Annual report
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ANNUAL REPORT 2025 NORAM DRILLING AS
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Contents General Information 3 Accounting and Auditing 3 NorAm Drilling Group 4 Board of Directors’ Report 2025 5 Financial Statements 2025 14 Note Disclosures 18 Auditors Report 27
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General Information This report contains forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements may be identified using forward-looking terminology such as “believes”, “experts”, “predicts”, “may”, “will continue”, “should”, “would be”, “seeks” or “anticipates” or similar expressions or comparable terminology, or by discussions of plans, intentions and strategy. Such forward-looking statements are necessarily dependent on assumptions, data or methods that may be incorrect or imprecise. The Company or its officers assumes no obligation that such expectations will prove to be correct. These forward-looking statements are subject to risks and uncertainties that could cause actual results to vary materially from such forward-looking statements. Accounting and Auditing NorAm Drilling AS is audited by KPMG Norway. The accounting is outsourced to Amesto Business Partner, Norway. NorAm Drilling Company performs its own accounting. Alternative Performance Measurement (APM) In the report we refer to the APM ADJUSTED EBITDA; Earnings Before Interest, Tax, Depreciation and Amortization and noncash stock compensation expenses.
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THIS IS NORAM DRILLING GROUP NorAm Drilling AS (“the Group”, “NorAm” or “the Company”) owns and operates a quality rig portfolio of “super spec” advanced high-end AC driven rigs tailored for the drilling of horizontal wells in the US land drilling market. These rigs are designed to combine the cost efficiency of a compact rig with the versatility of different rig classes, enabling the rigs to cover a broad range of wells for both liquids and gas. The Company was established in 2007, and at year-end 2025 the Group’s fleet consisted of 11 “super spec” rigs located in the Permian Basin. The Company Structure The parent company NorAm Drilling AS owns 100% of NorAm Drilling Company, Texas Corp., a US-based drilling contractor, located in Houston, Texas. NorAm Drilling Company owns all eleven rigs and is financed through a combination of equity investments and intercompany loans, at arm’s length terms, from its parent. NorAm Drilling Company is staffed with competent, local personnel that perform all aspects of a contract drilling company. The assets of NorAm Drilling AS consists mainly of shares in and loans to its US subsidiary. Our Offices NorAm Drilling AS head office is in Oslo, Norway. The office is located at Bryggegata 3, 0112 Oslo, Norway. NorAm Drilling Company is headquartered in Houston, Texas. NorAm Drilling Company has yard facilities in Odessa, Texas. Organization and Operations Marty Jimmerson has served as Chief Executive Officer and Chief Financial Officer since joining the Company in January 2017. Thomas Taylor has served as Chief Operating Officer since November 2014 and has been with the Company for 14 years. Mr. Jimmerson and Mr. Taylor fulfil their roles for both NorAm Drilling AS and NorAm Drilling Company. The executive team is supported with a complement of business development, safety, operations (including electricians, mechanics and equipment specialists) and accounting functions. Each rig is supported by crews that work on 2-week hitches. Each hitch is staffed with crews working 12-hour shifts. The rig is managed by a rig manager, and each shift is typically staffed with a minimum of a driller, derrickman, motorman and two floormen.
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Board of Director’s Report Nature of the business activities and where conducted NorAm Drilling AS (herein called “Company”) and its subsidiaries (herein called “Group”) were established on February 19, 2007. NorAm Drilling AS owns 100% of NorAm Drilling Company, a Texas corporation (collectively referred to as “NorAm” or the “Company” herein). NorAm owns and operates a quality rig portfolio of “super spec” advanced high-end AC driven rigs tailored for the drilling of horizontal wells in the US land drilling market. As of May 27, 2026, all of our eleven rigs are under contract in the Permian Basin. These rigs are designed to combine the cost efficiency of a compact rig with the versatility of different rig classes, enabling the rigs to cover a broad range of wells for both liquids and gas. The Group’s executive management team is based out of Houston, Texas with administrative functions located in both Houston and Oslo, Norway. 2025 Developments MARKET and CONTRACTS WTI began 2025 around $72 per barrel and finished 2025 near $58 per barrel. WTI reached a high of $78 per barrel in January 2025 and a low of $57 per barrel in December 2025. WTI increased steadily to $67 through February 2026 when the 2026 Iran war commenced. WTI has continued to be volatile based upon uncertainties regarding the Iran war and traded as high of $133. WTI is currently trading around $90 per barrel. Dayrates for land rigs in the US improved significantly during the 2022 and continued to strengthen into Q1 2023. Demand for drilling rigs started to decline in the first half of 2023 in a response to lower natural gas and WTI prices which also resulted in dayrates for high end “super spec” drilling rigs in the Permian starting to soften. This trend in declining demand for rigs continued throughout 2025. Dayrates in the Permian were relatively stable during 2024 and 2025. Mergers and acquisitions among E&Ps also led to lower active rig counts and put pressure on dayrates. As of May 22, 2026, the US land drilling active rig count and Permian rig count was 536 and 250, respectively. As of December 31, 2025, the US land drilling active rig count and Permian rig count was 527 and 247, respectively. In comparison, as of December 31, 2024, the US land drilling active rig count and Permian rig count was 573 and 304, respectively. As of May 27, 2026, all of our eleven rigs were under contract.
