Prosafe SE: Second quarter and first half report 2014

Operating profit for the first quarter came to USD 133.4 million and net profit
amounted to USD 42.1 million. An interim dividend of NOK 0.98 per share was
resolved. At the end of the quarter, the gross value of the contract backlog
amounted to USD 2.2 billion including clients' extension options. Although the
long-term demand drivers remain intact, there is increased uncertainty regarding
the short-to-medium term market development.

Financials
(Figures in brackets refer to the corresponding period of 2013)

Second quarter

Utilisation of the vessel fleet was 84 per cent (84 per cent) in the second
quarter. Operating profit amounted to USD 55.0 million (USD 68.7 million).

Regalia, Safe Concordia, Safe Lancia, Jasminia, Safe Hibernia, Safe Britannia
and Safe Regency were in full operation throughout the quarter.

The existing contract with Petrobras for Safe Concordia was completed on 10
June, and was immediately followed by a further three-year extension. The
average effective day rate for the quarter was approximately USD 148 000.

Safe Caledonia underwent preparatory work at Burntisland in the UK before
mobilising for the contract with Nexen in the UK. The contract commenced on 3
June, and the vessel was in full operation throughout the remainder of June.

Regalia was in full operation for Statoil in Norway throughout the second
quarter.

Safe Scandinavia commenced the contract with Statoil in Norway on 28 April, and
Safe Bristolia started on the contract with ConocoPhillips in the UK on 1 May.

Safe Astoria completed its operation for Swiber in Indonesia on 15 May, and then
moved to the yard in Batam for preparation for the contract with Shell at
Malampaya in August. The vessel earned a de-mobilisation day rate until it
arrived in Batam on 20 May.

Net financial costs were reduced to USD 9.2 million (USD 12.5 million). This
change is mainly due to an unrealised gain on the NOK bond loans, which was
partly offset by a change in fair value of currency forwards.

Net profit amounted to USD 42.1 million (USD 54.9 million), corresponding to
diluted earnings per share of USD 0.18 (USD 0.24).

Total assets at 30 June amounted to USD 1 689.9 million (USD 1 502.9 million),
while the book equity ratio declined to 41 per cent (44 per cent). Net interest-
bearing debt stood at USD 799 million (USD 651 million).

New builds and projects

The new build projects are progressing well and cost forecasts remain as
previously communicated.

Delivery of Safe Boreas, which is being constructed at Jurong Shipyard in
Singapore, is scheduled for the fourth quarter of this year. This gives adequate
time for mobilisation for the first contract commencing in April/May 2015. Its
sister vessel Safe Zephyrus will be ready for operations in the North Sea during
the summer of 2015.

Construction of the Safe Notos and Safe Eurus at COSCO Quidong in China is
progressing as planned. As a result the vessels should be ready for operations
during the first and second half of 2016 respectively.

Outlook

Prosafe has seen a strong contract inflow over the past 18 months. As at 30 June
2014 the value of the contract backlog amounted to USD 1.5 billion - USD 2.2
billion including clients' extension options.

There are signs that we are entering a period of more uncertainty related to
demand for offshore oil services. Several oil companies have signalled reduced
E&P spending going forward and have introduced cost reduction programmes. In
Prosafe's core markets, this development is most visible in the North Sea
region, where there is a lower activity level and fewer tenders and enquiries
from clients than in the last three year period.

Despite this, the long-term drivers for demand in the North Sea market remain
intact. An aging infrastructure requiring maintenance and modifications combined
with the prospects for further field developments and related hook-up and
commissioning jobs, continues to result in a positive long-term outlook for this
market.

In Mexico demand remains robust. The level of activity in shallow water is high,
evidenced by an increased number of drilling jack-ups under contract in the
area. Most of the accommodation vessels in Mexico are currently working in the
Cantarell area, with significant potential for future assignments in other
shallow water areas.

In the long-term there may also develop a need for accommodation vessels in the
deep water areas of Mexico. The recently introduced energy reform is expected to
spur deepwater exploration, which in due course should result in demand related
to hook-up and commissioning projects and, ultimately, maintenance and
modification work.

There has been a strong growth in demand in the Brazilian market. This has
attracted a number of new suppliers, which has resulted in a fragmented market
with strong competition and only a moderate growth in day rates. The outlook for
further increased demand in Brazil is positive and there are several potential
contracts that could be tendered in the coming months and quarters.

In recent years there has been a strong growth in the worldwide fleet of semi-
submersible accommodation vessels. This growth is comprised of vessels of
different qualities and designs, ranging from high-end Norway compliant vessels
to low-end converted units for benign waters. The impact of this supply growth
is most visible in markets with lower entry barriers, such as Brazil, as opposed
to markets with higher entry barriers, such as the North Sea. Prosafe is one of
only two vessel owners, which have successfully brought in new capacity to the
North Sea, compared to eight different companies that have entered the Brazilian
market during the past four years.

In summary, the general activity level in the worldwide offshore accommodation
market is now lower than experienced one to two years ago. The announcement of
budget cuts by oil companies has inevitably resulted in increased uncertainty
related to demand over the next couple of years, particularly in the North Sea
market. This temporary setback will also force a stronger cost focus within the
oil services industry. However, the positive long-term demand outlook remains
unaffected with prospects of increasing need for offshore accommodation services
related to maintenance and upgrades of an aging production infrastructure, hook-
up and commissioning of new facilities and decommissioning of old fields.

Dividend

On 20 August 2014 the Board of Directors resolved to declare an interim dividend
equivalent to USD 0.16 per share to shareholders of record as of 29 August
2014. The shares will trade ex-dividend on 27 August 2014. The dividend will be
paid in the form of NOK 0.98 per share on 10 September 2014.

In light of the acknowledged weakened mid term market the Board of Directors
will consider temporary reductions in dividend payments.

Risk

Prosafe's key risks are described in detail in the Directors' Report as set out
in the Annual Report 2013 and include Prosafe's main operational risks i.e. day
rate level and  utilisation rate of the accommodation vessels. The company's
results also depend on operating costs, interest expenses and exchange rates.

Statement from the Board, the CEO and the CFO

We confirm that, to the best of our knowledge, the financial statements for the
first half year of 2014, which have been prepared in accordance with IAS 34
Interim Financial Statements as adopted by the European Union and the
requirements of the Cyprus Companies Law, give a true and fair view of the
company's assets, liabilities, financial position and profit or loss of the
company, and that the interim management report includes a fair review of the
information required under the Norwegian Securities Trading Act section 5-6
fourth paragraph and the Cyprus Companies Law and Cyprus Transparency
Requirements Law No:190(1) 2007 section 10.

Prosafe is the world's leading owner and operator of semi-submersible
accommodation/service rigs. Operating profit reached USD 245.1 million in 2013
and net profit was USD 199.1 million. The company operates globally, employs
650 people and is headquartered in Larnaca, Cyprus. Prosafe is listed on the
Oslo Stock Exchange with ticker code PRS. For more information, please refer to
www.prosafe.com.


Larnaca, 21 August 2014
Georgina Georgiou, General Manager
Prosafe SE

For further information, please contact:

Karl Ronny Klungtvedt, Chief Executive Officer
Prosafe Management AS
Phone: + 47 51 64 25 81

Sven Børre Larsen, Chief Financial Officer
Prosafe Management AS
Phone: +47 909 43 673


This information is subject of the disclosure requirements pursuant to section
5-12 of the Norwegian Securities Trading Act.


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