shareholders ....................................................................................................................................................................... 23

5.6 Memorandum of association and bye-laws of the Issuer ................................................................................... 24

5.7 Winding-Up and Liquidation Provisions of Bermuda Legislation ................................................................. 28

6. Management and Management agreement .................................................................................................. 30

5
 6.1 BassDrill Management .................................................................................................................................................... 30

6.2 BassDrill Management's experience and track-record ...................................................................................... 31

6.3 The Management Agreement ....................................................................................................................................... 32

7. The Alpha – the Tender Barge ........................................................................................................................... 35

7.1 Historical background and development ................................................................................................................ 35

7.2 The Unit ................................................................................................................................................................................. 35

7.3 Operational performance .............................................................................................................................................. 36

7.4 Fair Market Appraisals ................................................................................................................................................... 36

7.5 Classing ................................................................................................................................................................................. 36

7.6 Technical description....................................................................................................................................................... 37

8. The Contracts - Total E&P Congo ...................................................................................................................... 40

8.1 Perenco .................................................................................................................................................................................. 40

8.2 Total contract – initial term ......................................................................................................................................... 40

8.3 Total contract – extended term ................................................................................................................................... 40

8.4 Suspension and termination clauses in new Total contract............................................................................. 41

8.5 Changes to the Congo tax regime ............................................................................................................................... 42

9. Financials .................................................................................................................................................................. 44

9.1 Accounting principles ...................................................................................................................................................... 44

9.2 BassDrill Alpha Ltd. Income statement .................................................................................................................... 45

9.3 BassDrill Alpha Ltd. Balance sheets ........................................................................................................................... 45

9.4 BassDrill Alpha Ltd. Statement of cash flows ......................................................................................................... 47

9.5 Statutory auditors ............................................................................................................................................................. 48

9.6 Key Financials & Projections ........................................................................................................................................ 48

9.7 Cash-flow sensitivity and break-even analysis ...................................................................................................... 49

9.8 Current financing .............................................................................................................................................................. 50

10. Market overview ................................................................................................................................................ 52

10.1 The global energy market .............................................................................................................................................. 52

10.2 Tender rigs ........................................................................................................................................................................... 53

10.3 Production spending and earnings cyclicality ....................................................................................................... 55

10.4 Fleet of tender drilling units ......................................................................................................................................... 56

10.5 Utilization is close to 100% for tender-barges ...................................................................................................... 57

6
 10.6 Demand and day rates .................................................................................................................................................... 58

10.7 Backlog for shallow water tender rigs...................................................................................................................... 59

10.8 Recent contract awards and rig orders .................................................................................................................... 59

10.9 Additional prospects in West Africa........................................................................................................................... 61

11. Taxation ................................................................................................................................................................ 62

11.1 Bermuda ............................................................................................................................................................................... 62

11.2 The Congo Tax Regime .................................................................................................................................................... 62

12. Risk factors and other considerations ...................................................................................................... 63

12.1 General .................................................................................................................................................................................. 63

12.2 Risks related to the Issuer .............................................................................................................................................. 63

12.3 Market Risks ............................................................................................................. Error! Bookmark not defined.

12.4 Risks related to the bonds ................................................................................... Error! Bookmark not defined.

APPENDIX 1: Term Sheet

7
1. DEFINITIONS AND GLOSSARY OF TERMS
Alpha or the Unit Tender assist barge, the 'BassDrill Alpha' currently under employment
to Total E&P Congo

Application Form The application form to be used by investors when ordering Bonds in
the Bond Issue.

Application Period The period in which investors could subscribe for the Bonds, starting at
19 June 2013 and ending on June 25 2013.

BassDrill Ltd. BassDrill Ltd. (Bermuda)

BassDrill Alpha or the BassDrill Alpha Ltd. (Bermuda) the issuer of the Bonds and owner of
Issuer the Alpha.

BassDrill Management BassDrill Management (USA) Inc. (the “BassDrill Management”), a

wholly owned subsidiary of BassDrill Ltd. providing management
services to the various companies within the BassDrill group

Beta The semi-submersible tender assist drilling rig currently under

construction for BassDrill Beta (Malta) Ltd at Dalian.

Bond Agreement The bond agreement related to the Bond Issue.

Bond Issue/Transaction The USD 90 million Bond Issue contemplated by the Issuer.

Bonds The bonds in the Bond Issue.

Book-building period The period in which orders may be forwarded to the Managers in
respect of the Bond Issue.

Congo Republic of the Congo

Delta The semi-submersible tender assist drilling rig currently under

construction for BassDrill Delta Ltd at Dalian.

Gamma The tender assist barge currently under construction for BassDrill
Gamma Ltd at Dalian.

Information Memorandum This Information Memorandum dated 19 June 2013 prepared in

connection with the Bond Issue.

Issuer or BassDrill Alpha BassDrill Alpha Ltd. (Bermuda) the issuer of the Bonds and owner of
the Alpha.

Joint Lead Managers and

DNB Markets and Swedbank First Securities
Bookrunners

Managers The Joint Lead Managers and Bookrunners collectively.

Management Agreement A contract between BassDrill Management and BassDrill Alpha, dated
27 June 2008 for management of the Alpha (as amended from time to
time).

8
Management Services The Services provided by BassDrill Management under the
Management Agreement

MEP Mast equipment package – The equipment which is assembled on the

operators platform or facility

NOK Norwegian Kroner, the lawful currency in Norway

Public Limited Companies The Norwegian Public Limited Companies Act of 13 June 1997 no. 45
Act (“Allmennaksjeloven”).

QIB Qualified Institutional Buyer, as defined in Rule 144A under the US

Securities Act.

Settlement Date The date the Bonds will be issued, expected to be 5 July 2013

Term Sheet The Term Sheet for the Bond Issue dated 19 June 2013

Total Total E&P Congo

Total Contract Charter contract between BassDrill Alpha and Total E&P Congo for
the employment of the Alpha, as extended.

UAE United Arab Emirates

USD US Dollar, the lawful currency of the United States.

US Securities Act The Securities Act of 1933, as amended.

VPS Verdipapirsentralen (Norwegian Central Securities Depository), which

organizes the Norwegian paperless securities registration system.

VPS account An account with VPS for the registration of holdings of securities.

9
2. RESPONSIBILITY STATEMENT
This Information Memorandum has been prepared by BassDrill Alpha Ltd. (Bermuda) (the “Issuer” or
“BassDrill Alpha”, owner of the tender drilling barge the Alpha") in connection with the Bond Issue.

The Issuer hereby confirms that the information contained in this Information Memorandum is as of its date, and
in the light of the circumstances under which it was made, in all material respects in accordance with the facts,
and contains no omissions likely to materially affect the contents of the Information Memorandum and which
may materially influence the assessment of the Issuer, including the creditworthiness of the Issuer. If at any time
prior to the completion of the Bond Issue, any event occurs as a result of which the Information Memorandum
would include any untrue statement of material fact or omit to state any material fact necessary to ensure that the
statements therein, in the light of the circumstances under which they were made, are not misleading, the Issuer
will (i) promptly notify the subscribers of the Bonds thereof, (ii) prepare an amendment or supplement that will
correct such statement or omission and (iii) supply any supplemented or amended Information Memorandum to
the subscribers of the Bonds without charge.

19 June 2013

The Board of Directors of BassDrill Alpha Ltd. (Bermuda)

Geir Sandvik (Chairman) Johannes Felix Lambertus Maria Simons

Jan Petter Røed Helge Haakonsen

10
3. EXECUTIVE SUMMARY
3.1 The Issuer
BassDrill Alpha Ltd. was established in 2008. The Issuer is registered in Bermuda and is in good standing. The
Issuer’s objective is the ownership of a tender assist drilling rig (the “Unit” or the "Alpha") for the provision of
drilling services internationally to major independent and national oil and gas companies. The Issuer is a single
asset entity and has no employees. The Issuer has a Management Agreement with BassDrill Management (USA)
Inc. (the “BassDrill Management”), a wholly owned subsidiary of BassDrill Ltd. (a 25.26% equity owner of the
Issuer), for the management and marketing affairs of the Issuer.

The Issuer's sole activity is to own and finance the tender drilling barge Alpha. The Issuer's authorized share
capital is USD 2,800,000 and the Issuer has an issued share capital of USD 2,497,267.09, comprising
249,726,709 shares with a par value of USD 0.01.

3.2 The Tender Barge

The Alpha is a state-of-the-art flat bottom tender assist drilling unit incorporating modern technical, safety,
maritime and drilling technologies, built on a proprietary design developed and owned by Bassoe Technology
AB, Sweden. The design is at present the only one available in the market offering its main crane on the bow of
the vessel, as opposed to mid-ship as in the design of the competitors’ units. The advantages of the bow mounted
crane offer a quicker and more efficient anchoring and rig up/rig down cycle to the customer.

The Unit was built at Lampell Shipyard, Hamriyah, UAE (the "Yard") and delivered in 2010.

The Unit is an ABS classed vessel, has obtained all requisite certifications and is flagged in Panama.

3.3 Contract Coverage

The Alpha is currently operating for Total in the Congo under a 12 well contract, now expected to be completed
in Q4 2013. Following completion of this contract, the Unit will continue directly on a new contract for Total in
the Congo, for 24 firm months with an option for one further year. Consequently, the Unit is contractually
engaged until early 2016, or 2017 in the event of the option being exercised.

3.4 The Bond Issue

The Issuer is issuing [7.50] per cent Bonds due 5 July 2018 for an aggregate principal amount of USD 90
million. The Bonds, having a nominal value of USD 1 each, will be issued at par and shall bear interest at the
rate of [7.5]% per annum payable quarterly in arrears on 5 January], 5 April , 5 July and 5 October each year, the
first such payment to be made on the 5 October 2013.

3.5 Refinancing objective

The objective of the Bond Issue is to repay the existing loans (a senior secured term loan facility and
subordinated shareholder loans – see section 9.8 for more information) and to enable the Issuer to distribute
dividends to its shareholders from realized profits and available cash flow.

11
4. THE BOND ISSUE AND THE BONDS
4.1 Purpose for the Bond Issue
The Issuer will proceed with the Bond Issue in order to use the proceeds as set forth below in clause 4.4.

4.2 The Issuer

The Issuer was established in 2008. The Issuer is registered in Bermuda and is in good standing. The
Issuer's objective is the ownership of the Alpha for the provision of drilling services internationally to
major independent and national oil and gas companies. The Issuer is a single asset entity and has no
employees. The Issuer has a Management Agreement with BassDrill Management, a wholly owned
subsidiary of BassDrill Ltd. (a 25.26% equity owner of the Issuer), for the management and marketing
affairs of the Issuer.

The Issuer may be substituted with an entity incorporated in Malta or Luxembourg, having assumed all
rights and obligations of the Issuer and having the identical activity as the Issuer (the "Alternate Issuer"),
provided that the Alternate Issuer establishes security similar to the Issuer Security Documents, and the
Trustee consents to the release of the Issuer Security Documents. In addition, the Alternate Issuer shall
provide any other relevant security required to give the Bondholders an equal security position as prior to
the assignment, as solely determined by the Trustee.

4.3 Managers
The following Managers have been appointed as managers for the Bond Issue:

 DNB Markets, part of DNB Bank ASA (a Norwegian public limited company having its business
address at Dronning Eufemias gate 30, N-0191 Oslo, Norway with registration number 984 851 006).

 Swedbank First Securities, the investment banking arm of Swedbank AB (publ) the Swedish
incorporated company having its registered address at Brunkebergstorg 8, SE-105 34 Stockholm,
Sweden with organization number 502017-7753 in the Swedish Register of Business Enterprises;
Swedbank First Securities has visiting address Filipstad Brygge 1, NO-0115 Oslo, Norway.

4.4 Use of proceeds

The net proceeds from the Bond Issue (net of legal costs, fees to the Managers and the Trustee and any other
agreed costs and expenses) shall be employed to:

(i) refinance the Issuer’s debt under the Senior Secured Term Loan Facility (USD 46.4 million) and
Subordinated Shareholder Loan (USD 13,082,267 million);
(ii) fund the Reserve Account;
(iii) pay the Initial Dividend; and

(iv) fund general corporate purposes.

4.5 Initial Dividend

The Initial Dividend is an amount up to USD 26 million to be paid by the Issuer to its shareholders as dividend.
The Initial Dividend will be paid in two amounts: (i) USD 21 million within 30 days after the Settlement Date,
and (ii) USD 5 million within 2 years after the Settlement Date, which shall be deposited on the Reserve

12
Account until payment but shall not count towards the USD 5 million required for the Reserve Account,
notwithstanding any restrictions set out herein on transfers by the Issuer to its shareholders.

4.6 Eligible subscribers and minimum subscription

The Bonds are freely transferable and may be pledged, subject to the following:

(i) bondholders may be subject to purchase or transfer restrictions with regard to the Bonds, as applicable
from time to time under local laws to which a bondholder may be subject (due e.g. to its nationality, its
residency, its registered address, its place(s) for doing business). Each bondholder must ensure
compliance with local laws and regulations applicable at own cost and expense.

(ii) notwithstanding the above, a bondholder which has purchased the Bonds in contradiction to mandatory
restrictions applicable may nevertheless utilize its voting rights under the Bond Agreement.

The Bond Issue is within the EEA made with a minimum subscription and allocation of USD 200,000 which
under the Prospectus Directive provides adequate exemption from prospectus requirements in all EEA states
which have implemented the Prospectus Directive. The Bonds will only be offered or sold within the United
States to Qualified Institutional Buyers (”QIBs”) as defined in Rule 144A under the U.S. Securities Act. To the
extent the Bond Issue is made in other jurisdictions than the U.S. pursuant to an exemption from the U.S.
Securities Act and in Europe under an exemption from prospectus requirements under the Prospectus Directive,
it is only being made if exempted from prospectus requirements in such other jurisdictions.

4.7 Subscription period

The subscription period will commence on 19 June 2013 and will end on 25 June 2013 (the "Subscription
Period"). The Issuer may at its own discretion close the Subscription Period at an earlier time or extend the
Subscription Period.

4.8 Allocation
Following the end of the Subscription Period, the Managers will allocate the Bonds within the limits of each
subscriber's subscription. Following the allocation, the Managers will send out allocation letters and/or a trade
note to subscribers following the allocation, including payment instructions. Allocations will, at the Managers’
discretion, be made on the basis of timeliness and quality of the subscription.

4.9 Issuance of the Bonds

The Bonds will be registered and issued in the VPS. In order to receive the Bonds, each subscriber must open a
VPS account or have an agreement with an authorized nominee in VPS holding the Bonds on behalf of the
subscriber.

The Bonds will be transferred to the subscribers' VPS accounts upon receipt of full payment for allocated Bonds.

4.10 Regulation of registration

The registration of the Bonds will be subject to the provisions of the Norwegian Security Register Act of 5 July
2002 no. 64.

13
4.11 Summary of the terms
4.11.1 General
The trustee for the Bonds is Norsk Tillitsmann ASA, a Norwegian incorporated limited liability company having
its business address at Haakon VII gate 1, 0161 Oslo, Norway, with organization number 963 342 624 in the
Norwegian Register of Business Enterprises.

The following constitutes a brief summary of the Bond Issue. For further information about the Bond Issue
please see the Term Sheet attached to this Information Memorandum as Appendix 1. Further, the draft Bond
Agreement is available at the request of the investor. In the event any discrepancy should occur between the
Term Sheet and the Bond Agreement, then the Bond Agreement shall prevail.

The Bonds shall be repaid by USD 1.5 million on the interest payment date falling 3 months after the Settlement
Date, and likewise USD 1.5 million on each subsequent interest payment date until maturity of the Bonds. The
maturity date of the Bonds is expected to be 5 July 2018 (the "Maturity Date"), giving the Bonds a duration of 5
years from the Settlement Date. The interest on the Bonds will be [7.50]% p.a., payable as quarterly coupons.
The Bonds that have not been redeemed at an earlier date shall be redeemed in full on the Maturity Date.

The Issuer may redeem all or parts of the outstanding Bonds as set out in the Term Sheet at any time (i) from and
including the date falling 3 years after the Settlement Date to, but not including, the date falling 4 years after the
Settlement Date at a price equal to 103 % of par value (plus accrued interest on the redeemed amount), (ii) from
and including the date falling 4 years after the Settlement Date but not including, the date falling 4.5 years after
the Settlement Date at a price equal to 101.50 % of par value (plus accrued interest on the redeemed amount) and
(iii) from and including the date falling 4.5 years after the Settlement Date up to the Maturity Date at a price
equal to 100.50 % of par value (plus accrued interest on the redeemed amount).

The Bonds will have a nominal value of USD 1. Minimum subscription and allotment amount shall be USD
200,000, and integral multiplies of USD 100,000 thereof.

4.11.2 Yield and return

The Bond Issue will have tenor of 5 years, and yield quarterly interest payments of [7.50]% p.a. The Bonds shall
amortize with quarterly installments during the loan period and mature in their entirety on or around 5 July 2018.

4.11.3 Security and priority

The Bonds will be secured as set out in the Term Sheet, where the security sections are divided into pre-
settlement security (security in favour of the Trustee that must be in place prior to the Settlement Date) and pre-
disbursement security (security in favour of the Trustee that must be in place prior to disbursement of the funds
to the Issuer from the Escrow Account). The security package shall rank on first priority.

The pre-settlement security includes a pledge over the escrow account with [DNB Bank ASA].

The pre-disbursement security includes, inter alia, (i) a mortgage over the Alpha, (ii) a floating charge over all
assets of the Issuer, (iii) share pledges granted by the shareholders over the shares in the Issuer, (iv) to the extent
possible, an assignment of the rights of the Issuer under the Total Contract, (v) to the extent possible, an
assignment of earnings payable to the Issuer under the Total Contract, (vi) to the extent possible, an assignment
of the Management Agreement, (vii) pledges of the Issuer's earnings account, the operating account, the
retention account and the reserve account, (viii) an assignment of insurance proceeds in respect of the Alpha, (ix)
the Issuer shall pledge its shares in any subsidiary ("Issuer Share Pledge"), and (x) an unconditional and
irrevocable on-demand guarantee granted by a subsidiary ("Guarantee") (collectively, the "Issuer Security
14
Documents"). The pre-disbursement security shall also include the Charter Transfer Additional Security
Documents (as defined below) and the Rig Transfer Additional Security Documents (as defined below) if
reasonably practical and legally possible to obtain.

The charter may be entered into by a Subsidiary of the Issuer; provided, that: (i) the Issuer, and any other
shareholders (as long as reasonably practical), grants an Issuer Share Pledge unless already provided as a pre-
disbursement security; and (ii) such subsidiary provides a Guarantee (such guarantee to also contain relevant
covenants to the Trustee's satisfaction) for the Issuer's obligations under the Finance Documents unless already
provided as a pre-disbursement security and a pledge over the subsidiary's claim against the bank for the amount
from time to time standing to the credit in the subsidiary earnings account and the subsidiary operating account
(both as defined below) (the “Subsidiary Account Pledge”, together with the Issuer Share Pledge and the
Guarantee, the "Charter Transfer Additional Security Documents").

The Issuer may transfer ownership of the Alpha to a wholly owned (directly) subsidiary established in Malta or
Luxembourg; provided, that, in addition to the Charter Transfer Additional Security Documents, the following
security is established: (i) a new mortgage over the Alpha, (ii) a new assignment of the Total Contract, (iii) a new
assignment of earnings under the Total Contract, (iv) an irrevocable on-demand guarantee (such guarantee also
to contain all relevant rig covenants and other covenants to the Trustee's satisfaction) and (v) any other relevant
security required to give the bondholders an equal security position (hereunder a new assignment of insurances if
relevant) as determined by the Trustee (the "Rig Transfer Additional Security Documents", and together with
the Charter Transfer Additional Security Documents and the Issuer Security Documents, the "Security
Documents").

4.11.4 Account structure

The Issuer shall open and maintain the following accounts (the "Accounts") with [DNB Bank ASA] (the
“Account Bank”):

(a) the Escrow Account,

the Issuer shall prior to the issuance of the Bonds establish an escrow account and the net proceeds from the
Bond Issue shall be transferred to the escrow account. The Escrow Account shall be pledged in favor of the
Trustee (on behalf of the bondholders) and blocked. The amount on the Escrow Account shall only be used in
accordance with clause 4.4. Before release of funds from the Escrow Account takes place, all the Pre-
Disbursement Conditions Precedent (as described below) relevant shall be complied with;

(b) the Earnings Account,

all earnings related to the Alpha, including the Charter Rate (as defined in 4.11.8) /Net Charter Hire (as
defined in 4.11.5) (as, and if, applicable) and any excess cash in a subsidiary earnings account (if any) shall be
paid directly to the Earnings Account, and shall only be used in accordance with the Application of Earnings (as
described below). The Earnings Account shall be pledged on a first priority basis in favor of the Trustee (on
behalf of the bondholders), but not blocked unless there is an outstanding default;

(c) the Operating Account,

the budgeted operating expenses related to the Alpha shall be deposited on the Operating Account in accordance
with the Application of Earnings (as described below). The Operating Account shall be pledged on a first

15
priority basis in favor of the Trustee (on behalf of the bondholders), but not blocked (unless there is an
outstanding default);

(d) the Retention Account,

amounts used to pay scheduled interest and amortizations under the Bond Issue shall be deposited on the
Retention Account in accordance with the Application of Earnings (as described below). The Retention Account
shall be pledged on a first priority basis in favor of the Trustee (on behalf of the bondholders) and blocked in
favor of the Trustee; and

(e) the Reserve Account,

all remaining earnings following the transfers under the Application of Earnings (as described below) shall be
transferred to the Reserve Account. The Reserve Account shall be pledged in favor of the Trustee (on behalf of
the bondholders) but not blocked unless there is an outstanding default, and amounts standing to the credit of the
Issuer in the Reserve Account may be utilized by the Issuer, in accordance with the Term Sheet, including, but
not limited to, for the purpose of operating and keeping the Alpha in repair, other working capital matters and to
cover any shortfall under the cash waterfall described under the Application of Earnings (as described below).
The amount standing on the Reserve Account shall at all times be minimum USD 5 million.

Subject to the Trustee’s prior written approval, the Issuer may transfer amounts standing to the credit of the
Issuer on any Account to another bank replacing the Account Bank for the purpose of facilitating a time deposit,
provided that such new account is pledged, and blocked if relating to amounts credited to the Escrow Account or
the Retention Account, in favor of the Trustee (on behalf of the Bondholders) in a form and content satisfactory
to the Trustee.

