Interim report
Page 1
INTERIM FINANCIAL INFORMATION NORAM DRILLING AS SECOND QUARTER 2026
Page 2
Oslo, Norway, August 25, 2026. NorAm Drilling AS (the “Company” or “NorAm”), today reported unaudited results for the three and six months ended June 30, 2026: HIGHLIGHTS • Reported Revenues of MUSD 29.4 • Adjusted EBITDA(1) of MUSD 6.3 • Fleet utilization of 98.6% • Current revenue backlog of MUSD 30.3 Marty L. Jimmerson, Chief Executive Officer of NorAm Drilling AS commented: During the second quarter, our financial results improved with revenue increasing 12.3% sequentially as all 11 of our rigs remained under contract and operational throughout the period. This came against a market backdrop of increasing activity in our core basin. Permian rig counts increased 17 during the quarter to 258 driven primarily by private E&Ps. WTI prices continued to be volatile as a result of the Iran war, however, the increase in WTI prices subsequent to quarter end has led to more inquiries for available rigs. With our industry-low cost base and zero debt, we continue to return capital to shareholders despite volatile market conditions, demonstrating the strength of our unique model. We paid MUSD 4.9 or NOK 1.08 per share in monthly dividends during the second quarter and have declared two additional dividends after quarter end. Our rigs continue to rank among the very top performers in the U.S shale market measured in feet drilled per day and we believe NorAm’s rigs should be well positioned to benefit from any further market recovery. (1) Adjusted EBITDA is defined as earnings before interest, tax, depreciation and amortization plus non-cash stock option expense.
Page 3
BUSINESS SUMMARY 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. NorAm’s 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. As of the date of this report, 100% of the Company’s rigs are contracted and working. Our contracts currently range from multiple well pads (typically 2-3 month intervals per pad) up to 12-month terms. OPERATIONS During 2Q 2026, NorAm achieved a 98.6% utilization compared to 90.3% utilization in 1Q 2026. Rig operating costs were modestly higher in 2Q 2026 compared to the prior quarter as a result of higher reimbursables. We have low general and administrative costs and maintenance capital expenditures and believe this continues to provide us with the lowest cash break even per operating day in the industry. FINANCIALS NorAm had revenue of MUSD 29.4 during 2Q 2026 compared to MUSD 26.2 during 1Q 2026. The increase in revenue is primarily attributable to higher utilization and increased reimbursables. We generated an operating profit of MUSD 4.8 in 2Q 2026 compared to an operating profit of MUSD 3.0 in 1Q 2026. The increase in operating profit is attributable to higher utilization. We generated Adjusted EBITDA of MUSD 6.3 in 2Q 2026 compared to MUSD 4.5 in 1Q 2026. Net cashflow from operational activities was MUSD 8.4 for the six months ended June 30, 2026 compared to MUSD 10.7 for the six months ended June 30, 2025. Capital expenditures were MUSD 0.8 in 2Q 2026 and MUSD 1.9 for the six months ended June 30, 2026. The Company is debt free, and we paid MUSD 4.9 or NOK 1.08 per share in monthly dividends to our shareholders in the second quarter of 2026. For the six months ended June 30, 2026, we paid MUSD 8.9 or NOK 1.96 per share in monthly dividends. 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. The Company intends to continue paying future dividends based upon free cash flow and maintaining minimum available liquidity of approximately MUSD 11.0. The Company has MUSD 4.5 available under a Revolving Promissory Note (“Revolver”) with a U.S. based bank for working capital and general corporate purposes. There were no borrowings outstanding under the Revolver as of June 30, 2026.
