Annual Report 2024
The world's most sophisticated harsh environment offshore fleet
2
Table of Contents
Financial Statements
This is Northern Ocean
3
Consolidated Statements of Comprehensive Income
18
Our  Assets
4
 
Consolidated Balance Sheets
19
CEO Letter
6
Consolidated Statements of Cash Flows
20
Executive Management
7
Consolidated Statements of Changes in Equity
21
Board of Directors
8
Notes to the Consolidated Financial Statements
22
Board of Directors' Report
9
Independent Auditor's Report
38
Responsibility Statement
17
Annual Report 2024 | This is Northern Ocean | 3
This is Northern Ocean
Northern Ocean Ltd (NOL) owns and operates two of the world’s newest and
most capable harsh-environment semi-submersible drilling rigs – Deepsea Bollsta
and Deepsea Mira – both ideally suited for operations across all major offshore
basins.
With a modern fleet, completed CAPEX programs, and strong commercial and
operational execution, the company is well-positioned to benefit from a
tightening supply of high-end rigs and an expected increase in long-term demand.
The company’s strategic approach has delivered results: NOL has secured a solid
contract backlog with blue-chip clients, while maintaining flexibility to pursue
high-value opportunities.
Near-term priorities include securing new contracts for Deepsea Mira, continued
focus on operational efficiency and cost control, and preparing for refinancing –
all aimed at enhancing earnings and unlocking long-term value for shareholder.
Annual Report 2024 | Our Assets | 4
Our Assets
Deepsea Mira and Deepsea Bollsta are two of the world’s most advanced drilling rigs. They are both based on the Moss Maritime CS60 design,
capacity of drilling in water depth of up to 10,000 feet, Norwegian Continental Shelf (NCS) compliant and fully winterized making them capable
of drilling in all harsh environment areas globally.
Annual Report 2024 | Our Assets | 5
Capable of Working in all Basins
Semi-Submersibles are the preferred year-round solution for harsh environment countries. Deepsea Bollsta is currently under mobilization to
Norway, while Deepsea Mira is located in Namibia.
Annual Report 2024 | CEO Letter | 6                   
CEO Letter
Dear Shareholders,
Reflecting on Northern Ocean Ltd.’s developments in 2024, I am pleased to report
notable progress and strategic achievements. These accomplishments highlight our
ongoing commitment to operational excellence and prudent financial management,
positioning us well for continued performance in the years ahead.
Operational Performance
Our fleet, consisting of the Deepsea Bollsta and Deepsea Mira, delivered reliable
operations in harsh-environment drilling throughout 2024. Deepsea Mira
successfully operated offshore Namibia under contract with TotalEnergies SE for
the entire year. Deepsea Bollsta concluded contracts in Namibia and Ghana and is
currently relocating to Norway, where it will begin a one-well contract with OMV in
Q2 2025, followed by a two-year engagement with Equinor. The Equinor contract,
including five annual extension options, adds approximately $335 million to our
confirmed backlog.
Financial Position
Amid ongoing industry challenges, we have strengthened our financial position
through disciplined operational management and strategic refinancing completed in
June 2024. A private placement raised gross proceeds of $60 million, enhancing our
working capital and extending debt maturities. To further optimize costs and
enhance financial performance, Northern Ocean renegotiated the contract with
Odfjell Drilling to introduce a more incentive-based agreement, reduced company
overhead expenses, and restructured its internal organization. These measures
improved our financial resilience and strengthened our capability to maintain
financial and operational discipline across our activities.
Corporate Social Responsibility
Northern Ocean Ltd. continues to uphold rigorous environmental, ethical, and social
standards. In Namibia, our local hiring, training initiatives, and school renovation
project have positively impacted communities. Furthermore, investments in
advanced rig technologies have reduced our environmental footprint and improved
operational efficiencies, aligning our practices with the industry's growing
sustainability requirements.
Future Outlook
While short-term market challenges remain, ongoing demand for advanced drilling
rigs in demanding environments provides a solid foundation for future growth. Our
focus for 2025 is to secure new contracts for the Deepsea Mira, continue to
enhance cost efficiency and capital discipline in our operations, and prepare for
future refinancing to optimize returns and create value for our shareholders.
We thank you for your continued confidence and support and look forward to a
productive year ahead.
Sincerely,
Arne Jacobsen
CEO
Annual Report 2024 | Executive Management | 7                   
Executive Management
Arne Jacobsen
Jonas Ytreland
Eirik Sunde
Vidar Skjelbred
Chief Executive Officer
Chief Financial Officer
Chief Commercial Officer
Chief Operating Officer
Arne Jacobsen has been working
for the Company since August
2024. Mr. Jacobsen was
previously the CEO of Orion, a
joint venture between Hayfin
Capital and Transocean, and has
experience as a senior
investment advisor for the oil
and gas investment portfolio of
Hayfin Capital. Beyond his
background as an investment
professional, he holds extensive
commercial and operational
experience from the oil and gas
industry. Before joining Hayfin
Capital, he held leading positions
in Songa Offshore and Ocean
Rig, where he was positioned in
Brazil, South Korea and Norway.
He is a Norwegian citizen.
Jonas Ytreland has been working
for the Company since August
2020 and was appointed CFO of
NOL in January 2022. Mr
Ytreland has more than 23 years’
financial experience within the
Shipping, Offshore and Oil
industries. Before joining NOL,
he worked with Seadrill
Management Ltd  for 10 years, a
company managing all of Seadrill
Limited’s operations, the last 8 of
those as VP and Treasurer. Mr.
Ytreland holds a degree in
financial analysis from BI
Norwegian Business School. He
is a Norwegian citizen.
Eirik Sunde has been working for
the Company since December
2024. Before joining NOL, he
worked for Transocean, for 19
years  the last 14 of these
overseeing marketing on the
Norwegian Sector. Mr. Sunde
holds a master’s degree in
Economics from the University
of Edinburgh. He is a Norwegian
citizen.
Vidar Skjelbred was appointed
COO of NOL in November 2023.
Mr. Skjelbred has more than 35
years’ experience in the offshore
drilling industry in operational,
business development and
management roles. Prior to his
appointment within NOL, he
worked for Schlumberger for 5
years on a Total Well Delivery
program, and 10 years with
Songa Offshore. Mr. Skjelbred
holds a degree in Petroleum
Engineering from the University
in Stavanger. He is a Norwegian
citizen.
Annual Report 2024 | Board of Directors | 8                             
Board of Directors
Gary W. Casswell
Sven Børre Larsen
Mikhael Botbol
Jan Erik Klepsland
James Ayers
Chair
Director
Director
Director
Director
Gary W. Casswell has more
than 45 years industry
experience and currently
serves as a Director and
Chairman of Northern Ocean,
Ltd. Mr. Casswell also serves
as a Director of Ensign Energy
Services, Inc. Most recently
Mr. Casswell served as
President and CEO of
Northern Offshore Ltd from
2010 until mid-2017. Mr.
Casswell has served with the
IADC and received the IADC
Exemplary Service award in
2007 and is a member of The
Society of Petroleum
Engineers. Mr. Casswell holds
a Bachelor of Science degree
in Business Administration
from the University of
California, Long Beach. He is a
US citizen.
Sven Børre Larsen has served
as CFO of TGS from 2015 until
2019, when he assumed the
position of Head of Strategy
and M&A. Mr. Larsen re-
assumed the role as CFO in
August 2021. Before joining
TGS in 2015, Mr. Larsen was
CFO of Prosafe, the world’s
leading owner and operator of
semisubmersible
accommodation vessels for
the offshore oil and gas
industry. Mr. Larsen was also
CFO of Prosafe Production,
one of the world’s leading
FPSO contractors. Mr. Larsen
holds an M.S. degree in
business specializing in
finance from Bodo Graduate
School of Business in Norway.
He is a Norwegian citizen.
Mikhael Botbol is a senior
advisor to Hayfin Capital, prior
to this he was a senior partner
and Portfolio Manager for
Private Credit, responsible for
the firm’s special opportunities
investment activities for
Hayfin. Before joining Hayfin,
Mr. Botbol spent five years as
Portfolio Manager at MB Asset
Management, a European
credit fund he founded. Mr.
Botbol has previously worked
for Brevan Horward Asset
Management, HBK Capital
Management, Goldman Sachs
and Morgan Stanley. Mr.
Botbol holds a BA in
Mathematics from University
of Paris VI, an MSc from UCLA,
and an MBA from INSEAD. He
is an Israeli citizen.
Jan Erik Klepsland is an
Investment Director in
Seatankers Management
Norway AS. Prior to joining
Seatankers, he held the
position as Partner at ABG
Sundal Collier and prior to that
Director at Nordea. He has
experience within equity/debt
financing, M&A and
restructuring. Mr. Klepsland
holds a MSc in Finance from
Norwegian School of
Economics (NHH).  Mr.
Klepsland is also a Director in
Archer Limited and Noram
Drilling AS. He is a Norwegian
citizen.
James Ayers has served as
Director and Secretary of the
Company since February 2019.
Mr. Ayers has more than ten
years of industry experience
with a range of director and
management positions across
the sector. Mr. Ayers is the
CEO of Front Ocean
Management and Company
Secretary for the Fredriksen
Group companies based in
Bermuda. Mr. Ayers holds a
Masters in International
Business and Commercial Law
(LLM), a Bachelors in Law (LLB)
and a professional qualification
in Legal Practice (LPC). He is a
British citizen.
Annual Report 2024 | Board of Directors' Report | 9
Board of Directors' Report
Key Information
Unless otherwise indicated, the terms "Northern Ocean", "NOL", "our", the
"Company" and the "Group" refer to Northern Ocean Ltd. and its consolidated
subsidiaries.
Unless otherwise indicated, all references to "U.S. dollars", "USD", "US$" and "$"
in this Annual Report are to the lawful currency of the United States of America,
references to "Norwegian Kroner", and "NOK" are to the lawful currency of
Norway.
