Annual Report 2025
2
Table of Contents
Financial Statements
This is Northern Ocean
3
Consolidated Statements of Comprehensive Income
18
CEO Letter
5
 
Consolidated Balance Sheet
20
Executive Management
6
Consolidated Statements of Cash Flows
21
Board of directors
7
Consolidated Statements of Changes in Equity
22
Board of Directors' Report
8
Notes to the Consolidated Financial Statements
23
Responsibility Statement
17
Independent Auditor's Report
38
Annual Report 2024 | This is Northern Ocean | 3
This is Northern Ocean
Northern Ocean owns and operates one of the world’s newest and
most capable harsh-environment semi-submersible drilling rig –
Deepsea Mira – ideally suited for operations across all major
offshore basins. With a modern rig, completed capex programs, and
strong commercial and operational execution, NOL is well-
positioned to benefit from a tightening supply of high-end rigs and
an expected increase in long-term demand.
Northern Ocean maintain 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 shareholders. 
Deepsea Mira is one of the world’s most advanced drilling rigs. It is
based on the Moss Maritime CS60 design, capacity of drilling in
water depth of up to 10,000 feet and it is capable of drilling in all
areas globally.
The Company is listed on Oslo Stock Exchange under the ticker
symbol "NOL".
Annual Report 2024 | This is Northern Ocean | 4
Annual Report 2025 | CEO Letter | 5                   
CEO Letter
Dear Shareholders,
2025 has been a defining and transitional year for Northern Ocean Ltd,
characterized by disciplined execution, strategic repositioning, and a
continued focus on protecting shareholder value in a challenging market
environment. While industry conditions have remained demanding, we have
taken important steps to strengthen the Company and position it for the
improving cycle ahead.
A key milestone during the year was the successful sale of Deepsea Bollsta,
enabling a significant reduction in debt and enhancing our financial
flexibility. This transaction, combined with continued financial discipline,
has reinforced our balance sheet and improved our ability to navigate near-
term market uncertainty.
The industry landscape continues to evolve, with increasing momentum
toward consolidation. Developments such as the Valaris-Transocean
combination highlight the need for scale and efficiency across the sector.
We expect further consolidation and attrition through 2026 and into 2027,
contributing to a tightening supply-demand balance and supporting a
stronger market outlook over time.
Operationally, our priority throughout 2025 has been to secure utilization,
maintain high-quality delivery, and build runway into a more favorable
pricing environment. Despite the challenges faced during the year, we have
successfully protected Northern Ocean’s equity through strong operational
performance, financial discipline, and our ability to secure contracts in a
competitive market. These efforts have been critical in maintaining stability
during a period of transition.
Looking ahead, 2026 and the beginning of 2027 is expected to remain a
challenging year and will require continued focus on securing additional
backlog. Our primary objective is to establish long-term contracts on terms
that reflect the underlying value of our assets and deliver sustainable
returns for our shareholders. We are working relentlessly toward this goal,
with a constant focus on commercial execution and strategic positioning.
Encouragingly, the long-term outlook for our industry continues to improve.
Recent developments in the Middle East are driving a reallocation of capital
expenditure by the oil majors toward other deepwater regions, reinforcing
the fundamentals of a tightening market from 2027 and beyond. We believe
these trends will support improved utilization and pricing over time.
Northern Ocean Ltd. will continue to build on its core strengths; operational
excellence, financial discipline, and commercial agility to protect and create
long-term value for all shareholders. While 2025 has been a transformative
year, it has also demonstrated the resilience of our business and the
strength of our strategic direction.
We thank you for your continued trust and support.
Sincerely,
Arne Jacobsen
CEO
Annual Report 2025 | Executive Management | 6                   
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 24 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. Prior
to joining Seadrill, he held various
positions within the shipping and
banking sectors.  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 2025 | Board of directors | 7                             
Board of Directors
In accordance with applicable corporate governance guidelines, the Board has assessed the independence of its members. 5 of the 5 directors are deemed independent of
management, and 3 are deemed independent of the Company’s major shareholder.