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SHARE LISTING and DIVIDENDS On October 7, 2022, the Company’s shares commenced trading on the Euronext Growth Oslo exchange under the ticker “NORAM”. The Company is debt free and paid its initial monthly dividend in December 2022. The Company has paid 37 consecutive monthly dividends from December 2022 through December 2025 of MUSD 87.3 or approximately NOK 21.25 per share. The company has paid MUSD 7.2 or approximately NOK 1.58 per share after December 31, 2025. The dividend distributions were made from the Company’s contributed surplus account which consists of previously paid in share premium transferred to the Company’s share premium account. COMPANY DEVELOPMENT AND RESULTS NorAm had revenue of MUSD 101.1 during the twelve months of 2025 compared to MUSD 103.1 during the twelve months of 2024. During the twelve months of 2025 we generated operating profit of MUSD 13.8 compared to an operating profit of MUSD 4.3 in the twelve months of 2024. During the twelve months of 2025 we generated ADJUSTED EBITDA of MUSD 20.0 compared to MUSD 24.1 in the twelve months of 2024. During the twelve months of 2025 we generated cash flow from operational activities of MUSD 25.6 compared to MUSD 21.5 in the twelve months of 2024. The decrease in revenue and ADJUSTED EBITDA is primarily due to lower utilization as industry conditions continued to soften as a result of operators demonstrating operational discipline, merger activity among E&Ps and declines in WTI prices to $58 as of the end of 2025. Operating profit improved as a result of lower depreciation offset by lower revenue. With effect from 1 January 2025, the Company has revised the estimated useful life of its rigs and related equipment. The useful life of these assets is now estimated to be 10 years. The revision reflects a reassessment of the condition and standard of the rigs and related equipment, as well as their operational and historical performance, which together indicate that the assets are expected to generate economic benefits over a longer period than previously estimated. The change in estimate has been accounted for prospectively, whereby the carrying amount at the date of change is depreciated over the revised remaining useful life (the “break-point” approach). As a result of this change, depreciation expense decreased to MUSD 5.9 million in 2025, compared to MUSD 19.7 million in 2024. Cash flow from operational activities increased primarily as a result of changes in working capital. Capital expenditures were MUSD 1.5 in the twelve months of 2025, compared to MUSD 3.4 in the twelve months of 2024. As of December 31, 2025, our cash position was MUSD 10.4. The Company is debt free and paid its initial monthly dividend in December 2022 and continue to pay monthly dividends through May 2026. The Company’s subsidiary has a loan agreement with a U.S. based bank for a Revolving Promissory Note (“Revolver”) of MUSD 4.5. Use of proceeds for any borrowings under this Revolver are available for working capital and general corporate purposes. The Revolver is secured by accounts receivable and is expected to be utilized to reduce the Company’s need for liquidity on the balance sheet. There were no borrowings outstanding under the Revolver as of December 31, 2025. The parent company NorAm Drilling AS had total operating income of MUSD 0.1 in 2025, the same as for 2024. Operating expenses were flat at MUSD 0.8 in 2025 compared to 2024. The parent
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company had a net income before tax of MUSD 2.6 in 2025, compared to a net income of MUSD 3.7 in 2024. The main driver for the decrease in net income before tax is due to lower interest income on intercompany notes attributable to repayments from its operating subsidiary. KEY FINANCIAL FIGURES 2025 2024 MUSD Revenue 101.1 103.1 Operating Profit 13.8 4.3 Net Profit before Tax 14.2 4.5 ADJUSTED EBITDA (1) 20.0 24.1 (1) ADJUSTED EBITDA - Earnings Before Interest, Tax, Depreciation and Amortization plus noncash stock option expenses. IMPAIRMENT ON FIXED ASSETS No impairment indicators have been identified. Accordingly, no impairment test has been performed as a result of no impairment indicators being identified. FINANCING On the balance sheet, the Group has equity of MUSD 51.6 equivalent to an equity ratio of 67.6% at year-end 2025, compared to MUSD 53.4 equivalent to an equity ratio of 67.8% at year-end 2024. The Company’s balance sheet at year end 2025 had equity of MUSD 116.2 and an equity ratio of 88.1%, compared to MUSD 129.5 and an equity ratio of 88.1% equity ratio at year-end 2024. The Board considers the equity for both the Company and Group to be in compliance with the requirement for sufficient equity under the Norwegian Limited Liability Companies Act. On October 7, 2022, the Company’s shares commenced trading on the Euronext Growth Oslo exchange under the ticker “NORAM”. The Company is debt free and paid its initial monthly dividend in December 2022. The Company has paid 37 consecutive monthly dividends from December 2022 through December 2025 of MUSD 87.2 or approximately NOK 21.25per share. The company has paid MUSD 7.2 or approximately NOK 1.58 per share after December 31, 2025. The dividend distributions were made from the Company’s contributed surplus account which consists of previously paid in share premium transferred to the Company’s share premium account.
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The Company’s subsidiary has a loan agreement with a U.S. based bank for a Revolving Promissory Note (“Revolver”) of MUSD 4.5. Use of proceeds for any borrowings under this Revolver are available for working capital and general corporate purposes. The Revolver is secured by accounts receivable and is expected to be utilized to reduce the Company’s need for liquidity on the balance sheet. There were no borrowings outstanding under the Revolver as of December 31, 2025. CASH FLOW and LIQUIDITY The cash position for the Group increased from MUSD 8.4 as of December 31, 2024, to MUSD 10.4 as of December 31, 2025. For the Norwegian parent company, the cash position decreased from MUSD 1.2 to MUSD 1.1. KEY RISKS and UNCERTAINITIES The Group and the Company are exposed to a number of risk factors when performing its activities, such as market risk, operational risk, credit risk and liquidity risk. Dayrates for land rigs in the US improved significantly during the 2022 and continued to strengthen into Q1 2023. Demand for drilling rigs started to decline in the first half of 2023 in a response to lower natural gas and WTI prices which also resulted in dayrates for high end “super spec” drilling rigs in the Permian starting to soften. This trend in declining rigs continued throughout 2025. Dayrates in the Permian were relatively stable during 2024 and 2025. Mergers and acquisitions among E&Ps also led to lower active rig counts and put pressure on dayrates. The Company’s and the Group’s key risks are comprised to a large extent of (i) global oil demand, (ii) 2026 Iran war, (iii) Russian invasion of Ukraine, (iv) OPEC+ maintaining and complying with appropriate supply targets, (v) operating discipline demonstrated by US E&P operators, (vi) supply and demand activity for US and Permian land rigs, (vii) availability and costs of labor, equipment and rig supplies, (viii) recent tariffs instituted by the United States and (viii) any possible regulatory changes issued by the US government. Global oil and gas prices have been historically and will likely continue to be volatile for the foreseeable future. Global demand and supply of oil; levels of exploration and production by oil and gas companies operating in the United States; worldwide political, regulatory, economic and military events as well as natural disasters have contributed to oil and gas volatility and are likely to continue to do so in the future. The US land drilling market is strongly related to energy prices. Dayrates and utilization levels of the Group’s rigs correlate with the price of oil and natural gas. An increase in oil price requires supply reductions or increases in demand. The Group’s income is the most sensitive factor, and a reduction either in utilization or dayrates compared to budget has clear negative effects on the result. Conversely, higher rates and utilization have very positive effects on our results. The cost level will vary with constraints in the market for input factors. The client risk of the Group varies, and even though the Group targets blue-chip E&P clients with extensive operations, contracts may also be signed with smaller companies to increase utilization of