Company Background
Northern Ocean was incorporated under the laws of Bermuda on March 3, 2017.
The Company was incorporated for the primary purpose of engaging in offshore
contract drilling for the oil and gas industry in harsh environments worldwide
through the ownership of offshore drilling rigs.
The Company's shares are registered for trading on the Norwegian Stock
Exchange (ticker “NOL”) and commenced trading on December 9, 2019. The
Company was originally established as a wholly owned subsidiary of Northern
Drilling Ltd. ("NODL") and in February 2020, NODL completed an exchange offer
to its shareholders, reducing its ownership in the Company to zero.
Our registered office is at Par-La-Ville Place, 14 Par-La-Ville Road, Hamilton,
Bermuda. Our website is www.northernoceanltd.com.
Share Issuances and Financing Transactions
On June 19, 2024, the Company completed a private placement, issuing
90,538,285 new shares at a subscription price of NOK 7.00 per share, generating
gross proceeds of approximately $60.0 million.
As part of the transaction, related party Sterna Finance Ltd. ("Sterna"), with
whom the Company holds existing credit facilities, exercised its right to convert
$15.0 million of outstanding debt into equity. This conversion was executed at a
price of $0.50 per share, resulting in the issuance of 30,000,000 new shares and a
corresponding reduction in the Company’s debt.
On June 28, 2024, the Company completed a refinancing of its existing debt to
enhance working capital, extend debt maturities, and support general corporate
purposes. As part of this transaction, the Company repaid $90.0 million of its
bank debt, with the remaining maturity extended to June 2026.
On the same date, the facility with Sterna was increased by $65.0 million,
bringing the total to $215.0 million, and the maturity was extended to December
2026. The remaining balance under the facility was fully drawn, resulting in
proceeds of approximately $70.0 million. Additionally, during the year, where
permitted, the Company opted to capitalize interest payments into Payment-In-
Kind ("PIK") interest, drawing a further $16.8 million under the facility.
Operational Activity
In 2024, the Deepsea Mira continued operations under its existing contract with a
subsidiary of TotalEnergies SE, primarily offshore Namibia. In the fourth quarter,
the firm term of the contract was extended to include one additional well, which
commenced in the first quarter of 2025.
The Deepsea Bollsta began the year operating under a contract with Shell in
Namibia, which concluded in June 2024.
On June 26, 2024, the Company announced a new contract award for the
Deepsea Bollsta with Chevron Corporation for operations in Namibia. The
contract, covering one well, commenced in December 2024 and was successfully
completed by the end of January 2025.
On September 26, 2024, the Company was awarded a contract for the Deepsea
Bollsta in Ghana by the Springfield Group of Companies. This contract, also for
one well, commenced in October 2024—prior to the aforementioned Namibia
campaign—and concluded in December 2024.
On November 18, 2024, the Company signed a significant contract with Equinor
for the Deepsea Bollsta to operate in Norway. The contract is expected to
commence in the second half of 2025 and includes a firm two-year term, with five
optional one-year extensions. The agreement contributes approximately $335
Annual Report 2024 | Board of Directors' Report | 10
million in firm backlog, along with an additional $80 million related to client-
specific upgrades, integrated services, and the rig’s mobilization from Namibia to
Norway.
Subsequently, on December 5, 2024, Northern Ocean secured another contract
for the Deepsea Bollsta, this time with OMV Norge AS (OMV) for work on the
Norwegian Continental Shelf. Scheduled to begin in the second quarter of 2025
following the rig’s arrival in Norway, the contract has a firm duration of 54 to 99
days and is expected to add between $23 million and $42 million to the
Company’s firm backlog. The Deepsea Bollsta is currently in transit, mobilizing
from Namibia to Norway.
Corporate Social Responsibility
Ensuring high standards environmentally, ethically, and socially are key values of
the Company for which the Group has established policies, procedures and
guidelines. The sections below of ‘The Working, Safety and Social Environment’,
‘Employment Equality’, ‘Impact on the External Environment', ‘Human Rights and
'Anti-bribery and Anti-corruption’ more specifically detail how the Company
operates in accordance with these values.
The Working, Safety and Social Environment
The Company operates in an industry which poses an inherent risk to personnel
health and safety. It is therefore paramount that the Company conducts its
business in a manner designed to protect the health and safety of its employees.
The health and safety record of potential operational managers was therefore a
significant consideration when selection of the Company’s new operational
manager was performed in December 2021. The operational manager, Odfjell,
has over 50 years’ experience in the industry and is well regarded in terms of
safety. There were no serious injuries or accidents during 2024 and total absence
due to sickness was minimal.
In the countries where the Company operates, it is committed, together with its
operational manager, to make a positive impact on the local communities. During
2024, Northern Ocean completed the construction and handover of two sports
fields at public schools in the Khomas Region of Namibia. As part of the grand
opening, Northern Ocean sponsored field days with both schools to highlight the
importance of recreational activities in the lives of young people. The company
also donated books and volunteered at after-school centers in Katutura.
At the end of 2024, the Company had ten direct employees, primarily office
based. The mental and physical well-being of employees is of paramount
importance to the Company. The Company provides competitive medical and
wellness benefits. Northern Ocean invests in employees through providing
training to develop skill sets, including providing financial and time-based support
to allow employees to develop personally and professionally.
The Company’s Board of Directors currently consists of five men and the
employee workforce is 20% female.
Employment Equality
The Company is an equal opportunities employer and will not discriminate
against any employee or job applicant because of race, color, religion, national
origin, sex, age, physical or mental disability. The Company's recruitment policy is
based on these values. The Company has in 2024 been, and remains, committed
to base any decision with respect to any person on the Company’s needs and the
performance and potential of the person, and not on any other criterion.
Impact on the External Environment
The Company acknowledges that its operations have an environmental impact
through emissions to air and potentially through accidental spills and discharges
of contaminants to sea, which could have a severe adverse impact on the external
environment. The Company is committed to ensuring that the environmental
impacts of its operations are reduced wherever possible. Northern Ocean
invested in systems and technology on the Deepsea Bollsta and Deepsea Mira that
will potentially lower fuel consumption, reduce NOx and CO2 emissions, and
perform the drilling operations more efficiently to reduce time in operations
thereby making the rigs more environmentally friendly.
Human Rights
The Company does not perform, and strictly prohibits any of its business
partners, including contractors and suppliers from practices such as modern
slavery, child labor, forced or indentured servitude, and other human rights
abuses. The operations of Northern Ocean are global with its rigs potentially
operating in countries or regions with high human rights abuse risk profiles. We
Annual Report 2024 | Board of Directors' Report | 11
recognize that respect for human rights is a global standard and that it is our
responsibility to uphold this standard wherever we operate. The Company’s
operational manager Odfjell has since July 1, 2022, established human rights risk
profiles for all new suppliers, further reducing the risk of human rights violations.
Anti-Bribery and Anti-corruption
The operations of Northern Ocean are global with its rigs potentially operating in
countries or regions with high reputations for corruption or bribery. To mitigate
the risks the Company and its operations manager have strict policies,
procedures and guidelines in place.
Going Concern Assumption
These consolidated financial statements are prepared under the going concern
assumption.
The Deepsea Bollsta is currently mobilizing for operations in Norway, supported
by two secured contracts. The first is a firm two-year contract with Equinor,
which includes five optional one-year extensions. This agreement adds
approximately $335 million in firm backlog, with an additional $80 million
associated with rig upgrades, integrated services, and mobilization from Namibia
to Norway. Operations under this contract are expected to commence in the
second half of 2025. The second contract is with OMV and is expected to begin in
the second quarter of 2025, immediately following the rig’s arrival on the
Norwegian continental shelf. With a firm duration ranging from 54 to 99 days, the
OMV contract is expected to contribute between $23 million and $42 million in
additional backlog.
The Deepsea Mira is expected to conclude its firm contract with TotalEnergies in
mid-May 2025. The Group is actively engaged in discussions with other clients
regarding potential follow-on work following the completion of this contract.
Management remains optimistic about Northern Ocean’s ability to secure
additional profitable contracts, supported by ongoing dialogue with prospective
customers in West Africa and other harsh environment markets.
Due to the short-term nature of the Deepsea Mira’s current contract portfolio, the
Group’s financial position is dependent on securing additional drilling contracts
for the rig. This situation potentially gives rise to substantial doubt regarding the
Group’s ability to continue as a going concern. In the absence of new contract
Annual Report 2024 | Board of Directors' Report | 12
awards, the Group will need to rely on loan amendments, new financing
arrangements, and/or equity issuances to meet its loan obligations and working
capital requirements over the next twelve months. However, the Board remains
confident that a solution will be reached.
Risk Assessment
The Company’s activities are subject to significant risks and uncertainties that
can have an adverse effect on the Company’s business, financial condition, results
of operations and cash flow. Such risks and uncertainties include, among others,
decreasing market value of the rigs and maintaining sufficient operating liquidity.
In addition, public health threats, such as the Coronavirus, influenza and other
highly communicable diseases or viruses, outbreaks of which have from time to
time occurred in various parts of the world in which we operate could adversely
impact our operations as well as the operations of our customers. The Company
also needs to comply with certain financial covenants under the terms of its
existing loan facilities and failure to do so would potentially require the
outstanding loan to be pre-paid. Further, the success and growth of the Company
relies on favorable contracts for its rigs continuing to be obtained, which is
heavily dependent on the level of activity in the offshore oil and gas industry
generally and the drilling industry specifically. The industry is highly competitive
and significantly impacted by the price of oil, which can be very volatile. The
limited number of rigs in the Northern Ocean fleet also makes the Company
vulnerable in the event of a loss of revenue of any such rigs due to market
developments, technical or regulatory matters. The Company is dependent on
technical and commercial services from third parties, including dependency on
Odfjell for the provision of manager services for the operation of the rigs and for
the compliance with requirements under applicable drilling contracts with its
customers. The Company relies on the rigs acquiring certain governmental
approval, which may vary depending on the jurisdictions of operations. If the
Company fails to secure the necessary approvals or permits in a timely manner,
the Company's customers may have the right to terminate or seek to renegotiate
their drilling contracts to the Company's detriment. The Company is also subject
to complex laws and regulations, including environmental laws and regulations
that can adversely affect the cost, manner or feasibility of doing business.