Page 4
MARKET TRENDS AND OUTLOOK WTI began the first quarter trading around $58 per barrel, rising steadily to $67 through February 28, 2026, when the Iran war commenced. WTI has continued to be volatile based upon the uncertainties surrounding the war, trading as high as $113. WTI began the second quarter at $111 and finished the quarter trading at $68 on the prospects of a possible resolution to the Iran war. Subsequent to quarter end, the war in Iran has resumed and WTI is currently trading at $82 per barrel as of August 25, 2026. During the second quarter, US land rig counts increased by 31 to 561 rigs and Permian land rigs increased by 17 to 258 rigs. US land rig counts and Permian land rigs are currently 576 and 267, respectively. Based on current commodity prices, the ongoing uncertainty surrounding the Iran war, and discussions with operators, we continue to believe most major E&Ps are maintaining their original 2026 capital expenditure plans while some private operators are increasing theirs. As a result of the increase in WTI subsequent to the second quarter, we have witnessed an increase in inquiries for available rigs, primarily from private E&Ps. Uncertainties surrounding the Iran war and broader global and domestic conditions are expected to keep commodity prices volatile in the near term. We expect rig counts, dayrates and contract terms, especially in the Permian, to remain stable in the coming months. Any significant increase in demand for rigs in the US and the Permian Basin could support higher dayrates upon contract renewals. This further leads us to be optimistic longer term, especially for “super spec” rigs which we expect to remain in high demand in the Permian basin.
Page 5
Unaudited Condensed consolidated Income Statement June 2026June 2025 June 2026June 2025 (All amounts in USD 1000s) Revenue/Expense Sales 29,398 24,940 55,582 50,727 Other Income Total Operating Income 29,398 24,940 55,582 50,727 Payroll Expenses 9,516 8,366 18,331 17,026 Depreciation of Tangible and Intangible Assets1,414 1,466 2,880 2,919 Rig Mobilization, Service and Supplies 7,849 7,244 15,766 13,917 Insurance Rigs and Employees 2,157 1,894 4,165 3,770 Other Operating Expenses 3,646 2,172 6,652 4,093 Total Operating Expenses 24,582 21,142 47,795 41,726 Operating Profit (+)/ Loss (-) 4,816 3,798 7,788 9,001 Financial Income and Expenses Other Interest Income 36 71 80 133 Other Financial Income -25 90 38 248 Other Interest Expenses 19 5 19 27 Other Financial Expenses 16 105 27 154 Net Financial Items -24 51 73 201 Profit (+)/Loss(-) before Income Tax 4,792 3,849 7,861 9,201 Income Tax Expense 581 198 1,081 398 Net Profit (+)/Loss (-) 4,211 3,651 6,780 8,804 Quarter Ended Six Months Ended
Page 6
Unaudited Condensed consolidated Balance Sheet Notes June 2026Dec 2025 (All amounts in USD 1000s) Assets Tangible Assets Rigs and Accessories 1 50,526 51,280 Vehicles and Office Equipment 1 395 595 Total Tangible Assets 50,921 51,875 Current Assets Receivable Accounts Receivable 14,325 12,244 Prepaid Expenses and Other Current Assets 3,118 1,775 Total Receivable and Other 17,442 14,020 Cash and Cash Equivalents Bank Deposits/Cash 8,105 10,385 Total Current Assets 25,547 24,404 Total Assets 76,468 76,279
Page 7
Unaudited Condensed consolidated Balance Sheet Notes June 2026Dec 2025 (All amounts in USD 1000s) Equity Owners Equity Issued Capital 2 12,589 12,580 Share Premium 2 68,402 69,819 Other Shareholder Contribution 2 369 369 Total Owners Equity 81,360 82,768 Accumulated Profits Other Equity 2 -24,411-31,191 Total Accumulated Profits -24,411-31,191 Total Equity 56,949 51,577 Liabilities Deferred Tax 2,841 2,841 Total deferred tax 2,841 2,841 Current Liabilities Accounts Payable 7,038 8,666 Tax Payable 932 1,754 Public Duties Payable 137 164 Other Current Liabilities 8,570 11,276 Total Current Liabilities 16,678 21,861 Total Liabilities 19,519 24,702 Total Equity & Liabilities 76,468 76,279
Page 8