A subsidiary (if any) which becomes a counterparty under the Total Contract, or enters into a new charter, shall
open (i) an earnings account ("Subsidiary Earnings Account") and (ii) an operating account ("Subsidiary
Operating Account") with an internationally recognized and acceptable bank. The Subsidiary Earnings Account
and the Subsidiary Operating Account shall be pledged, if reasonably practical or legally possible, on a first
priority basis in favor of the Trustee (on behalf of the bondholders), but not blocked unless there is an
outstanding default.

4.11.5 Application of Earnings

All gross earnings related to the Alpha, including the Charter Rate (as defined in 4.11.8) / Net Charter Hire (as
defined below) (as, and if, applicable) and any excess cash in a subsidiary earnings account (if any) shall be paid
into the Earnings Account, and the following transfers and payments shall be made from the Earnings Account
on a monthly basis as soon as practicable after receipt ("Transfer Date"):

(i) firstly, the Issuer shall procure a transfer to the Retention Account of an amount equal to 1/3 of the next
interest payment and 1/3 of the next scheduled amortization;

(ii) secondly, the Issuer shall procure a transfer to the Operating Account of the management and operational
expenses for the Alpha, as provided under the Management Agreement; being the aggregate of:

(a) the amount equal to the budgeted operating expenses for the Alpha, in each case to be paid at least
30 days before the start of the next calendar month in which the budgeted cost commitments are
16
 anticipated, plus or minus any shortfall or surplus between the budgeted operating expenses and
the actual operating expenses from the previous month;

(b) the fixed management fee amounting to USD 4,500 per day of the forthcoming month, which is
payable to BassDrill Management monthly in advance pursuant to the Management Agreement;

(c) a performance bonus, payable to BassDrill Management, of 3% of full EBITDA under drilling
contracts, pursuant to the Management Agreement; and

(d) such additional funds, if any, as are required to ensure that the Operating Account at any time holds
not less than the higher of either (i) 150% of the then budgeted operating expenses; or (ii) USD
400,000,

in each case in accordance with the terms of the Management Agreement; and

(iii) thirdly, the Issuer shall procure that any excess cash is transferred to the Reserve Account

If for any reason, funds on the Earnings Account are insufficient for the transfers to the Retention Account and
the Operating Account as set out in (i) and (ii) above, such shortfall may be covered from the Reserve Account.

The Issuer shall be entitled to make payments from the Reserve Account to the Operating Account where (i) the
funds on the Operating Account fall below the minimum amount of USD 400,000; or (ii) as otherwise required
by BassDrill Management for the management of the Rig, in accordance with the terms of the Management
Agreement.

All earnings related to the Rig under a charter entered into by a subsidiary shall be paid directly to the Subsidiary
Earnings Account. From the Subsidiary Earnings Account, the subsidiary shall (i) transfer an amount equal to its
budgeted operating expenses to the Subsidiary Operating Account and pay such expenses out of such account,
and (ii) transfer the Charter Rate/Net Charter Hire (as, and if, applicable) into the Issuer's Earnings Account
which funds shall be subject to the Application of Earnings above.

"Net Charter Hire" means all earnings received related to the Alpha less (a) any amount sufficient to cover tax
requirements, (b) budgeted operating expenses, (c) a minimum profit element to accommodate for minority
shareholders which have become minority shareholders by local law requirements, and (d) any other amount that
much be held within the Subsidiary (if applicable) for tax, operational or other regulatory expenses.

4.11.6 Cash sweep

All cash exceeding USD 7.5 million, however not including the part of the Initial Dividend not paid within 30
days after the Settlement Date, deposited on the Reserve Account in accordance with the Application of Earnings
(as defined above) (the “Cash Sweep Amount”) shall be used to repay the Bonds at 100% of par value (plus
accrued interest on redeemed amount). Such redemption shall take place on every interest payment day subject
to the credit balance on the Reserve Account on the tenth banking day prior to the relevant interest payment day
being in an amount of minimum USD 7.5 million. The Cash Sweep shall only be in effect as long as the Asset
Coverage Ratio is below 160%.

4.11.7 Financial Covenants

The Issuer undertakes to comply with the following financial covenants during the term of the Bond Issue:

17
(i) Asset Cover Ratio: The Market Value of the Alpha shall exceed 120.0% of the amount of outstanding
Bonds; and

(ii) Liquidity: The Issuer shall ensure that the amount standing on the Reserve Account shall at all times be
minimum USD 5 million.

The Financial Covenants shall be tested on a quarterly basis. In the event of any breach of (ii) above, the Issuer
shall immediately give notice to the Trustee, and the Issuer shall have the right to remedy the non-compliance
within 30 banking days after the date of sending such notice or after the date on which such notice should have
been sent. Remedy shall be made by providing the required funds through equity or subordinated loans to the
Issuer (on terms acceptable to the Trustee) which shall be deposited (for the required period, which in any event
shall not expire prior to the next reporting date of the Financial Covenants) on a separate account to be pledged
but not blocked to the Trustee and where the account bank has waived its set-off rights. If the Issuer has
remedied the non-compliance of (i) above within said 30 banking days, no event of default shall have occurred.

"Market Value" means the fair market value of the Alpha determined as the arithmetic mean of independent
valuations of the rig obtained from two independent and well-reputed sale and purchase brokers familiar with the
market for the Alpha appointed by the Issuer and approved by the Trustee. Such valuation shall be made on the
basis of a sale for prompt delivery for cash at arm’s length on normal commercial terms as between a willing
seller and willing buyer, on an “as is where is” basis, free of any existing charters or other contracts for
employment. The cost of such determination shall be for the account of the Issuer. The valuation shall be made
at least semi-annually, or following an event of default, upon the request of the Trustee.

4.11.8 Positive and Negative Covenants

The Issuer must comply with both positive and negative covenants as set forth in Term Sheet.

Positive covenants to include, inter alia, that the Issuer shall:

(i) deliver to the Trustee, its annual audited and semi-annual interim unaudited reports;

(ii) upon request of the Trustee, arrange for the Trustee, and/or any person appointed by the Trustee, to
undertake a technical inspection of the Alpha without interference of the daily operation of the Alpha and
at the expense of the Issuer;

(iii) except for "best endeavors" obligations and the feasibility of creating the Charter Transfer Additional
Security Documents and the Rig Tranfer Additional Security Documents as set forth in the Term Sheet,
maintain the Security Documents in good condition and that each such Security Document remains duly
created, enforceable and perfected on first priority, at the expense of the Issuer, or the relative security
provider (as the case may be);

(iv) procure that BassDrill Management operates the Alpha in accordance with good industry standards and in
accordance with its obligations under the Management Agreement;

(v) maintain a 100% ownership interest (save for any minority ownership interest necessary for operations
under any legal framework where the Alpha is chartered) and control over each subsidiary (if any);

(vi) ensure that any charter it enters into, and procure that any charter entered into by a subsidiary (if any), is
based on generally accepted international industry standards not incurring any potential liability for the

18
 Issuer or such subsidiary, as the case may be, directly or indirectly other than what is normal in the
industry for operation of such rigs;

(vii) enter into a charter with a subsidiary (if any) (the “Charter”), if such subsidiary enters into a new charter,
and the Charter shall be on market terms and shall provide for a charter rate at least sufficient to cover
debt service under the Bond Issue as well as management and operation expenses in accordance with the
Application of Earnings (as described above) (the " Charter Rate"). If the Charter Transfer Additional
Security Documents are not delivered to the Trustee, the Charter Rate shall equal the Net Charter Hire;

(viii) remain a single purpose company with a sole purpose of owning, operating, maintaining the Alpha unless
approved by the Trustee or, where necessary, the bondholders’ meeting;

(ix) maintain 100% direct ownership of the Alpha except as set forth under the Rig Transfer Additional
Security Documents above, or otherwise as approved by the Trustee or, where necessary, the
bondholders’ meeting;

(x) ensure that all shareholder loans to the Issuer from any of its shareholders or any other third party shall be
fully subordinated to the Bonds, with maturity after the Final Maturity Date and with no cash pay interest;

(xi) perform and observe all of its covenants and agreements contained in any of the Management Agreement,
Total Contract or any other charter (the "Project Documents") to which it is or becomes a party, take all
necessary action to prevent the termination of any such Project Document in accordance with the terms
thereof or otherwise, and take any and all commercially reasonable action as may be reasonably necessary
to promptly enforce its rights and to collect any and all sums due to it under such Project Documents;

(xii) comply with the Application of Earnings (as described above); and

(xiii) if required in its sole discretion, assign rights and obligations under the Total Contract to a subsidiary (if
any); provided, that, the Issuer and such subsidiary enter into a Charter.

Negative covenants to include, inter alia, that the Issuer shall not:

(i) declare or make any dividend payment or distribution, whether in cash or in kind, repurchase of shares or
make other similar transactions (included, but not limited to total return swaps related to shares in the
Issuer), or other distributions or transactions implying a transfer of value to its shareholders other than (a)
the Initial Dividend, and (b) repayment of the Subordinated Shareholder Loan or (c) if the Asset Cover
Ratio immediately subsequent to such transactions is equal to or higher than 160% and remaining charter
backlog (excluding options) is above 12 months;

(ii) amend its constitutional documents (including change of domicile) unless related to (i) a re-domiciliation as
set out in Rig Transfer Additional Security Documents above or (ii) the issuance of new shares to the
shareholders in connection with conversion of debt to equity or otherwise, provided that such shares are
subject to the share pledge;

(iii) cease to carry on its business or change the nature of its business unless related to a re-domiciliation as set
out in Rig Transfer Additional Security Documents above;

(iv) de-merge, merge or in any other way restructure its business; provided, incorporating subsidiaries
shall not require the approval of the Trustee as long as the shares of such subsidiaries are subject
to the Issuer Share Pledge and such subsidiary provides a Guarantee;

19
(v) in respect of any Project Document (i) dispose of (by operation of law or otherwise) any part of its interest,
(ii) amend, supplement, modify or give any consent under any Project Document or exercise any material
option thereunder, except for amendments not having any material negative impact on the value of the
Alpha or value of the relevant charter as contemplated pursuant to the Project Documents, or (iii) agree to
the cancellation or termination of any Project Document or take any legal or administrative action that seeks
to rescind or terminate such Project Documents, except in the event that it constitutes a substitution of the
said Project Document which is acceptable to the Trustee;

(vi) change the flag state of the Alpha;

(vii) agree to or permit the assignment of any rights or the delegation of any obligations under the Project
Documents, save to the extent already permitted herein or by the terms of the Project Documents;

(viii) incur or permit to remain outstanding any additional financial indebtedness (whether secured or
unsecured) other than (i) any Financial Indebtedness arising under the Bond Issue, (ii) any subordinated
loans and (iii) any intercompany loans;

(ix) create or permit to subsist any security over any of its assets or enter into arrangements having a similar
effect except for (i) any security contemplated by the Bond Issue, and (ii) any security arising by operation
of law;

(x) enter into any sale- and leaseback transactions;

(xi) grant any financial support such as loans, guarantees or other financial assistance to any party, except for (i)
guarantees issued for the benefit of third parties in the ordinary course of business and (ii) any financial
support contemplated by this Bond Agreement, and (iii) any intercompany loans;

(xii) make any investments or capital expenditures, other than solely related to the ownership in and operation of
the Alpha and for any investments (being part of a program or as separate investment exceeding USD 5
million) in any case subject to the Trustee’s prior written approval (on behalf of the bondholders);

(xiii) engage directly or indirectly, in any transaction with any related party (without limitation, the purchase,
sale or exchange of assets or the rendering of any service) unless on arm's length terms and for fair market
value; and

(xiv) enter into any contracts in North Korean, Iranian territorial waters or any other jurisdictions/organizations
which is prohibited by the US Department of Treasury Office of Foreign Asset Control (OFAC), or move
the Alpha into any of those areas.

The Issuer shall procure compliance to the negative covenants set out in (ii) – (v) and (viii) – (xiv) by any
subsidiary.

20
5. PRESENTATION OF THE ISSUER
5.1 The Issuer - Overview
BassDrill Alpha, the issuer of the Bonds, was incorporated on 19 June 2008 and is organized as an “exempted
company incorporated with limited liability” under the Companies Act 1981 of Bermuda. It has its registered
office situated at Canon’s Court, 22 Victoria Street, Hamilton HM 12, Bermuda, telephone +441 295 2244, +441
292 8666. The Issuer is registered with the Bermuda Registrar of Companies with registration number 42038.

BassDrill Alpha was founded as a single asset company and owner of the tender barge rig, BassDrill Alpha. In
2008 the Issuer acquired from BassDrill Ltd. a construction contract with Lamprell Energy Ltd. (the “Builder”)
for the construction of one or more medium tender assist barges. On January 14, 2010, the first and only Unit,
the Alpha, was delivered to the Issuer by the Builder. The Unit completed its outfitting in the port of Hamriyah,
Sharjah, UAE and was mobilized in September of 2010 for its first contract in the Republic of Congo, West
Africa. All remaining options granted by the Builder for the construction of further units have expired and the
Issuer has no intentions to build a second Unit.

On 27 June 2008, the Issuer entered into a Management Agreement with BassDrill Management (USA) Inc, a
wholly owned subsidiary of BassDrill Ltd., for the management and marketing of the affairs of the Issuer.

5.2 Legal structure

Below is an overview of the legal structure of BassDrill Alpha and its shareholders as at the date of this
Information Memorandum.

5.3 Share capital

The Issuer’s authorized share capital is USD 2,800,000.00 consisting of 280,000,000 shares each with a nominal
value of USD 0.01. The Issuer's issued share capital is USD 2,497,267.09 consisting of 249,726,709 shares each
with a nominal value of USD 0.01 which are fully paid and issued in accordance with Bermuda law.

All shares in the Issuer are vested with equal shareholder rights in all respects. There is only one class of
common shares issued, and all Shares are freely transferable.

21
5.4 Board of Directors
In accordance with Bermudan law, the Board of Directors of BassDrill Alpha is responsible for administering the
company's affairs and for ensuring that the company's operations are organized in a satisfactory manner.

As at the date of this Information Memorandum the Board of Directors consists of the following persons:

Geir Sandvik, Chairman of the Board of Directors

Mr. Sandvik is an independent consultant. He is the Chairman of the Boards of Prospector Offshore Drilling S.A.
and Neptune Offshore AS, as well as a director of Pareto World Wide Offshore AS and Integrated
Optoelectronics AS. Recent previous directorships include Hydroenergi AS (chair), Beerenberg Corp. AS,
Floatel International Ltd. (chair), Master Marine ASA (chair). From 1994 to 2006, Mr. Sandvik held various
management positions with Pareto Securities ASA’s Corporate Finance division, managing nearly 150 IPOs and
share issues and 80 M&A transactions. Prior to Pareto Securities, Mr. Sandvik was the Executive Vice President
and CFO of Transocean Offshore, Executive Vice President and CFO of Astrup Høyer AS, Vice President
Finance of Aker and Vice President Finance of Royal Viking Line.

Mr. Sandvik holds an MSc in Business from the Norwegian School of Economics and Business Administration
in Bergen. He is a citizen of Norway and resides in Oslo. Mr. Sandvik was born on 14 April 1949. He has served
as a director and Chairman of the Board of BassDrill Alpha Ltd. since 2008.

Johannes Felix Lambertus Maria Simons, Board Member

Mr. Simons (1965) is Head of Offshore of Maas Capital Investments B.V., an equity investment fund controlled
by ABN AMRO Bank. Before joining Maas Capital Investments in 2008, he held various positions with NIBC
Bank including business consultant, market analyst, risk & portfolio manager and relationship manager Shipping
and Offshore, starting in 1999. Prior to that he worked with Utrecht University, The Netherlands

Mr. Simons has an MSc in Economic and Social History from Radboud University in Nijmegen, the
Netherlands. He is a Dutch citizen, residing in Utrecht. He has served as a director and Chairman of the Board of
BassDrill Alpha Ltd. since 2008.

Jan Petter Røed, Board Member

Mr. Røed is a member of the American Bureau of Shipping, and has deep experience within the commercial and
financial operations of the shipping industry. He has owned and operated a mixed fleet of oil and chemical
tankers, passenger ferries, container ships, and bulk carriers since 1967. He has been an active investor in the
offshore sector since 1980. He attended the Norwegian Institute of Technology, attaining a Master of Science
degree in Naval Architecture and Marine Engineering. Amongst his other achievements, his commendations
include the Order of the North Star, Sweden, and the Order of the Falcon, Iceland. Other interests have ranged
from geothermal power plants and windmills in the US and globally, to environmental and safety management in
the oil, petrochemical and aviation industries.

22
Helge Haakonsen, Board Member
Haakonsen has more than 40 years of experience in the oil and gas and shipping sectors. Since 1972 until
retirement in the fall of 2009 Haakonsen was employed by Fred Olsen related companies and held a number of
senior project, management and board positions within the offshore and tanker industries, including
shipbuilding, offshore construction, offshore drilling and floating production. From 1997 to retirement
Haakonsen was employed as CEO and President by Fred Olsen Energy ASA. Haakonsen received a B.Sc. degree
in marine engineering from the University of Newcastle upon Tyne, England in 1969 and a B-Sc in business
administration from the Norwegian School of Business Administration, Oslo in 1973. Haakonsen chairs the
BassDrill Ltd. board of directors.

Robert Bennet, Alternate Director

Mr. Bennet has over twenty-years successful multidisciplinary senior management and ownership experience in
shipping including commercial ship operations (Norse, Crescent Tankships), shipping investments, vessel
technical management (Goodwood, Crescent Marine Services), oil major chartering, trading and corporate
chartering group restructuring co-ordinator (ExxonMobil), brokerage and research (Clarkson). He has managed
over 40 sale and purchase and newbuilding transactions within the last 7 years, totaling over USD 1 billion.

5.5 Shareholders
As of the date of this Information Memorandum, BassDrill Alpha Ltd. has six shareholders;

Pareto World Wide Offshore AS

Pareto World Wide Offshore AS (PWWO) is an Asset Management Fund under the Pareto Group. PWWO
focuses on asset investments within the offshore segment. The fund has committed USD 217 million in
investments since its inception in June 2007 and currently holds ownership in 12 offshore projects with a total of
27 units. The fund invests in all offshore sectors, and is currently exposed to the supply market, the subsea
market, the rig market, the accommodation market and the seismic market. PWWO currently holds 36.8% of the
outstanding shares in the Issuer.

BassDrill Ltd.
BassDrill Ltd is the parent company in the BassDrill Group and holds 25.26% of the outstanding shares in the
Issuer. BassDrill Ltd. is the sole owner of the BassDrill Management which has entered into a Management
Agreement with the Issuer as further described in section 6.3 below.

Maas Capital Investment B.V

Maas Capital Investments, wholly owned by ABN AMRO, is a global investment fund with equity and near-
equity investments in the Shipping and Offshore Oil & Gas Service industries. Maas Capital Investments is part
of the specialized finance division ECT (Energy, Commodities and Transportation) within Large Corporate and
Merchant Banking in ABN AMRO. Maas Capital Investments currently holds 26.0% of the outstanding shares in
the Issuer.

Grover Star Shipping Corporation

A privately owned investment holding company with over 30 years’ experience in commercial shipping and
offshore markets. Grover Star Shipping currently holds 10.9% of the outstanding shares in the Issuer.

23
Marine Services and Trading Company
Oil Techniques & Services Company (OTSC) is a privately owned oil & gas drilling services company
incorporated in 2001 providing a range of products and services to the industry, ranging from logistics support,
field and well engineering, drilling operations project management through to the supply of drilling structures
and support. OTSC holds 0.7% of the outstanding shares in the Issuer.

Kontiki Four World Holdings Ltd.

Kontiki Four World Holdings Ltd is a wholly owned subsidiary of Seahorse Enterprises Limited (SEL). SEL is
an investment company controlled by Mr. Christian Larsson and has investments of 5% up to 25% in a total of
27 modern ships – PCTCs, RoRo's, tankers and bulk carriers – as well as the investment in BassDrill and in
various commercial property projects. Kontiki holds 0.3% of the outstanding shares in the Issuer.

5.6 Memorandum of association and bye-laws of the Issuer

5.6.1 Memorandum of association
The Issuer’s memorandum of association states that the liability of shareholders is limited to the amount, if any,
for the time being unpaid on the shares respectively held by them and that the Issuer is an exempted company as
defined in the Companies Act 1981 of Bermuda. The memorandum of association also sets out the objects of the
Issuer which are stated to be unrestricted, and the powers of the Issuer, which are those of a natural person and
subject to section 42 of the Companies Act 1981 it has the option to issue preference shares that are liable to be
redeemed, under section 42A of the Companies Act 1981 the Issuer has the power to purchase its own shares
which may be held as treasury shares under the provisions of section 42B of the Companies Act 1981.

5.6.2 Bye-Laws
The following is a summary of certain provisions of the Bye-Laws as of the date of this Information
Memorandum. The summary does not purport to be complete and is qualified in its entirety by the Bye-Laws and
all applicable laws.

Variation of class rights and changes in capital

Subject to the Bermuda Companies Act 1981, the rights attaching to any class of the Issuer’s shares may be
altered or abrogated with the consent in writing of the holders of not less than seventy five percent (75%) of the
issued shares of that class, or with the sanction of a special resolution passed at a separate general meeting of the
holders of the shares of such class voting in person or by proxy.

Shares

Subject to the Companies Act 1981, the Bye-Laws and any special rights conferred on the holders of any share,
the Board of Directors may issue all unissued shares with such rights, preferences and restrictions as they shall in
their sole discretion decide.

Transfer of shares

The approval of the Bermuda Monetary Authority is required for all issues and transfers of shares in Bermuda
exempted companies prior to the completion of the issuance or transfer.

24
The Bye-Laws provide that, subject to the Companies Act 1981, and to such restrictions which may be contained
in the Bye-Laws as may be applicable, any shareholder may transfer all or any of his shares by an instrument of
transfer in the usual common form or in any other form as the Board of Directors may approve.

The Bye-Laws also provide that the Board of Directors may in its absolute discretion decline to register any
transfer of any share which is not a fully-paid share. The Board of Directors may also in certain other cases
decline to register the transfer of any share.

Annual General Meetings

Annual general meetings of the Issuer shall be held in accordance with the Companies Act 1981 at such time and
place as the Board of Directors shall appoint. The Board of Directors may, whenever it thinks fit, and shall when
required by shareholders pursuant to the provisions of the Companies Act 1981, convene special general
meetings of the Issuer. Except in the case of removal of auditors or Directors, anything which may be done by
resolution of the shareholders in general meeting or by resolution of any class of shareholders in separate general
meeting may be done by resolution in writing.