Additional risks relating to the listing and the shares include risk related to
holders of shares being registered through nominee accounts, certain few
shareholders controlling a large portion of the listed shares, and a risk of further
financing requirements potentially having a dilutive impact on current
shareholders.
Outlook
This past year turned out to be a strong year for the offshore drilling industry.
Increased activity levels in virtually all areas and segments drove dayrates and
utilizations upwards. Northern Ocean remains confident that, despite a reduced
short term activity level in benign operating areas, these trends will continue for
the harsh environment market from 2026.
Both of the company’s harsh-environment semisubmersibles, Deepsea Mira and
Deepsea Bollsta, have benefited from a strong market and saw significant contract
additions in 2024. Despite a current short-term weakening in the global market
for ultra deepwater floaters ("UDW floater"), we experience a continued demand
for harsh environment deepwater floaters ("UHE floater"). The Norwegian
market is sold out for Tier 1 assets, such as Deepsea Bollsta and Deepsea Mira, until
2027.  There will also be significant benefits in using an UHE floater for year-
round operations in Namibia and South Africa, and the Deepsea Mira is well
positioned for both areas.
The Company remains active in Namibia where there has been increasing activity
this past year with up to six UDW floaters in operation. The high activity was
driven by the success operators have seen in exploration and appraisal. The
current activity in Namibia is mainly exploration and appraisal wells, which by
nature results in drilling activity that is highly dependent on the results and
analysis of each subsequent well. This makes drilling contracting activity follow
the same pattern, short-term and contingent on results. However, as this phase
matures and appraisals confirm expectations, oil companies will be able to
determine development plans and enter the next phase where longer-term
contracting would be expected. The Company continues to monitor activity in
this region and keep an active dialogue with all the potential operators.
The benign environment markets worldwide experienced a softening towards the
end of 2024 and into 2025, with dayrates awarded in a wide range between
mid-$300 to $500 thousand. The surplus drillship capacity will continue to affect
the benign market for near term programs."
Annual Report 2024 | Board of Directors' Report | 13
Board of Directors' Report - Corporate Governance
Section 1 “Implementation and reporting on corporate governance”: As a company
incorporated in Bermuda, the Company is subject to Bermuda laws and
regulations. Additionally, as a consequence of being listed on the Oslo Stock
Exchange, the Company must comply with section 3-3b and 3-3c of the
Norwegian Accounting Act and certain aspects of Norwegian securities law and is
also obligated to adhere to the Norwegian Code of Practice for Corporate
Governance, or the Code of Practice, on a “comply or explain” basis. Further, the
Company has in place a Memorandum of Association and Bye-Laws, which set
forth certain governance provisions. The Norwegian Accounting Act is found on
www.lovdata.no and the Code of Practice is found on www.nues.no.
The Company’s corporate governance principles are based on the Code of
Practice. However, since the Company is governed by Bermuda laws and
regulations, and given the nature of the Group’s activities, certain practices are
applied which deviate from some of the recommendations of the Code of
Practice.
In the following sections, the Company’s corporate governance policies and
procedures will be explained with reference to the principles of corporate
governance as set out in the sections identified in the Code of Practice. This
summary does not purport to be complete and is qualified in its entirety by the
Company’s Memorandum of Association and Bye-Laws, Bermuda and Norwegian
law.
Section 2 “Business”: The Company is an international offshore drilling contractor
to the oil and gas industry, with the ambition of acquiring and operating modern
drilling assets. The Company has initially targeted the harsh environment sector
and will continue to dedicate resources for further growth within this segment.
The Company has an opportunistic strategy and will carefully review and
consider all business prospects identified.
In accordance with normal practice for Bermuda companies, the Company’s Bye-
Laws do not include a specific description of its business. According to the
Memorandum of Association, the objects for which the Company was formed and
incorporated are unrestricted. As a Bermuda incorporated company, the
Company has chosen to establish the constitutional framework in compliance
with the normal practice of Bermuda and accordingly deviate from section 2 of
the Code of Practice.
Section 3 “Equity and dividends”: The Company’s equity capital is at a level
appropriate for its objectives, strategy, and risk profile. In accordance with
Bermuda law, the Board of Directors is authorized to permit its own shares to be
held as treasury shares, and to issue any unissued shares within the limits of the
authorized share capital without further shareholder approval. These authorities
are neither limited to specific purposes nor to a specific period as recommended
in section 3 of the Code of Practice. The Board of Directors will propose to the
shareholders that they consider and, if necessary, resolve to increase the
authorized capital of the Company that will allow the Board of Directors some
flexibility to increase the number of issued shares without further shareholder
approval. Any increase of the authorized capital is, however, subject to approval
by the shareholders by simple majority of the votes cast. While the Company
aims to provide a competitive long-term return on the investments of its
shareholders, it does not currently have a formal dividend policy.
Section 4 "Equal treatment of shareholders and transactions with close associates":
Neither the Company’s Bye-Laws nor Bermuda company laws include regulation
of pre-emptive rights for shareholders in connection with share capital increases.
The Bye-Laws provide for the Board of Directors in its sole discretion to direct a
share issue to existing shareholders at par value or at a premium price. The
Company is subject to the general principle of equal treatment of shareholders
under the Norwegian Securities Trading Act section 5-14. The Board of Directors
will, in connection with any future share issues, on a case-by-case basis, evaluate
whether deviation from the principle of equal treatment is justified. The Board of
Directors will consider and determine on a case-by-case basis whether
independent third party evaluations are required if entering into agreements
with close associates in accordance with the Code of Practice section 5. The
Board of Directors may decide, however, due to the specific agreement or
transaction, to deviate from this recommendation if the interests of the
shareholders in general are believed to be maintained in a satisfactory manner
through other measures.
Annual Report 2024 | Board of Directors' Report | 14
Section 5 "Freely negotiable shares": With limited exceptions, all shares in the
Company are freely negotiable, and the Bye-Laws contain no form of restriction
on the negotiability of the shares, or on voting rights.
Section 6 “General meetings”: The Company’s Bye-Laws require five days’ notice
for a meeting of the shareholders, rather than 21 days. Given the Company’s
current commercial position, this shorter period is considered to be sufficient for
shareholders to consider the matters being voted on.
The Company strives to maintain an open and fair dialogue with its shareholders
through the publishing of information, presentations and responding to questions
from shareholders. The Company has not, however, taken specific measures for
obtaining shareholders’ proposals for matters to be proposed to the meeting of
shareholders. In the view of the Company, the current shareholder structure, the
shareholder representation, and the policy to communicate with shareholders is
sufficient to ensure that shareholders may communicate their points of view to
the executive management and the Board.
The Board of Directors has not made arrangements for an independent Chairman
for each annual meeting of the shareholders as the Company believes that the
Chairman of the Board can act independently and in the interests of
shareholders. Further, the Company does not believe that it is necessary for all
directors and the auditor to be physically present at the meeting of the
shareholders.
As a Bermuda registered company, the general meetings of the Company can be
conducted through proxy voting. The VPS registered shareholders are holders of
interests in the shares and thus represented by the VPS Registrar in the general
meetings and not through their own physical presence. This is in line with the
general practice of other non-Norwegian companies listed on the Oslo Stock
Exchange. The Company complies in all other respects with the
recommendations for general meetings as set out in the Code of Practice.
Section 7 “Nomination committee”: As permitted under Bermuda law, the Company
will not have a nomination committee as recommended by the Code of Practice
section 7. In lieu of a nomination committee comprised of independent directors,
the Board of Directors is responsible for identifying and recommending potential
candidates to become board members and recommending directors for
appointment to board committees.
Section 8 “Corporate assembly and board of directors”: The Company’s Board of
Directors shall consist of a minimum of two members, and shall at all times
comprise a majority of directors who are not resident in the United Kingdom. The
current composition of the Company's Board of Directors is in compliance with
the independence requirements of the Code of Practice. The Company’s
shareholders may determine the minimum and maximum number of directors by
the vote of shareholders representing a majority of the total number of votes
which may be cast at any annual or extraordinary general meeting, or by written
resolution. Each director is elected at an annual general meeting of shareholders
for a term commencing upon election and expiring on the date of the next
scheduled annual general meeting of shareholders or until his or her successor is
appointed. The Bye-Laws do not permit cumulative voting for directors.
The Board of Directors elects its Chair, rather than the shareholders. Given the
Company’s current development status the Company believe that this is
satisfactory and that the Chair can ensure that the Board is effective in its tasks
of setting and implementing the Company’s direction and strategy.
As a Bermuda registered company with a limited number of employees and
contractors, the Company does not have a corporate assembly. Given the size of
the Company this is not believed to be necessary.
Section 9 “The work of the board of directors”: The Board is ultimately responsible
for the management of the Company and for supervising its day-to-day
management. The entire Board of Directors acts as the audit committee and is
responsible for any decisions otherwise subject to review and preparation by an
audit committee.
Section 10 “Risk management and internal control”: The Board shall ensure that the
Company has sound internal controls and systems for risk management that are
Annual Report 2024 | Board of Directors' Report | 15
appropriate in relation to the extent and nature of the Company’s activities.