Unaudited Condensed Consolidated Statement of Cash Flow June 2026June 2025 (All amounts in USD 1000s) Net Profit (+)/Loss (-) 7,861 9,201 Tax paid -1,739 -1,861 Depreciation of fixed assets 2,880 2,919 Change in accounts receivable -2,081 -82 Change in accounts payable -1,628 2,220 Change in other current balance sheet items 3,150 -1,705 Net cash flow from operational activities 8,443 10,692 Purchase of tangible fixed assets -1,926 -1,049 Net cash flow from investing activities -1,926 -1,049 Repayment of long term debt Issued capital 74 12 Dividends -8,871-10,477 Net cash flow from financing activities -8,797-10,465 Net change in cash and cash equivalent -2,280 -821 Cash and cash equivalents opening balance 10,385 8,365 Cash and cash equivalents closing balance 8,105 7,543 YTD
Page 9
NOTE DISCLOSURE Note 1 - Accounting Principles 1-1 Income tax 1-3 Property, Plant and Equipment 1-4 Audit of management reporting/interim reporting The interim financials are unaudited. The condensed consolidated interim financial statement is prepared in accordance with the Norwegian accounting standard for interim financial statements, NRS 11. Principles and policies are the same for the interim financial statements as in the last annual financial statements, that were prepared according to the Norwegian Accounting Act and generally accepted principles in Norway. For description of accounting principles we refer you the last issued Annual Financial Statement. Property, plant and equipment are capitalized and depreciated over the estimated useful life. Costs for maintenance are expensed as incurred, whereas costs for improving and upgrading property, plant and equipment are added to the acquisition costs and depreciated with the related asset. If carrying value of a non-current asset exceeds the estimated recoverable amount, the asset is written down to the recoverable amount. The recoverable amount is the greater of the net realizable value in use. In assessing value in use, the discounted estimated cash flows from the asset are used. The tax expense for management reporting and interim reporting purposes is a simplified tax calculation where the tax rate in the different jurisdictions are applied to the net result in the different jurisdiction booked against deferred tax/deferred tax asset. If a jurisdiction has a negative result, and no deferred tax asset is expected to be capitalized, no tax expense are calculated for that jurisdiction. 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. Vehicles and office equipment have estimated useful lifes for accounting purposes of 3-5 years.
Page 10
NOTE DISCLOSURE Note 2 - Equity and Shareholders Information Share capital Share premium Other paid in capital Other equity Total Equity December 2025 12,580 69,819 369 -31,191 51,577 Profit/loss in the period 6,780 6,780 Change in dividends -1,679 -1,679 197 197 Issued Capital 9 65 74 Equity June 2026 12,589 68,402 369 -24,411 56,949 Note 3 - Long term liabilities and covenants Note 4 - Key figures and ratios (USD mill) 2026 2025 2026 2025 Revenue 29.4 24.9 55.6 50.7 Operating profit 4.8 3.8 7.8 9.0 Net profit before tax 4.8 3.8 7.9 9.2 EBITDA 6.2 5.3 10.7 11.9 ADJUSTED EBITDA 6.3 5.3 10.9 12.0 Equity to asset ratio 74.5 % 78.3 % Total average number of shares (in mill) 43.3 43.3 43.3 43.3 EPS 0.10 0.08 0.16 0.20 Diluted EPS (Including options) 0.10 0.08 0.15 0.20 Definitions EBITDA - Earnings Before Interest, Tax, Depreciation and Amortization. ADJUSTED EBITDA - Earnings Before Interest, Tax, Depreciation and Amortization plus non cash stock option expenses. Q2 YTD 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. As of 30 June 2026, there were no borrowings outstanding on the Revolver. Stock option program The Company had MUSD 8.7 and MUSD 7.2 of dividends accrued as of December 31, 2024 and December 31, 2025. The company declared and paid dividends of MUSD 18.5 for the 12 months ended December 31, 2025. The Company declared and paid dividends of MUSD 12.8 subsequent to December, 31, 2025. All dividend distributions were from the Company's contributed surplus account which consists of previously paid in share premium transferred to the Company's share premium account.