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the rigs. In such cases, a review of financial statements or payment references is performed to reduce risk of non-payment. Supplier and client risks are also present in the market in which the Group is operating. Even if the Group targets contracts with larger and financially solid partners, the contracts will be subject to uncertainty with regards to the suppliers’ or the clients’ ability to meet their commitments, as they, too, on a general basis also will be subject to market and financial risk. Idle rigs will lead to significant loss of income. In addition, there could be stacking expenses during weak periods of demand for rigs resulting on loss of work. Such expenses are modest in terms of influence on the result. The Group is also exposed to changes in the regulatory and fiscal frameworks in Norway and the USA. BUSINESS OUTLOOK The Group will continue its focus on operating its premium rig fleet and evaluate opportunities to build a larger US presence by further developing our US subsidiary. The foundation has been laid over the years, building strong inhouse drilling competences and safety records, a flat organization with focus on training and motivation of our drilling crews, effective corporate routines and strong client relationships. By growing the Group’s rig fleet from three rigs in 2009 to eleven “Super Spec” rigs, the Group has taken important steps forward to become an important player in the US onshore drilling industry. The Group has an ongoing dialogue with its existing customers as well as potential new customers about rig performance and contracts. The Board emphasizes the importance of modern, efficient rigs and trained personnel as a powerful combination for reaching our drilling, safety and utilization targets and winning new contracts with quality clients. A key driver for financial results in 2026 will ultimately be the continued price development of crude oil and natural gas prices, which are currently extremely volatile as a result of the 2026 Iran war, which impacts capital spending by the US energy producers. Furthermore, recent announcements of tariffs implemented by the United States and OPEC+ announcing plans to increase production could have a significant impact on our financial results in the foreseeable future. Key targets for 2026: • Ensure continued high safety standard in line with our historical performance • Continue to operate our rigs with an industry leading effectiveness and efficiency • Scale our operations and overhead in response to any change in rig activity • Maintain and develop customer relationships to obtain higher dayrates contracts with reputable clients FUTURE DEVELOPMENT
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Utilization outlook All eleven rigs are currently located in the Permian Basin. Our current drilling contract status as of May 29, 2026, is as follows: - Rig 21 – on contract pad-pad - Rig 22 – on contract through August 2026 - Rig 23 – on contract pad-pad - Rig 25 – on contract through August 2026 - Rig 26 – on contract through July 2026 - Rig 27 – on contract through June 2026 - Rig 28 – on contract pad-pad - Rig 29 – on contract pad-pad - Rig 30 – on contract through August 2026 - Rig 32 – on contract pad-pad - Rig 34 – on contract through November 2026 Subject to key risks and uncertainties mentioned in this report, we currently expect continued strong demand for high end “super spec” drilling rigs in the Permian. The Board expects to maintain the Group’s strong safety record. Operating expenses Combined with focus on our rig personnel staffing levels and effectively managing our other daily operating costs we were able to maintain rig operating costs and maintenance capital expenditures during 2025 and in line with our expectations. RESEARCH and DEVELOPMENT ACTIVITIES Neither the Company nor the Group had research and development expenses in 2025. GOING CONCERN The Board considers the Financial Statements for 2025 to represent a true and fair view of the development and results of the Company’s and Group’s operations and accounts as of December 31, 2025. The Board confirms that going concern assumptions are satisfied as to the standards set by the Norwegian Accounting Act and which has formed the basis for the financial statements presented
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herein for the Company and the Group. This is based on the Boards expectations relating to market conditions going forward, with increased payrates and utilization expected to continue to gradually recover over the next few years. WORKING ENVIRONMENT As of December 31, 2025, the Group had an operational organization of 311 people. The Board considers the working environment in the Company and the Group to be good. Management consists of the Chief Executive Officer / Chief Financial Officer and a Chief Operating Officer. Apart from these individuals, the Company uses external advisors for accounting, legal affairs and other professional services. The absentee rate was minimal. There were no significant property damage incidents in 2025. NorAm Drilling AS has no employees during 2025, hence no sick leave. No serious occupational accidents or incidents have been experienced over the year, whether in the parent company or in the subsidiaries. EQUAL OPPORTUNTIES The Group and the Company target to be an employer to promote equality for all employees’ regardless of nationality, sex, skin color, language or religion. This is true for recruiting new people, for salary and bonus schemes, working relations, promotions and protection against harassment. Women will be encouraged to apply for posted available positions to increase the representation of both sexes in the organization. At the end of 2025, the Group had three women employed. There will be no discrimination between men and women regarding recruitment, salaries in relation to position/competence, or promotion, or any other aspect of the Group’s activities. The Group has conducted a high-level salary analysis showing that on average, men have higher salary than women. The main reason for this is that the management group consist of only men, and management level has higher average salary than the employees working on the rigs. Among employees working on the rigs, there is no indication on significant differences in average salary between men and women with the same experience etc. During 2025 the Group has had no involuntary part-time employees, and no persons have been on leave of absence. The NorAm Drilling AS Board of Directors consists of three men. NorAm Drilling Company has the same board as NorAm Drilling AS. EXTERNAL ENVIRONMENT NorAm Drilling AS has limited activity and does not pollute the external environment. The Group undertakes activities that are potentially polluting. The oil and gas well drilling business, by its very
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nature, can, if proper procedures are not followed adversely impact the environment. This can range from blowouts of wells or pollution of the area surrounding the drilling activities. NorAm Drilling takes all reasonable precautions by assuring proper equipment and maintenance and that the rig personnel are all properly trained. Also, NorAm Drilling conducts standard procedures beyond regulations to ensure not to pollute. Other actions taken by NorAm Drilling includes converting engine systems into Dual Gas system, whereby our customers agree, allowing our engines to run on natural gas at a lower cost and generating less pollution. The Company has available and is also evaluating installing additional power converters whereby rigs may be connected to the electrical grid where feasible. This will further reduce emissions. NorAm Drilling has implemented Health, Environment and Safety services to support the company’s activities and the rig crew is trained in Occupational Safety and Health Administration (OSHA) HSE regulations in the US. The focus is to train all site personnel in their daily routines to act safely and to prevent unwanted occurrences with the rigs. NorAm Drilling complies with US state and federal regulations in its activities, including environmental protection regulation. The operator carries the main responsibility regarding the external environment when drilling a well under standard daywork drilling contracts. The Group will publish on our website an updated human rights statement in line with the Norwegian Transparency Act reporting requirements by 30th June 2026. NorAm Drilling has a group insurance policy for the liability of the Company’s and its subsidiaries’ directors and officers. The insurance covers personal legal liabilities including legal costs for defense. The limit of liability is NOK 100 million per claim and in aggregate per year.