Further, the Board in conjunction with the executive management evaluates the
risk inherent in the operations of the Company. Principal among these risks
currently are risks associated with the capacity of the Group to obtain future
financing on reasonable terms, risks associated with the ability of the Company to
retain key staff, the general drilling market conditions and trends and the charter
market conditions for the drilling rigs. In addition, the following risks inherent in
the business of the Group are monitored: risk associated with changes in
exchange rates, increased competition, the political, regulatory and tax
environment of the Group, counterparty performance and risks associated with
potential growth of the business. The Board ensures that the Company has
reliable internal controls and systems for risk management through this annual
assessment.
The Board has the responsibility of evaluating risk exposure and internal controls
on an annual basis. The Board is also presented financial statements on a
quarterly basis, which are reviewed with the executive management. The
Company’s annual accounts provide information on internal control and risk
management systems as they relate to its financial reporting. 
Section 11 “Remuneration of the board of directors”: The compensation of the
Company’s Board of Directors is determined on an annual basis by the
shareholders of the Company at the annual shareholders meeting. Board
remuneration is to reflect the Board’s responsibility, expertise, time spent, and
the complexity of the business. Remuneration does not depend on the Company’s
financial performance and the Company does not grant share options to the
board members. There is no obligation to present the guidelines for remuneration
of the Board of Directors to the shareholders of a Bermuda incorporated
company. The Company therefore deviates from this part of section 11 of the
Code of Practice. There are no service contracts between the Company and any
of its directors providing for benefits upon termination of their service.
Section 12 “Remuneration of executive personnel”: The remuneration of the Chief
Executive Officer is determined by the Board of Directors. The process aims to
link the performance related element of the remuneration (options and bonus) to
value creation for shareholders. There is no obligation to present the guidelines
for remuneration of the executive management to the shareholders of a Bermuda
incorporated company. In the view of the Company there is sufficient
transparency and simplicity in the remuneration structure and information
provided through the annual report and financial statements are sufficient to
keep shareholders adequately informed. The Company therefore deviates from
this part of section 12 of the Code of Practice.
Section 13 “Information and communications”: The Company will ensure that the
shareholders receive accurate, clear, relevant and timely information in
accordance with the legal requirements and good corporate governance
practices. Publication methods will be selected to ensure simultaneous and equal
access for all equity shareholders and the information is provided in English. The
Company also provides information to the market through financial reports.
Events of importance are made available to the stock exchange market through
notification to the Oslo Stock Exchange in accordance with the Stock Exchange
regulations. Stock Exchange announcements are also made available on the
Company’s website.
Section 14 “Take-overs”: The Company has not yet established guiding principles
for how it will act in the event of a take-over bid. Although a deviation from the
Code of Practice, the Board has thus far not deemed it appropriate to adopt
specific guidelines for takeover situations.
Section 15 “Auditors”: The auditor shall annually present its assessment of
accounting risk and audit plan to the Board. The Board of Directors have
established procedures for regular contact with the external auditor through the
management. This contact will include, but is not limited to, the auditor
presenting the audit plan for the coming year, contributing to meetings
concerning the Company’s annual financial statements, presentation of audit
findings, including changes in accounting principles, significant estimates and
judgments reflected in the annual financial statements, any areas of
disagreement with management and identified internal control process
improvement opportunities.
Annual Report 2024 | Board of Directors' Report | 16
Annually, the auditor will present to the Board of Directors a review of the
Company’s internal control procedures, and the Board of Directors holds a
meeting with the auditor at least once a year at which no member of the
executive management is present. At present, the Company believes this is
sufficient given its size and enables the auditor to communicate with members of
the Board.
The Board of Directors have established guidelines in respect of the use of the
auditor by the Company’s executive management for services other than the
audit. The Board of Directors shall report the remuneration paid to the auditor at
the annual general meeting, including details of the fee paid for audit work and
any fees paid for other specific assignments.
The external auditor has provided the Board with written confirmation of its
independence.
Annual Report 2024 | Board of Directors' Report | 17
Board of Directors' Report - Responsibility Statement
We confirm that, to the best of our knowledge, the financial statements for the
year ended December 31, 2024 have been prepared in accordance with U.S.
generally accepted accounting principles, and give a true and fair view of the
Company's assets, liabilities, financial position and profit or loss of the Company
and the Group as a whole. We also confirm that the Board of Directors’ Report
includes a true and fair review of the development and performance of the
business and the position of the Company and the Group, together with a
description of the principal risks and uncertainties facing the Company and the
Group.
Board of Directors and Chief Executive Officer
Northern Ocean Ltd.
Hamilton, Bermuda
April 28, 2025
/s/ Gary Casswell
/s/ Arne Jacobsen
Gary Casswell (Director and Chairman)
Arne Jacobsen (Chief Executive Officer)
/s/ Sven Børre Larsen
/s/ Mikhael Bothbol
Sven Børre Larsen (Director)
Mikhael Bothbol (Director)
/s/ James Ayers
/s/ Jan Erik Klepsland
James Ayers (Director)
Jan Erik Klepsland (Director)
Annual Report 2024 | Consolidated Financial Statements | 18
Consolidated Statements of Comprehensive Income
(in thousands of $, except loss per share)
Note
2024
2023
Operating revenues
Contract revenue
4
252,615
215,261
Reimbursable revenue
10,912
19,902
Other revenues
333
1,760
Total operating revenues
263,860
236,923
Operating expenses
Rig operating expenses
5
206,316
191,119
Reimbursable expenses
10,809
18,966
Depreciation
49,929
42,889
Administrative expenses
7,011
7,534
Total operating expenses
274,065
260,508
Net operating loss
(10,205)
(23,585)
Other income (expenses)
Interest income
2,679
1,837
Interest expense
(56,300)
(45,992)
Foreign exchange gain (loss)
610
(389)
Other financial expenses
(41)
(7)
Total other income (expenses)
(53,052)
(44,551)
Net loss before taxes
(63,257)
(68,136)
Tax charge
(2,400)
(2,762)
Net loss
(65,657)
(70,898)
Basic and diluted loss per share ($)
7
(0.23)
(0.39)
See accompanying Notes to the Consolidated Financial Statements.
(in thousands of $)
2024
2023
Net loss
(65,657)
(70,898)
Foreign currency translation income
56
35
Other comprehensive income
56
35
Comprehensive loss
(65,601)
(70,863)
See accompanying Notes to the Consolidated Financial Statements.
Annual Report 2024 | Consolidated Financial Statements | 19
Consolidated Balance Sheets
(in thousands of $)
Note
2024
2023
ASSETS
Short-term assets
Cash and cash equivalents
42,751
54,350
Restricted cash
8
138
142
Related party receivables
16
—
129
Accounts receivable, net
47,410
41,388
Unbilled receivables
7,556
6,520
Deferred costs
5
2,200
27,073
Other current assets
10
1,973
2,455
Materials and supplies, net
344
—
Right-of-use assets
128
130
Total short-term assets
102,500
132,187
Long-term assets
Drilling units
9
929,049
923,560
Fixtures and fittings
18
33
Total long-term assets
929,067
923,593
Total assets
1,031,567
1,055,780
(in thousands of $)
Note
2024
2023
LIABILITIES AND EQUITY
Short-term liabilities
Short-term debt
12
14,950
29,977
Other current liabilities
11
47,861
59,668
Deferred revenue
4
3,970
14,743
Related party payables
54
2
Related party debt
13, 16
—
53,727
Lease dilapidations
5
—
Obligations under operating leases
112
106
Total short-term liabilities
66,952
158,223
Long-term liabilities
Long-term debt
12
284,006
359,725
Long-term deferred revenue
4
2,605
2,715
Long-term related party debt
13, 16
231,840
98,222
Total long-term liabilities
518,451
460,662
Total liabilities
585,403
618,885
Equity
Share capital
151,608
91,339
Additional paid in capital
580,214
565,613
Accumulated other comprehensive loss
(54)
(110)
Retained deficit
(285,604)
(219,947)
Total equity
446,164
436,895
Total liabilities and equity
1,031,567
1,055,780
See accompanying Notes to the Consolidated Financial Statements.
Annual Report 2024 | Consolidated Financial Statements | 20
Consolidated Statements of Cash Flows
(in thousands of $)
2024
2023
Net loss
(65,657)
(70,898)
Adjustments to reconcile net loss to net cash
used in operating activities
Amortization of deferred charges
504
283
Amortization of deferred costs
33,337
65,009
Amortization of deferred revenue
(19,073)
(30,517)
Depreciation
49,929
42,889
Compensation cost
273
—
Unrealized foreign exchange gain
56
35
Accrued demobilization income
(752)
543
Accrued demobilization costs
878
—
Change in operating assets and liabilities
Receivables
(6,022)
(33,617)
Unbilled receivables
(284)
4,870
Other current assets
136
10,706
Right-of-use assets under operating leases
2
252
Additions to deferred costs
(8,464)
(62,388)
Additions to deferred revenue
8,191
19,520
Other current liabilities
(12,684)
22,697
Related party balances
186
277
Obligations under operating leases
6
(255)
Net cash used in operating activities
(19,438)
(30,594)
(in thousands of $)
2024
2023
Adjustments to reconcile net loss to net cash
used in investing activities
Additions to drilling units
(55,404)
(48,966)
Net cash used in investing activities
(55,404)
(48,966)
Adjustments to reconcile net loss to net cash
used in financing activities
Net proceeds from share issuances
59,598
959
Related party debt: Proceeds
94,891
60,171
Long term debt: Repayments
(90,000)
—
Debt fees paid
(1,250)
—
Net cash provided by financing activities
63,239
61,130
Net change
(11,603)
(18,430)
Cash, cash equivalents and restricted cash at
start of the year
54,492
72,922
Cash, cash equivalents and restricted cash at
end of the year
42,889
54,492
Supplementary information
Interest paid, net of amounts capitalized, was $45 million for the year ended
December 31, 2024, compared to $25 million for the year ended December 31,
2023
See accompanying Notes to the Consolidated Financial Statements.