Annual general meetings shall be called on no less than five (5) days’ notice in writing given to each shareholder
entitled to attend and vote thereat, stating the date, place and time at which the meeting is to be held and the
nature of the business to be considered. Such meeting can only be called on shorter notice if agreed to in writing
by all the shareholders entitled to attend and vote thereat.

In case of a special general meeting no less than five (5) days’ notice in writing shall be given to each
shareholder entitled to attend and vote thereat, stating the date, place and time and the general nature of the
business to be considered at the meeting. Any special general meeting can only be called on shorter notice if
agreed to in writing by a majority in number of the shareholders entitled to attend and vote thereat, being a
majority together holding not less than ninety five percent (95%) in nominal value of the shares giving that right.

Save as otherwise provided in the Bye-Laws a general meeting may be held with only one individual present
provided that the requirement for a quorum is satisfied.

Shareholders are entitled to attend and vote in person or by proxy before the time appointed for holding the
general meeting or adjournment thereof by (in the case of proxies or corporate representatives) giving notice in
writing to the company.

The accidental omission to give notice of a general meeting to, or the non-receipt of a notice of a general
meeting by, any person entitled to receive notice shall not invalidate the proceedings at the meeting.

A shareholder may participate in a general meeting by means of such telephone, electronic or other
communication facilities as permits all persons participating in the meeting to communicate with each other
simultaneously and instantaneously, and participation in such meeting shall constitute presence in person at such
meeting.

No shareholder shall, unless the Board of Directors otherwise determines, be entitled to vote at any general
meeting unless all calls or other sums payable by him in respect of shares in the company have been paid.

Powers and duties of directors

The Bye-Laws provide that the business of the Issuer shall be managed by the Board of Directors subject to the
Companies Act 1981 and any specific provisions of the Bye-Laws. Generally, the Board of Directors can

25
exercise the powers of the Issuer except to the extent the Companies Act 1981 or the Bye-Laws reserve such
power to the shareholders.

The Bye-Laws provide that the Board of Directors shall have between three (3) and five (5) directors, as
determined by ordinary resolution of the shareholders.

Directors are elected by the shareholders, for such term of office as the shareholders determine, or, in the absence
of such determination, until the next annual general meeting.

A director may resign by notice in writing delivered to the registered office of the Issuer or tendered at any
meeting of the board. In addition, the office of a director of the Issuer shall be vacated if he:

(i) becomes of unsound mind or a patient for any purpose of any statute or applicable law relating to
mental health and the Board of Directors resolves that his office is vacated;

(ii) becomes bankrupt under the laws of any country or compounds with his creditors;

(iii) is prohibited by law from being a director; or

(iv) ceases to be a director by operation of law or the provisions of the Bye-laws.

A director may hold any office or act for the Issuer in any capacity (except as auditor). A director may vote and
be counted in quorum in a transaction with the Issuer (and shall not be accountable to the Issuer for any benefit
received) in which he is interested provided that he declares his interest in accordance with the Bye-Laws and
the Companies Act 1981.

Dividends

According to Byelaw 35, the Board may from time to time declare dividends or distributions out of contributed
surplus to be paid to the Shareholders according to their rights and interests, including such interim dividends as
appear to the Board to be justified by the position of the Issuer. The Board, in its discretion, may determine that
any dividend shall be paid in cash or shall be satisfied, in paying up in full shares in the Issuer to be issued to the
Shareholders credited as fully paid or partly paid or partly in one way and partly the other. The Board may also
pay any fixed cash dividend which is payable on any shares of the Issuer half yearly or on such other dates,
whenever the position of the Issuer, in the opinion of the Board, justifies such payment.

All dividends or distributions out of contributed surplus may be declared and paid according to the amounts paid
up on the shares in respect of which the dividend or distribution is paid, and an amount paid up on a share in
advance of calls may be treated for the purpose of this Bye-Law as paid-up on the share. Dividends or
distributions out of contributed surplus may be apportioned and paid pro rata according to the amounts paid-up
on the shares during any portion or portions of the period in respect of which the dividend or distribution is paid.

The Board may deduct from any dividend, distribution or other monies payable to a Shareholder by the Issuer on
or in respect of any shares all sums of money (if any) presently payable by him to the Issuer on account of calls
or otherwise in respect of shares of the Issuer.

No dividend, distribution or other monies payable by the Issuer on or in respect of any share shall bear interest
against the Issuer.

Any dividend or distribution out of contributed surplus unclaimed for a period of six years from the date of
declaration of such dividend or distribution shall be forfeited and shall revert to the Issuer and the payment by

26
the Board of any unclaimed dividend, distribution, interest or other sum payable on or in respect of the share into
a separate account shall not establish the Issuer as a trustee in respect thereof.

The Board may also, in addition to its other powers, direct payment or satisfaction of any dividend or
distribution out of contributed surplus wholly or in part by the distribution of specific assets, and in particular of
paid-up shares or debentures of any other company, and where any difficulty arises in regard to such distribution
or dividend, the Board may settle it as it thinks expedient, and in particular, may authorise any person to sell and
transfer any fractions or may ignore fractions altogether, and may fix the value for distribution or dividend
purposes of any such specific assets and may determine that cash payments shall be made to any Shareholders
upon the footing of the values so fixed in order to secure equality of distribution and may vest any such specific
assets in trustees as may seem expedient to the Board, provided that such dividend or distribution may not be
satisfied by the distribution of any partly paid shares or debentures of any company without the sanction of a
shareholder resolution.

Neither the Bye-laws nor Bermudan law restrict the ability of the Issuer to declare and pay dividends to persons
who are non-resident of Bermuda for exchange control purposes.

Pre-emptive rights

As a matter of Bermudan law, the holders of common shares in the capital of the Issuer do not have pre-emptive
rights.

Under the Bye-laws of the Issuer, the holders of common shares in the capital of the Issuer are not entitled to
pre-emptive rights.

Distribution of assets on winding-up

If the Issuer shall be wound up, the liquidator may, with the sanction of a resolution of the general meeting of the
Issuer any other sanction required by the Companies Act 1981, divide amongst the shareholders in specie or kind
that whole or any part of the assets of the Issuer (whether they shall consist of property of the same kind or not)
and may for such purposes set such values as he deems fair upon any property to be divided as aforesaid and
may determine how such division shall be carried out as between the shareholders. The liquidator may, with the
like sanction, vest the whole or any part of such assets in trustees upon such trust for the benefit of the
contributories as the liquidator, with the like sanction, shall think fit, but so that no shareholder shall be
compelled to accept any shares or other assets upon which there is any liability.

Amalgamation

Any resolution proposed for consideration at any general meeting to approve the amalgamation of the Issuer
with another company, shall require the approval of a majority of the directors then in office and two thirds
majority of votes cast at the relevant shareholders’ meeting.

Continuation

Subject to the Companies Act 1981, the Issuer may, by the affirmative vote of a majority of the directors then in
office and by two thirds majority of the votes cast at a shareholder meeting, resolve to discontinue the place of
incorporation as Bermuda and to continue into another jurisdiction outside Bermuda.

Compulsory Acquisition

Under Bermudan law, an acquiring party is generally able to acquire compulsorily the common shares of
minority holders in the following ways:

27
  By a procedure under the Companies Act 1981 known as a “scheme of arrangement.” A scheme of
arrangement could be effected by obtaining the agreement of the company and of holders of common
shares, comprising in the aggregate a majority in number representing at least 75% in value of the
shareholders (excluding shares owned by the acquirer) present and voting at a meeting ordered by the
Bermudan Supreme Court held to consider the scheme of arrangement. Following such approval by the
shareholders, the Bermudan Supreme Court must then sanction the scheme of arrangement. If a scheme
of arrangement receives all necessary agreements and sanctions, upon the filing of the court order with
the Registrar of Companies in Bermuda, all holders of common shares could be compelled to sell their
shares under the terms of the scheme of arrangement.

 If the acquiring party is a company, by acquiring pursuant to a tender offer 90% in value of the shares
not already owned by, or by a nominee of, the acquiring party (the offeror), or any of its subsidiaries. If
an offeror has, within four months after the making of an offer for all the shares not owned by, or by a
nominee of, the offeror, or any of its subsidiaries, obtained the approval of the holders of 90% or more
in value of all the shares to which the offer relates, the offeror may, at any time within two months
beginning with the date on which the approval was obtained, require by notice any non-tendering
shareholder to transfer its shares on the same terms, including the form of consideration, as the original
offer. In those circumstances, non-tendering shareholders could be compelled to transfer their shares
unless the Bermuda Supreme Court (on application made within a one-month period from the date of
the offeror’s notice of its intention to acquire such shares) orders otherwise.

 Where the acquiring party or parties hold not less than 95% of the shares of a company, by acquiring,
pursuant to a notice given to the remaining shareholders, the shares of such remaining shareholders.
When this notice is given, the acquiring party is entitled and bound to acquire the shares of the
remaining shareholders on the terms set out in the notice, unless a remaining shareholder, within one
month of receiving such notice, applies to the Bermuda Supreme Court for an appraisal of the value of
their shares. This provision only applies where the acquiring party offers the same terms to all holders
of shares whose shares are being acquired.

Alteration of Bye-Laws

The Bye-Laws may be amended from time to time, in the manner provided for in the Companies Act 1981,
provided that any such amendment shall only become operative to the extent that it has been approved by the
board and by the affirmative vote of two thirds majority of the votes cast at the relevant general meeting.

5.7 Winding-Up and Liquidation Provisions of Bermuda Legislation

The winding-up of Bermudan companies is governed by the statutory provisions contained in the Companies Act
1981 (as amended), the Companies (Winding-Up) Rules 1982 and the Bankruptcy Act 1989, as supplemented by
principles of Bermudan common law and equity, where appropriate. Winding-up may be divided into the
following two modes:

(i) Voluntary winding-up which commences with a members' resolution in general meeting or upon the
happening of a specified event (fixed or limited life company) and which itself can be sub-divided into a
members' voluntary winding-up (if the company is solvent) and a creditors' voluntary winding-up (if the
company is insolvent); and

28
(ii) Compulsory winding-up by the Supreme Court of Bermuda, which commences a winding-up Order
made by the Supreme Court of Bermuda, upon the hearing of a petition presented by the company, a
creditor, or a contributor. In the event that a winding up Order is made by the Bermudan Court, the
winding up is deemed to commence at the time of the presentation of the petition for winding up.

29
6. MANAGEMENT AND MANAGEMENT AGREEMENT
6.1 BassDrill Management
BassDrill Management was incorporated in 2007 as a limited liability company with registered offices at 50
Briar Hollow Lane, Suite 330W, Houston Texas, 77027. BassDrill Management entered into the Management
Agreement with BassDrill Alpha on 27 June 2008, under which BassDrill Management provides services
including management of the Issuer and of the Unit (see further details in section 6.3 below). BassDrill
Management has approximately 38 employees.

BassDrill Management is wholly owned by BassDrill Ltd. Below is an overview of a simplified legal structure of
the BassDrill companies as at the date of this Information Memorandum:

The BassDrill group's executive management is, responsible for the daily management and the operations of the
BassDrill group, thereunder BassDrill Alpha under the Management Agreement referred to in section 6.3. The
executive management of the BassDrill group as at the date of this Information Memorandum is presented
below:

Kerry Kunz, Chief Execution Officer / President

Kunz is a co-founder of BassDrill and has been the President of BassDrill Ltd since 2007. Kunz has 32 year
experience in the offshore sector. Prior to joining BassDrill he was Vice President of International Offshore
Operations in Nabors International Management Ltd.

Lasse B. Kjelsås, Chief Financial Officer

Kjelsås joined BassDrill in 2012, and is employed with BassDrill International Ltd. Prior to joining BassDrill he
was the CFO of Aker Clean Carbon AS. From 1999 to 2007 Kjelsås worked in Elcon/First Securities ASA's
Corporate Finance department, initially as a senior advisor, then as a director. Kjelsås holds a Master of Science
degree from the Norwegian School of Economics and Business Administration (NFIH) and a Master of Science
degree in finance from London Business School.

Eric Hoegg, Senior VP of Finance and Administration

30
Hoegg is a co-founder of BassDrill and has been Senior VP Finance and Administration in BassDrill
Management since 2008. He has 34 years of international business management and planning experience in the
international oilfield drilling and workover fields, both land and offshore. Previous work experience includes
Director of International Tax and Director of International Business Development and Marketing with Pool
Energy Service Company, International Controller Tesco Corporation, VP and CFO for NeoGas Inc. He is a
Certified Public Accountant State of Texas, USA and graduated from Texas A & M University (1977) with a BA
in Business Administration with a Major in Accounting.

Keith Stratton, Senior VP of Quality, HSE, Training and HR

Stratton is a co-founder of BassDrill and has been the Senior VP of Quality, HSE, Training and HR of BassDrill
Management since 2007. He has 33 years of Operations/QHSE/Training experience with international offshore
and land drilling. Prior to joining BassDrill he was Vice President of Quality, Health, Safety & Environment in
Nabors International Management Ltd.

Christian Wood, Senior VP of Engineering and Projects

Wood is a co-founder of BassDrill and has been Sr. VP of Engineering and Projects in BassDrill Management
since 2008, and has 19 year experience in offshore rig design and rig system design. Prior to joining BassDrill he
was a Senior Project Engineer in Nabors International Management Ltd. He has a Bachelor of Science in
Petroleum Engineering from the University of Alaska Fairbank.

6.2 BassDrill Management's experience and track-record

BassDrill Management has been involved in the development of design of the Alpha, negotiating the
construction contract, managing the construction contract, marketing the Alpha, contracting the Alpha, taking
delivery of the Alpha, mobilizing the Alpha from Dubai to West Africa and thereafter operating the Alpha. The
involvement with the Alpha in effect predates the management agreement to some degree which came into force
at the same time as the construction contract was first being negotiated in 2008.

In addition to managing the Alpha through the Management Agreement, BassDrill Management has 1 April
2011 entered into a management agreement to manage the Beta on behalf of BassDrill Beta Bermuda. BassDrill
Beta Bermuda appointed BassDrill Management to act as a full service manager for the company in relation to
the Beta unit under construction. As a part of a re-domiciliation of the business of the Beta from Bermuda to
Malta, BassDrill Beta Bermuda novated to BassDrill Beta Malta all of its rights and obligations under the
management agreement for the Beta. The management agreement comprises yard supervision and management,
business and administrative management, operation and technical management and marketing. BassDrill Beta
Ltd has a term contract in place with Petrobras for the provision of the Beta for use offshore Brazil commencing
in the latter half of 2013. This agreement is in the process of being novated to a subsidiary of BassDrill Beta Ltd.
(Malta). The vessel Beta is presently under construction at Dalian Shipbuilding Industry Offshore Company in
Dalian China with an expected delivery in August 2013.

BassDrill Gamma Ltd was established in Malta in April 2012. A new build tender assist barge similar in nature
to the Alpha, but larger, was ordered from Dalian Shipbuilding Industry Offshore Company in Dalian China in
October of 2012 for delivery in mid 2014. The vessel Gamma is being built on speculation and to date remains
un-contracted. It is expected that BassDrill Gamma will enter into a management agreement for the Gamma on
substantially the same terms as the Management Agreement.

31
BassDrill Delta Ltd was established in Malta in Q4 2012. The company has a term contract in place with Total
for the provision of a new build semi tender assist for use offshore Congo commencing in mid-2015. In May
2013 BassDrill executed a contract for the construction and delivery of the Delta at Dalian Shipbuilding Industry
Offshore Co. Ltd with an expected delivery in the second quarter of 2015. BassDrill Management is expected to
enter into a management agreement similar to the management agreement for the Beta for managing the Delta.

6.3 The Management Agreement

The Issuer has no employees and the entire management of the company is conducted by BassDrill Management
(USA) Inc (the "BassDrill Management"), regulated through the Management Agreement. Originally, the
Management Agreement was intended to be applied for two units. However, only the Alpha was ordered by the
Issuer and delivered by the Builder.

The Management Agreement comprises

 Yard supervision and management during construction and delivery of the Unit;

 Business and Administrative Management, including receiving invoices and making payments,
issuing invoices and receiving payment from the clients under any drilling contract entered into by the
Issuer, preparing the necessary documentation for the Issuer’s Board and shareholders’ meeting;

 Operation and technical management services for the Unit, including all services necessary for the
performance of the Issuer’s obligations under any Drilling Contracts, maintenance and repair in relation
to the Unit, crewing, procurement of necessary insurance policies on behalf of the Issuer, ensuring that
the Unit is maintained in class and with all necessary certifications; and

 Marketing services for the Unit and regularly communicating its marketing efforts to the Issuer.

All matters related to the above are jointly referred to as the “Services”. All Services are performed by BassDrill
Management. BassDrill Management hires local crew through a labor provider in the Congo.

Authority and Instructions

BassDrill Management is authorized to represent, and act on behalf of the Issuer in order to perform the
Services, provided however, that such authority shall not, without the prior written authority of the Issuer,
include authority

 to make formal bids or enter into any drilling contracts for the Issuer;

 to incur non-budget expenses or investments in excess of an accumulated amount per quarter of USD
200,000; and

 to enter into any other material agreement on behalf of the Issuer, or agree to any early termination or
material amendment or waiver of terms of any agreement to which the Issuer is a party, including any
drilling contract entered into by the Issuer.

 Manager may in every case take immediate steps where required to safeguard the interests of the Issuer
and/or the client, avert danger to life or health or losses or damage to the Unit and related property or to
maintain seaworthiness or Class of the Unit ("Urgent Measures").

32
Management fee and reimbursable costs

 The Issuer pays BassDrill Management a fixed management fee of USD 4,500 per day. The
management fee shall cover BassDrill Management’s overhead costs and normal administrative
expenses, including lease of offices and salary to general management and administration office
personnel ("Management Personnel"). The cost of personnel employed by BassDrill Management in
relation to the operation of the Unit, other than Management Personnel, is reimbursed to BassDrill
Management as part of the operating costs. All operating costs are incurred on behalf of, and invoiced
directly to, the Issuer with no mark-up. If costs are incurred and/or paid by BassDrill Management on
behalf of the Issuer and subsequently refunded by the Issuer, a 5 % handling fee shall be payable.

 In addition to the management fee BassDrill Management are entitled to a performance bonus of 3% of
full EBITDA under drilling contracts. In this context, the Management Agreement states that EBITDA
shall mean the applicable operating rate (net of commissions) earned less the aggregate of operating
costs, including earned management fee and any other compensation paid by the Owner to the BassDrill
Management.

 In the event the Unit is sold BassDrill Management shall be entitled to an early termination fee equal to
a 12 months management fee.

Management Account

 BassDrill Management has opened a Management Account in the name of the Issuer with Amegy Bank
NA, from which BassDrill Management is authorized to draw funds to pay Operating Costs,
Management Fee and Performance Bonus ("Costs"). BassDrill Management is only authorized to
withdraw funds in accordance with the budget or non-budgeted expenses or investments in excess of an
accumulated amount per quarter of USD 200,000, or as required in case of Urgent Measures as
referenced above.

 The Issuer shall ensure that the minimum working capital per Unit on the Management account is at
least 1.5 times the budgeted monthly costs from time to time. The Issuer shall fund the account upon 10
days written notice from BassDrill Management in the event that the funds available on the
Management Account are insufficient to meet the budgeted monthly Costs, or fall below the minimum
amount of USD 400,000.

Termination

Either party may at any time after 24 months from the date of delivery of the Unit terminate without cause
by giving 12 months written notice to the other party.

The Issuer may terminate with 6 months written notice if the Unit is sold or declared a Total Loss. In case
of a sale a Termination Fee of 12 months Management Fee shall be payable to BassDrill Management. In
addition, in either case, BassDrill Management will be refunded actual reasonably incurred costs of
scaling down resources committed to performance of the Services.

Either Party may terminate with immediate effect in case of breach of a material term of the Management
Agreement, which is not remedied within thirty days of written notice thereof, or in case of liquidation
proceedings.

33
The Management Agreement is governed by and construed in accordance with the laws of England. Any
disputes are subject to ICC arbitration in London.

34
7. THE ALPHA – THE TENDER BARGE
7.1 Historical background and development
The Alpha was ordered on speculation in mid-2008 from Lamprell in Dubai. It was delivered in early 2010 and
prepared for a short 4-6 month contract with Perenco in The Republic of Congo. The Alpha mobilized in Q3 and
began operations for Perenco in Q4. Perenco elected to extend the Alpha’s contract to include a second program
based upon the favorable operations performed during the initial program.

During mid-2011 the Alpha secured a 6 well contract with 4 options with Total E & P Congo with a
commencement date adjusted to coincide with the conclusion of the Perenco program in late Q3 of 2011. The
Alpha moved seamlessly between operators and commenced operations for Total Congo in early Q4 of 2011. In
late 2011 the Alpha received an unconditional letter of award for a 440+ day contract with options for Canadian
Natural Resources (CNR) for a program in Cote d’Ivoire, West Africa with a commencement requirement for no
later than Q4 2012. At this point Total Congo elected to exercise all available options for the Alpha early in order
to effectively block CNRs use of the rig. Owing to the fact that the Alpha’s program scope with Total Congo had
doubled at this point, BassDrill Alpha was forced to relinquish the CNR contract amicably. This permitted CNR
to pursue another unit as they had a firm requirement to commence drilling before the end of 2012 in order to
arrest decreasing production in their Espoir field.

In Q4 of 2012 BassDrill Alpha negotiated a two year extension of the contract with Total Congo inclusive of a
year’s option which will see the Alpha under contract with Total Congo well into 2016 and possibly longer. This
is reflective of the Alpha performance and effectiveness since commencing operations in late 2010.

Hence the Alpha has been continuously employed since the initial contract with Perenco, and currently the
contract backlog for the vessel is at its longest ever. More so, when the Alpha commences the 2 year firm
contract extension with Total E&P Congo in Q4 2013 it will earn a more than 60 percent higher dayrate than it
did on its initial contract, a significant improvement over only 3 years.