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Signature of the Board, May 29, 2026 Ole B. Hjertaker Jan Erik Klepsland Christopher Baker Chairman Board member Board member Marty Jimmerson Chief Executive Officer
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Signature of the Board, May 29, 2026 Ole B. Hjertaker Jan Erik Klepsland Christopher Baker Chairman Board member Board member Marty Jimmerson Chief Executive Officer Docusign Envelope ID: 1B9CBBA1-279F-8217-82C1-D17F499C02AA
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CONSOLIDATED 2025 REPORT NorAm Drilling AS INCOME STATEMENT NorAm Group (Amounts in USD 1,000) 2025 2024 Note Note 2025 2024 - - 2 Sales 2 101,126 103,098 110 110 Other operating income - - 110 110 Total operating income 101,126 103,098 152 176 3 Payroll Expenses 3 33,170 33,543 - - Depreciation of tangible and intangible assets 7 5,909 19,678 - - Rig mobilization, service and supplies 29,561 31,413 - - Insurance rigs and employees 7,595 5,570 643 582 3 Other operating expenses 3 11,064 8,620 795 758 Total operating expenses 87,299 98,826 -686 -648 Operating profit (+) / loss (-) 13,828 4,272 3,152 4,377 4, 9Interest income from group companies 70 71 4 Other interest income 4 309 416 264 103 4 Other financial income 264 103 - - 4 Other interest expenses 4 27 84 184 250 4 Other financial expenses 4 202 254 3,303 4,300 Net financial items 345 180 2,617 3,652 Profit before income tax 14,173 4,452 -784 2,137 5 Income tax expense 5 -641 2,198 3,402 1,515 Net profit 14,813 2,254
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CONSOLIDATED 2025 REPORT NorAm Drilling AS BALANCE SHEET NorAm Group (Amounts in USD 1,000) 2025 2024 Note Note 2025 2024 ASSETS Tangible assets - - Rigs and accessories 7 51,280 55,732 - - Other tangible assets 7 595 569 - - Total tangible assets 51,875 56,301 Financial assets 84,974 84,872 8 Investment in subsidiaries - - 44,464 61,512 9 Loan to group companies - - 129,437 146,384 Total financial assets - - 129,437 146,384 Total Non-current Assets 51,875 56,301 Current assets Receivable - - Accounts receivable 12,244 12,339 0 15 Other receivable 1,775 1,673 0 15 Total receivable 14,020 14,012 Cash and cash equivalent 1,071 1,213 10Bank deposit/cash 10 10,385 8,365 1,071 1,213 Total cash and cash equivalents 10,385 8,365 1,072 1,227 Total current assets 24,404 22,377 130,509 147,611 TOTAL ASSETS 76,279 78,678
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CONSOLIDATED 2025 REPORT NorAm Drilling AS BALANCE SHEET NorAm Group (Amounts in USD 1,000) 2025 2024 Note Note 2025 2024 EQUITY & LIABILITIES Equity Owners equity 12,580 12,569 11Share capital 11 12,580 12,569 69,819 86,538 11Share premium 11 69,819 86,538 439 439 11Other paid in capital 11 369 369 82,838 99,545 Total owners equity 82,768 99,475 Accumulated profits 33,366 29,964 11Other equity 11 -31,191 -46,004 33,366 29,964 Total accumulated profits -31,191 -46,004 116,203 129,509 Total equity 51,577 53,471 Liabilities 2,510 4,887 5Deferred tax 5 2,841 5,234 2,510 4,887 Total deferred tax 2,841 5,234 Current liabilities 12 11 Accounts payable 8,666 3,617 1,592 1,605 5Tax payable 5 1,754 1,781 164 169 Public duties payable 164 169 10,027 11,430 Other current liabilities 11,276 14,406 11,795 13,215 Total current liabilities 21,861 19,973 14,305 18,102 Total liabilities 24,702 25,207 130,509 147,611 TOTAL EQUITY & LIABILITIES 76,279 78,678 Board member Oslo, 29.05.2026 Ole Bjarte Hjertaker Christopher Baker Chairman Board member Jan Erik Klepsland Marty Jimmerson CEO
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CONSOLIDATED 2025 REPORT NorAm Drilling AS BALANCE SHEET NorAm Group (Amounts in USD 1,000) 2025 2024 Note Note 2025 2024 EQUITY & LIABILITIES Equity Owners equity 12,580 12,569 11Share capital 11 12,580 12,569 69,819 86,538 11Share premium 11 69,819 86,538 439 439 11Other paid in capital 11 369 369 82,838 99,545 Total owners equity 82,768 99,475 Accumulated profits 33,366 29,964 11Other equity 11 -31,191 -46,004 33,366 29,964 Total accumulated profits -31,191 -46,004 116,203 129,509 Total equity 51,577 53,471 Liabilities 2,510 4,887 5Deferred tax 5 2,841 5,234 2,510 4,887 Total deferred tax 2,841 5,234 Current liabilities 12 11 Accounts payable 8,666 3,617 1,592 1,605 5Tax payable 5 1,754 1,781 164 169 Public duties payable 164 169 10,027 11,430 Other current liabilities 11,276 14,406 11,795 13,215 Total current liabilities 21,861 19,973 14,305 18,102 Total liabilities 24,702 25,207 130,509 147,611 TOTAL EQUITY & LIABILITIES 76,279 78,678 Ole Bjarte Hjertaker Christopher Baker Chairman Board member Jan Erik Klepsland Marty Jimmerson CEOBoard member Oslo, 29.05.2026 Docusign Envelope ID: 152F82F2-C5DB-83BA-8059-6317A0148166
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CONSOLIDATED 2025 REPORT NorAm Drilling AS STATEMENT OF CASH FLOW NorAm Group (Amounts in USD 1,000) 2025 2024 2025 2024 2,617 3,652 Profit(+)/Loss(-) before income tax 14,173 4,452 - - Tax paid for the period -1,861 -289 - - Depreciation of fixed assets 5,909 19,678 - - Change in accounts receivable 95 -1,042 0 2 Change in accounts payable 5,049 -771 -1,347 210 Change in other current balance sheet items -1,399 -525 1,271 3,864 Net cash flow from operational activities 21,966 21,503 - - Purchase of tangible fixed assets -1,486 -3,365 17,048 18,598 Received payment on loans to group companies - - 17,048 18,598 Net cash flow from investing activities -1,486 -3,365 12 - Issued capital 12 21 -18,471 -21,934 Dividends -18,471 -21,934 -18,459 -21,934 Net cash flow from financing activities -18,459 -21,913 -141 528 Net change in cash and cash equivalent 2,020 -3,775 1,213 684 Cash and cash equivalents opening balance 8,365 12,139 1,071 1,213 Cash and cash equivalents closing balance 10,385 8,365
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NorAm Drilling Group Notes to Financial Statement Note 1 - Accounting Principles The Financial Statements include Income Statement, Balance Sheet, Statement of Cash Flow and Note Disclosures. The Financial Statements have been prepared in accordance with the Norwegian AccounAng Act and generally accepted accounAng principles in Norway. The Financial Statements are based on the basic principles, and the classificaAon of Assets and LiabiliAes is according to the definiAons of the Norwegian AccounAng Act. In applicaAon of the accounAng principles and presentaAon of transacAons and other informaAon, emphasis has been put not only on legal form, but on economic reality. CondiAonal losses that are probable and quanAfiable are expensed. There have been no changes in the accounAng principles used. 1-1 Basis for consolida/on The Group’s consolidated financial statements comprise of NorAm Drilling AS and NorAm Drilling Company which NorAm Drilling AS has a controlling interest. A controlling interest is normally obtained when the Group owns more than 50% of the shares in the company and can exercise control over the company. Minority interests are included in the Group’s equity. TransacAons between Group companies have been eliminated in the consolidated financial statement. The consolidated financial statement has been prepared in accordance with the same accounAng principles for both parent and subsidiary. 1-2 Use of es/mates Management has used esAmates and assumpAons that have affected assets, liabiliAes, incomes, expenses and informaAon on potenAal liabiliAes in accordance with Norwegian generally accepted accounAng principles. 1-3 Foreign currency transla/on TransacAons in foreign currency are translated at the rate applicable on the transacAon date. Monetary items in a foreign currency are translated into USD using the exchange rate applicable on the balance sheet date. Non-monetary items that are measured at their historical price expressed in a foreign currency are translated into USD using the exchange rate applicable on the transacAon date. Non- monetary items that are measured at their fair value expressed in a foreign currency are translated at the exchange rate applicable on the balance sheet date. Changes to exchange rates are recognized in the income statement as they occur during the accounAng period. 1-4 Revenue recogni/on and opera/onal costs Income from sale of goods and services are recognised at fair value of the consideraAon, net aQer deducAon of VAT, returns, discounts and reducAons. Sales are taken to income when the company has delivered its products to the customer and there are no unsaAsfied commitments which may influence the customer's acceptance of the product. Delivery is not completed unAl the products have been sent to the agreed place, and risks relaAng to loss and obsolescence have been transferred to the customer. NorAm Drilling Group revenue relates to rental of rig capacity and sale of drilling services from the US based subsidiary NorAm Drilling Company. Sales regarding rental of rig is invoiced and booked in line with actual contract and the period of delivering the services, while drilling services are invoiced and booked in the same period as the services has been provided.