Gary W. Caswell
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 olds a
Bachelor of Science degree in
Business Administration from
the University of California,
Long Beach. He is a US citizen.
Sven Børre Larsen has serves
as CFO of TGS, a leading
global energy data and
intelligence company. 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 the FPSO contractor
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, SFL
Corporation Ltd. 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 2025 | Board of Directors' Report | 8
Board of Directors' Report
Key Information
Unless otherwise indicated, the terms "Northern Ocean", "we", "us", "our", the
"Company", the "Northern Group" and the "Group" refer to Northern Ocean Ltd.
and its consolidated subsidiaries.
Unless otherwise indicated, all references to "U.S. dollars", "USD", "dollars",
"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's primary purpose is to engage in offshore contract drilling services
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 one semi-submersible rig,
Deepsea Mira, which is currently operating under a drilling contract with a
subsidiary of Shell plc. ("Shell") off the coast of Namibia and is expected to remain
in West Africa through the contract term.
The Company's shares are registered for trading on the Norwegian Stock
Exchange (ticker “NOL”) and commenced trading on December 9, 2019.
Our registered office is at Par-La-Ville Place, 14 Par-La-Ville Road, Hamilton,
Bermuda. Our website is www.northernoceanltd.com.
Operational Activity
In 2025, Deepsea Bollsta transitioned from international operations to the
Norwegian Continental Shelf, marking a year of strong operational activity and
strategic milestones. The rig completed a one-well contract in Namibia for a
Chevron subsidiary in January before mobilizing to Norway. It received its
Acknowledgement of Compliance on 9 May and subsequently commenced
operations with OMV Norge AS, completing the contract on 23 July.
Following this, Deepsea Bollsta began a long-term contract with Equinor Energy
AS, a subsidiary of Equinor ASA, on 31 August. The agreement included a firm
two-year period with five optional one-year extensions, this added approximately
$335 million in firm backlog, along with an additional $80 million related to
upgrades, integrated services, and mobilization.
A key strategic development occurred in November, when the company agreed
to sell Deepsea Bollsta to a subsidiary of Odfjell Drilling for a cash consideration of 
$480 million. The transaction was completed on 15 December following
regulatory approval. The proceeds enabled the company to significantly reduce
debt, strengthen its balance sheet, and enhance capital efficiency.
Deepsea Mira operated in Namibia under contract with a subsidiary of
TotalEnergies SE during the first half of 2025, completing its campaign on 12 May
before commencing demobilization and BOP maintenance. In July, the rig
secured a new contract with Rhino Resources Ltd. and began operations on 29
July.
During the fourth quarter, Deepsea Mira continued operations in Namibia,
completing work for BW Energy and Rhino Resources. Following completion of
the Rhino contract on 31 January 2026, the rig prepared to commence a new
contract with a subsidiary of Shell plc. The rig commenced the contract on 29
March 2026.
During 2025 both rigs continued to demonstrate exceptional operational
performance under the management of Odfjell and in operations maintained an
average technical utilization of 97% for the year. Additionally, all clients have
been able to realize benefits from the high specification semi-submersible design
of the Deepsea Mira and Deepsea Bollsta, until the rig was sold on 15 December
last year. The rigs have proven their ability to drill at water depths exceeding
3,000 meters (9,842 ft) and withstood severe weather and sea conditions with
very minimal impact on performance efficiencies.
During the first quarter of 2025, Northern Ocean initiated a significant
organizational restructuring, including the strategic closure of the Dublin office
and a targeted reduction in workforce. These actions were aimed at streamlining
Annual Report 2025 | Board of Directors' Report | 9
operations, reducing the cost base, and enhancing long-term efficiency. The
restructuring was largely completed during the second quarter, with the full
financial impact realized in the second half of the year.