7.2 The Unit

The Alpha is a state-of-the-art flat bottom tender assist drilling unit incorporating modern technical, safety,
maritime and drilling technologies, built on a proprietary design developed and owned by Bassoe Technology
AB, Sweden. The design is the only one available in the market, offering its main crane on the bow of the vessel
as opposed to the mid-ship design of the competitors’ units. The bow-mounted crane offers quicker and more
cost effective anchoring and rig up/rig down cycle to the customer. This configuration allows the Unit to be
positioned once for assembly, operations and disassembly. The design of the Alpha reduces downtime and
increases efficiency. The 600mt lightweight drilling package is adaptable with weigh sensitive platforms. It is
lifted onto the platform in 30mt packages as opposed to 125-150mt packages for other tender rig units. Easy
assembling/disassembling in a broader range of sea conditions enhance operational uptime and lowers the risk
profile while lifting modular packages with lower weights over production platforms. The barge system and hull
design is purpose designed for medium depth drilling and remedial programs and is specifically configured to
move quickly and efficiently between platforms. The bow-mounted main crane allows for assembly and
disassembly without re-positioning of the barge for operations and re-running of anchors. The double-hull gives
increased safety, combined with modern drilling components increase environmental security. The Unit is
equipped with equipment from industry-recognized suppliers. LeTorneau has supplied the drilling system,
National Oilwell Varco the top drive, Caterpillar the engines, SeaTrax the crane and Skagit the mooring system.

35
7.3 Operational performance
The Alpha’s operational performance has been very strong since start-up. For 2012 the Unit had only 271
hours of downtime, and the average revenue efficiency from 2012 – YTD (as shown in the graph below)
was 97.1% versus the 96% budgeted utilization. Excluding the months with reduced day rates due to rig
moves, the average revenue efficiency for the same period was 99%.

BassDrill Alpha Revenue Efficiency (%), 2012 - YTD

100%

95%
Rig
Rig move Note*
90% move

85%

80%

75%

70%

* 60 Hours of Downtime Associated with Dropped Casing String

7.4 Fair Market Appraisals

Based on desk top fair market value appraisals conducted by IHS Global Inc. dated and provided as of 4 April
2013, it was estimated that the fair market value of the Alpha is USD 120 million.

Based on desk top fair market value appraisals conducted by RS Platou dated and provided as of 9 April 2013, it
was estimated that the fair market value of the Alpha is in the range USD 120 – 125 million.

The replacement cost for the Alpha fully delivered is anticipated to be approximately USD 130 million.

7.5 Classing
The Alpha will be due for its first special survey in Q1, 2015. This may involve towing the Unit to the nearest
dry-dock where the hull can be fully inspected without the use of divers. In general main structural welds are
inspected as well as deck plate gauging in areas that display corrosion or deterioration. It is not expected that any
steel replacement will be required at the 5 year special survey. Following inspection the hull will be cleaned and
depending upon the condition of the anti-fouling paint, the hull may or may not need painting. There is however
a chance that following an inspection on location by divers, that a UWILD (underwater inspection in lieu of dry
docking) could negate the requirement for the Alpha to be dry docked. On a vessel of this age and assuming no
hull damage the Issuer expects that a 10 day dry docking should be sufficient. In the case of the Alpha being in
The Republic of Congo, the most probably dry-dock is located in Walvis Bay Namibia. An expected cost of the
towing and dry-docking assuming no steel replacement could cost in the region of $ 1.2- 1.5m.

36
7.6 Technical description

DRILLING EQUIPMENT
Mast Rating 700,000 lbs Static Hook Load
Mast Capacity 17,000 ft of 5'' Drill Pipe/Collars
Mast Make Woolslayer Boot Strap, Self Erecting
Mast Height 142 ft Clear Height
Substructure Woolslayer Box-on-box type
Substructure Capacity 31' rig floor height x 420kip Setback
Skidding System Lift & Roll Systems, X-Y
Drawworks LDW 750k 1,500hp, AC
Rotary Table LTI 37.5'' X 100 hp Hyd Drive
Top Drive NOV TDS11SA 500T
Top Drice Rating 37,500 ft lbs continuous @ 125 RPM
Traveling Block LTI 350 ton, 6 Sheave
Drillers Cabin Enclosed, Climate Controlled
Drilling Systems PLC based controls & monitoring
Power Slips B & V PS500 Slips f/DP & CSG
Casing Stabbing ODS Intl PSA-322 Mechanized Arm
Make up/Break up B & V Grey 9,400 Floorhand
Handling Tools Complete Set for Drill String

37
STORAGE CAPACITIES
Liquid Mud System 3,300bbl on barge (92% cap)
Liquid Mud System 180 bbls in Substructure
Trip Tanks 2 ea. 45 bbl
Brine/Base Oil 1,900bbl (92% cap)
Drill Water 7,100 bbl (100% cap)
Potable Water 1,700 bbl (100% cap)
Diesel Fuel 2,400 bbl (96% cap)
Bulk Volume 7,900 cu ft (100% cap=
Sack Storage 3,400 sx

MUD SYSTEM, POWER & BOP EQUIPMENT

Mud Pumps 3 x LTI WH 1312, 1,300 hp x 5m
Shale Shakers 3x Swaco PT Mongoose
Solids Control Swaco Desander (2 x 10'' Cones)
Solids Control Swaco Desilter (16 x 4'' Cones)
Degasser Swaco Vacuum Type 1,000gpm
Main Engines 4 x Catepillar 3516B 1901 Bkw
Main Generators 4 x Leroy Somer 60Hz, 600v
Standby Engine 1 x Catepillar 3412 TA 620 Bkw
Standby Generator 1 x Catepillar DR4 60 Hz 480v
Diversity Assy T3 21-1/4 2m, 12'' vakves & lnes
Annular Preventor T3 13-5/8'' 5m
Ram Preventor T3 13-5/8'' 5m 3 Rams & Shears
Choke Manifold T3 3'' 5M with Auto & Manual Chokes
Accumulator T3 8 Station, Control Panel & Remote
BOPE Handling Twin Trolley, Hyd Hoist Unit
Well Control N2 B/U System on BOP Control Unit

CRANES & DRILL STRING

Main Crane Seatrax S90 Starboard Aft
Capacity 25 mt at 30m Radius, offboard
Aux Crane Seatrax S48 Port Mid Ship
Capacity 5 mt at 20m Radius, offboard
Platform Access Forum Adjustable Bridge
Tubular Handling Highline Transfer Systen
Range 3 Drill Pipe 15,000 ft of 5'' G-105
Range 3 Drill Pipe 5,000 ft of 3-1/2'' G-105
Range 2 Heavy Weight 30 ea 5''
Range 2 Heavy Weight 18 ea 3-1/2''
Range 2 Drill Collars 6 ea 8-1/4'' Spiral
Range 2 Drill Collars 6 ea 6-1/2'' Spiral
Range 2 Drill Collars 12 ea 4-3/4'' Spiral
Pup Joints & Subs 1 lot for Contractors String
Handling Tools 1 lot for Contractors String

38
39
8. THE CONTRACTS - TOTAL E&P CONGO
8.1 Perenco
The Unit’s first contract was entered into in June 2010 with CMS Nomeco Congo Inc, a subsidiary of Perenco.
The initial contract was for two wells plus two option wells. The initial contract was extended through October
2010 for another 4 wells. With all options exercised, the Alpha conducted operations on eight wells for Perenco
over a period of 11 months.

8.2 Total contract – initial term

On 15 September 2011, BassDrill Alpha Ltd, entered into a contract with Total E&P Congo for a six well
drilling contract. The wells are located on PEX Sendju / Yanga offshore the Republic of Congo, West Africa.
The Contract came into force on 1 November 2011 and the Unit started operations November 2011. Total held
the right to extend the initial operational period of 6 wells with 4 options covering 6 options wells. The first
option for 3 additional wells was exercised in January 2012, the second option for a single well was exercised in
February 2012, the third option for a single well was exercised in March 2012 and the final remaining single
well option was exercised in April 2012. Accordingly, Total has now exercised all options available to them
under this initial contract, and the work is expected to last until Q4 2013.

The current Base Rate is USD 117,549 and will remain so until completion of the twelfth (12) well at which time
the rate increases to USD 127,771 per day plus defined cost escalations under the new Total contract.

8.3 Total contract – extended term

On 16 November 2012, the Issuer signed an extension to the contract with Total E&P Congo for an additional
two year drilling program to commence immediately upon completion of the above mentioned drilling program,
expected to be in the first quarter of 2014. Total holds the right to extend the new contract by another twelve
months, exercisable 6 months prior to expiration of the firm contract period.

The day rate at the beginning of this contract (i.e. starting from completion of the twelfth (12) well) will be USD
127,771 plus cost inflation from signing of the contract, in the below projections assumed to be approximately
2.0% (while opex there have been adjusted by 4.0% per year). At the beginning of year two of the contract,
another cost inflation adjustment will take place.

In the event that Total declares the optional year, the day rate at commencement of such period will be the day
rate from the previous day plus an increase of 4.0%. In the projections, this results in a forecasted day rate of
approximately USD 138,250 in 2016.

In all cases, through an agency agreement entered into 19 September 2008 between BassDrill International Ltd.
and OTSC as agent, made applicable for the Issuer, the Issuer's local agent in the Congo shall receive a
commission. The agency agreement provides for a commission of 3% of the day rate and the mobilisation fees in
term projects for tender assist drilling or workover barges awarded to BassDrill International Ltd. The
commission based upon the mobilisation fee is capped at a maximum amount of USD 150,000 for each contract.
OTSC is obliged to always comply with any reasonable specific instructions given by BassDrill International
Ltd. and must observe all applicable laws and regulations. The agency agreement also includes anti-corruption
provisions, where the parties to the agreement agree not to participate in any activity which might be taken as
bribery or corruption in any form in respect of the agreement.

In the event of the Alpha being unable to perform the services specified in the Contract due to factors under the
control of Total or during periods when the meteorological conditions do not allow operations, the Issuer
40
receives a stand-by rate equaling 85% of the Base Rate. In the event of force majeure, the occurrence of any
event which is unforeseeable and outside Total's and the Issuer’s control, the Issuer shall be paid a daily rate
equaling 50% of the Base Rate. In the event of the Issuer breaching its obligations under the contract (and such
breach having a material adverse effect on the safety or performance of the Alpha), the Issuer receives a reduced
performance rate equaling 80% of the Base Rate or Total may elect to suspend the contract. Rig-Up, Moving and
Rig-Down rates equal 90% of the Base Rate from day 0 to day 15 and 85% of the Base Rate from day 16 until
the rig move is complete. During periods in which moving operations are unable to continue due to weather
conditions, the Issuer shall receive 80% of the Base Rate. In case of breakdown of the Unit, Base Rate shall
apply for the first 12 hours, however after 12 hours the rate will be zero.

The Mobilisation Fee amounted to USD 2,500,000. On demobilisation, the Issuer will receive a Demobilisation
Fee of USD 500,000.

The contract contains standard knock-for-knock liability allocation provisions regarding damage to property,
personnel or third parties. Total shall further indemnify the Issuer against damage to reservoirs and wells, Total's
tools unless caused by the Issuer's gross negligence and against damage to the Issuer's down-hole tools in certain
cases. Total shall also indemnify the Issuer against third party claims relating to well manifestation and pollution
from the contractor group's property and equipment, except when caused by the contractor group's gross
negligence, in which case the Issuer shall bear the costs up to USD 1 million per occurrence.

The Issuer shall indemnify Total against third party claims relating to pollution resulting from discharge of any
substance emanating from the Unit or the contractor group's property or equipment above the well head, or the
company group's property or equipment above the well head if due to the act, omission or negligence or breach
of duty by the contractor group.

Liability for consequential losses is mutually excluded.

Total is entitled to assign the contract or to sublet the Unit to any of its affiliates or future or present participants.
In case of assignment to a third party, the Issuer's prior written consent is required. The Issuer's assignment or
subcontracting requires Total's prior written consent. The Issuer also guarantees that his subcontractors comply
with all provisions of the contract and is solely liable for any failure by subcontractors.

The contract is governed by French law with ICC arbitration in Paris.

8.4 Suspension and termination clauses in new Total contract

Should the Issuer fail to supply sufficient or proper property, equipment, personnel or services, Total may
suspend the contract. If said suspension has lasted for 60 cumulative days or more within a one year period, the
Issuer may terminate the contract and demobilize the Unit at his own cost.

The Total Contract includes customary termination clauses in line with industry standards. In case of termination
for contractor's non-compliance, the Issuer shall compensate Total for all documented direct costs and expenses
resulting from the termination. Instead of termination, Total may however elect to take over or to employ another
contractor to perform the services. In such case, costs borne by Total shall then be deducted from the Base Rate
and the services shall be performed by Total at its own risk. The Unit shall be returned to the Issuer in the same
condition, fair wear and tear excepted, once the services have been completed.

In case of a force majeure event lasting for 30 days or more, or being anticipated to do so, either party may elect
to terminate the contract without having to pay indemnity or any compensation. In addition the contract includes

41
clauses, which are customary to Total regarding termination for convenience. According to this, Total can
terminate the contract at any time giving seven (7) days' notice. If such termination is exercised anytime within
the 2 year extension period (following completion of the twelfth (12) well), Total shall compensate the Issuer at
50% of base day rate applicable at that time for a period of 180 days, plus pay the demobilization fee. In
addition, the day rate remains payable during any period in which the Alpha is demobilized on location.

8.5 Changes to the Congo tax regime

8.5.1 Current situation
Since commencement of operations in Congo in late 2010, the Issuer has operated under a Temporary
Authorization to Operate ("Autorisation Temporaire d'Exercer" or "ATE") granted by the Government of Congo.
The ATE allows an entity to temporarily carry out its business in Congo without a constituted branch or
subsidiary and taxation is based on a simplified tax regime. Pursuant to the 2013 Finance Act, effective as from 1
January 2013, changes were made to the ATE regime inter alia restricting the possibilities to apply for
extensions. The Issuer nevertheless applied for, and was on 23 April 2013 granted, an extension of the ATE,
which is due to end on 23 October 2013.

The Issuer intends to apply for another extension upon expiry. However, due to the changed ATE regime, there
is a risk that the Issuer will not be granted an extension and that the Issuer will have to adjust its legal structure in
order to be able to continue to carry out its business in Congo. This will have certain tax implications as further
described below. If not an extension of the ATE is granted, Congolese laws require subcontracting activities to
be carried out through a legal entity incorporated in Congo with at least 30% of the share capital held by national
residents.

A Congolese SARL (a private limited company) will be taxed under the deemed profit regime, and in addition,
payments made to non-Congolese service providers will be subject to a 20% withholding tax (subject to Treaty
reduction), which in practice, does not apply under the ATE. Congolese law requires inter alia that funds earned
by a Congolese SARL to be deposited in Congolese banks.

The only double tax treaty entered into by Congo is with France. Accordingly, to avail the benefits of such
treaty, the Congolese SARL would need to be owned by a French entity. A proper ownership structure above the
French entity, and ultimately of the ownership of the asset, would be needed to benefit from the protection of the
French double tax treaty network and EU directives (e.g. interest – royalty EU directive).

BassDrill Alpha’s current contract with Total Congo includes provisions for Total E&P Congo to compensate
increased tax burden due to Congolese legislative changes which occur after the date of the contract. In the
event of "any change of all taxes of any kind", which may be levied on the Issuer, its personnel or subcontractors
in Congo, the day rates shall be increased by the amount of the increase in Corporation and/or personal income
tax payable per day. Total E&P Congo has honored this provision in the past when a 2% tax increase was
introduced in 2012. On this basis, the Issuer expects Total E&P Congo to compensate any additional tax liability
in the event the Issuer is no longer permitted to operate under the ATE in Congo.

8.5.2 Alternative structures

The Issuer is considering several alternatives with respect to changing its legal structure in order to meet the
requirements of the Congolese authorities for continued operations. At present, the Issuer considers the main
alternative to be to establish a Congolese SARL and charter the Unit to this subsidiary through a French
intermediary company, to benefit from the Double Tax Treaty ("DTT") between France and Congo. The further
structure could include two alternatives:
42
 (i) a subsidiary in the Netherlands with the rig owning company to retain the Issuer in its current form; or
(ii) re-domiciliation of the Issuer from Bermuda to Malta or Luxembourg.

The table below illustrates certain possible tax rates (under the current regime) in respect of the
alternative legal structures.

Company structure Estimated effective tax rate* (% of revenues)

ATE (current situation) 10%

Congolese SARL subsidiary only 16-17%

Dutch/French/ Congolese intermediaries 11%

Re-domicile to Malta, Maltese/French/Congolese intermediaries 11%

*Management estimates of total payable tax applicable to the Group

Through the continued assessment by the Issuer of possible structures, there is a risk that the above
alternatives may be adjusted, abandoned or replaced. In addition, the legislation may be subject to further
changes which may require further adjustments, and will therefore represent a risk factor.

43
9. FINANCIALS
9.1 Accounting principles
The financial statements have been prepared in accordance with US Generally Accepted Accounting Principles
(GAAP). The preparation of financial statements in conformity with accounting principles generally accepted in
the United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period.

Management reviews all significant estimates affecting its financial statements on a recurring basis and records
the effect of any necessary adjustments in the financial statements. Adjustments made with respect to the use of
estimates often relate to improved information not previously available. Uncertainties with respect to such
estimates and assumptions are inherent in the preparation of financial statements. While management believes
current estimates are reasonable and appropriate, actual results could differ from those estimates.

Revenue is recognized as services are performed based on contracted day-rates and the number of operating days
during the period.

In connection with a customer contract, the Issuer may receive lump-sum fees for the mobilization of equipment
and personnel. Mobilization fees and costs incurred to mobilize a rig from one geographic market to another are
deferred and recognized on a straight-line basis over the initial term of such contract, excluding any option
periods. Costs incurred to mobilize a rig without a contract are expensed as incurred. Fees or lump-sum
payments received for capital improvements to rigs are deferred and amortized to income over the term of the
related drilling contract. The costs of such capital improvements are capitalized and depreciated over the useful
lives of the assets. The Issuer records reimbursements from customers for “rebillable” costs and expenses as
revenue and the related direct costs as operating expenses.

44
9.2 BassDrill Alpha Ltd. Income statement
The table below sets out the Issuer's audited US GAAP statements of operations for the years ended 31
December 2012 and 2011.

9.3 BassDrill Alpha Ltd. Balance sheets

The table below sets out the Issuer's audited US GAAP balance sheets as of 31 December 2012 and 2011.

45
46
9.4 BassDrill Alpha Ltd. Statement of cash flows
The table below sets out the audited US GAAP statements of cash flows as of 31 December 2012 and
2011.

47
9.5 Statutory auditors
BassDrill Alpha Ltd.'s independent auditor is UHY LLP, and their address is 12 Greenway Plaza, 12 th Floor
Houston, Texas 77046-1289. UHY has been BassDrill Alpha Ltd.’s auditor since 2009. UHY has audited the
financial statements as of and for the years ended 2012, 2011, 2010, and 2009, and their report thereon expressed
an unqualified opinion on those financial statements. The auditor's report for 2012 contains however the
following "Emphasis of matter regarding going concern".

"The accompanying financial statements have been prepared assuming that the Company will
continue as a going concern. As discussed in Note B to the financial statements, the Company’s
senior secured term loan facility of which $46,405,250 is outstanding as of December 31, 2012,
comes due in December 2013. The Company will need to successfully refinance this amount or
raise additional capital to meet its existing commitments. Until either of these events occurs, this
condition raises substantial doubt about its ability to continue as a going concern.
Management’s plans regarding those matters are described in Note B. The financial statements
do not include any adjustments that might result from the outcome of this uncertainty. Our
opinion is not modified with respect to that matter."

9.6 Key Financials & Projections

The financial forecast 2013 – 2018 included below has been prepared in June 2013 by the senior management
team, based on extensive experience in the region and working for Total. For 2012 the efficiency was about
97%, for 2013 – 2018, with more wells per platform and less rig moves an efficiency rate of 96% can be
considered conservative. The expected EBITDA covered by the fixed term of the Total Contract (2Q2013 –
2015) is around USD 50.3 million with an additional USD 21.0 million for the optional year, this includes a class
survey in Q1 2015 with an expected 30 days off hire. After the expiry of the Total Contract the (new) market /
contract rate is assumed to be similar for 2017 and escalating with 4% in 2018.

For forecasting purposes it is assumed the new bond financing is continued beyond its intended maturity in order
to show a fully financed Balance Sheet in the end of 2018.

48
Financial forecast to 2018 2013E 2014E 2015E 2016E 2017E 2018E

Assumptions: 2013E 2014E 2015E 2016E 2017E 2018E

Average dayrate USDth/d 118 130 133 138 138 144
Average OPEX " 56 59 61 63 66 68
Utilization 96 % 96 % 88 % 96 % 96 % 96 %

P&L: 2013E 2014E 2015E 2016E 2017E 2018E

Rig EBITDA USDm 21.2 24.3 22.4 26.0 24.5 25.5
Management fees " (2.0) (2.3) (2.1) (2.3) (2.2) (2.3)
SG&A " (2.7) (2.4) (2.1) (2.2) (2.7) (2.8)
EBITDA " 16.8 19.9 18.1 21.0 19.5 20.3
Depreciations " (4.5) (4.6) (4.6) (4.7) (4.8) (4.8)
EBIT " 12.4 15.3 13.4 16.3 14.7 15.5
Net financials " (10.0) (7.0) (6.5) (6.0) (5.2) (4.4)
Tax " (4.0) (4.4) (4.1) (4.7) (4.7) (4.9)
Net profit " (1.7) 3.9 2.8 5.6 4.8 6.2

Balance Sheet: 2013E 2014E 2015E 2016E 2017E 2018E

Total cash USDm 10.7 12.5 7.5 12.4 8.8 9.9
Accounts receivable " 9.0 9.0 9.0 9.0 9.0 9.0
Other current assets " 0.6 0.6 0.6 0.6 0.6 0.6
Current assets " 20.3 22.1 17.1 21.9 18.4 19.5

Tangible assets USDm 86.5 82.4 78.3 74.1 69.8 65.5

Other fixed assets " 2.3 1.7 2.6 1.5 0.8 0.4
Fixed assets " 88.8 84.1 80.9 75.6 70.6 65.9
Total assets " 109.2 106.1 98.0 97.5 89.0 85.4

Current interest bearing debt USDm 6.9 6.0 6.0 6.0 6.0 1.5
Accounts payable " 4.1 4.1 4.1 4.1 4.1 4.1
Other current liabilities " 0.4 0.4 0.4 0.4 0.4 0.4
Current liabilities " 11.4 10.5 10.4 10.4 10.4 5.9

Long-term interest bearing debt USDm 80.1 74.0 68.0 62.0 56.0 54.5
Other long-term liabilities " - - - - - -
Long-term liabilities " 80.1 74.0 68.0 62.0 56.0 54.5

Shareholders equity USD, 17.7 21.7 19.5 25.1 22.5 24.9

Total liabilities and equity " 109.2 106.1 98.0 97.5 89.0 85.4

Dividend USDm (21.0) - (5.0) - (7.4) (3.8)

9.7 Cash-flow sensitivity and break-even analysis

With substantial operational experience in the region, the management team can make a fair estimate of future
opex for this region. The Alpha is completely cash break even at a day-rate of USD 73,287 (covering Opex,
Onshore, management fee & tax) if no debt service is taken into account.