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NorAm Drilling Group Notes to Financial Statement Note 1 - Accounting Principles 1-5 Income tax The tax expense consists of the tax payable and changes to deferred tax. Deferred tax/tax assets are calculated on all differences between the book value and tax value of assets and liabili=es. Deferred tax is calculated as 22%/21% (Norway/USA) of temporary differences and losses carried forward. Deferred tax assets are recorded in the balance sheet when it is more likely than not that the tax assets will be u=lized. Taxes payable and deferred taxes are recognized directly in equity to the extent that they relate to equity transac=ons. Temporary differences in jurisdic=ons with other currency than USD, is calculated using local currency and converted to USD at foreign exchange rate at the balance sheet. 1-6 Balance sheet classifica5on Current assets and current liabili=es consist of receivables and payables due within one year, and items connected to the flow of goods. Other balance sheet items are classified as non-current assets / non- current liabili=es. Current assets are valued at the lower of cost and fair value. Current liabili=es are recognized at nominal value at the =me they incur. Fixed assets are valued at cost, less deprecia=on and impairment losses. Non-current liabili=es are recognized at nominal value. 1-7 Property, plant and equipment Property, plant and equipment are capitalized and depreciated over the es=mated useful life. Costs for maintenance are expensed as incurred, whereas costs for improving and upgrading property, plant and equipment are added to the acquisi=on cost and depreciated with the related asset. If carrying value of a non-current asset exceeds the es=mated recoverable amount, the asset is wriTen down to the recoverable amount. The recoverable amount is the greater of the net realizable value and value in use. In assessing value in use, the discounted es=mated future cash flows from the asset are used. Opera=onal leasing is expensed as ordinary rental expense and classified as an ordinary opera=ng expense. Equipment leased on terms that transfer prac=cally all economic rights and obliga=ons to the company (financial leasing) is depreciated as a capital asset, and is included as a liability under interest bearing debt at the present value of minimum rental expense. 1-8 Subsidiaries Subsidiaries are valued at cost in the company accounts. The investment is valued as cost of the shares in the subsidiary, less any impairment losses. An impairment loss is recognized if the impairment is not considered temporary, in accordance with generally accepted accoun=ng principles. Impairment losses are reversed if the reason for the impairment loss disappears in a later period. Dividends, group contribu=ons and other distribu=ons are recognized in the same year as they are recognized in the subsidiary financial statement. If dividends / group contribu=on exceed withheld profits aVer acquisi=on, the excess amount represents repayment of invested capital, and the distribu=on will be deducted from the recorded value of the investment in the balance sheet for the parent company.
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NorAm Drilling Group Notes to Financial Statement Note 1 - Accounting Principles 1-9 Accounts receivable and other receivables Accounts receivable and other current receivables are recorded in the balance sheet at nominal value less provisions for doub5ul accounts. Provisions for doub5ul accounts are based on an individual assessment of the different receivables. For the remaining receivables, a general provision is es<mated based on expected loss. 1-10 Pension obliga8ons and expenses NorAm Drilling Company has a contribu<on-based pension plan. Payments to the pension company are expensed as pension costs. 1-11 Cash Flow Statement The cash flow statement has been prepared according to the indirect method. Cash and cash equivalents include cash, bank deposits, and other short-term investments which immediately and with minimal exchange risk can be converted into known cash amounts, with due date less than three months from purchase date. 1-12 Func8onal Currency and Presenta8onal Currency Func<onal and presenta<on currency is for NorAm Drilling Company AS and the NorAm Drilling Group is USD. This is based on the following ra<onale; NorAm Drilling Company AS All significant P/L transac<ons is denominated in USD (Interest income from group companies, Other Interest Expenses) All significant Balance Sheet items is denominated in USD (Loan to group companies, Accounts Receivables and Cash) NorAm Drilling Group All significant P/L transac<ons is denominated in USD (Sales, Payroll, Opera<ng expenses from US subsidiary and Other interest expenses) All significant Balance Sheet items is denominated in USD (Fixed assets, Accounts Receivables, Cash, Accounts Payable and Other Current Liabili<es)
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NorAm Drilling GroupNotes to Financial Statement Note 2 – Segment and Geographic Information2025(USD) Noram Drilling ASNorAm Drilling CompanyGroup Sales income from third parties - 101,126,205 101,126,205 Sales income from other segments 109,688 - - Depreciation - 5,909,075 5,909,075 Other operating expenses 795,346 80,594,226 81,389,572 Operating profit -685,658 14,622,905 13,827,559 Financial expenses 183,875 44,290 228,165 Financial expenses other segments -3,152,179 3,152,179 - Financial income 334,848 238,460 573,309 Net financial items 3,303,153 -2,958,009 345,144 Taxes -784,186 143,626 -640,561 Non Current Assets 129,437,334 51,875,024 51,875,024 Interest bearing debt other segments - 44,463,805 - 2024(USD) Noram Drilling ASNorAm Drilling CompanyGroup Sales income from third parties - 103,098,007 103,098,007 Sales income from other segments 109,688 - - Depreciation - 19,678,450 19,678,450 Other operating expenses 757,553 78,389,745 79,147,298 Operating profit -647,865 5,029,812 4,272,259 Financial expenses 250,099 88,023 338,122 Financial expenses other segments -4,376,583 4,376,583 - Financial income 173,549 344,676 518,225 Net financial items 4,300,033 -4,119,930 180,103 Taxes 2,137,325 60,945 2,198,270 Non Current Assets 146,383,635 56,301,267 56,301,267 Interest bearing debt other segments - 61,511,626 - Note 3 - Payroll expenses / Number of Employees / Remuneration/ Auditor’s Fee Payroll expenses etc. (in USD) NorAm Drilling AS GroupNorAm Drilling AS Group Salaries 38,551 29,917,205 37,258 30,811,892 Payroll tax/Social Security 19,526 2,357,416 11,867 2,413,484 Pension costs - - - - Other benefits 92,945 499,927 126,715 318,057 Payroll expenses etc. 151,022 32,774,548 175,840 33,543,433 Number of man-labour years 0 366 0 359 Management Remuneration - Noram Drilling AS(USD) 2024Company officers Period Salaries PensionsOther benefits Total TotalMarty Jimmerson* 01.01 - 31.12 495,157 - - 495,157 525,045 Board Period Salaries PensionsOther benefits Total TotalOle Bjarte Hjertaker (Board member/Chairman)01.01 - 31.12 19,276 - - 19,276 18,629 Christopher Baker (Board member) 01.01 - 31.12 19,693 - - 19,693 18,500 Jan Erik Klepsland (Board member)***01.01 - 31.12 19,276 - - 19,276 18,629 Total Officers 495,157 - - 495,157 525,045 Total Board 58,245 - - 58,245 55,758 Total Remuneration Board and Management 553,402 - - 553,402 580,803 *Marty Jimmerson received salary from US subsidiary Noram Drilling Company. The Salaries include bonus payments. CEO Marty Jimmerson has a 1 year rolling employment agreement. In addition to a base salary he is also entitled to a bonus subject to the company's performance. Mr. Jimmerson is entitled to (i) one-year base salary; (ii) annual cash bonus up to 33% of annual salary and (iii) group health coverage benefits for up to 18 months in the event of a change in controlif his employment contract is terminated for anything other than cause. The CEO is also entitled to a 3-month notice period prior to termination. 2025 2024 2025 ** See discussion further below in this Note on the next page regarding vested options for the Board and Management. No loans or securities have been given to the CEO, directors or shareholders except for during the year ended 2025 and 2024, loans amounting to $11.7k and $20.7k, respectively, were issued to an employee, which was settled before both year-end(s).