Overall, 2025 was characterized by successful contract execution, strong backlog
generation, and a transformative asset sale that improved the company’s
financial flexibility and strategic outlook.
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 rig 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. On 23
September 2025 Deepsea Bollsta experienced a well control situation. The rig
activated the blowout preventer, all rig-based safety barriers worked as intended
and the crew handled the situation well.
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
2025, the Company continued its commitment to workforce localization by hiring
and training Namibian nationals for offshore rig roles. In the second quarter of
2025, the Company initiated development of the Green Hat Program in
partnership with a local training provider, focused on preparing Namibians for
careers in the offshore drilling industry. The program consists of an intensive
two-week introductory course, and the Company successfully launched and
completed its first session in the first quarter of 2026.
At the end of 2025, the Company had 7 direct employees, all 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 14% 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 2025 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 to 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 Deepsea Mira that 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 is global with its rig potentially
operating in countries or regions with high human rights abuse risk profiles. We
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
Annual Report 2025 | Board of Directors' Report | 10
operational manager Odfjell has since 1 July 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 rig 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.
Deepsea Mira is currently operating under a drilling contract with Shell off the
coast of Namibia and is expected to remain in West Africa through the contract
term.
The Company continues to have a positive outlook on Northern Ocean's ability to
obtain further profitable contracts, with the Company continuing ongoing
dialogues with potential customers in the West Africa region and other harsh
environment markets.
The Company had a remaining estimated firm revenue backlog of $17 million as
of 31 December 2025.
As the Deepsea Mira currently has no long term backlog, the Group's financial 
position is reliant on securing additional drilling contracts for the rig. This 
situation  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.
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 rig 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 facility and failure to do so would require the outstanding loan to be
pre-paid. Further, the success and growth of the Company relies on favorable
contracts for its rig 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 Company’s reliance on a single
rig makes it particularly vulnerable to revenue loss in the event that the rig
becomes unavailable due to market developments or technical or regulatory
issues. 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 rig and for the compliance with requirements
under applicable drilling contracts with its customers. The company relies of the
rig require 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
includes 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.
Annual Report 2025 | Board of Directors' Report | 11
Outlook
Northern Ocean enters 2026 as a more focused company following the sale of
Deepsea Bollsta in December 2025, with Deepsea Mira now representing the
Company’s remaining operating asset. The transaction simplified the corporate
structure, reduced leverage and strengthened the Company’s financial flexibility,
while allowing management to concentrate on maximizing the value of Deepsea
Mira through disciplined commercial execution. 
The Company believes the offshore drilling market presents a mixed near-term
picture. While management has indicated that market conditions are expected to
remain challenging through 2026, Northern Ocean is encouraged by a
strengthening pipeline of longer-term opportunities for drilling programs
expected to start in 2027. The Company sees early signs of opportunities
emerging across several regions that could develop into meaningful term work
for Deepsea Mira. 
Northern Ocean also expects market structure to improve over time. In its latest
4Q 2025 reporting, the Company highlighted that consolidation in the ultra-
deepwater segment, including the Valaris/Transocean combination, could
support more disciplined pricing behavior. Over time, this is expected to
contribute to stronger overall market conditions and have a positive effect on
pricing across deepwater asset classes. 
Operationally, the Company continues to benefit from Deepsea Mira’s strong
performance in Namibia, where the rig operated through 2025 and demonstrated
high-quality execution for TotalEnergies, BW Energy and Rhino Resources.
Northern Ocean strengthened this position with the Rhino contract in July 2025,
an extension in November 2025, and a further contract award from Shell
announced in December 2025 for work that commenced on 29 March this year.
These awards underline continued customer demand for high-specification
harsh-environment and deepwater units, while also improving near-term
contract visibility for the Company’s remaining rig. 