Annual Report 2024 | Consolidated Financial Statements | 21
Consolidated Statements of Changes in Equity
(in thousands of $)
2024
2023
Share capital
Balance at beginning of period
91,339
90,809
Shares issued
60,269
530
Balance at end of period
151,608
91,339
Additional paid in capital
Balance at beginning of period
565,613
565,184
Shares issued
14,328
429
Stock options issued
273
—
Balance at end of period
580,214
565,613
Accumulated other comprehensive income (loss)
Balance at beginning of period
(110)
(145)
Other comprehensive income
56
35
Balance at end of period
(54)
(110)
Retained deficit
Balance at beginning of period
(219,947)
(149,049)
Net loss
(65,657)
(70,898)
Balance at end of period
(285,604)
(219,947)
Total equity
446,164
436,895
See accompanying Notes to the Consolidated Financial Statements.
(Number of shares)
2024
2023
Number of shares outstanding
Balance at beginning of period
182,677,107
181,618,186
Shares issued
120,538,285
1,058,921
Balance at end of period
303,215,392
182,677,107
See accompanying Notes to the Consolidated Financial Statements.
Annual Report 2024 | Notes | 22
Notes
Notes to the Consolidated Financial Statements
1.  GENERAL
Northern Ocean was incorporated under the laws of Bermuda on March 3, 2017.
The Company was incorporated for the primary purpose of engaging in offshore
contract drilling for the oil and gas industry in harsh environments worldwide
through the ownership of offshore drilling rigs.
As of the date of this report, the Company owns two semi-submersible rigs,
Deepsea Mira and Deepsea Bollsta. The Deepsea Mira is currently performing
activties under a drilling contract with a subisidary of TotalEnergies SE
("TotalEnergies") off the coast of West Africa. The Deepsea Bollsta is currently
being mobilized to Norway.
2.  BASIS OF ACCOUNTING
Basis of accounting
The consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America. The
preparation of the consolidated financial statements requires that management
make estimates and assumptions affecting the reported amounts of assets and
liabilities. Actual results could differ from those estimates.
We have evaluated all activity through to the date these financial statements
were available for issue. Any subsequent events that would require recognition in
the financial statements are disclosed in Note 19.
Going concern
These consolidated financial statements are prepared under the going concern
assumption.
The Deepsea Bollsta is currently mobilizing for operations in Norway, supported
by two secured contracts. The first is a firm two-year contract with Equinor,
which includes five optional one-year extensions. This agreement adds
approximately $335 million in firm backlog, with an additional $80 million
associated with rig upgrades, integrated services, and mobilization from Namibia
to Norway. Operations under this contract are expected to commence in the
second half of 2025. The second contract is with OMV and is expected to begin in
the second quarter of 2025, immediately following the rig’s arrival on the
Norwegian continental shelf. With a firm duration ranging from 54 to 99 days, the
OMV contract is expected to contribute between $23 million and $42 million in
additional backlog.
The Deepsea Mira is expected to conclude its firm contract with TotalEnergies in
mid-May 2025. The Group is actively engaged in discussions with other clients
regarding potential follow-on work following the completion of this contract.
Management remains optimistic about Northern Ocean’s ability to secure
additional profitable contracts, supported by ongoing dialogue with prospective
customers in West Africa and other harsh environment markets.
Due to the short-term nature of the Deepsea Mira’s current contract portfolio, the
Group’s financial position is dependent on securing additional drilling contracts
for the rig. This situation potentially gives rise to substantial doubt regarding the
Group’s ability to continue as a going concern. In the absence of new contract
awards, the Group will need to rely on loan amendments, new financing
arrangements, and/or equity issuances to meet its loan obligations and working
capital requirements over the next twelve months. However, the Board remains
confident that a solution will be reached.
Principles of consolidation
The Company's consolidated financial statements comprise of Northern Ocean
and its directly wholly owned subsidiaries. Intra-group transactions and balances,
including internal profits and unrealized gains and losses, have been eliminated
upon consolidation.
Revenue from contracts with customers
The activities that primarily drive the revenue earned from our drilling contracts
include (i) providing a drilling rig and the crew and supplies necessary to operate
the rig, (ii) mobilizing and demobilizing the rig to and from the drill site and (iii)
performing rig preparation activities and/or modifications required for the
contract. Consideration received for performing these activities may consist of
dayrate drilling revenue, mobilization and demobilization revenue, contract
preparation revenue and reimbursement revenue. We account for these
integrated services as a single performance obligation that is (i) satisfied over
time and (ii) comprised of a series of distinct time increments.
Annual Report 2024 | Notes | 23
We recognize consideration for activities that correspond to a distinct time
increment within the contract term in the period the services are performed. We
recognize consideration for activities that are (i) not distinct within the context of
our contracts and (ii) do not correspond to a distinct time increment, ratably over
the estimated contract term.
We determine the total transaction price for each individual contract by
estimating both fixed and variable consideration expected to be earned over the
term of the contract. The amount estimated for variable consideration may be
constrained and is only included in the transaction price to the extent that it is
probable that a significant reversal of previously recognized revenue will not
occur throughout the term of the contract. When determining if variable
consideration should be constrained, we consider whether there are factors
outside of our control that could result in a significant reversal of revenue as well
as the likelihood and magnitude of a potential reversal of revenue. We re-assess
these estimates each reporting period as required. Refer to Note 4 - Revenue
from Contracts with Customers.
Dayrate Drilling Revenue
Our drilling contracts generally provide for payment on a dayrate basis, with
higher rates for periods when the drilling unit is operating and lower rates or zero
rates for periods when drilling operations are interrupted or restricted. The
dayrate invoices billed to the customer are typically determined based on the
varying rates applicable to the specific activities performed on an hourly basis.
Such dayrate consideration is allocated to the distinct hourly increment it relates
to within the contract term, and therefore, recognized in line with the contractual
rate billed for the services provided for any given hour.
Mobilization Revenue
We may receive fees (on either a fixed lump-sum or variable dayrate basis) for the
mobilization of our rigs. These activities are not considered to be distinct within
the context of the contract and therefore, the associated revenue is allocated to
the overall performance obligation and recognized ratably over the expected
term of the related drilling contract. We record a contract liability for
mobilization fees received, which is amortized ratably to contract drilling revenue
as services are rendered over the initial term of the related drilling contract.
Demobilization Revenue
We may receive fees (on either a fixed lump-sum or variable dayrate basis) for the
demobilization of our rigs. These activities are not considered to be distinct
within the context of the contract and therefore, the associated revenue is
allocated to the overall performance obligation and recognized ratably over the
expected term of the related drilling contract. We record a contract asset for
demobilization fees earned, which is recognized ratably to contract drilling
revenue as services are rendered over the initial term of the related drilling
contract.
Revenues Related to Reimbursable Expenses
We generally receive reimbursements from our customers for the purchase of
supplies, equipment, personnel services and other services provided at their
request in accordance with a drilling contract or other agreement. Such
reimbursable revenue is variable and subject to uncertainty, as the amounts
received and timing thereof are highly dependent on factors outside of our
influence. Accordingly, reimbursable revenue is fully constrained and not
included in the total transaction price until the uncertainty is resolved, which
typically occurs when the related costs are incurred on behalf of a customer. We
are generally considered a principal in such transactions and record the
associated revenue at the gross amount billed to the customer, at a point in time,
as “Reimbursable revenues” in our Consolidated Statements of Operations.
Contract Balances
Accounts receivable is recognized when the right to consideration becomes
unconditional based upon contractual billing schedules. Contract asset balances
consist primarily of demobilization revenues which have been recognized during
the period but are contingent on future demobilization activities. Contract
liabilities include payments received for mobilization as well as rig preparation
and upgrade activities which are allocated to the overall performance obligation
and recognized ratably over the initial term of the contract.
Local Taxes
In some countries, the local government or taxing authority may assess taxes on
our revenues. Such taxes may include sales taxes, use taxes, value-added taxes,
gross receipts taxes and excise taxes. We generally record tax-assessed revenue
transactions on a net basis.
Annual Report 2024 | Notes | 24
Deferred Contract Costs
Certain direct and incremental costs incurred for upfront preparation, initial
mobilization and modifications of contracted rigs represent costs of fulfilling a
contract as they relate directly to a contract, enhance resources that will be used
in satisfying our performance obligations in the future and are expected to be
recovered. Such costs are deferred and amortized ratably to contract drilling
expense as services are rendered over the initial term of the related drilling
contract.
Technical utilization
Technical utilization for a period is defined as the percentage of hours deemed to
be operational out of the total number of rig hours in the measurement period.
Economic utilization
Economic utilization for a period is defined as the dayrate drilling revenue
obtained as a percentage of the maximum possible dayrate drilling revenue which
could have been obtained.
Other income
Other revenue is primarily earned from the provision of management services
rendered to a related party, Northern Drilling Ltd. ("NODL"). Revenue is
recognized as earned.
Rig operating expenses
Rig operating expenses are costs associated with operating a drilling unit that is
either in operation or stacked and include the remuneration of offshore crews
and related costs, rig supplies, insurance costs, expenses for repairs and
maintenance and costs for onshore support personnel. We expense such costs as
incurred.
Mobilization and demobilization expenses
We incur costs to prepare a drilling unit for a new customer contract and to move
the rig to a new contract location. We capitalize the mobilization and preparation
costs for a rig's first contract as a part of the rig value and recognize them as
depreciation expense over the expected useful life of the rig (i.e. 30 years). For
subsequent contracts, we defer these costs over the expected contract term (see
deferred contract costs above), unless we don't expect the costs to be
recoverable, in which case we expense them as incurred.
We incur costs to transfer a drilling unit to a safe harbor or different geographic
area at the end of a contract. We expense such demobilization costs as incurred.
We also expense any costs incurred to relocate drilling units that are not under
contract.
Repairs, maintenance and periodic surveys
Costs related to periodic overhauls of drilling units are capitalized and amortized
over the anticipated period between overhauls, which is generally five years.