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NorAm Drilling GroupNotes to Financial Statement Management Remuneration - Group(USD) 2024Company officers Salary Pension costs Other Total TotalNoram Drilling AS - - - - - Subsidiaries 495,157 - - 495,157 525,045 BoardNoram Drilling AS 58,245 - - 58,245 55,758 Subsidiaries - - - - - Total Officers 495,157 - - 495,157 525,045 Total Board 58,245 - - 58,245 55,758 553,402 - - 553,402 580,803 Noram Drilling AS Share-Based Payment Recognized cost in 2025 and 2024 relating the share options are USD 195 463 and 193 254, respectively. Historical details for the option plans are as follows: OptionsWeighted Average Exercise Price (NOK) *Options Weighted Average Exercise Price (NOK) * 450,000 26.22 550,000 23.09 Granted 700,000 26.90 Exercised (50,000) 9.00 (100,000) 9.00 TerminatedForfeitedExpiredOutstanding at the end of period 1,100,000 27.44 450,000 26.22 Vested options 400,000 7.12 266,668 28.38 *Weighted average exercise price (NOK) excludes accrued dividends. Auditors remuneration (USD, excl. MVA (VAT)) NorAm Drilling AS GroupNorAm Drilling AS Group Ordinary audit 88,019 88,019 82,962 82,962 Other confirmation services 1,495 1,495 1,378 1,378 Tax advisory services 2,737 2,737 6,185 6,185 Other non audit services 38,984 38,984 13,527 13,527 Total 131,236 131,236 104,052 104,052 The ordinary audit expense includes fees for auditing the US subsidiary for the Group consolidated accounts. The strike price for all granted options shall be reduced by any declared and paid dividends. In 2025 and 2024, the company declared and paid aggregate dividends of NOK 4 and 5 per share, respectively. 2025 2024 Remuneration Board and Management(excl. Share based) Outstanding at the beginning of period 01.01.2025 - 31.12.2025 01.01.2024 - 31.12.2024 2025 On 28 February 2022, Marty Jimmerson and Thomas Taylor were granted 150 000 options each. The grant was Equity Based and vest equally on 28 February, 2023, 2024 and 2025. The grant expires on 28 February 2027. On 24 July 2024, Thomas Taylor, the Company's Chief Operating Officer, exercised 100,000 stock options. Due to prior cash distribution adjustments, the strike price per share option was negative NOK 5.6412. To account for the negative share price, the company settled the net difference in additional 14,103 shares based upon its market value by applying the volume weighted average price of NOK 40.0004 on 24 July 2024. On 10 March 2025, Thomas Taylor also exercised 50,000 stock options. Due to prior cash distribution adjustments, the strike price per share option was negative NOK 8.7212. To account for the negative share price, the company settled the net difference in additional 12,861 shares based upon its market value by applying the volume weighted average price of NOK 33.9053 on 10 March 2025.The initial strike price for both Jimmerson and Taylor was NOK 9. Including accrued dividends as of 31 December 2025, Jimmerson has a total of 150,000 stock options with an adjusted strike price of negative NOK 12.51. Fair value of granted options is calculated using the Black-Scholes-Merton option pricing model. The options strike price will be adjusted by paid dividends. On 1 September 2022, each Director and certain members of management were granted a total of 300 000 options. 50 000 options were forfeited in 2023. The grant was Equity Based and vest equally on 1 September, 2023, 2024 and 2025. The grant expires on 01.09.27. The initial strike price was NOK 40. Including accrued dividends as of 31 December 2025, stock options issued to each Board of Director and certain members of management have an adjusted strike price of NOK 19. Fair value of granted options is calculated using the Black-Scholes-Merton option pricing model. The options strike price will be adjusted by paid dividends. As of 31 December 2025, Ole Hjertaker and Chris Baker hold 100 000 and 50 000 stock options, respectively. On 25 August 2025, each Director and certain members of management were granted a total of 700 000 options. The grant was Equity Based and vest equally on 25 August, 2026, 2027 and 2028. The grant expires on 25 August 2030. The initial strike price was NOK 27. Including accrued dividends as of 31 December 2025, stock options issued to each Board of Director and certain members of management have an adjusted strike price of NOK 26.90. Fair value of granted options is calculated using the Black-Scholes-Merton option pricing model. The options strike price will be adjusted by paid dividends. As of 31 December 2025, Marty Jimmerson, Ole Hjertaker, Jan Erik Klepsland and Chris Baker hold 170 000, 80 000, 50 000 and 50 000 stock options, respectively.