Against this backdrop, Northern Ocean states that its contracting strategy
remains value-focused. The Company intends to evaluate opportunities carefully
with emphasis on commercial terms, timing and risk-adjusted shareholder
returns. Management has also stated that it will preserve capital until contracting
visibility through 2026 is further secured and backlog is sufficient to support
refinancing on improved pricing and terms. 
Overall, Northern Ocean’s outlook is centered less on broad market tightness
than in the prior year and more on selective contracting, capital discipline and
positioning Deepsea Mira for higher-value work as the market develops. With a
simplified company structure, a proven modern rig and an improving pipeline of
longer-duration opportunities beyond 2026, the Company believes it is well
positioned to enhance earnings and create long-term shareholder value. 
Annual Report 2025 | Board of Directors' Report | 12
Corporate Governance Report
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 2-9 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 2025 | Board of Directors' Report | 13
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 Chairman, rather than the shareholders. Given
the Company’s current development status the Company believe that this is
satisfactory and that the Chairman 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 is responsible for any decisions
otherwise subject to review and preparation by an audit committee,
including oversight of the Company's financial reporting process, internal
controls, and the relationship with the external auditor. The Board of Directors
has adopted instructions governing the respective responsibilities of the Board
and the Chief Executive Officer. The Board conducts an annual evaluation of its
own performance, composition, and working methods, the results of which are
Annual Report 2025 | Board of Directors' Report | 14
considered when determining the need for any changes to the Board's
composition or procedures.
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
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 rig. 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 to evaluate 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 remuneration  of the
Company’s Board of Directors is determined at the annual shareholders meeting,
where the shareholders approve an appropriate cap on the collective Board
compensation for that year. 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. Notwithstanding this deviation, the
Board of Directors is committed to acting in the best interests of shareholders as
a whole in the event of any take-over approach. The Board of Directors will keep
under review the need to adopt formal takeover guidelines as the Company's
circumstances develop. Notwithstanding this deviation, the Board of Directors is
committed to acting in the best interests of shareholders as a whole in the event
of any take-over approach. The Board of Directors will keep under review the
Annual Report 2025 | Board of Directors' Report | 15
need to adopt formal takeover guidelines as the Company's circumstances
develop.
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.
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 has 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 2025 | Board of Directors' Report | 16
Responsibility Statement
We confirm that, to the best of our knowledge, the financial statements for the
year ended 31 December 2025 have been prepared in accordance with U.S.
generally accepted accounting principles, and give a 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
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
30 April 2026
/s/ Gary W. Casswell
/s/ Arne Jacobsen
Gary W. Casswell (Director and Chairman)
Arne Jacobsen (Chief Executive Officer)
/s/ Sven Børre Larsen
/s/ Mikhael Botbol
Sven Børre Larsen (Director)
Mikhael Botbol (Director)
/s/ James Ayers
/s/ Jan Erik Klepsland
James Ayers (Director)
Jan Erik Klepsland (Director)
Annual Report 2025 | Consolidated Financial Statements | 17
Consolidated Statements of Comprehensive Income
(in thousands of $, except loss per share)
Note
2025
2024
Operating revenues
Contract revenue
4
271,916
252,615
Reimbursable revenue
7,380
10,912
Other revenues
122
333
Total operating revenues
279,418
263,860
Operating expenses
Rig operating expenses
5
241,227
206,316
Reimbursable expenses
7,906
10,809
Depreciation
2
55,134
49,929
Impairment
6
13,130
—
Administrative expenses
7,880
7,011
Total operating expenses
325,277
274,065
Net operating loss
(45,859)
(10,205)
Other income (expenses)
Interest income
1,613
2,679
Interest expense
7
(56,303)
(56,300)
Foreign exchange loss
44
610
Other financial expenses
(33)
(41)
Total other income (expenses)
(54,679)
(53,052)
Net loss before taxes
(100,538)
(63,257)
Tax charge
8
(2,127)
(2,400)
Net loss
(102,665)
(65,657)
Basic and diluted loss per share ($)
(0.34)
(0.23)
(in thousands of $)
2025
2024
Net loss
(102,665)
(65,657)
Foreign currency translation income
780
56
Other comprehensive income
780
56
Comprehensive loss
(101,885)
(65,601)
See accompanying Notes to the Consolidated Financial Statements.