Related costs are primarily yard costs and the cost of employees directly involved
in the work. We include amortization costs for periodic overhauls in depreciation
expense. Costs for other repair and maintenance activities are included in vessel
and rig operating expenses and are expensed as incurred.
Cash and cash equivalents
All demand and time deposits, and highly liquid low risk investments with original
maturities of three months or less, are considered equivalent to cash.
Restricted cash
Restricted cash consists of bank deposits which are subject to restrictions due to
legislation, regulation or contractual arrangements.
Deferred charges
Loan costs, including debt arrangement fees, are capitalized and amortized on a
straight-line basis over the term of the relevant loan. The straight line basis of
amortization approximates the effective interest method. Amortization of loan
costs is included in other financial expenses. The Company has recorded debt
issuance costs (i.e. deferred charges) as a direct deduction from the carrying
amount of the related debt.
Receivables
Receivables, including accounts receivable, are recorded in the balance sheet at
their nominal amount less an allowance for doubtful accounts. We establish
reserves for doubtful accounts on a case-by-case basis when it is unlikely that
required payments of specific amounts will occur. In establishing these reserves,
we consider the financial condition of the customer as well as specific
circumstances related to the receivable such as customer disputes. Receivable
Annual Report 2024 | Notes | 25
amounts determined as being unrecoverable are written off. Interest income on
receivables is recognized as earned.
Drilling units
Rigs, vessels and related equipment are recorded at historical cost less
accumulated depreciation. The cost of these assets, less estimated residual value
is depreciated on a straight-line basis over their estimated remaining economic
useful lives. The estimated residual value is taken to be offset by any
decommissioning costs that may be incurred. The estimated economic useful life
of our rigs, when new, is 30 years. Significant investments are capitalized and
depreciated in accordance with the nature of the investment. Significant
investments that are deemed to increase an asset’s value for its remaining useful
life are capitalized and depreciated over the remaining life of the asset.
Impairment of long-lived assets
The carrying value of the Drilling Units is assessed for impairment whenever
events or changes in circumstances indicate that the carrying amount may no
longer be appropriate. The Company first assesses recoverability of the carrying
value of the asset by estimating the undiscounted future net cash flows expected
to result from the asset, including eventual disposition. If the undiscounted future
net cash flows are less than the carrying value of the asset, an impairment loss is
recorded based on the difference between the carrying value and the fair value.
Related parties
Parties are related if one party has the ability, directly or indirectly, to control the
other party or exercise significant influence over the other party in making
financial and operating decisions. Parties are also related if they are subject to
common control or common significant influence.
Earnings per share
Basic earnings per share is computed based on the income available to ordinary
shareholders and the weighted average number of shares outstanding. The
Company does not have any potentially dilutive instruments.
Foreign currencies
The functional currency of the Company and all of its subsidiaries is either the
U.S. dollar or the Norwegian Kroner, as the majority of expenditures are
denominated in U.S. dollars or Norwegian Kroner. The Company's reporting
currency is U.S. dollars. Assets and liabilities are translated into the functional
currency at exchange rates existing at the date of the balance sheet. Such
currency translation gains and losses are included in the Consolidated Statement
of Operations. Transactions in currencies other than the functional currency are
translated into the functional currency at the exchange rate at the transaction
date. Exchange gains and losses on translation of our net equity investments in
subsidiaries are reported as a separate component of accumulated other
comprehensive loss in shareholders' equity. The Company utilizes various cash
management tools to maintain a balance of exposure to any one particular
currency and works to match cash inflows and outflows to minimize foreign
currency impact. In the twelve months ended December 31, 2023, the NOK
weakened against the U.S. dollars resulting in a foreign currency loss.
Fair values
We have determined the estimated fair value amounts presented in these
consolidated financial statements using available market information and
appropriate methodologies. However, considerable judgment is required in
interpreting market data to develop the estimates of fair value. The estimates
presented in these consolidated financial statements are not necessarily
indicative of the amounts that we could realize in a current market exchange.
Operating leases
The Company, as lessee, currently holds one operating lease for office space. The
Company recognizes right-of-use assets and corresponding lease liabilities for its
operating leases.
The Company has not elected the practical expedient to not separate lease and
non-lease components for all of our leases where we are the lessee. ASC 842 also
allows lessees to elect as an accounting policy not to apply the provisions of ASC
842 to short-term leases (i.e. leases with an original term of 12-months or less).
Instead, a lessee may recognize the lease payments in profit or loss on a straight-
line basis over the lease term and variable lease payments in the period in which
the obligation for those payments is incurred. The Company has elected not to
apply the provisions of ASC 842 to short-term leases.
Where the Company is lessee, operating lease expense is recognized on a
straight-line basis over the lease term.
Annual Report 2024 | Notes | 26
Fuel
Fuel is stated at the lower of cost and net realizable value. Cost is determined on
a first-in, first-out basis.
Share-based Compensation
The Company accounts for share-based payments in accordance with ASC Topic
718 Compensation - Stock Compensation, under which the fair value of issued
stock options is expensed over the period in which the options vest under the
simplified method. Share-based compensation represents the cost of vested and
non-vested shares and share options granted to employees and directors for their
services, and are included in administrative expenses in the consolidated
statements of operations. The fair value of share options grants is determined
with reference to option pricing models, and depends on the terms of the granted
options. The fair value is recognized as compensation expense over the requisite
service period.
Recently adopted accounting standards
The Company adopted no new accounting standard in the period.
3.  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
There have been no accounting pronouncements issued in 2024 or thereafter, up
to the date of this report that are expected to have significance to our
consolidated financial statements.
4.  REVENUE FROM CONTRACTS WITH CUSTOMERS
The following table provides information about the composition of contact
revenue:
(in thousands of $)
2024
2023
Dayrate revenue
222,121
166,538
Amortization of deferred revenue
18,964
30,408
Accrued demobilization revenue
3,152
8,457
Other
8,378
9,858
Contract revenue
252,615
215,261
Dayrate revenue
Dayrate revenue earned from the Deepsea Bollsta and Deepsea Mira drilling
contracts.
Amortization of deferred revenue
The Company may receive fees from its customers for the mobilization of rigs.
These activities are not considered to be distinct within the context of the
contract and therefore, where these fees are known and probable the associated
revenue is allocated to the overall performance obligation and recognized ratably
over the initial firm term of the related drilling contract.
The following table provides information about the composition of amortization
of deferred revenue:
(in thousands of $)
2024
2023
Balance at beginning of period
14,633
25,521
Deferred revenue accruing in the period
8,191
19,520
Amortization of deferred revenue
(18,964)
(30,408)
Balance at the end of period
3,860
14,633
Short-term deferred revenue
3,860
14,633
Long-term deferred revenue
—
—
Annual Report 2024 | Notes | 27
Note the deferred revenue assets in the balance sheet also contain funds
received from the Norwegian government as a grant, due to the Deepsea Mira
being equipped with systems which reduce NOx emissions. The grant is being
amortized over the estimated useful life of the Deepsea Mira, resulting in annual
amortization of circa $110 thousand. At the date of this report $2.7 million is held
as deferred revenue in relation to the NOx grant, split between short-term and
long-term.
Accrued demobilization revenue
The Company may receive fees from its customers for the demobilization of our
rigs. These activities are not considered to be distinct within the context of the
contract and therefore, where these fees are known and probable the associated
revenue is allocated to the overall performance obligation and recognized ratably
over the initial firm term of the related drilling contract.
The following table provides information about the composition of the accrued
demobilization revenue:
(in thousands of $)
2024
2023
Balance at beginning of period
—
543
Accrual of demobilization revenue
3,152
8,457
Demobilization payments received
(2,400)
(9,000)
Balance at the end of period
752
—
Short-term accrued revenue
752
—
Long-term accrued revenue
—
—
Other
This balance consists of operational excellence bonuses, add-on revenue and fuel
sales. The costs associated with this revenue are included within rig operating
expenses (detailed in Note 5).
The following table provides information about receivables from contracts
outstanding at year-end:
(in thousands of $)
2024
2023
Accounts receivable, net
47,410
41,388
Unbilled receivables
7,556
6,520
Receivables from contracts with customers
54,966
47,908
Receivables are typically billed in the fortnight following the month the
performance obligations were satisfied, and have credit terms of between 30 and
45 days.
5. RIG OPERATING EXPENSES
The following table provides information about the composition of rig operating
expenses:
(in thousands of $)
2024
2023
Daily operating expenses
148,409
113,879
Maintenance projects
5,142
—
Amortization of deferred costs
33,337
65,009
Accrued demobilization costs
4,248
—
Other
15,180
12,231
Rig operating expenses
206,316
191,119
Daily operating expenses
This category includes the costs associated with the daily operations of the rigs.
The notable constituents of the daily operating expenses are the expenses for
offshore personnel, repairs and maintenance (excluding maintenance projects
referred to below), onshore support services, catering costs and management
fees payable to Odfjell Drilling.
Included in daily operating expenses are incremental costs associated with
providing customers with add-on services for which the commercial terms differ
from those services provided on a reimbursable basis. The costs and the
Annual Report 2024 | Notes | 28
associated revenue for these services are reported on a gross basis under rig
operating expenses and contract revenue respectively.
Maintenance projects
Maintenance projects which are considered non-recurring and with an individual
cost in excess of $100,000 are not considered to be indicative of the ordinary
daily running costs of our operations and have been disaggregated from daily
operating expenses. These projects are either preventive or corrective in nature.
Amortization of deferred costs
Certain direct and incremental costs incurred for upfront preparation, initial
mobilization and modifications of the contracted rigs represent costs of fulfilling
a contract as they relate directly to a contract and enhance resources that will be
used in satisfying performance obligations. Such costs are deferred and
amortized ratably to rig operating expenses as services are rendered over the
initial term of the related drilling contract.