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NorAm Drilling GroupNotes to Financial Statement Note 4 Net Financial Items NorAm Drilling AS GroupNorAm Drilling AS Group Financial incomeInterest income from group companies 3,152,179 - 4,376,583 - Other interest incomeInterest income bank 70,449 308,910 70,962 415,638 Other financial incomeCurrency gains 264,399 264,399 102,587 102,587 Total financial income 3,487,028 573,309 4,550,132 518,225 Financial expensesOther interest expensesOther interest expenses - 26,648 - 84,346 Other financial expensesCurrency losses 183,875 201,517 250,099 253,776 Total Financial expenses 183,875 228,165 250,099 338,122 Net financial items 3,303,153 345,144 4,300,033 180,103 Note 5 - Tax (USD) NorAm Drilling AS GroupNorAm Drilling ASGroupTax base calculationProfit (+)/ Loss (-) before income tax 2,617,495 14,172,703 3,652,167 4,452,362 Permanent differences -6,175,784 -4,900,416 7,133,628 8,331,370 Temporary differences 11,187,341 10,284,039 -2,540,457 9,983,482 Tax base 7,629,052 19,556,326 8,245,339 22,767,215 NOL Utilization -390,454 -12,317,479 -950,629 -15,519,334 Tax base after NOL Utilization 7,238,598 7,238,847 7,294,710 7,247,881 Income tax payable 1,592,492 1,592,492 1,604,836 1,604,836 Sales tax - 161,513 - 181,145 Tax Payable this year 1,592,492 1,754,005 1,604,836 1,785,981 Income Tax Expense:Tax Payable this year 1,592,492 1,754,005 1,604,836 1,785,981 Changes in deferred tax -2,376,679 -2,392,366 472,761 352,561 Correction to prior years - -2,199 59,727 59,727 Total Income Tax Expense -784,186 -640,561 2,137,324 2,198,269 Total Income Tax Expense in P&L -784,186 -640,561 2,137,324 2,198,269 Income Tax Payable:Income Tax Payable this year 1,592,492 1,754,005 1,604,836 1,785,981 Total Income Tax Payable 1,592,492 1,754,005 1,604,836 1,785,981 Specification of Basis for Deferred Tax Asset:Differences to be balancedFixed assets -8,289 45,457,647 -10,402 47,941,422 Non-current receivables/debt in foreign exchange 6,826,926 6,826,926 16,817,780 16,817,780 Deferred gain carried forward 4,627,571 4,627,571 5,807,552 5,807,552 Other differences -36,103 -36,103 -24,080 -1,868,755 Total temporary differences 11,410,105 56,876,042 22,590,849 68,697,998 NOL's carried forward - -84,114,641 - -96,041,662 Interest limitation carried forward - -29,940,804 -377,657 -33,740,925 Basis for calculation of deferred tax asset/liability 11,410,104 -57,179,403 22,213,192 -61,084,588 Deferred tax asset (-) /liability (+) 2,510,223 -13,212,598 4,886,902 -13,703,658 Valuation allowance - 16,053,811 - 18,937,236 Deferred tax asset (-) /liability (+) after valuation allowance 2,510,223 2,841,213 4,886,902 5,233,578 Deferred tax asset (-) /liability (+) in balance sheet 2,510,223 2,841,213 4,886,902 5,233,578 Deferred tax/tax asset not recorded in balance - 16,053,811 - 18,937,236 Deferred tax/ deferred tax assetEstimated deferred tax asset in subsidiary NorAm Drilling Company is not recorded in the balance sheet due to uncertainty related to valuation of this asset. 2025 2024 20242025
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NorAm Drilling GroupNotes to Financial Statement Note 6 - Earnings per share (USD) NorAm Drilling AS GroupNorAm Drilling AS Group Result after income tax 3,401,681 14,813,264 1,514,842 2,254,092 Weighted number of shares 43,304,602 43,304,602 43,190,874 43,190,874 Options 1,100,000 1,100,000 450,000 450,000 EPS 0.08 0.34 0.04 0.05 Diluted EPS (incl. Options) 0.08 0.33 0.03 0.05 Note 7 Tangible assets Group Rigs and rig related accessoriesVehicles and Office Equipment Total Acquisition cost at 01.01 210,660,396 3,289,393 213,949,789 Additions 1,132,642 353,640 1,486,283 Disposals - - - Acquisition cost at 31.12 211,793,039 3,643,033 215,436,072 Accumulated depreciation 31.12 160,512,849 3,048,198 163,561,047 Net carrying value at 31.12 51,280,190 594,835 51,875,025 Depreciation for the year 5,584,766 324,309 5,909,075 Impairment loss for the year - - The useful economic life is estimated to be 10 years 3-5 years The group use linear depreciation for all tangible assets Impairment trigger analysis and impairment assessment on tangible assets Note 8 Shares in Subsidiaries (USD) Company Book value SharesShare of voting rightsEquity 2025 Result 2025Main Office NorAm Drilling Company 84,973,529 100% 100% 20,347,416 11,411,583 Houston Impairment trigger analysis and impairment assessment for investments in subsidiaries Note 9 Intercompany Balances (USD) 2025 2024 Noram Drilling AS Loan to NorAm Drilling Company (subsidiary) 44,463,805 61,511,626 Loan from NorAm Drilling Company (subsidiary) Accounts payable to NorAm Drilling Company (subsidiary) 11,548 11,155 NorAm Drilling AS receivables from NorAm Drilling Company (subsidiary) - - Property, plant and equipment(USD) 20242025 No impairment indicators have been identified. The overall market where the rigs operate has been stable and no changes in expected use have occurred. Accordingly, no impairment test has been performed as a result of no impairment indicators being identified. No impairment indicators have been identified. Recoverable amount of investment in shares is sensitive to changes in key assumptions, such as expected future dayrates and utilization. Given the magnitude of the carrying amount, management remains attentive to any changes in such assumptions. The overall market where the rigs operate has been stable and no changes in expected use have occurred. Effective 1 January 2025, the Company evaluated and changed the remaining estimated useful life to 10 years on the remaining carrying values of its Rig and Rig related accessories. The revision reflects a reassessment of the condition and standard of the rigs and related equipment, as well as their operational and historical performance, which together indicate that the assets are expected to generate economic benefits over a longer period than previously estimated. The change in estimate has been accounted for prospectively, whereby the carrying amount at the date of change is depreciated over the revised remaining useful life (the “break-point” approach). Vehicles and office equipment have estimated useful lifes for accounting purposes of 3-5 years. Depreciation in 2025 was 5,909,075 compared to 19,678,450 in 2024
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NorAm Drilling GroupNotes to Financial Statement Note 10 - Restricted bank accounts (USD) Noram Drilling AS GroupNoram Drilling AS Group Employees tax deduction, deposited in a separate bank account 2,995 2,995 2,843 2,843 Certificate of deposit securing letter of credit - 226,406 - - Secure deposit office leasing and credit cards - 54,246 - 24,590 Total 2,995 283,647 2,843 27,433 Note 11 - Equity and Shareholder Information Share Capital Noram Drilling AS and the Group No. of sharesFace value NOKBook value NOKNo. of sharesFace value NOKBook value NOKOrdinary shares 43,317,957 2.00 86,635,914 43,255,096 2.00 86,510,192 Total 43,317,957 86,635,914 43,255,096 86,510,192 Equity (USD) ShareCapital SharePremium Other paid in capital OtherEquity Total Equity 31.12.2024 12,568,524 86,537,857 438,907 29,963,865 129,509,153 Profit (+)/Loss (-) 3,401,682 3,401,682 Dividends paid -18,471,219 -18,471,219 Change in dividends payable 1,556,604 1,556,604 Stock Options 195,464 195,464 Issued Capital 11,781 11,781 Equity 31.12.2025 12,580,305 69,818,706 438,907 33,365,547 116,203,465 EquityGroup ShareCapital SharePremium Other Equity Contributed OtherEquity Total Equity 31.12.2024 12,568,524 86,537,856 369,053 -46,004,015 53,471,419 Profit (+)/Loss (-) 14,813,264 14,813,264 Dividends paid -18,471,219 -18,471,219 Change in dividends payable 1,556,604 1,556,604 Stock Options 195,464 195,464 Issued Capital 11,781 - 11,781 Equity 31.12.2025 12,580,305 69,818,705 369,053 -31,190,751 51,577,312 The company declared and paid dividends of MUSD 7.2 subsequent to December 31, 2025 through the date of the issuance of this report. 10 Largest Shareholders as per 31.12.2025 Number of sharesShare (%):Geveran Trading Ltd 20,818,658 48.1 %Nordnet Livforsikring AS 1,788,159 4.1 %SFL Corporation Ltd 1,266,225 2.9 %Avanza Bank AB 973,756 2.2 %Clearstream Banking S.A. 944,016 2.2 %The Bank of New York Mellon 860,489 2.0 % Euroclear Bank S.A./N.V. 749,758 1.7 %Morgan Stanley & Co LLC 677,120 1.6 %US Bank National Association 601,496 1.4 %Nordnet Bank AB 577,708 1.3 %Other 14,060,572 32.5 %Total 43,317,957 100% Noram Drilling AS and Group 2025 Noram Drilling AS 2025 2024 2024