Based on the Bond Issue, interest come at a daily rate of 17,300-18,500 (at 7-7.5% on USD 90 million in debt),
plus amortization of 16,400. The Issuer could cover USD 90 million on 7.5% on a day-rate of USD 112,700
assuming 96% utilization. The day rate at the beginning of the new Total contract (i.e. starting from completion
of the twelfth (12) well) will be USD 127,771 plus cost inflation from signing of the contract. The average
revenue efficiency in 2012 was 97.1% and 2013 incl. May is 97.4%, including rig moves and specific downtime.

49
9.8 Current financing
Senior Secured Term Loan Facility – USD 55 million
On 14 December 2011 the Issuer entered into a loan agreement with Natixis and ABN AMRO Bank for a USD
55,000,000 senior secured term loan facility. Draw down was 20 December 2011 and the term was 2 years. The
loan finally matures on 19 December 2013 (the "Final Maturity Date").

Interest
The loan bears interest at a variable rate of LIBOR plus 5.25% payable quarterly. Currently approximately 95%
of the remaining interest exposure has been swapped into a fixed rate of 6.1809% pa.

Repayment
The loan is repayable in 8 consecutive installments, commencing on the date occurring three months
after the draw -down date and subsequent installments shall be payable quarterly thereafter until the Final
Maturity Date, as follows:

First 3 quarterly installments USD 2,292,000

Remaining 5 quarterly installments USD 1,718,750
Final Maturity Date Balance

On the Final Maturity Date, the Issuer shall pay the final installment of the Facility reduced by Cash
Sweep Amounts (cash available in excess of USD 5 million).

Security
The loan is collateralized by the Unit and substantially all revenues related to the operation of the Unit.

Amount outstanding:
As per 31 May 2013, the amount outstanding under this loan was USD 45,119,931.70.

Subordinated Shareholder Loans – USD 10 million

In connection with entering into the above bank facility agreement, the Issuer on 9 December 2011 also entered
into a loan agreement with its shareholders, where the shareholders agreed to make available USD 10,000,000 as
a subordinated loan on these main terms:

The Lenders:
BassDrill Ltd: USD 2,526,453
Pareto Worldwide Offshore AS: USD 3,679,889
Maas Capital Investments B.V: USD 2,599,587
Grover Star Shipping Corporation: USD 1,090,235
Marine Services and Trading Company: USD 71,429
Kontiki Four World Holdings Ltd: USD 32,407

Interest:

50
The Issuer shall pay interest on the loan at the rate of 20% per annum. Accrued interest shall be capitalized and
added to the loan at the end of each calendar quarter, first time at 31 March 2012, and shall be payable as set out
below.

Repayment:
The loan and all interest accrued and capitalized thereon shall be repaid in full 2 years and 6 months after
draw down (19 December 2011). However, the Issuer may elect to prepay the loan as soon as the
above bank facility has been fully repaid and discharged.

Amount outstanding:
As per 31 May 2013, the amount outstanding under this shareholder loan was USD 13,314,272.84.

51
10. MARKET OVERVIEW
10.1 The global energy market
Global supply and demand of oil and gas is one of the key drivers for the global rig market as increased oil
demand spurs exploration and production (“E&P”) spending, affecting the tender rig market favorably.

In 2011, global demand for oil increased by 0.7% and reached 87.4 mmbbl/day (excluding biofuels demand),
according to IEA World Energy Outlook 2012. The annual growth of 0.7% came after a 3.1% increase in oil and
global demand for oil in 2010 and two years of consecutive reduction in global demand for oil in 2008 and 2009.
Asia/Pacific accounted for 31% of the total demand in 2010, followed by North America and Europe with 28%
and 22% respectively of the total demand.

Different growth scenarios until 2035 are outlined by IEA;

 If only existing environmental and production policies are assumed to be in place, oil demand is
expected to reach 108 mmbbl/day by 2035, implying an annual growth rate of 0.9% from 2011

 In a scenario where commitments to reduce oil dependence and spur growth for alternative energy
sources is included, oil demand reaches 99.7 mmbbl/day by 2035, a 14% increase over 2011-levels

In 2035, Asia/Pacific is expected to account for 41% of total global demand, compared to 31% in 2011. Half of
the increase in Asian oil demand (and about half of the global increase) is expected to come from China. The
overall demand from North America is expected to be 19% of the total global demand by 2035, compared to
28% in 2010. Europe’s relative demand is expected to decrease to 17% while Middle East linger around 10% of
the total demand. Table below illustrates IEAs base case for expected oil primary demand until 2035.

Global oil demand by regions 2011 Global oil demand by regions 2035E

Latin Africa 5
Africa Latin
America; %
4% Asia / America 8
7% Asia /
Pacific % Pacific 41
Middle 31%
%
East Middle
9% East 10 %

Europe 17
Europe % North
22% America
North 19 %
America
28%
Source: IEA World Energy Outlook 2012

According to BP Statistical Review of World Energy (BP, 2012) proven reserves of oil increased by 1.9% in
2011 to 1,652 billion barrels of oil (bboe). An estimated 16 bboe reserves were discovered in 2011 according to
IEA, compared to an average of 14 bboe discovered annually over the last decade. Smaller discoveries in mature
basins and large discoveries in more remote places is an increasing mega trend in term of new oil discoveries
(with shale gas in the United States as a major exception). IEA estimates remaining recoverable resources
worldwide to be 5,500 bboe and with proven reserves of about 1,300 bboe according to IEA World Energy
Outlook 2011.

52
IEA predicts a rise in the global production capacity of 1.1 mmbbl/day annually from a production capacity of
93.8 mmbbl/day in 2010 to 100.6 mmbbl/day by 2016. Crude oil prices above 100 USD per barrel have led to
increased investments in non-OPEC capacity which non-OPEC supply expected to increase its relative share
going forward.

10.2 Tender rigs

Tender rigs are servicing the offshore sector providing development drilling capabilities on fixed installations
with surface wellheads, thus late-cyclical. The tender units, either a barge or a semi-submersible, carry
modularized drilling packages which are lifted onto the fixed installation by a large crane located on the tender
rig. Both the tender barge and the semi-submersible unit could be equipped with the same operational
specification in terms of drilling packages. After lifting the modularized drilling packages onto the fixed
installation, the tender rig is moored next to the platform during drilling operations and provides living quarters,
storage, power supply, fluids, pumping, helicopter deck and third party equipment. As such a tender rig may be a
source of great cost savings to an oil company associated with the construction and maintenance costs of a
production platform with dry wellheads.

The industry commonly classifies offshore drilling into four main water depth categories: shallow water (up to
500 ft), midwater (up to 3,000 ft), deepwater (up to 7,500 ft) and ultra-deepwater (beyond 7,500 ft). Tender
drilling rigs can in theory operate within all segments, but are limited by the structure of the unit and mooring
capabilities. Tender barges mainly operate in water within the shallow water segment which represents the
majority of the offshore activity. Of the nearly 30 million barrels per day of liquids (oil and condensate) that is
produced offshore, close to 70 per cent emanates from shallow waters. According to Energyfiles Ltd., oil
production in shallow water has been close to 20-21 million barrels per day the last 10 years and represents a
significant market for tender rigs.

The meteorological conditions in the different areas are another key factor determining the market for tender
barges and semi tenders. With limited freeboard and wave loads capabilities, the tender barges are dependent on
operating in benign areas, while the semi submersible is more stable than the barge shaped hull and therefore can
contend with more challenging met-ocean conditions. The main markets today for tender rigs are South East
Asia and West Africa, employing close to 90% of the existing global tender fleet. The Beta, which will
commence operations in Brazil in Q3 2013, will be the first tender rig to operate offshore Brazil.

53
 South East Asia:
Gulf of Mexico
• The dominating regions in terms of demand for
• Potential large market for tender rigs
tender rigs
• Largest number of spars and TLP’s
• Thailand and Malaysia are the largest market
worldwide
for tenders
• Several marginal fields have become profitable
with the tender assist option available

West Africa:
• Strong demand from operators in the region
– Total exercised all available options for BassDrill
Brazil: Alpha including a two year contract extension
• Fastest growing offshore region – More deepwater developments opportunities for
• More challenging weather conditions semi tenders announced
compared SE Asia W Africa  Tender semis – Seadrill’s semi West Esperanza (2013) entered
only alternative into 18 months contract at a dayrate of USD 235k
• BassDrill Beta is Petrobras’ first tender rig
• Deepwater floaters Jackups not an
alternative to tender rigs

Tender drilling rigs offer cost effective and flexible solutions for the oil companies for drilling wells on weight
bearing installations/platform. Not all platforms allow the use of these rigs. Reportedly, an estimated 65% of the
platforms in the key markets are suitable for tender-rigs, including most platforms with six or more well slots
that can sustain the weight of a drilling package. Typically, tender barges are used alongside fixed jackets, while
semi-tenders may be used alongside TLPs and Spars or on fixed jackets where there is the requirement for larger
capacity or more stability than a tender barge can offer.
A jack-up rig can in some cases be used instead of a tender barge. Traditionally jack-ups require higher day rates
compared to tender barges as the jack-ups normally have a higher capital expenditure for the unit and
consequentially require higher contracted day rates. Tender barges are anchored to the seabed, whereas the jack-
ups’ legs are planted on the seabed. As such, the jack-ups have water depth restrictions (~400 feet) and cantilever
reach (~70 feet) which pre-disqualifies a number of jack-ups from potential tender rig contracts. With personnel
residing on the tender rigs (and not on the platform) and only the modularized drilling packages being lifted on
the fixed installation, the use of a tender barge allows for a reduction of the weight/dimension of the fixed
platform. Furthermore, it the seabed has significant infrastructure which could be damaged by the jack-ups legs,
a moored tender barge drilling rig can would likely to be a preferred choice. On the other hand, a jack up is
more versatile and can drill wells independently from its hull with the legs placed on the seabed whereas the
tender barge rig needs a weight bearing installation/platform to mount its drilling package on and drill from.

54
The Alpha moored alongside a fixed platform

10.3 Production spending and earnings cyclicality

In essence, E&P companies have four alternatives when oil and gas prices are above their project planning prices
over a period; 1) Accumulate cash/repay debt, 2) Pay/increase dividends, 3) Buyback shares or 4) Capital
spending. In the current environment, with most of new upstream projects generating a strong IRR and oil
companies in general struggling to increase production and replace reserves, most of the operational cash flow is
likely to move into the capital spending alternative. This is also seen historically, with E&P spending increasing
fivefold over the past decade to 2011 levels of USD 500bn+ and with E&P companies having historically spent
approximately 75% of the operational cash flow into capital spending. There is substantial upside to the current
E&P spending level as oil prices are significantly higher than the planning prices used by E&P companies in
their budgets and spending plans. Higher-than-expected oil prices give E&P companies additional cash flow, of
which the majority is likely to be reinvested.
Historically production spending has been approximately 80% of the total capital spending, with exploration
spending constituting the remaining 20%. With the tender rigs being mostly deployed in fields already
producing oil (development drilling and not exploration drilling), production spending is one of the key
indicators for the upcoming tender rig market trends. As a result of production spending being a key driver for
tender rigs, the industry has also historically enjoyed less cyclicality and higher profitability compared to other
offshore drilling segments as seen on the graph below illustrating historical EBITDA margin for tender rigs and
other drilling segments. In addition, tender drilling units often have blue chip, strong counterparties in the oil
majors with strong balance sheets and predictable spending curves. These companies often have need for
development drilling on several wells/installations and are consequently able to charter the tender rigs on long-
term basis (2-5 years).

55
Historical EBITDA margins 1995 – 2012 EBITDA Margins average 1997 – 2012
60 % Land drillers avg.
Of f shore drillers avg
55 % Tender rigs (SME/SDRL history) Tender rigs
(SME/SDRL 46 %
history)
50 %

45 %

Of f shore drillers
40 % 40 %
avg.

35 %

30 %
Land drillers
33 %
avg.
25 %

20 %
1995 1997 1999 2001 2003 2005 2007 2009 2011 0% 10 % 20 % 30 % 40 % 50 %

Source: ODS Petrodata, Swedbank First Securities research

10.4 Fleet of tender drilling units

The size of the tender rig fleet has remained relatively stable over the past years however a number of new builds
have entered the market and retirement of units beyond 25 years is taking place. Recent market development as
seen increased ordering activity showing that the tender rig supply side is responding to the growing demand.
Use of semi tenders for deepwater developments and prolonged life of shallow water fields have contributed to
an overall rise in demand for tender drilling rigs.
Tender rigs – historical fleet (# units) Net fleet growth
70 8 40 %

Net f leet change (Lef t)

60 6 30 %
Net f leet change in % (Right)

50 4 20 %

40 2 10 %

30 - 0%

20 (2) -10 %

10 (4) -20 %

- (6) -30 %

Source: ODS Petrodata, Managers’ research

10.4.1 Operators and fleet of tender barges

According to ODS-Petrodata, the current fleet of tender barges adds up to 28 units, of which 19 units have been
delivered and 9 are under construction. Of the 19 tender barges delivered, 2 units are warm stacked (Triumph
109 and Triumph 110), leaving 17 tender barges currently under employment. Triumph 110 will commence on a
contract with Perenco outside West Africa in third quarter 2013.

The global fleet is dominated by SapuraKencana, which after the acquisition of SeaDrill's tender fleet has 10
units under contract and another 3 currently under construction, implying a market share of 46% (incl.
newbuilds). Triumph Drilling (previous Marlin Offshore) is controlled by United States private equity funds and

56
has a fleet of 3 tender drilling barges built from 1977 to 1983, of which 2 units are currently warm stacked. KCA
Deutag currently has 3 units under employment, making KCA the third largest player in terms of operating
tender barges. Mermaid Drilling controls 1 unit which currently operates as an accommodation unit. BassDrill
with the Alpha under a fixed contract to Total and the Gamma currently under construction for delivery mid
2014, has a fleet of 2 tender barges. Seadrill has two units under construction for delivery in March and June
2013. In April 2012, a group of investors led by the Norwegian venture capital firm Energy Ventures initiated a
tender barge establishment by placing an order for 2 tender barges at the COSCO yard in China with options for
an additional two rigs. The two units are scheduled for delivery in mid-2014. Saipem has one tender barge
currently under employment.

The global fleet of tender barges is old with the 19 barges currently under employment on average being 18
years old. When the last of the 9 units under construction is delivered in late 2015, the average age of the fleet is
reduced to 16 years.

# of units
Current fleet of tender barges
14 13 Under construction
Operating
12

10

4 3 3
2 2 2
2 1 1 1

0
Sapura Triumph KCA Deutag BassDrill Seadrill Energy Pentacle Mermaid Saipem
Drilling
Source: ODS-Petrodata

10.5 Utilization is close to 100% for tender-barges

The size of the tender rig fleet has remained relatively stable over the past years with limited newbuilds and/or
removals. The utilization has remained consistently around 85-95% due to the generally longer term contracts.
Additionally, tender rigs only drill development wells that typically are the last projects to be cancelled during
market downturns.

57
Tender rig supply and utilization in shallow water

35 100%

90%
30
80%
25 70%

60%
20
50%
15
40%

10 30%

20%
5
10%

0 0%
1q95 1q97 1q99 1q01 1q03 1q05 1q07 1q09 1q11 1q13
Contracted Idle Cold stacked Marketed Utilization % (rhs)

Source: ODS Petrodata, Managers

10.6 Demand and day rates

The latest recorded day rates for semis are USD 220’-235’/day, while new barges currently earn around
USD 130’/day. Note that this is a small market with long contract duration, and consequently the number of
fixtures is not very high. Mermaid’s MTR-1 is employed as an accommodation unit at significantly lower
rates.

Recent contract awards

Dayrate (USDk)
250

Barge
Semi Beta
200 Delta(1)

150

100
Alpha
Alpha

50

0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Managers, ODS Petrodata

58
The increased demand for tender barges has pushed the average day rate to a 5 year high. The average day rate
for tender barges is in the range of USD ~130,000 + according to ODS-Petrodata, compared to an average day
rate of USD ~95,000 in 2009.
10.7 Backlog for shallow water tender rigs
New tender assist barges experience superior backlog and attractiveness versus older barges, which evidence the
bifurcation in the industry. Operators seek to lock in their development drilling capacity (e.g. tender barges) for a
longer time due to longer field lives and their ability to plan drilling campaigns long ahead, hence the tender rigs
built after 1990 currently experience 100% utilization and longer average backlog vs. older equipment. On the
other hand, increased uncertainty and less visibility for the operators regarding future need of drilling capacity
for exploration drilling (e.g. jack-ups and floaters with non-movable drilling equipment) may result in a lower
average backlog for these types of assets.

Current backlog in the tender barge drilling market yields strong support for increased activity and demand in the
tender market. The tender barge fleet has achieved high utilization and strong day rates. The warm-stacked
tender barge (Triumph 109) is 32 years old and in relatively poor condition and therefore not an indication on
market condition. This unit is not likely to re-enter the market, but the current re-entering of Triumph 110 (30
years old) confirms that there is currently a very strong demand for tender barges.

Average backlog (# months), current active fleet of shallow water tender rigs

50
45
40
35
30
25
20
15
10
5
0
1q95 1q97 1q99 1q01 1q03 1q05 1q07 1q09 1q11 1q13
Shallow water tender rigs built before 1990 Shallow water tender rig, built 1990 or later
Total shallow water tender rigs Jack-ups
Source: Managers, ODS Petrodata

10.8 Recent contract awards and rig orders

In February 2011 Seadrill Ltd. entered into an agreement for the construction of two tender barge rigs (T-15 and
T-16) with COSCO Nantong Shipyard in China at an estimated total project cost of approximately USD 225
million. Both units have been contracted to Chevron Thailand Exploration and Production for a five-year period
offshore Thailand at an estimated contract value for the two units of approximately USD 420 million, implying a
day rate of USD 115,000 per unit. In April 2011, Seadrill ordered another 2 tender barges with similar
specifications as T-15 and T-16 from COSCO, named T-17 and T-18. The T-17 and T-18 units, both to be
controlled by SapuraKencana following the transaction with Seadrill, have a combined total project price of

59
USD 250m, including project management, drilling and handling tools, spares and capitalized interest. The units
are scheduled for delivery in second quarter of 2013 and first quarter of 2014 respectively. In May 2012, Seadrill
announced it had received a letter of award for a five-year contract for the T-18 by Chevron Thailand
Exploration and production with commencement of operations scheduled for the first quarter of 2014. The
estimated value of the five-year contract is approximately USD 235 million, corresponding to a day rate of
approximately USD 125,000/day.

As aforementioned, in April 2012 Energy Ventures established Energy Drilling Pte. Ltd. and entered into a firm
agreement with COSCO for the construction of two tender barges, with options for an additional two rigs. The
combined total project price is estimated to USD 260 million. Both units are scheduled for delivery in mid-2014
and currently un-contracted. In February 2013, Energy Drilling Pte. Ltd. declared one option for construction of
an additional tender semi for delivery in June 2015. Following this option exercise Energy Drilling Pte. Ltd has
one option remaining at COSCO.

During fall of 2012, Pentacle, a Norwegian start-up, placed an order for a tender rig at Rongsheng Heavy
Industries, with options for an additional three rigs. The total project price is estimated to USD 145 million. The
tender barge has an estimated delivery date in late-2014.

The Gamma is the latest unit under construction within the tender barge space, and is scheduled for delivery mid
2014, bringing the total orderbook of tender barges up to 9 units.

The average duration of the contracts is approximately 670 days with eight of the contracts having an average
optional extension period of 16 months.

TENDER DRILLING BARGES

Year Day Rate
Rig name Owner Hull Type Built Region Operator USD/d 2013 2014 2015
Triumph 109 Triumph Barge 1981 Warm Stack ed
T-7 SapuraKencana Barge 1983 SE Asia Chevron 88
Saipem TAD Saipem Barge 2008 W Africa Eni
T-9 SapuraKencana Barge 2004 SE Asia Petronas 132
T-3 SapuraKencana Barge 1980 SE Asia PTTEP 92
KM-2 SapuraKencana Barge 2013
T-4 SapuraKencana Barge 1981 SE Asia Chevron 105
Triumph 101 Triumph Barge 1977 SE Asia Petronas 115
T-6 SapuraKencana Barge 1982 SE Asia CPOC 99
Glen Affric KCA Deutag Barge 1982 SE Asia PTTEP
Triumph 110 Triumph Barge 1983 W Africa Perenco
Glen Tanar KCA Deutag Barge 1982 SE Asia Petronas Private
T-10 SapuraKencana Barge 2007 SE Asia Chevron 123
Glen Esk KCA Deutag Barge 1994 W Africa CNR Private
T-12 SapuraKencana Barge 2010 SE Asia Chevron 121
EDrill-1 Energy Drilling Barge 2014
Berkat SapuraKencana Barge 1990 SE Asia Petronas 133
EDrill-2 Energy Drilling Barge 2014
BassDrill Gamma BassDrill Barge 2014
Tender Tbn1 Pentacle Barge 2015
MTR-2 Mermaid Barge 1981 SE Asia Chevron 99
KM-1 SapuraKencana Barge 2010 SE Asia Petronas 130
BassDrill Alpha BassDrill Barge 2010 W Africa Total 118/128
T-11 SapuraKencana Barge 2008 SE Asia Chevron 131
T-15 Seadrill Partners Barge 2013 SE Asia Chevron 116
T-17 SapuraKencana Barge 2013 SE Asia PTTEP 118
T-16 Seadrill Barge 2013 SE Asia Chevron 115
T-18 SapuraKencana Barge 2014 SE Asia Chevron 127
Source: ODS-Petrodata

Contract
Option
Construction / yard

South East Asia is dominating the demand side for tender barges; 18 units are currently operating (or scheduled
to operate) in South East Asia, with majority of tender barges operating in Thailand or Malaysia. BassDrill
Alpha, Saipem TAD and Glen Esk all operating offshore West Africa, are currently the only three units working
outside South East Asia.