The following table provides information about the deferred costs to fulfill a
contract with customers;
(in thousands of $)
2024
2023
Balance at beginning of period
27,073
29,694
Cost additions
8,464
62,388
Amortization
(33,337)
(65,009)
Balance at the end of period
2,200
27,073
Short-term deferred costs
2,200
27,073
Long-term deferred costs
—
—
Accrued demobilization costs
Certain direct and incremental costs incurred for the decommissioning,
relocation, and final demobilization of contracted rigs represent costs of fulfilling
a contract, as they relate directly to a contract and are necessary to conclude
operations and transition the rig. Such costs are accrued and recognized ratably
as rig operating expenses over the remaining term of the related drilling contract
or as incurred upon contract completion.
In the fourth quarter, demobilization costs were recognized from the Deepsea
Bollsta’s drilling contracts. A total of $4.2 million was accrued across these
contracts, with $3.4 million already incurred. The remaining $0.9 million is
recorded as a liability and will be incurred in the first quarter of 2025.
The following table provides information about the accrued costs to fulfill a
contract with customers;
(in thousands of $)
2024
2023
Balance at beginning of period
—
—
Accrual of demobilization costs
4,248
—
Demobilization costs incurred
(3,370)
—
Balance at the end of period
878
—
Short-term accrued costs
878
—
Long-term accrued costs
—
—
Other
Balance primarily consists of the cost of fuel sold at contract commencement and
withholding taxes payable in Namibia.
Additional information
Included within daily operating expenses are incremental costs associated with
providing our customers with add-on services for which the commercial terms
differ from those services provided on a reimbursable basis. The cost, and the
associated revenue for these services are reported on a gross basis under rig
operating expenses and contract revenue respectively.
Annual Report 2024 | Notes | 29
6.  INCOME TAXES
Bermuda
Under current Bermuda law, the Company is currently not required to pay taxes
in Bermuda on either income or capital gains. The Company has received written
assurance from the Minister of Finance in Bermuda that, in the event of any such
taxes being imposed, the Company will be exempt from taxation until March 31,
2035.
Namibia
The Company is currently operating in Namibia through a branch of one of the
Company's subsidiaries. This branch is subject to income tax, VAT and
withholding taxes.
Other jurisdictions
The Company has subsidiaries which were incorporated in the Marshall Islands
and thus are not subject to income tax. Certain of the Company's subsidiaries and
branches in Norway, Ireland, Angola, Namibia and the USA are subject to income
tax in their respective jurisdictions.
Deferred tax
Deferred tax assets and liabilities are based on temporary differences that arise
between carrying values of assets and liabilities used for financial reporting
purposes and amounts used for taxation purposes and the future tax benefits of
tax loss carry forwards.
The Company does not have any unrecognized tax benefits, material accrued
interest or penalties relating to income taxes.
7.  EARNINGS PER SHARE
The computation of basic earnings per share is calculated by dividing the net
income attributable to the Company by the weighted average number of shares
outstanding during the period.
Diluted earnings per share amounts are calculated by dividing the net income
attributable to the Company by the weighted average number of shares
outstanding during the year plus the weighted average number of ordinary shares
that would be issued on conversion of all the dilutive potential ordinary shares
into ordinary shares. If in the period there is a loss then any dilutive potential
ordinary shares have been excluded from the calculation of diluted loss per share,
as their effect would be anti-dilutive.
The components of the numerator and the denominator in the calculation are as
follows:
(in thousands)
2024
2023
Net loss ($)
(65,657)
(70,898)
Weighted average number of ordinary shares
283,071
182,500
8.  RESTRICTED CASH
The restricted cash as of December 31, 2024, of $0.1 million (December 31,
2023, $0.1 million) consists of cash withheld for a guarantee to NIS and payroll
taxes.
Annual Report 2024 | Notes | 30
9.  DRILLING UNITS
Movements in the carrying value of drilling units in the years ended December
31, 2024 and 2023 may be summarized as follows:
(in thousands of $)
Cost
Accumulated
depreciation
Net carrying
value
Balance at December 31, 2022
1,032,890
(115,425)
917,465
Retirement of assets
(15,140)
15,140
—
Additions
48,966
—
48,966
Depreciation
—
(42,871)
(42,871)
Balance at December 31, 2023
1,066,716
(143,156)
923,560
Retirement of assets
(18,631)
1
8
6
3
1
18,631
—
Additions
55,403
—
55,403
Depreciation
—
(49,914)
(49,914)
Balance at December 31, 2024
1,103,488
(174,439)
929,049
No interest costs were capitalized during the years ending December 31, 2024 or
December 31 2023.
Retirement of assets
This category represents previously capitalized assets which have been retired
from use, and therefore removed from the fixed asset register.
10.  OTHER CURRENT ASSETS
Other current assets at December 31, 2024 and 2023, are summarized as
follows:
(in thousands in $)
2024
2023
Deposit held
35
35
VAT receivable
600
493
Other
1,338
1,927
1,973
2,455
Other
This category principally consists of prepayments for insurance and operational
costs.
Annual Report 2024 | Notes | 31
11.  OTHER CURRENT LIABILITIES
Other current liabilities at December 31, 2024 and 2023, are summarized as
follows:
(in thousands in $)
2024
2023
Accounts payable
12,586
5,171
Accrued administrative expenses
1,602
2,694
Accrued operating expenses
9,522
22,503
Other payables
17,703
11,016
Accrued interest expense
5,570
18,284
Accrued demobilization costs
878
—
47,861
59,668
Other payables
Other payables primarily consist of withholding, corporate and value added taxes
due to the Namibian and Congolese tax authorities.
Accrued demobilization costs
Certain direct and incremental costs incurred for the decommissioning,
relocation, and final demobilization of contracted rigs represent costs of fulfilling
a contract, as they relate directly to a contract and are necessary to conclude
operations and transition the rig. Such costs are accrued and recognized ratably
as rig operating expenses over the remaining term of the related drilling contract
or as incurred upon contract completion. See Note 5 for more details.
12.  DEBT
Debt due to non-related parties as of December 31, 2024 and 2023, are
summarized as follows
(in thousands of $)
2024
2023
U.S. dollar denominated floating rate debt:
  $200.0 million term loan facility - Deepsea
Mira
126,923
165,000
  $200.0 million term loan facility - Deepsea
Bollsta
134,615
175,000
  $50.0 million term loan facility - Deepsea Mira
and Deepsea Bollsta
38,462
50,000
Total debt - gross of deferred charges
300,000
390,000
Short-term portion of debt issuance costs
(50)
(23)
Long-term portion of debt issuance costs
(994)
(275)
Total debt - net of deferred charges
298,956
389,702
Short-term debt
14,950
29,977
Long-term debt
284,006
359,725
The outstanding debt to non-related parties as of December 31, 2024, is
repayable as follows:
(in thousands in $)
Year 1
15,000
Year 2
285,000
Year 3
—
Thereafter
—
300,000
$200.0 million senior secured term loan facility - Deepsea Mira
The Deepsea Mira term loan facility was originally established in 2018 and has
since been amended and extended on multiple occasions, most recently in June
2024. As part of the June 2024 amendment, the Company repaid $38.1 million,
Annual Report 2024 | Notes | 32
reducing the outstanding balance from $165.0 million to $126.9 million. Of this,
$7.5 million is classified as current and falls due within one year of December 31,
2024. The facility has a final maturity date in June 2026.
The interest rate is based on the Secured Overnight Financing Rate (“SOFR”), plus
a credit adjustment spread (either 0.26161% or 0.42826%, depending on
whether a 3-month or 6-month interest period is selected), and a margin of 4.0%.
The loan is secured by a mortgage over the Deepsea Mira and includes financial
covenants on a consolidated basis. These covenants require the Company to
maintain a minimum equity ratio, positive working capital, and a defined level of
liquidity.
$200.0 million senior secured term loan facility - Deepsea Bollsta
The Deepsea Bollsta facility was established in 2019 and, like the Mira facility, has
undergone several amendments and extensions, the most recent occurring in
June 2024. As part of this amendment, the Company repaid $40.4 million,
reducing the outstanding loan balance from $175.0 million to $134.6 million. Of
this, $7.5 million is classified as current and due within one year of December 31,
2024. The facility matures in June 2026.
The interest rate is calculated on the same basis as the Mira facility—SOFR plus a
credit adjustment spread (0.26161% or 0.42826%) and a 4.0% margin.
The loan is secured by a mortgage over the Deepsea Bollsta and is subject to the
same consolidated financial covenants as the Mira facility.
$50.0 million senior secured term loan facility - Deepsea Mira and Deepsea
Bollsta
In 2019, the Company established a $50.0 million revolving credit facility as part
of a broader amendment to its bank financing arrangements. The revolving
facility shares the same key terms as the Mira and Bollsta term loans, including
maturity in June 2026, interest rate calculation based on SOFR, and the same
financial covenants.
As part of the June 2024 amendments, the Company repaid $11.5 million under
this facility reducing the outstanding balance from $50.0 million to $38.5 million.
The Company was in compliance with all financial covenants as of December 31,
2024.
Assets pledged
(in thousands of $)
2024
2023
Drilling units
929,049
923,560
Deferred charges
(in thousands of $)
2024
2023
Debt arrangement fees
2,080
830
Accumulated amortization
(1,036)
(532)
1,044
298
Annual Report 2024 | Notes | 33
13.  RELATED PARTY DEBT
Debt due to related parties as of December 31, 2024 and 2023, are summarized
as follows
(in thousands of $)
2024
2023
U.S. dollar denominated fixed rate debt:
  $100.0 million term loan facility
—
98,222
  $50.0 million term loan facility
—
53,727
  $215.0 million credit loan facility
231,840
—
Total debt
231,840
151,949
Short-term debt
—
53,727
Long-term debt
231,840
98,222
Total debt
231,840
151,949
The outstanding debt as of December 31, 2024, is repayable as follows:
(in thousands in $)
Year 1
—
Year 2
231,840
Year 3
—
Thereafter
—
231,840
All related party debt is repayable to Sterna Finance Ltd. ("Sterna").