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NorAm Drilling GroupNotes to Financial Statement Note 12 Liabilities (USD) NorAm Drilling AS GroupNorAm Drilling AS Group Long term liabilities with maturity before 5 yearsBond - - - - Other long term liabilities - - - - Total - - - - Loan to Group Companies Revolving Promissory Note Definitions: The Group complied with the financial covenants as of 31.12.2025. Note 13 – Subsequent events Market & Activities The company declared and paid dividends of MUSD 7.2 subsequent to December 31, 2025 through the date of the issuance of this report. As of May 27, 2026, the US land drilling active rig count and Permian rig count was 536 and 250, respectively. As of December 31, 2025, the US land drilling active rig count and Permian rig count was 527 and 247, respectively. In comparison, as of December 31, 2024, the US land drilling active rig count and Permian rig count was 573 and 304, respectively. We currently have all of our eleven rigs under contract. 2025 2024 E&P acquisition announcements could continue to influence dayrates and rig counts. Despite the recent volatilty from the Iran war, major E&P operators remain focused on maintaining current production levels and with drilling but uncompleted (DUCs) wells at decade lows in the Permian basin, we believe “super spec” rigs will remain in high demand in the Permian basin and see increasing incoming interest for rigs later in 2025. EBITDA - Borrower's combined earnings before interest expense, income taxes, depreciation and amortization. Based upon current commodity prices, uncertainty regarding the Iran war and discussions with operators, we continue to believe most major E&Ps are currently maintaining their original 2026 cap ex plans while some private operators are increasing their cap ex plans. We believe the majority of any additional rig additions in the Permian will likely occur in the 2H of 2026 primarily as a result of a lack of supply of available hot stacked and fully crewed rigs. WTI began 2025 around $72 per barrel and finished 2025 near $58 per barrel. WTI reached a high of $78 per barrel in January 2025 and a low of $57 per barrel in December 2025. WTI increased steadily to $67 through 28 February 2026 when the 2026 Iran war commenced. WTI has continued to be volatile based upon uncertainties regarding the Iran war and traded as high of $133. WTI currently trading around $90. Debt Service Coverage Ratio - Borrower will maintain, as of the last day of each fiscal year, a ratio of (a) net income after taxes plus depreciation, amortization and other non-cash expenses, less any distributions during such fiscal year, to (b) current maturities of long-term debt and long-term leases of not less than 1.2 to 1.0. Minimum Liquidity - maintain, as of the last day of each quarter, Liquidity of at least MUSD 5.0. Liquidity means total market value of Unencumbered Liquid Assets. Unencumbered Liquid Assets means assets owned by Borrower which are not subject to any lien (other than a lien in favor of Lender): (1) cash or cash equivalents held in the United States; and (ii) funds available to be advanced under the note. Debt to EBITDA Ratio - Borrower will maintain, as of the last day of each fiscal year, a ratio of (a) Debt to (b) EBITDA of not more than 2.0 to 1.0. Notes Payable and other debt payable to NorAm Drilling AS will not be included as "Debt". Distributions - mean all dividends and other distributions made by Borrower to its shareholder. Outlook The Company’s subsidiary ("Borrower")has a Loan agreement with a U.S. based bank that provides for a Revolving Promissory Note (“Revolver”) of MUSD 4.5. Use of proceeds for any borrowings under this Revolver are available for working capital and general corporate purposes based upon a borrowing base calculation equal to 70% of eligible accounts. Financial covenants include (i) a debt service coverage ratio of not less than 1.2 to 1; (ii) Minimum liquidity requirement of MUSD 5.0 and (iii) a debt to EBITDA ratio of not more than 2.0 to 1.0. The Revolver is secured by accounts receivable and expected to be utilized to reduce the required level of liquidity on our balance sheet. NorAm Drilling AS has a loan outstanding from its wholly owned subsidiary NorAm Drilling Company. A total of MUSD 44.5 and MUSD 61.5 was outstanding as of 31 December 2025 and 2024, respectively.
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KPMG AS Kanalveien 11 P.O. Box 4 Kristianborg N-5822 Bergen Telephone +47 45 40 40 63 Internet www.kpmg.no Enterprise 935 174 627 MVA To the General Meeting of NorAm Drilling AS Independent Auditor’s Report Opinion We have audited the financial statements of NorAm Drilling AS, which comprise: • the financial statements of the parent company NorAm Drilling AS (the Company), which comprise the balance sheet as at 31 December 2025, the income statement and cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and • the consolidated financial statements of NorAm Drilling AS and its subsidiaries (the Group), which comprise the balance sheet as at 31 December 2025, the income statement and cash flow statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion • the financial statements comply with applicable statutory requirements, • the financial statements give a true and fair view of the financial position of the Company as at 31 December 2025, and its financial performance and its cash flows for the year then ended in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and • the consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2025, and its financial performance and its cash flows for the year then ended in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Penneo document key: S0ZOF-M88I5-E1J3A-OEULM-GR234-O0HBS
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Other Information The Board of Directors and the Managing Director (management) are responsible for the information in the Board of Directors’ report. The other information comprises information in the annual report, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the information in the Board of Directors’ report. In connection with our audit of the financial statements, our responsibility is to read the Board of Directors’ report. The purpose is to consider if there is material inconsistency between the Board of Directors’ report and the financial statements or our knowledge obtained in the audit, or whether the Board of Directors’ report otherwise appears to be materially misstated. We are required to report if there is a material misstatement in the Board of Directors’ report. We have nothing to report in this regard. Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report • is consistent with the financial statements and • contains the information required by applicable statutory requirements. Responsibilities of Management for the Financial Statements Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’s an d the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern. The financial statements use the going concern basis of accounting insofar as it is not likely that the enterprise will cease operations. Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error. We design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a b asis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's and the Group's internal control. • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. • conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's a nd the Group's ability to continue as a going concern. If we conclude that a material uncertainty Penneo document key: S0ZOF-M88I5-E1J3A-OEULM-GR234-O0HBS
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exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company and the Group to cease to continue as a going concern. • evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves a true and fair view. • obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Bergen, 29 May 2026 KPMG AS Bjart Roger Vie State Authorised Public Accountant (This document is signed electronically) Penneo document key: S0ZOF-M88I5-E1J3A-OEULM-GR234-O0HBS
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