60
10.9 Additional prospects in West Africa
Beyond Total Congo, which has the largest concentration of platforms configured for tender assist barges,
BassDrill Alpha has a number of additional prospects. Perenco have repeatedly requested an assignment for the
Alpha in order to drill infield wells on a number of their platforms in the Congo. Canadian Natural Resources
(CNR) initially contracted the Alpha and was very intent on using it for a long term program off the Ivory Coast.
Due to Total Congo extending the Alpha’s contract the Issuer was forced to relinquish this contract opportunity.
CNR continues to express interest in the Alpha’s availability. Foxtrot, a company with production in the Ivory
Coast, has also made inquiries into the Alpha’s availability. The Alpha has a favorable reputation in West Africa
and owing to its light mast equipment package, it continues to be an attractive unit for infield drilling in the
region.

61
11. TAXATION
The description below is based on current law and practice that may be subject to amendments and/or
change in interpretation. Such amendments or change in interpretation could be effective on a
retrospective basis. The description is intended to serve as a general guideline, and does not purport to
describe all relevant issues and/or effects of relevance when making a decision to subscribe, purchase,
own or dispose in the bonds in the Issuer.

Investors are advised to consult their own tax advisors concerning the overall tax consequences of their
ownership of bonds.

11.1 Bermuda
Under current Bermudan law, no income, withholding or other taxes or stamp or other duties are imposed
upon the issue, transfer or sale of the Issuer's shares or on any payments thereunder.

Under current Bermudan law, the Issuer is not subject to tax on income or capital gains. Furthermore, the
Issuer has obtained from the Minister of Finance of Bermuda under the Exempted Undertakings Tax
Protection Act 1966 (as amended), an undertaking that, in the event that Bermuda enacts any legislation
imposing tax computed on profits, income, any capital asset, gain or appreciation, or any tax in the nature
of estate duty or inheritance tax, then the imposition of such tax will not be applicable to the Issuer or to
any of its operations, or the shares or capital until March 28, 2016. This undertaking does not however
prevent the imposition of property taxes on any company owning real property or leasehold interests in
Bermuda.

11.2 The Congo Tax Regime

For a description of the Congo tax regime, see section 8.5 – "Changes to the Congo tax regime".

62
12. RISK FACTORS AND OTHER CONSIDERATIONS
12.1 General
An investment in the Bonds involves inherent risks. Prospective investors should carefully consider, among other
things, the risk factors set out in this Information Memorandum before making an investment decision. This section is
not intended to be exhaustive – additional risks and uncertainties not presently known to the Issuer, or currently
deemed immaterial, may also impair the Issuer's business operations or the value of the Bonds. The Issuer cannot
assure investors that any of the events discussed in the risk factors below will not occur. If they do, the Issuer's
business, financial condition, results of operations and cash flows could be materially adversely affected. In such case,
the Issuer may be unable to repay the Bond Issue.

A prospective investor should consider carefully the factors set out below, and elsewhere in the Information
Memorandum, and should consult his or her own expert advisors as to the suitability of an investment in the
Bonds.

An investment in the Bonds is suitable only for investors who understand the risk factors associated with this
type of investment and who can afford a loss of all or part of the investment. The information is presented as of
the date hereof and is subject to change, completion or amendment without notice.

All forward-looking statements included in this Information Memorandum are based on information available to
the Issuer on the date hereof, and the Issuer assumes no obligation to update any such forward-looking
statements. Forward-looking statements will, however, be updated if required by applicable laws or regulations.
Investors are cautioned that any forward-looking statements are not guarantees of future performance and are
subject to risks and uncertainties and that the actual results may differ materially from those assumed in the
forward-looking statements. Factors that could cause or contribute to such differences include, but are not
limited to, those described below and elsewhere in this Information Memorandum.

12.2 Risks related to the Issuer

Reduced or no hire

There is a risk that in certain instances the Alpha during periods of operation receives reduced or no hire
under the terms of the Total Contract, and there is a risk that the Total Contract will be terminated by
Total, resulting in reduced revenues. In addition the Issuer may face certain penalties under the Total
Contract, i.a. for delay and/or breach of confidentiality.

Currently the Company has only one customer

Total E&P Congo is currently the Company's only customer. Lack of payments from Total or any future
contracting parties may significantly and adversely impair the Company's liquidity.

63
The Issuer's future prospects will to a large extent be dependent on the Alpha securing further
operational drilling contracts and obtaining sufficient utilization upon the expiry of the Total
Contract

The Issuer’s future prospects will depend on the Alpha securing further operational drilling contracts and
obtaining sufficient utilization upon the expiry of the Total Contract in Q4 2015. There can be no
assurance given that the Issuer will negotiate a contract or contracts on acceptable commercial terms and
at favorable daily rates after expiry of the Total Contract.

If no additional operational contract is secured after the expiry of the Total Contract, the Alpha could be
laid up for a period and the Company's liquidity may be significantly and adversely impaired. The Issuer
is then likely to have an increased working capital requirement.

The Issuer may be required to upgrade, repair and/or refurbish the Alpha

The timing and costs of repairs on rigs are difficult to predict with certainty and may be substantial. Many
of these expenses, such as dry-docking and certain repairs for normal wear and tear, are typically not
covered by insurance. Large repair expenses could impair the Company's profits. In addition, repair time
could result in loss of revenue.

If the Alpha fails to maintain its class certification and/or any other applicable regulatory or other
requirements and/or fails any annual survey or special survey, the Alpha may be unable to operate,
thereby reducing the Issuer’s revenues and profitability.

The Alpha must be "classed" by a classification society. The classification society certifies that the Unit is
“in-class”, signifying that the tender unit has been built and maintained in accordance with the rules of the
classification society and also that the Unit complies with applicable laws, rules and regulations of the
registry and other maritime authorities of the Unit’s flag state and the international conventions of which
that state is a member. It is not possible to predict future changes to the existing rules of the class society,
the rules which the Unit is constructed in accordance with, or to the national (including the flag state) and
international laws, rules and regulations with which the Unit must comply. There can be no assurance that
any future changes to any of such laws, rules and regulations or relevant international conventions will
not subject the Unit to additional onerous requirements and obligations which may have a material
adverse effect on the Issuer’s business, financial position, results of operations and cash flows.

The Issuer may be subject to legal, governmental, regulatory or arbitration proceedings that would
have a material adverse effect on its business, financial position, results of operations and cash
flows.

The Issuer is not currently aware of any pending or threatened legal, governmental, regulatory or
arbitration proceedings against it that would have a material adverse effect on its business, financial
position, results of operations and cash flows. The Issuer may however be involved in material litigation,
claims and disputes in the future, which may involve claims for significant monetary amounts, some of
which may not be covered by insurance. The Issuer may also be subject to frivolous or vexatious claims.
A substantial settlement payment or judgment or attempt by a third party to make a frivolous, vexatious

64
or strategic claim could have a material adverse effect on the Issuer’s reputation, business, financial
position, results of operations and cash flows.

Intellectual Property Rights

The Issuer must observe third parties' patent rights and intellectual property rights. There is always an
inherent risk of third parties claiming that the technology being utilized by the Issuer in its operations
infringes third parties’ patents or intellectual property rights, and any such claim, if successful, could have
a material adverse effect on the Issuer’s business, financial condition, results of operation and cash flow.

The Issuer’s business involves numerous operating hazards, and the Issuer’s insurance may not be
adequate to cover the Issuer’s losses.

The Issuer’s operations will be subject to the usual hazards inherent in the drilling and operation of oil
and gas wells, such as blowouts, reservoir damage, loss of production, loss of well control, fires and
pollution. The occurrence of any one of these events could result in the suspension of drilling or
production operations, claims by the operator, severe damage to, or destruction of, the property and
equipment involved, injury or death to personnel and environmental damage. The Issuer may also be
subject to claims as a result of personal injuries and other claims from the personnel onboard the Unit, or
other units, as a result of its drilling operations. Operations may also be suspended because of machinery
breakdowns, abnormal operating conditions, weather, failure of subcontractors to perform or supply
goods or services and personnel shortages, requirements to obtain permits or meet other regulatory
requirements.

In addition, the Issuer’s operations will be subject to perils peculiar to marine operations, including
capsizing, collision and loss or damage from severe weather or turbulent waters, any one of which could
have a material adverse effect on the Issuer’s business, financial position, results of operations and cash
flows.

Damage to the environment could result from the Issuer’s operations, particularly through oil spillage or
gas leaks. In certain jurisdictions, the operating company may be subject to strict liability in the event of
pollution. The Issuer may also be subject to property, environmental and other damage claims by oil and
gas companies and other businesses operating offshore and in coastal areas.

Moreover, pollution and environmental risks generally are not fully insurable. As a result of the number
of catastrophic events in the offshore drilling industry in recent years, the most recent and topical being
the Deepwater Horizon drilling rig accident in April 2010 and resulting oil spill, and the total loss of the
Aban Pearl unit in Venezuelan waters in May 2010, insurance underwriters have increased insurance
premiums and increased restrictions on coverage and have made other coverage unavailable.

The Issuer’s business is subject to numerous and extensive governmental laws and regulations,
including those that may impose significant costs and liability on it for environmental and natural
resource damages.

65
Many aspects of the Issuer’s operations are affected by governmental laws and regulations that may relate
directly or indirectly to the contract drilling and well servicing industries, including those requiring the
Issuer to control the discharge of oil and other contaminants into the environment or otherwise relating to
environmental protection. Such laws and regulations (including licenses and approvals) may adversely
affect business operations and financial condition and prospects of the Company.

Failure to comply with laws and regulations may result in the assessment of administrative, civil and even
criminal penalties, the imposition of remedial obligations, the denial or revocation of permits or other
authorizations and the issuance of injunctions that may limit or prohibit the Issuer’s or the relevant party
operations.

Changes in tax laws, treaties, regulations or effective tax rates or adverse outcomes resulting from
examination of the Issuer’s tax returns could adversely affect its financial results.

The Issuer’s future effective tax rates could be adversely affected by changes in applicable tax laws,
treaties and regulations. The application of tax laws, treaties and regulations are highly complex and
subject to interpretation. Consequently, the Issuer is subject to changing tax laws, treaties and regulations
in and between countries in which it operates. The Issuer expects to minimize any income taxes and
corporation taxes based upon its interpretation of the tax laws in the country of operation. Although the
Issuer has sought the advice of external tax advisors, the application of these tax laws is not entirely clear.
In particular, to the extent that the Issuer structures its operations through the incorporation of subsidiaries
or the opening of branch offices in local jurisdictions in order to minimize its exposure to applicable rates
of taxation in such jurisdiction, there can be no assurance that the Issuer will continue to benefit from any
favorable rates of taxation in the event of changes in tax laws, regulations or effective tax rates in such
jurisdiction, and any such changes could have an adverse impact on the Issuer’s business, financial
position, results of operations and cash flows. In particular the changes to the Congolese tax regime in
effect from 1 January 2013 may impact the Issuer. The Issuer will likely have to re-organise its corporate
structure to avail withholding tax in Congo, see further information on changes in the Congolese tax
regime in section 8.5.

While the Issuer expects Total to compensate any additional tax burden incurred by reason of the changes
to the Congolese tax regime, the Issuer has not yet discussed with Total the situation if it is unable to
operate under the ATE after 23 October 2013. As such, no guarantees can be given that Total will agree
to compensate the Issuer for all or any of the additional tax liability. There is a risk that Total may apply
a different interpretation to its contractual obligations in this respect and may dispute either that such an
obligation exists or that it extends to the full liability of the Issuer for additional tax.

If any country successfully challenges the Issuer’s income tax, corporation tax or other tax filings based
on the company structure there, or if the Issuer otherwise loses a material dispute, its effective tax rate on
worldwide earnings could increase substantially or it could be subject to substantial penalties. Any such
increase in the Issuer’s taxes or incurrence of penalties could have a material adverse effect on its
business, financial position, results of operations and cash flows, as well as loss of key personnel.

A small sized rig fleet will make the Issuer more vulnerable to operational downtime with a more
significant effect on period results than for a company with a larger fleet.

66
With a fleet of only one rig, any operational downtime will affect the periodic results more significantly
than for a company with a larger fleet. Furthermore, frequent rig mobilizations could be disruptive to the
financial results in the event of delays due to adverse weather, third party services or physical damage to
its rigs.

Failure to employ a sufficient number of skilled labor via BassDrill Management and BassDrill
International

The Issuer's ability to undertake operations, and to employ the Alpha in the future, depends in part upon
its ability to maintain the size of its skilled labor force via BassDrill Management and BassDrill
International.

Legal disputes

In the course of its activities, the Issuer may become party to legal proceeding and disputes; e.g. from its
contractual counterparties. Any proceedings, even if lacking merit, could result in the expenditure of
significant financial and managerial resources

12.3 Market Risks

The international operations of the Issuer will be subject to a number of risks inherent in operating
a business in foreign countries, particularly those in emerging markets.

The Issuer will operate worldwide (except on the Norwegian Continental Shelf and in other harsh
environmental areas). The Issuer will thus be subject to a number of risks inherent in operating a business
in various jurisdictions, particularly those in emerging markets, including, but not limited to:

 political, social and economic instability, war and acts of terrorism;

 potential seizure, expropriation or nationalization of assets;

 damage to the Issuer’s equipment or violence directed at the management company's employees,
including, but not limited to;

– kidnappings; and

– piracy;

 increased operating costs;

 complications and delays associated with repairing and replacing equipment in the remote locations in
which the Issuer operates (including as a result of having to transport replacement equipment from
distant locations);

 repudiation, modification or renegotiation of, or default by counterparties under, contracts;

 limitations on insurance coverage, such as war risk coverage in certain areas;

67
  import-export quotas and costs;

 confiscatory taxation;

 work stoppages;

 unexpected changes in regulatory requirements;

 wage and price controls;

 imposition of trade barriers;

 imposition or changes in enforcement of local content laws;

 changes in economic or tax policies;

 changes in legislation which give rise to increased compliance costs;

 a violation of FCPA rules which incurs a significant fine or penalty;

 restrictions on currency or capital repatriations;

 currency fluctuations and devaluations and high levels of inflation;

 high interest rates;

 significant governmental influence over many aspects of local economies; and/or

 other forms of government regulation and economic conditions that are beyond the Issuer’s control.

A material or extended decline in expenditures by oil and gas exploration and production
companies due to a decline or increased volatility in oil and gas prices, a decrease in demand for oil
and gas, or other factors, would adversely affect the Issuer’s business

The Issuer’s business depends on the level of activity in oil and gas exploration, development and
production by potential customers. Oil and gas prices and customers' expectations of potential changes in
these prices significantly affect this level of activity. Commodity prices are affected by numerous factors
outside the control of the Issuer.

A slowdown in economic activity caused by a recession could reduce worldwide demand for energy and
result in lower oil and gas prices. Historically, crude oil prices have been highly volatile.

Demand for the Issuer’s services depends on oil and gas industry activity and expenditure levels that are
directly affected by trends in oil and gas prices. In addition, demand for the Issuer’s services is
particularly sensitive to the level of exploration, development and production activity of, and the
corresponding capital spending by, oil and natural gas companies. Any prolonged reduction in oil and gas
prices could depress the near-term levels of exploration, development, and production activity.

The Issuer’s industry is competitive, cyclical and subject to price competition. Due to the Issuer’s
limited operating history, it may be at a competitive disadvantage to the Issuer’s competitors.

68
The offshore drilling industry is competitive, and contracts have traditionally been awarded on a
competitive bid basis. The technical capabilities, availability and pricing of the tender barges are often the
primary factors in determining which qualified contractor is awarded a drilling contract. Other key factors
include a contractor’s reputation for service, safety and environmental records, technical and engineering
support and long-term relationships with national and international oil and gas companies. Some of the
Issuer’s competitors generally have larger, more diverse fleets, longer operating histories with more
established safety and environmental records over a measurable period of time, more experienced in-
house technical and engineering support departments and longer-term relationships with customers.

New technology and/or products may cause the Issuer to become less competitive

The offshore drilling industry is constantly subject to the introduction of new drilling techniques and
services using new technologies, some of which may be subject to patent protection. As competitors and
others use or develop new technologies, the Issuer may be placed at a competitive disadvantage. Further,
it may face competitive pressure to implement or acquire certain new technologies at a substantial cost.
Some of the Issuer’s competitors in the tender drilling sector have greater financial, technical and
personnel resources that will allow them to implement and use new technologies before the Issuer. The
Issuer cannot be certain that it will be able to implement and use new technology or products on a timely
basis or at an acceptable cost. Thus, the Issuer’s potential inability to implement and use new and
emerging technology in an effective and efficient manner may have a material and adverse effect on its
business, financial condition, results of operations and cash flows.

Fluctuation in asset value

Due to the fluctuating markets in which the Issuer operates the value of the Alpha and the other assets of
the Issuer may fluctuate significantly in value.

12.4 Risks related to the bonds

Following the issuance of Bonds contemplated in this Information Memorandum, the Issuer will
have substantial indebtedness which could have negative consequences for the bondholders.

Following the issuance of the Bonds, the Issuer will have substantial indebtedness which could have
negative consequences for the bondholders as:

 the Issuer’s ability to obtain additional financing for working capital, capital expenditure, asset
acquisitions or general corporate purposes and its ability to satisfy its obligations under the Bonds may
be impaired in the future;

 the Issuer may be more vulnerable to general adverse economic and industry conditions;

 the Issuer may be at a competitive disadvantage compared to its competitors with less indebtedness or
comparable indebtedness at more favorable interest rates and as a result, it may not be better positioned
than its competitors to withstand economic downturns;

69
  the Issuer’s ability to refinance indebtedness may be limited or the associated costs may increase; and

 the Issuer’s flexibility to adjust to changing market conditions and ability to withstand competitive
pressures could be limited, or the Issuer could be prevented from carrying out capital expenditures that
are necessary or important to the Issuer’s growth strategy and efforts to improve operating margins for
the Issuer’s business.

Ability to service indebtedness

The Issuer’s ability to make scheduled payments on, or to refinance its obligations under, the Bonds will
depend upon the Issuer’s financial and operating performance, which, in turn, will be subject to prevailing
economic and competitive conditions and to financial and business factors, many of which may be
beyond the Issuer’s control.

The Bonds may not be a suitable investment for all investors.

Each potential investor in the Bonds must determine the suitability of that investment in light of its own
circumstances. In particular, each potential investor should:

 have sufficient knowledge and experience to make a meaningful evaluation of the Bonds, the merits and
risks of investing in the Bonds and the information contained or incorporated by reference in this
Information Memorandum or any applicable supplement;

 have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its particular
financial situation, an investment in the Bonds and the impact the Bonds will have on its overall
investment portfolio;

 have sufficient financial resources and liquidity to bear all of the risks of an investment in the Bonds;

 understand thoroughly the terms of the Bonds; and

 be able to evaluate (either alone or with the help of a financial adviser) possible scenarios for economic,
interest rate and other factors that may affect its investment and its ability to bear the applicable risks.

Bond Agreement will impose significant operating and financial restrictions

The terms and conditions of the Bond Agreement will contain restrictions on the Issuer’s activities,
including, but not limited to, covenants that limit its ability to:

 transfer or sell assets or use asset sale proceeds other than in or towards prepayment of the Bonds;
 incur or guarantee additional debt;
 amend certain documents;
 make certain investments or acquisitions;
 create or permit security interests on the Issuer’s assets;
 pay dividends or make other payments;

70
  enter into transactions with affiliates;
 restructure its business; and
 dispose of the Alpha.
The restrictions in the terms and conditions of the Bond Agreement may prevent the Issuer from taking
actions that it believes would be in the best interest of the Issuer’s business, and may make it difficult for
the Issuer to execute its business strategy successfully or compete effectively with companies that are not
similarly restricted. The breach of any of these covenants and restrictions could result in an event of
default under the Bond Agreement.

The Bonds may be subject to optional redemption by the Issuer

In accordance with the terms and conditions of the Bond Agreement, the Bonds are subject to optional
redemption by the Issuer at any time from and including the date falling 3 years after the Settlement Date
at 100.5% to 103% of par value depending on the date of the option, plus accrued and unpaid interest to
the date of redemption. During any period when the Issuer may elect to redeem the Bonds, the market
value of the Bonds generally will not rise substantially above the price at which they can be redeemed.
This may also be true prior to any redemption period. The Issuer may be expected to redeem the Bonds
when its cost of borrowing is lower than the interest rate on the Bonds. At those times, an investor
generally would not be able to reinvest the redemption proceeds at an effective interest rate as high as the
interest rate on the Bonds and may only be able to do so at a significantly lower rate. Potential investors
should consider reinvestment risk in light of other investments available at that time.

Change of control - The Issuer’s ability to redeem the Bonds with cash may be limited.

Upon the occurrence of a Change of Control Event (as defined in the Bond Agreement), each individual
bondholder will have a right of pre-payment of the Bonds at a price of 101% of par value plus all accrued
and unpaid interest to the date of redemption. However, it is possible that the Issuer will not have
sufficient funds at the time of the Change of Control Event to make the required redemption of Bonds.
The Issuer’s failure to redeem tendered Bonds would constitute an event of default under the Bond
Agreement.

Mandatory prepayment events

In accordance with the terms and conditions of the Bond Agreement, the Bonds are subject to mandatory
prepayment by the Issuer on the occurrence of certain specified events, including inter alia (i) the Alpha is
sold or disposed of, (ii) there is an actual or constructive total loss of the Alpha, each such event, a
Mandatory Prepayment Event. Upon the occurrence of a Mandatory Prepayment Event, the Issuer shall
redeem 100 % of the outstanding Bonds at 101.5% to 108% of par value depending on the date of the
redemption, plus accrued and unpaid interest to the date of redemption . Following any early redemption
after the occurrence of a Mandatory Prepayment Event, it may not be possible for bondholders to reinvest
such proceeds at an effective interest rate as high as the interest rate on the Bonds and may only be able to
do so at a significantly lower rate. It is further possible that the Issuer will not have sufficient funds at the
time of the Mandatory Prepayment Event to make the required redemption of Bonds.

71
The value of the collateral securing the Bonds may not be sufficient to satisfy the Issuer's
obligations under the Bonds.

Further, it may be difficult, or even impossible, for the Trustee to enforce any or all of the security under
the Bonds, maritime liens may take priority over the security for the Bonds and the enforcement of the
Bondholders' rights across multiple jurisdictions may prove difficult.

There will only be a limited trading market for the Bonds

There is no existing market for the Bonds, and there can be no assurance given regarding the future
development of a market for the Bonds.