At the start of the year, the Company held two credit facilities with its related
party, Sterna, a $100.0 million facility and a $50.0 million facility.
As part of the June 2024 refinancing, Sterna elected to perform a debt
conversion, reducing the Company’s debt by $15.0 million and converting this
amount into shares at a conversion price of $0.50 per share. In addition, the loan
agreements with Sterna were consolidated and extended into a single $215.0
million facility. The outstanding debts, including compounded and accrued
interest, were rolled into this facility, leaving approximately $70 million available
for drawdown, which was utilized as part of the refinancing on June 28, 2024.
The amended and extended facility requires no amortization and has a final
maturity date in December 2026. The Company also has the option to convert
cash interest payments into PIK interest at a pre-agreed premium, which it
utilized in December 2024.
The Company is in compliance with the covenants set out in the agreement with
Sterna.
14.  SHARE CAPITAL
On June 19, 2024, the Company successfully completed a private placement
("Private Placement"). A total of 90,538,285 new shares were issued at a
subscription price of NOK 7.00 per share, resulting in gross proceeds of
approximately $60.0 million.
Since 2019, the Company has maintained revolving credit facilities with its
related party, Sterna. Under this agreement, Sterna had the option to convert
$15.0 million of the loan into Company shares at a conversion price of $0.50 per
share. On June 19, 2024, Sterna exercised this option, resulting in the issuance of
30,000,000 new shares.
As at December 31, 2024, the Company had 303,215,392 fully paid common
shares outstanding and authorized share capital of $968,098,811, divided into
1,936,197,622 common shares of a par value of $0.50 each.
Annual Report 2024 | Notes | 34
15.  FINANCIAL INSTRUMENTS
The carrying value and estimated fair value of the Company's financial
instruments as of December 31, 2024 and 2023 are as follows:
2024
2023
(in thousands of $)
Carrying
Value
Fair Value
Carrying
Value
Fair Value
Assets:
Cash and cash equivalents
42,751
42,751
54,350
54,350
Restricted cash
138
138
142
142
Liabilities:
Floating rate debt
298,956
297,214
389,702
389,702
Related party long-term debt
231,840
247,278
98,222
97,479
Related party short-term debt
—
—
53,727
54,353
The estimated fair value of financial assets and liabilities are as follows:
2024
(in thousands of $)
Fair Value
Level 1
Level 2
Level 3
Assets:
Cash and cash equivalents
42,751
42,751
—
—
Restricted cash
138
138
—
—
Liabilities:
Floating rate debt
297,214
—
—
297,214
Related party long-term debt
247,278
—
—
247,278
Related party short-term debt
—
—
—
—
2023
(in thousands of $)
Fair Value
Level 1
Level 2
Level 3
Assets:
Cash and cash equivalents
54,350
54,350
—
—
Restricted cash
142
142
—
—
Liabilities:
Floating rate debt
389,702
—
389,702
—
Related party long-term debt
97,479
—
—
97,479
Related party short-term debt
54,353
—
—
54,353
The following methods and assumptions were used to estimate the fair value of
each class of financial instrument:
Cash and cash equivalents – the carrying values in the balance sheet approximate
fair value.
Restricted cash – the carrying value in the balance sheet approximates fair value.
Floating rate debt (being total debt less the carrying value of deferred charges) –
the fair value has been determined using level 3 inputs being the discounted
expected cash flows of the outstanding debt.
Related party long-term debt – the fair value has been determined using level 3
inputs being the discounted expected cash flows of the outstanding debt.
Related party short-term debt – the fair value has been determined using level 3
inputs being the discounted expected cash flows of the outstanding debt.
Annual Report 2024 | Notes | 35
16.  RELATED PARTY TRANSACTIONS
Hemen Holdings Ltd. ("Hemen"), a Cyprus holding company, indirectly controlled
by trusts established by Mr. John Fredriksen, for the benefit of his immediate
family, owned 54.3% of the Company's outstanding ordinary shares at December
31, 2024.
The Company currently transacts, or previously has transacted, business with the
following related parties, being companies in which Hemen, or companies
affiliated with Hemen, has a significant interest:
– Sterna Finance Ltd. (“Sterna”);
– Front Ocean Management Ltd. and Front Ocean Management AS (together
“Front Ocean”);
– Frontline Management (Bermuda) Ltd. (“Frontline”);
– Seatankers Management Co. Ltd. and STM Cyprus Ltd. (together “Seatankers”);
– Northern Drilling Ltd. (“NODL”).
Sterna transactions
See related party debt (Note 13).
Frontline, Front Ocean and Seatankers transactions
The Company and its subsidiaries have received treasury, accounting, corporate
secretarial and advisory services from these entities and were charged $0.6
million in the year ended December 31, 2024 (2023: $0.2 million).
NODL transactions
In 2024, the Company continued to provide management services to NODL and
charged $0.2 million in the year ended December 31, 2024 (2023: $1.0 million).
A summary of balances due from related parties at December 31, 2024 and 2023
is as follows:
(in thousands of $)
2024
2023
NODL
—
129
A summary of short-term balances due to related parties at December 31, 2024
and 2023 is as follows:
(in thousands of $)
2024
2023
Sterna
—
53,727
A summary of long-term balances due to related parties at December 31, 2024
and 2023 is as follows:
(in thousands of $)
2024
2023
Sterna
231,840
98,222
17.  COMMITMENTS AND CONTINGENCIES
As of December 31, 2024, the Company had no capital commitments.
18.  SHARE BASED COMPENSATION
On August 20, 2024, the Company granted a total of 6,500,000 share options to
Arne Jacobsen, CEO of Northern Ocean. An additional 3,000,000 share options
were granted on September 11, 2024. These options were allocated equally
among Jonas Ytreland (CFO), Vidar Skjelbred (COO), and Eirik Sunde (CCO) of
Northern Ocean.
The terms of all share options are consistent across grants. Each option has a five-
year contractual term from the date of grant and is subject to a three-year graded
vesting schedule, under which one-third of the options vest each year. The
exercise price is NOK 12.00 per share. Once exercised, the resulting shares are
subject to a two-year holding period before they may be sold. The exercise price
will be adjusted for any dividends distributed prior to the option's expiry.
Annual Report 2024 | Notes | 36
As of December 31, 2024, the Company had the following share options
outstanding, all of which are either fully vested or are expected to vest:
Tranche
Share
options
Initial
exercise
price
(NOK)
Vesting
date
Risk-
free
interest
rate
Expected
volatility
August 2024 Tranche
2,166,667
12.00
Aug-25
4.12%
62.46%
August 2024 Tranche
2,166,667
12.00
Aug-26
3.62%
88.33%
August 2024 Tranche
2,166,666
12.00
Aug-27
3.45%
108.18%
September 2024 Tranche
1,000,000
12.00
Sep-25
4.12%
62.46%
September 2024 Tranche
1,000,000
12.00
Sep-26
3.62%
88.33%
September 2024 Tranche
1,000,000
12.00
Sep-27
3.45%
108.18%
Total
9,500,000
The fair value of share options granted during the year was determined using the
Black-Scholes option pricing model, with tranche-specific inputs for risk-free
interest rate and expected volatility. A summary of these assumptions is
presented in the table above. Risk-free rates were derived from relevant U.S.
Treasury yields at the time of grant, while expected volatility was estimated
based on historical share price movements. The Company assumed a 0% dividend
yield, as the exercise price is adjusted for any dividends declared between the
grant date and exercise. No forfeiture rate was assumed at grant; the effect of
forfeitures is recognized as incurred.
A summary of option activity under the Share Option Scheme as of December 31,
2024, and changes during the year is presented below:
Share
options
Weighted
average
exercise
price per
share
(NOK)
Weighted
average
remaining
contractual
term (years)
Aggregated
intrinsic
value
($'000)
Outstanding at
December 31, 2023
—
—
—
—
Granted
9,500,000
12.00
1.7
0
Outstanding at
December 31, 2024
9,500,000
12.00
1.7
0
Exercisable at
December 31, 2024
—
N/A
N/A
N/A
A summary of the status of the Company's non-vested shares as of December 31,
2024, and changes during the year ended December 31, 2024, is presented
below:
Non-vested Shares
Shares
Weighted
average grant
date fair value
($)
Non-vested at December 31, 2023
—
—
Granted
9,500,000
0.19
Non-vested at December 31, 2024
9,500,000
0.19
As of December 31, 2024, there was $1.6 million of total unrecognized
compensation expense related to non-vested share-based payment
arrangements. This cost is expected to be recognized over a weighted-average
period of 1.7 years. The total share-based compensation expense recognized in
administrative expenses during the year ended December 31, 2024, was $0.3
million (2023: $0.0 million).
Annual Report 2024 | Notes | 37
There were no cash flow effects resulting from share option activity during the
year ended December 31, 2024, or the prior year.
19.  SUBSEQUENT EVENTS
The Company has evaluated subsequent events through to the date the financial
statements were available for issue.
On February 05, 2025, the Board of Directors of Northern Ocean Ltd. approved a
bonus for Arne Jacobsen (CEO), in the amount of $225,000 in the form of
331,728 shares in the company valued at the closing price on January 31, 2025.
The shares have a lock-up period of one year.
Annual Report 2024 | Notes | 38
Annual Report 2024 | Notes | 39
Annual Report 2024 | Notes | 40
Annual Report 2024 | Notes | 41
Annual Report 2024 | Notes | 42
Northern Ocean Ltd.
PO Box HM 1593,
Par-la-Ville Place, 14 Par-la-Ville Road,
Hamilton HM 08 Bermuda
Phone: +1 441 295 9500