The market price of the Bonds may fluctuate significantly

The market price of the Bonds could be subject to significant fluctuations in response to a number of factors
beyond the Issuer's control, including actual or anticipated variations in the Issuer’s operating results and those
of its competitors, adverse business developments, changes to the regulatory environment in which the Issuer
operates, changes in financial estimates by securities analysts, significant contracts, acquisitions or strategic
relationships, publicity about the Issuer, its products and services or its competitors, lawsuits against the Issuer,
unforeseen liabilities, and the actual or expected sale of a large number of Bonds, as well as other factors. In
addition, in recent years the global financial markets have experienced significant price and volume fluctuations,
which, if repeated in the future, could adversely affect the market price of the Bonds without regard to the
Issuer’s operating results, financial condition or prospects.

The price of the Bonds may fluctuate significantly in accordance with the interest rate and credit markets in
general, the market view of the credit risk of the Issuer, and the liquidity of this Bond Issue in the market.

Bond issues with a fixed coupon rate and longer tenor in general carry a higher price risk compared to bond
issues with floating coupon rate and shorter tenor.

72
 Appendix 1

Indicative Term Sheet

73
 Indicative Term Sheet
ISIN:[•]

BassDrill Alpha Ltd.

Senior Secured Bond Issue 2013/2018
(the “Bonds” / the “Bond Issue”)

Settlement Date: Expected to be 5 July 2013

Issuer: BassDrill Alpha Ltd. incorporated under the laws of Bermuda and the 100% owner
of the Rig, or any Alternate Issuer.

Rig Manager: BassDrill Management (USA) Inc. incorporated under the laws of Texas and 100%
owned by BassDrill Ltd.

Alternate Issuer: Entity incorporated in Malta or Luxembourg, having assumed all rights and
obligations of the Issuer and having the identical activity as the Issuer. The Issuer
may be substituted with the Alternate Issuer provided that the Alternate Issuer
provides the Alternate Issuer Conditions Precedent to the satisfaction of the Trustee.

Currency: USD

Principal Amount: USD 90 million.

Coupon Rate: [7.50]% p.a., quarterly interest payments.

Settlement Date: Expected to be 5 July 2013.

Notice to be given to subscribers a minimum of two banking days prior to the

Settlement Date (on which date the Principal Amount shall be credited to the
Escrow Account (as defined below)).

Final Maturity Date: 5 July 2018.

Amortization: The Bonds shall be repaid at par value by the Issuer with USD 1.5 million and be
subject to the Cash Sweep on each interest payment day. Any Bonds outstanding
shall be repaid at par value on the Final Maturity Date.

First interest payment 5 October 2013 (3 months after the Settlement Date).
day:

Last interest payment Final Maturity Date.

day:

Interest Payments: Interest on the Bonds will commence to accrue on the Settlement Date and shall be
payable quarterly in arrears on the interest payment day in January, April, July and
October each year. Daycount fraction is “30/360”, business day convention is
“unadjusted” and business day is “Oslo and New York”.

Price: [97.50] % of par value.

Nominal value: The Bonds will have a nominal value of USD 1 each. Minimum subscription and
allotment amount shall be USD 200,000.

Status of the Bonds: The Bonds shall be senior debt of the Issuer and secured on a first priority basis
over the Rig and certain other assets as set out herein. The Bonds shall rank at least
pari passu with all other claims of the Issuer other than obligations which are
mandatorily preferred by law.
Call Options The Issuer may redeem the outstanding Bonds (all or nothing) at (i) any time from
(American): and including the date falling 3 years after the Settlement Date to, but not including,
the date falling 4 years after the Settlement Date at a price equal to 103 % of par
value (plus accrued interest on the redeemed amount), (ii) from and including the
date falling 4 years after the Settlement Date but not including, the date falling 4.5
years after the Settlement Date at a price equal to 101.50 % of par value (plus
accrued interest on the redeemed amount) and (iii) from and including the date
falling 4.5 years after the Settlement Date up to the Final Maturity Date at a price
equal to 100.50 % of par value (plus accrued interest on the redeemed amount).

Release of funds from the The funds on the Escrow Account shall be released by the Trustee to the Issuer
Escrow Account: subject to all relevant Conditions Precedent being fulfilled.

Purpose of the Bond The net proceeds from the Bond Issue (net of legal costs, fees of the Managers and
Issue: the Trustee and any other agreed costs and expenses) shall be employed to (i)
refinance the outstanding amount under the Natixis Facility (as defined below) and
Existing Shareholder Loan (as defined below), (ii) fund the Reserve Account (as
defined below), (iii) pay the Initial Dividend (as defined below), and (iv) fund
general corporate purposes.

Initial Dividend: An amount up to USD 26 million to be paid by the Issuer to its shareholders as
distribution from contributed surplus. The Initial Dividend will be paid in two
amounts: (i) USD 21 million within 30 days after the Settlement Date; and (ii) USD
5 million within 2 years after the Settlement Date, notwithstanding any restrictions
set out herein on transfers by the Issuer to its shareholders, but always subject to the
Conditions Precedent being fulfilled.

Natixis Facility: USD 55 million senior secured term loan facility entered into by the Issuer with
Natixis and ABN AMRO Bank N.V. bearing interest at a variable rate of LIBOR
plus 5.25% payable quarterly with a final maturity date of no later than 30
December 2013. As of 31 May 2013, USD 45,119,931.70 outstanding.

Existing Shareholder USD 10 million subordinated loan agreement entered into by the Issuer as borrower
Loan: and its shareholders listed below as lenders on 9 December 2011 with an interest
rate of 20% p.a. (accrued interest is capitalized and added to the loan at the end of
each calendar quarter, first time as of 31 March 2012).

Shareholder loans as follows:

BassDrill Ltd: USD 2,526,453
Pareto Worldwide Offshore AS: USD 3,679,889
Maas Capital Investments B.V: USD 2,599,587
Grover Star Shipping Corporation: USD 1,090,235
Marine Services and Trading Company: USD 71,429
Kontiki Four World Holdings Ltd: USD 32,407

As of 31 May 2013, USD 13,314,272.84 outstanding.

Rig: The flat bottom tender assist drilling unit the "BassDrill Alpha" including all
relevant equipment thereto, built in 2010. The Rig is registered in Panama with call
sign 3F0L2 and MMSI 354088000.

Charter: Means:

(i) any intra-Group charter contract and/or other contract of employment in

respect of the Rig; and

(ii) any charter contract and/or other contract of employment in respect of the
Rig entered into by the Issuer or a Subsidiary (if any) with a customer
outside the Group, including but not limited to the Total Charter Contract.
Group: The Issuer, or the Alternate Issuer, and the Subsidiaries (if any) (each a “Group
Company”).

Subsidiary: An entity over which another entity or person has a determining influence due to (i)
direct and indirect ownership of shares or other ownership interests, and/or (ii)
agreement, understanding or other arrangement. An entity shall always be
considered to be the subsidiary of another entity or person if such entity or person
has such number of shares or ownership interests so as to represent the majority of
the votes in the entity, or has the right to vote in or vote out a majority of the
directors in the entity.

Charterer: Means (i) in respect of the Total Charter Contract, Total E&P Congo, and (ii) in
respect of any other Charter, any client under a Charter.

Total Charter Contract: The contract for offshore drilling services, with reference number 4640001800,
entered into between the Issuer and Total E&P Congo in respect of the Rig, as
amended and extended, originally dated 15 September 2011.

Management Any management agreement between the Rig Manager and the Issuer or any
Agreement(s): relevant Group Company, as the case may be, for the technical and commercial
management of the Rig, including the agreement dated 27 June 2008 between the
Rig Manager and the Issuer.

Cash Sweep: All cash exceeding USD 7.5 million, however not including the part of the Initial
Dividend not paid within 30 days after the Settlement Date, deposited on the
Reserve Account (as defined below) (the “Cash Sweep Amount”) in accordance
with the Application of Earnings (as defined below) shall be used to repay the
Bonds at 100% of par value (plus accrued interest on redeemed amount). Such
redemption shall take place on every interest payment day subject to the credit
balance on the Reserve Account, on the tenth banking day prior to the relevant
interest payment day, being in an amount of minimum USD 7.5 million. The Cash
Sweep shall only be in effect as long as the Asset Coverage Ratio is below 160%.

Security: As security for the Finance Documents (including any interest, default interest,
costs and expenses) the following security has been or will be executed (all in
favour of the Trustee (on behalf of the Bondholders)):

Pre-Settlement Security:

(i) a pledge over the Escrow Account (as defined below) (according to
Norwegian law) (the “Escrow Account Pledge”);

Pre-Disbursement Security:

(ii) a first priority mortgage over the Rig including all equipment legally part of
the Rig under Panamanian law (the “Mortgage”), (including a deed of
covenants supplemental to the Mortgage and to the security thereby created
between the Issuer and the Trustee);

(iii) a first ranking floating charge (the “Floating Charge”) over all the assets of
the Issuer governed by Bermudian law;

(iv) a pledge granted by the shareholders over all of the shares (100%) issued by
the Issuer (the “Share Pledge”), together with inter alia, letters of
resignation (effective upon a default) from current board members and
covenants to obtain such from future board members;

(v) to the extent possible, an assignment of the rights of the Issuer under the
Total Charter Contract, the Issuer shall give notice and use its best endeavors
to obtain consent and acknowledgement of such assignment from the
Charterer (the "Total Charter Assignment");
(vi) to the extent possible, an assignment of any earnings payable to the Issuer
under the Total Charter Contract. The Issuer shall give notice and use its best
endeavors to procure the acknowledgement of such assignment from the
Charterer (the “Assignments of Earnings”);

(vii) an assignment of any and all Management Agreements. The assignment to

contain direct cure and step-in rights and termination rights in case of default,
and the Issuer shall give notice and obtain consent and acknowledgement
from the Rig Manager (the “Assignment of Management Agreements”);

(viii) a pledge over the Issuer's claim against the bank for the amount from time to
time standing to the credit of the Issuer in the Earnings Account (as defined
below) (the “Earnings Account Pledge”);

(ix) a pledge over the Issuer’s claim against the bank for the amount from time to
time standing to the credit of the Issuer in the Operating Account (as defined
below) (the “Operating Account Pledge”);

(x) a pledge over the Issuer's claim against the bank for the amount from time to
time standing to the credit of the Issuer in the Retention Account (as defined
below) (the “Retention Account Pledge”);

(xi) a pledge over the Issuer’s claim against the bank for the amount from time to
time standing to the credit of the Issuer in the Reserve Account (as defined
below) (the “Reserve Account Pledge”);

(xii) an assignment in all relevant insurances related to the Rig and the equipment
related thereto (the “Assignment of Insurances”);

(xiii) a first priority assignment of any intercompany loans granted between two
Group Companies or receivables between two Group Companies (if any) (the
"Assignment of Intercompany Loans");

(xiv) a pledge granted by the Issuer, and any other shareholders (as long as
reasonably practical), over all of the shares (100%) in each Subsidiary of the
Issuer (if any) (the “Issuer Share Pledge”), together with (to the extent
legally possible), inter alia, letters of resignation (effective upon a default)
from current board members and covenants to obtain such from future board
members; and

(xv) an unconditional and irrevocable on-demand guarantee granted by each

Subsidiary of the Issuer (if any) (the "Guarantee"),

(collectively, the "Issuer Security Documents").

Additional Security:

The Charter may be entered into by a Subsidiary of the Issuer; provided, that: (i) the
Issuer, and any other shareholders (as long as reasonably practical), grants an Issuer
Share Pledge unless already provided as a Pre-Disbursement Security; and (ii) such
Subsidiary provides a Guarantee (such guarantee to also contain relevant covenants
to the Trustee's satisfaction) for the Issuer's obligations under the Finance
Documents unless already provided as a Pre-Disbursement Security and a pledge
over the Subsidiary's claim against the bank for the amount from time to time
standing to the credit in the Subsidiary Earnings Account and the Subsidiary
Operating Account (both as defined below) (the “Subsidiary Account Pledge”,
together with the Issuer Share Pledge and the Guarantee, the "Charter Transfer
Additional Security Documents").

The Issuer may transfer ownership of the Rig to a wholly owned (directly)
Subsidiary established in Malta or Luxembourg; provided, that, in addition to the
Charter Transfer Additional Security Documents, the following security is
 established: (i) a new Mortgage over the Rig, (ii) a new Total Charter Assignment,
(iii) a new Assignment of Earnings, (iv) an irrevocable on-demand guarantee (such
guarantee also to contain all relevant rig covenants and other covenants to the
Trustee's satisfaction) and (v) any other relevant security required to give the
Bondholders an equal security position (hereunder a new Assignment of Insurances
if relevant) as determined by the Trustee (the "Rig Transfer Additional Security
Documents").

The Pre-Settlement Security shall be established by no later than the Settlement

Date. The Pre-Disbursement Security shall be established prior to any release from
the Escrow Account as described below under Conditions Precedent Pre-
Disbursement.

Any new Charter entered into by the Issuer shall be subject to the same security as
the Total Charter Contract as set out in (v) and (vi) above.

The Issuer Security Documents, the Charter Transfer Additional Security

Documents and the Rig Transfer Additional Security Documents to be referred to
herein as the Security Documents.

The Charter Transfer Additional Security Documents shall only be provided to the
extent that such security is reasonably practical or legally possible to provide for
such Subsidiary, in the sole discretion of the Trustee. If the Charter Transfer
Additional Security Documents are not delivered to the Trustee, the Issuer shall
procure that such Subsidiary pays the Net Charter Hire on a monthly basis into the
Issuer's Earnings Account.

Ranking:

The Issuer Security Documents, the Charter Transfer Additional Security

Documents and the Rig Transfer Additional Documents above shall constitute first
priority security.

Quiet Enjoyment Letter: If required by any third party Charterer under a Charter, the Trustee (on behalf of
the Bondholders) shall be authorized and obligated to issue a quiet enjoyment letter
(the “QEL”) in favour of such Charterer (and its creditors) in such form as the
Issuer shall reasonably require in order to be able to comply with the requirements
of the Charter.

The QEL shall be given on industry standard terms, and shall include an
undertaking that for as long as:

(i) the Charterer is not in breach of obligations under the Charter which breach
would permit the termination of the Charter, and

(ii) payment of all amounts due and payable under the Charter is duly made
pursuant to the terms thereof,

then, the rights and remedies of the Trustee under the Mortgage shall be
subordinated and subject to the rights and remedies of the Charterer under the
Charter, and the Trustee shall not disturb or interfere with the quiet and peaceful
use, possession and enjoyment of the Rig by the Charterer under the Charter;
provided, subject to the prior approval of the Charterer, that the QEL provides for
the Trustee (i) to (if applicable) be notified by the Charterer if the rig owner is in
default under the Charter and is granted the right to remedy such breach, and (ii) in
case of an Event of Default under the Bond Agreement which is not remedied, to
have a right to assign the Rig and the Charter to a nominee of the Trustee, being
reasonably satisfactory to the Charterer.

Application of Earnings: All gross earnings related to the Rig, including the Charter Rate/Net Charter Hire
(as, and if, applicable) and any excess cash in a Subsidiary Earnings Account (if
any) shall be paid into the Earnings Account, and the following transfers and
payments shall be made from the Earnings Account on a monthly basis as soon as
 practicable after receipt ("Transfer Date"):

(i) firstly, the Issuer shall procure a transfer to the Retention Account of an
amount equal to 1/3 of the next interest payment and 1/3 of the next
scheduled amortization;

(ii) secondly, the Issuer shall procure a transfer to the Operating Account of the
management and operational expenses for the Rig, as provided under the
Management Agreement; being the aggregate of:

(a) the amount equal to the budgeted operating expenses for the Rig, in each
case to be paid at least 30 days before the start of the next calendar month
in which the budgeted cost commitments are anticipated, plus or minus
any shortfall or surplus between the budgeted operating expenses and the
actual operating expenses from the previous month;

(b) the fixed management fee amounting to USD 4,500 per day of the
forthcoming month, which is payable to the Rig Manager monthly in
advance pursuant to the Management Agreement;

(c) a performance bonus, payable to the Rig Manager, of 3% of full EBITDA

under drilling contracts, pursuant to the Management Agreement; and

(d) such additional funds, if any, as are required to ensure that the Operating
Account at any time holds not less than the higher of either (i) 150% of
the then budgeted operating expenses; or (ii) USD 400,000,

in each case in accordance with the terms of the Management Agreement;

and

(iii) thirdly, the Issuer shall procure that any excess cash is transferred to the
Reserve Account.

If for any reason, funds on the Earnings Account are insufficient for the transfers to
the Retention Account and the Operating Account as set out in (i) and (ii) above,
such shortfall may be covered from the Reserve Account.

The Issuer shall be entitled to make payments from the Reserve Account to the
Operating Account where (i) the funds on the Operating Account fall below the
minimum amount of USD 400,000; or (ii) as otherwise required by the Rig
Manager for the management of the Rig, in accordance with the terms of the
Management Agreement.

Net Charter Hire: All earnings received related to the Rig less (a) any amount sufficient to cover tax
requirements, (b) budgeted operating expenses, (c) a minimum profit element to
accommodate for minority shareholders which have become minority shareholders
by local law requirements, and (d) any other amount that must be held within the
Subsidiary (if applicable) for tax, operational or other regulatory expenses.

Application of Earnings Application following an Event of Default which is continuing:

following an Event of
Default: (i) firstly, the Issuer will indemnify the Trustee for all costs and expenses in
respect of all costs and expenses whatsoever incurred by the Trustee during
an Event of Default;

(ii) secondly, in or towards payment of all sums secured by the Security

Documents or otherwise outstanding under the Finance Documents; and

(iii) finally, the balance, if any, shall be paid to the Issuer.

Accounts: The Issuer shall open and maintain the following accounts with [DNB Bank ASA]
(the “Account Bank”):
 (i) the Escrow Account (in connection with the Settlement of the Bonds);

(ii) the Earnings Account;

(iii) the Operating Account;

(iv) the Retention Account; and

(v) the Reserve Account.

Subject to the Trustee’s prior written approval, the Issuer may transfer amounts
standing to the credit of the Issuer on any Account to another bank replacing the
Account Bank for the purpose of facilitating a time deposit, provided that such new
account is pledged, and blocked if relating to amounts credited to the Escrow
Account or the Retention Account, in favor of the Trustee (on behalf of the
Bondholders) in a form and content satisfactory to the Trustee.

Escrow Account: The Issuer shall prior to the issuance of the Bonds establish an escrow account and
the net proceeds from the Bond Issue shall be transferred to the escrow account. The
Escrow Account shall be pledged in favor of the Trustee (on behalf of the
Bondholders) and blocked. The amount on the Escrow Account shall only be used
according to the Purpose of the Bond Issue.

Before release of funds from the Escrow Account takes place, all the Pre-
Disbursement Conditions Precedent (as described below) relevant shall be complied
with.

Earnings Account: All earnings related to the Rig, including the Charter Rate/Net Charter Hire (as, and
if, applicable) and any excess cash in a Subsidiary Earnings Account (if any) shall
be paid directly to the Earnings Account, and shall only be used in accordance with
the Application of Earnings. The Earnings Account shall be pledged on a first
priority basis in favor of the Trustee (on behalf of the Bondholders), but not blocked
unless there is an outstanding default.

Operating Account: The budgeted operating expenses and management expenses related to the Rig shall
be deposited on the Operating Account in accordance with the Application of
Earnings. The Operating Account shall be pledged on a first priority basis in favor
of the Trustee (on behalf of the Bondholders), but not blocked unless there is an
outstanding default.

Retention Account: The Retention Account shall be pledged on a first priority basis in favor of the
Trustee (on behalf of the Bondholders) and blocked in favor of the Trustee.
Amounts standing on the Retention Account shall only be used to pay scheduled
interest and amortizations under the Bonds.

Reserve Account: All remaining earnings following the transfers under the Application of Earnings
shall be transferred to the Reserve Account. The Reserve Account shall be pledged
in favor of the Trustee (on behalf of the Bondholders) but not blocked unless there
is an outstanding default, and amounts standing to the credit of the Issuer in the
Reserve Account may be utilized by the Issuer, in accordance with this Term Sheet,
including, but not limited to, for the purpose of operating and keeping the Rig in
repair, other working capital matters, to cover any shortfall under the cash waterfall
described under the Application of Earnings and pay dividends in-line with
restrictions set out in this Term Sheet. The amount standing on the Reserve Account
less any Initial Dividend amount still standing on the Reserve Account, shall at all
times be minimum USD 5 million.

The Initial Dividend payment of USD 5 million shall be deposited on the Reserve
Account and may be paid to the shareholders within 2 years after the Settlement
Date, and such amount shall not count towards the USD 5 million required for the
Reserve Account.
Subsidiary Accounts: A Subsidiary (if any) which becomes a counterparty under the Total Charter
Contract, or enters into a new Charter, shall open (i) an earnings account
("Subsidiary Earnings Account") and (ii) an operating account ("Subsidiary
Operating Account") with an internationally recognized and acceptable bank. The
Subsidiary Earnings Account and the Subsidiary Operating Account shall be
pledged, if reasonably practical or legally possible, on a first priority basis in favor
of the Trustee (on behalf of the Bondholders), but not blocked unless there is an
outstanding default.

All earnings related to the Rig under such Charter shall be paid directly to the
Subsidiary Earnings Account. From the Subsidiary Earnings Account, the
Subsidiary shall (i) transfer an amount equal to its budgeted operating expenses to
the Subsidiary Operating Account and pay such expenses out of such account, and
(ii) transfer the Charter Rate/Net Charter Hire (as, and if, applicable) into the
Issuer's Earnings Account which funds shall be subject to the Application of
Earnings.

Conditions Precedent: Pre-Settlement:

Disbursement of the net proceeds from the Bond Issue to the Escrow Account will
be subject to certain conditions precedent as customary for these types of
transactions, including but not limited to:

(i) the Bond Agreement, duly executed;

(ii) an agreement between the Trustee and the Issuer related to expenses and
fees, duly executed;

(iii) corporate documents, necessary corporate resolutions and any necessary

governmental approvals, consent or waivers (as the case may be) to issue the
Bonds and execute the Bond Agreement, the Escrow Account Pledge and
the Trustee´s fee letter;

(iv) any statements or legal opinions reasonably required by the Trustee;

(v) the Escrow Account Pledge, duly executed and perfected by all parties
thereto (including all applicable notices, acknowledgements and consents
from the Account Bank); and

(vi) the Project Documents, in acceptable form and duly executed.

Pre-Disbursement:

The amount on the Escrow Account shall only be used according to the Purpose of
the Bond Issue and release from the Escrow Account shall be subject to certain
conditions precedent as customary for these types of transactions, including but not
limited to:

(vii) a duly executed release notice from the Issuer;

(viii) satisfactory documentation evidencing that the amount to be released shall be

applied in accordance with the Purpose of the Bond Issue;

(ix) no (potential) Event of Default has occurred and is continuing;

(x) satisfactory documentation evidencing that the Accounts (except the Escrow
Account) and the Subsidiary Accounts (if any) are opened;

(xi) necessary corporate resolutions from the Issuer and the Subsidiaries (if any)
to execute the Security Documents (except the Escrow Account Pledge);

(xii) all relevant Security (except the Escrow Account Pledge which is being
delivered Pre-Settlement, but including the Additional Security (if any)) duly
 executed and perfected;

(xiii) any other document the Issuer and the Trustee agree to be a “Finance
Document”, in acceptable form and duly executed;

(xiv) satisfactory evidence that all insurances have been taken out;

(xv) customary documents and certificates related to the Rig, including but not
limited to protocol of delivery and similar documents; and

(xvi) all legal opinions and insurance opinions received in form and substance
satisfactory to the Trustee.

The Trustee may waive or postpone the delivery of certain conditions precedent at
its sole discretion, and may accept that delivery of the Security and release of
existing security under the Natixis Facility be made according to a closing memo
with the existing creditors.

Alternate Issuer Conditions Precedent:

The Issuer may assign all its rights and obligations under the Finance Documents to
the Alternate Issuer, provided, the Alternate Issuer establishes security similar to the
Issuer Security Documents (to the extent the Issuer Security Documents do not
remain in full force and effect), and the Trustee consents to the release of the Issuer
Security Documents. In addition, the Alternate Issuer shall provide any other
relevant security required to give the Bondholders an equal security position as
prior to the assignment, as solely determined by the Trustee.

Issuer’s Positive The Issuer shall, inter alia:

Covenants:
(i) deliver on its own accord its annual audited and semi-annual interim
unaudited reports, to the Trustee, as soon as they are made available, and not
later than 120 days after the end of the financial year and not later than 90
days after the end of the relevant interim period;

(ii) upon request of the Trustee, arrange for the Trustee, and/or any person
appointed by the Trustee, to undertake a technical inspection of the Rig
without interference of the daily operation of the Rig and at the expense of
the Issuer, (however limited to one yearly inspection at the (reasonable)
expense of the Issuer unless an Event of Default has occurred);

(iii) except for "best endeavors" obligations and the feasibility of procuring the
creation of the Charter Transfer Additional Security Documents as set forth
herein, maintain the Security Documents in good condition and that each
such Security Document remains duly created, enforceable and perfected on
first priority, at the expense of the Issuer, or the relative security provider (as
the case may be);

(iv) procure that the Rig Manager operates the Rig in accordance with good
industry standards and in accordance with its obligations under the relevant
Management Agreement(s) and in compliance with the terms hereof and the
Security Documents;

(v) maintain a 100% ownership interest (save for any minority ownership interest
necessary for operations under any legal framework where the Rig is
chartered) and control over each Subsidiary (if any);

(vi) ensure that any Charter it enters into, and procure that any Charter entered
into by a Subsidiary (if any), is based on generally accepted international
industry standards not incurring any potential liability for the Issuer or such
Subsidiary, as the case may be, directly or indirectly other than what is
normal in the industry for operation of such rigs;
 (vii) enter into a Charter with a Subsidiary (if any), if such Subsidiary enters into a
new Charter, and the Charter with a Subsidiary (if any) shall be on market
terms and shall provide for a charter rate at least sufficient to cover debt
service under the Bond Issue as well as management and operation expenses
in accordance with the Application of Earnings (the "Charter Rate"). If the
Charter Transfer Additional Security Documents are not delivered to the
Trustee, the Charter Rate shall equal the Net Charter Hire;

(viii) remain a single purpose company with a sole purpose of owning, operating,
maintaining the Rig unless approved by the Trustee or, where necessary, the
Bondholders’ meeting;

(ix) maintain 100% direct ownership of the Rig except as set out under Additional
Security above, or otherwise as approved by the Trustee or, where necessary,
the Bondholders’ meeting;

(x) ensure that all loans to the Issuer (or any Subsidiary of the Issuer) from any
of the Issuer’s shareholders or any other third party shall be fully
subordinated to the Bonds, with maturity after the Final Maturity Date and
with no cash pay interest;

(xi) perform and observe all of its covenants and agreements contained in any of
the Project Documents to which it is or becomes a party, take all necessary
action to prevent the termination of any such Project Documents in
accordance with the terms thereof or otherwise, and take any and all
commercially reasonable action as may be reasonably necessary to promptly
enforce its rights and to collect any and all sums due to it under the Project
Documents;

(xii) comply with the Application of Earnings as set out herein; and

(xiii) if required in its sole discretion, assign rights and obligations under the Total
Charter Contract to a Subsidiary (if any); provided, that, the Issuer and such
Subsidiary enter into a Charter.

The Trustee may and shall upon request distribute such abovementioned reports
referred to in (i) above to the Bondholders.

Issuer’s Negative The Issuer shall not, without the approval of the Trustee or, where necessary, the
Covenants: Bondholders’ meeting:

(i) declare or make any dividend payment or distribution, whether in cash or in

kind, repurchase of shares or make other similar transactions (included, but
not limited to total return swaps related to shares in the Issuer), or other
distributions or transactions implying a transfer of value to its shareholders
other than (a) the Initial Dividend and repayment of the Existing Shareholder
Loan or (b) if the Asset Cover Ratio immediately subsequent to such
transactions is equal to or higher than 167% and remaining Charter backlog
(excluding options) is above 12 months. Any dividend payment or
distribution according to (b) above may not exceed 50% of the Issuer’s
consolidated net profit after taxes based on the audited annual accounts for
the previous financial year. Any un-utilized portion of the permitted dividend
pursuant to the above may not be carried forward to any subsequent financial
year;

(ii) amend its constitutional documents (including change of domicile) unless

related to (i) to a re-domiciliation as set out in Additional Security above or
(ii) the issuance of new shares to the shareholders in connection with
conversion of debt to equity or otherwise, provided that such shares are
subject to the Share Pledge;

(iii) cease to carry on its business or change the nature of its business unless
related to a re-domiciliation as set out in Additional Security above;
 (iv) de-merge, merge or in any other way restructure its business; provided,
incorporating Subsidiaries shall not require the approval of the Trustee as
long as the shares of such Subsidiaries are subject to the Issuer Share Pledge
and such Subsidiary provides a Guarantee;

(v) in respect of any Project Document (i) dispose of (by operation of law or
otherwise) any part of its interest, (ii) amend, supplement, modify or give
any consent under any Project Document or exercise any material option
thereunder, except for amendments not having any material negative impact
on the value of the Rig or value of the relevant Charter as contemplated
pursuant to the Project Documents, or (iii) agree to the cancellation or
termination of any Project Document or take any legal or administrative
action that seeks to rescind or terminate such Project Documents, except in
the event that it constitutes a substitution of the said Project Document which
is acceptable to the Trustee;

(vi) change the flag state of the Rig;

(vii) agree to or permit the assignment of any rights or the delegation of any
obligations under the Project Documents, save to the extent already permitted
herein or by the terms of the Project Documents;

(viii) incur or permit to remain outstanding any additional Financial Indebtedness

(whether secured or unsecured) other than (i) any Financial Indebtedness
arising under the Bond Issue, (ii) any subordinated loans and (iii) any
intercompany loans;

(ix) create or permit to subsist any security over any of its assets or enter into
arrangements having a similar effect except for (i) any security contemplated
by the Bond Issue, and (ii) any security arising by operation of law;

(x) enter into any sale- and leaseback transactions;

(xi) grant any financial support such as loans, guarantees or other financial
assistance to any party, except for (i) guarantees issued for the benefit of
third parties in the ordinary course of business and (ii) any financial support
contemplated by this Bond Agreement, and (iii) any intercompany loans;

(xii) make any investments or capital expenditures, other than solely related to the
ownership in and operation of the Rig and for any investments (being part of
a program or as separate investment exceeding USD 5 million) in any case
subject to the Trustee’s prior written approval (on behalf of the
Bondholders);

(xiii) engage directly or indirectly, in any transaction with any related party
(without limitation, the purchase, sale or exchange of assets or the rendering
of any service) unless on arm's length terms and for fair market value; and

(xiv) enter into any contracts in North Korean, Iranian territorial waters or any
other jurisdictions/organizations which is prohibited by the US Department
of Treasury Office of Foreign Asset Control (OFAC), or move the Rig into
any of those areas.

The Issuer shall procure compliance to the negative covenants set out in (ii) – (v)
and (viii) – (xiv) by any Subsidiary. The Bond Agreement shall include other vessel
covenants and standard covenants as customary in the Norwegian high-yield bond
market.

Financial Covenants: The Issuer undertakes to comply with the following financial covenants during the
term of the Bonds:

(i) Asset Cover Ratio: The Market Value of the Rig shall exceed 120% of the
 amount of outstanding Bonds; and

(ii) Liquidity: The Issuer shall ensure that the amount standing on the Reserve
Account less any Initial Dividend amount still standing on the Reserve
Account, shall at all times be a minimum of USD 5 million.

The Financial Covenants shall be tested on a quarterly basis. In the event of any
breach of (ii) above, the Issuer shall immediately give notice to the Trustee, and the
Issuer shall have the right to remedy the non-compliance within 30 banking days
after the date of sending such notice or after the date on which such notice should
have been sent. Remedy shall be made by providing the required funds through
equity or subordinated loans to the Issuer (on terms acceptable to the Trustee) which
shall be deposited (for the required period, which in any event shall not expire prior
to the next reporting date of the Financial Covenants) on a separate account to be
pledged but not blocked to the Trustee and where the account bank has waived its
set-off rights. If the Issuer has remedied the non-compliance of (ii) above within
said 30 banking days, no Event of Default shall have occurred.

Definitions: Asset Coverage Ratio means the Market Value of the Rig relative to outstanding
Bonds under the Bond Agreement.

Market Value means the fair market value of the Rig determined as the arithmetic
mean of independent valuations of the vessel obtained from two independent and
well-reputed sale and purchase brokers familiar with the market for the Rig
appointed by the Issuer and approved by the Trustee. Such valuation shall be made
on the basis of a sale for prompt delivery for cash at arm’s length on normal
commercial terms as between a willing seller and willing buyer, on an “as is where
is” basis, free of any existing charters or other contracts for employment. The cost
of such determination shall be for the account of the Issuer. The valuation shall be
made at least semi-annually, or following an Event of Default, upon the request of
the Trustee.

Rig Covenants: Standard rig covenants: (i) maintenance of insurances (see below), (ii) maintenance
of class and allow the Trustee to inspect the Rig if requested; (iii) no change of flag,
name and registry unless approved by the Trustee, such approval not to be
unreasonably withheld, always provided that such approval will not be required if a
change is required and permitted pursuant to the Project Documents and the
Security Documents are not impaired; (iv) the Rig to be kept in a good and safe
condition and repairs are consistent with prudent ownership and industry standards;
and (v) operation in accordance with laws and regulations.

Maintenance and The Issuer shall provide for reasonable and satisfactory maintenance and insurance
Insurances: of the Rig and all relevant equipment related thereto at all times, hereunder to retain
the Rig in class. During operation of the Rig, the Issuer shall ensure that the Rig
Manager runs proper maintenance of the Rig. The Rig shall also be adequately
insured (including war risk) against Hull & Machinery/Hull Interest risks at least
120% of the outstanding amount under the Finance Documents, and a third party
liability insurance as per industry standards, as well as any additional insurance
required under any other contracts.

The Issuer shall keep a Mortgagee Interest Insurance or similar insurance.

The insurances and Loss Payee Clause shall be in accordance with the Nordic
Marine Insurance Plan or other insurances with at least similar terms.

Mandatory Prepayment: Upon a Mandatory Prepayment Event (other than a Total Loss Event) occurring the
Issuer shall, on or about the day the Issuer receives the proceeds following the
relevant Mandatory Prepayment Event, redeem the Bonds in an amount equal to the
then aggregate principal amount of the outstanding Bonds:

i. if occurring anytime from the Settlement Date to, but not including, the
interest payment day 1 year after the Settlement Date, at a price equal to
108.00% of par value (plus accrued interest on the redeemed amount);
 ii. if occurring anytime from and including the interest payment day 1 year after
the Settlement Date to, but not including, the interest payment day occurring
2 years after the Settlement Date, at a price equal to 106.50% of par value
(plus accrued interest on the redeemed amount);

iii. if occurring anytime from and including the interest payment day 2 years
after the Settlement Date to, but not including, the interest payment day
occurring 3 years after the Settlement Date, at a price equal to 105.00% of
par value (plus accrued interest on the redeemed amount);

iv. if occurring anytime from and included the interest payment day 3 years after
the Settlement Date to, but not including, the interest payment day occurring
4 years after the Settlement Date, at a price equal to 103% of par value (plus
accrued interest on the redeemed amount);

v. if occurring anytime from and including the interest payment day 4 years
after the Settlement Date to, but not including, the Final Maturity Date, at a
price equal to 101.50% of par value (plus accrued interest on the redeemed
amount).

For the avoidance of doubt, the redemption price shall be determined based on the
date the Mandatory Prepayment Event occurred and not based on the date the
repayment is carried out.

Upon a Total Loss Event, the Issuer shall as soon as the insurance proceeds are
available redeem 100% of the outstanding Bonds at 100% of par value (plus
accrued interest on redeemed amount).

If the Bonds are redeemed in full according to this Mandatory Prepayment clause,
the entire amount on the Accounts and the Subsidiary Accounts (if any) may be
used as part payment in relation to the Mandatory Prepayment.

Mandatory Prepayment If (a) the Rig is sold or disposed of, or (b) there is an actual or constructive total loss
Event: of a Rig (a “Total Loss Event”).

Event of Default: The Bond Agreement shall include standard remedy and event of default provisions.
An Event of Default occurs if any default under the Bond Agreement is not
remedied within the relevant remedy period. The Finance Documents will contain
waterfall provisions in case of partial payments i.e. first to cover costs, fees and
expenses of the Trustee (the “Trustee Expenses”) and thereafter any other
outstanding amounts under the Finance Documents. In case the Issuer does not pay
the Trustee for incurred fees, then the Trustee may seek funding of the Trustee
Expenses from the Bondholders or, failing them, other sources, in which case such
other sources will be subrogated into the position of the Trustee, but subordinate to
any further Trustee expenses.

Material Adverse Effect: Means a material adverse effect on: (a) the financial condition or operations of the
Issuer, (b) the Issuer’s ability to perform and comply with its obligations under the
Finance Documents and the Project Documents, or (c) the validity or enforceability
of any Finance Document.

Financial Indebtedness: Means any indebtedness incurred in respect of: moneys borrowed (including
acceptance credit); any bond, note, debenture, loan stock or other similar
instrument; the amount of any liability in respect of any lease, hire purchase
contract which would, in accordance with GAAP, be treated as a finance or capital
lease; receivables sold or discounted (other than any receivables sold on a non-
recourse basis); any sale and lease-back transaction, or similar transaction which is
treated as indebtedness under GAAP; the acquisition cost of any asset to the extent
payable after its acquisition or possession by the party liable where the deferred
payment is arranged primarily as a method of raising finance or financing the
acquisition of that asset; any derivative transaction entered into in connection with
protection against or benefit from fluctuation in any rate or price, including without
 limitation currency or interest rate swaps, caps or collar transactions (and, when
calculating the value of the transaction, only the mark-to-market value shall be
taken into account); any amounts raised under any other transactions having the
commercial effect of a borrowing or raising of money, whether recorded in the
balance sheet or not (including any forward sale of purchase agreement); any
counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or
documentary letter of credit or any other instrument issued by a bank or financial
institutions; and (without double counting) any guarantee, indemnity or similar
assurance against financial loss of any person in respect of any of the items referred
to above.

GAAP: Generally accepted accounting principles.

Change of Control clause: Upon a Change of Control Event occurring, each Bondholder shall have a right of
pre-payment (Put Option) of the Bonds at a price of 101% of par value (plus
accrued interest) during a period of 60 calendar days following the notice of a
Change of Control Event.

Change of Control Event: A Change of Control Event occurs if any person or group (as such term is defined in
the Norwegian Limited Liability Companies Act § 1-3) save for (i) BassDrill Ltd. or
(ii) any holding company, owned directly or indirectly, by the shareholders
(provided that only BassDrill Ltd. may own more than 50% of the outstanding
voting shares therein), becomes the owner, directly or indirectly, of more than 50%
of the outstanding voting shares of the Issuer.

Project Documents: Means:

(i) the Total Charter Contract and any other Charter; and
(ii) the Management Agreement(s).

Finance Documents: Means:

(iii) the Bond Agreement;
(iv) the Security Documents;
(v) the Trustee’s fee letter; and
(vi) any other document the Issuer and the Trustee agree to be a Finance
Document.

Approvals: The Bonds will be issued in accordance with the Issuer’s board approval dated [●]
June 2013.

Issuer’s ownership of The Issuer has the right to acquire and own the Bonds. Such Bonds may at the
Bonds: Issuer’s discretion be retained by the Issuer, sold or discharged.

Managers: DNB Bank ASA, DNB Markets, NO-0191 Oslo, Norway, and
Swedbank First Securities, Filipstad Brygge 1, NO-0115 Oslo, Norway.

Trustee: Norsk Tillitsmann ASA, Postboks 1470 Vika, 0116 Oslo.

Governing Law: Norwegian.

Registration: The Norwegian Central Securities Depository (“VPS”). Principal and interest
accrued will be credited the Bondholders through VPS.

Paying Agent: [DNB Bank ASA].

Taxation: The Issuer shall pay any stamp duty and other public fees accruing in connection
with the issuance of the Bonds or the Security Documents, but not in respect of
trading of the Bonds in the secondary market (except to the extent required by
applicable laws), and the Issuer shall deduct before payment to the Bondholders at
source any applicable withholding tax payable pursuant to law.
Bond Agreement: The Bond Agreement will be entered into by the Issuer and the Trustee acting as the
Bondholders’ representative, and it shall be based on the Norwegian standard. The
Bond Agreement shall regulate the Bondholders’ rights and obligations with respect
to the Bonds. If any discrepancy should occur between this Term Sheet and the
Bond Agreement, then the Bond Agreement shall prevail. The Bond Agreement
shall include provisions where upon an Event of Default, repayment of the principal
amount during the first three (3) years after the Settlement Date, shall be equal to
the Mandatory Prepayment provided for above, and thereafter shall be equal to the
Call Options provided for above.

The subscriber is deemed to have granted authority to the Trustee to finalize the
Bond Agreement and the other Finance Documents. Although minor adjustments to
the structure described in this Term Sheet may occur, the provisions in the Bond
Agreement will be substantially consistent with those set forth in this Term Sheet.

The application form specifically authorises the Trustee to execute and deliver the
Bond Agreement on behalf of the prospective Bondholders, who will execute and
deliver such application form prior to receiving Bond allotments. On this basis, the
Issuer and the Trustee will execute and deliver the Bond Agreement and the latter’s
execution and delivery is on behalf of all of the subscribers, such that they thereby
will become bound by the Bond Agreement. The Bond Agreement specifies that all
Bond transfers shall be subject to the terms thereof, and the Trustee and all Bond
transferees shall, when acquiring the Bonds, be deemed to have accepted the terms
of the Bond Agreement, which specifies that all such transferees shall automatically
become bound by the Bond Agreement upon completed transfers having been
registered in the VPS, without any further action required to be taken or formalities
to be complied with. The Bond Agreement shall specify that it shall be made
available to the general public for inspection purposes and may, until redemption in
full of the Bonds, be obtained on request by the Trustee or the Issuer, and such
availability shall be recorded in the VPS particulars relating to the Bonds.

The Managers have appointed external counsel to draft and/or review the Finance
Documents. Upon appointment of the Trustee the external counsel will be acting
upon instruction of the Trustee.

Stock Exchange listing: An application will not be made for the Bonds to be listed.

Market making: No market-maker agreement has been made for this Bond Issue.

Eligible purchasers: The Bonds shall only be offered to non-“U.S. persons” in “offshore transactions”
within the meaning of Rule 902 under the U.S. Securities Act of 1933, as amended
(“Securities Act”) except for “Qualified Institutional Buyers” (“QIBs”) within the
meaning of Rule 144A under the Securities Act. In addition to the application form
that each investor will be required to execute, each U.S. investor that wishes to
purchase Bonds will be required to execute and deliver to the Issuer a certification
in a form to be provided by the Issuer stating, among other things, that the investor
is a QIB. The Bonds may not be purchased by, or for the benefit of, persons resident
in Canada. The Bond Agreement will contain customary terms and provisions for a
U.S. Rule 144A or Regulation S placement.

Transfer restrictions: The Bondholders will not be permitted to transfer the Bonds except (a) subject to an
effective registration statement under the Securities Act, (b) to a person that the
Bondholder reasonably believes is a QIB within the meaning of Rule 144A that is
purchasing for its own account, or the account of another QIB, to whom notice is
given that the resale, pledge or other transfer may be made in reliance on Rule
144A, (c) an offshore transaction in accordance with Regulation S under the
Securities Act, including, in a transaction on the Oslo Børs, and (d) pursuant to any
other exemption from registration under the Securities Act, including Rule 144
there under (if available). The Bonds may not, subject to applicable Canadian laws,
be traded in Canada for a period of four months and a day from the date the Bonds
were originally issued.
Subject to: The Bond Issue shall be subject to approval of the loan documentation by the
Issuer’s board and the Trustee.

Oslo, 19 June 2013

BassDrill Alpha Ltd.

As Issuer

DNB Markets Swedbank First Securities

As Managers
 BassDrill Alpha Ltd. (Bermuda)

Cannon’s Court 22, Victoria St,

Hamilton HM12, Bermuda

Phone: + 1-832-494-2200

Fax: + 1-832-494-2210

www.bassdrill.com

Joint Lead Manager and Bookrunners

Swedbank First Securities

DNB Markets
Filipstad Brygge 1
Dronning Eufemias gate 30,

P. O. Box 1600 Sentrum P.O. Box 1441 Vika

N-0021 Oslo N-0115 Oslo

Norway
Norway

Telephone: +47 91 50 30 00 Telephone: +47 23 23 80 00

Telefax: +47 23 23 80 01
Telefax: +47 22 83 20 00
www.swedbank.no
www.dnb.no

74