Annual Report 2025 | Consolidated Financial Statements | 18
Consolidated Balance Sheets
(in thousands of $)
Note
2025
2024
ASSETS
Short-term assets
Cash and cash equivalents
37,510
42,751
Restricted cash
10
169
138
Related party receivables
—
—
Accounts receivable, net
23,505
47,410
Unbilled receivables
1,513
7,556
Deferred costs
5
—
2,200
Other current asset
12
4,449
1,973
Materials and supplies, net
—
344
Right-of-use assets
19
128
Total short-term assets
67,165
102,500
Long-term assets
Drilling units
11
439,841
929,049
Fixtures and fittings
14
18
Total long-term assets
439,855
929,067
Total assets
507,020
1,031,567
(in thousands of $)
Note
2025
2024
LIABILITIES AND EQUITY
Short-term liabilities
Short-term debt
14
—
14,950
Other current liabilities
13
59,306
47,861
Deferred revenue
4
110
3,970
Related party payables
33
54
Related party debt
15, 18
100,000
—
Lease dilapidations
—
5
Obligations under operating leases
25
112
Total short-term liabilities
159,474
66,952
Long-term liabilities
Long-term debt
14
—
284,006
Long-term deferred revenue
4
2,495
2,605
Long-term related party debt
15, 18
—
231,840
Total long-term liabilities
2,495
518,451
Total liabilities
161,969
585,403
Equity
Share capital
151,608
151,608
Additional paid in capital
580,985
580,214
Accumulated other comprehensive
loss
727
(54)
Retained deficit
(388,269)
(285,604)
Total equity
345,051
446,164
Total liabilities and equity
507,020
1,031,567
See accompanying Notes to the Consolidated Financial Statements.
Annual Report 2025 | Consolidated Financial Statements | 19
Consolidated Statements of Cash Flows
(in thousands of $)
2025
2024
Net loss
(102,665)
(65,657)
Adjustments to reconcile net (loss) income to
net cash used in operating activities
Amortization of deferred charges
1,045
504
Amortization of deferred costs
63,900
33,337
Amortization of deferred revenue
(43,718)
(19,073)
Depreciation
55,134
49,929
Impairment
13,130
—
Compensation cost
770
273
Unrealized foreign exchange gain
780
56
Accrued demobilization income
(752)
(752)
Accrued demobilization costs
878
878
Change in operating assets and liabilities
Receivables
23,904
(6,022)
Unbilled receivables
6,795
(284)
Other current assets
(2,132)
136
Right-of-use assets under operating leases
109
2
Additions to deferred costs
(61,699)
(8,464)
Additions to deferred revenue
39,748
8,191
Other current liabilities
4,278
(12,684)
Related party balances
(20)
186
Obligations under operating leases
(87)
6
Net cash used in operating activities
(602)
(19,438)
(in thousands of $)
2025
2024
Investing activities
Additions to drilling units
(52,740)
(55,404)
Additions to Fixtures and fittings
(26)
Gross proceeds from sale of Drilling unit
480,000
Net cash used in investing activities
427,234
427,234
(55,404)
Financing activities
Net proceeds from share issuances
—
59,598
Related party debt: Proceeds
16,893
94,891
Long term debt: Repayments
(148,733)
(90,000)
Debt fees paid
(300,000)
(1,250)
Net cash provided by financing activities
(431,840)
63,239
Net change
(5,208)
(11,603)
Cash, cash equivalents and restricted cash at
start of the year
42,889
54,492
Cash, cash equivalents and restricted cash at
end of the year
37,681
42,889
See accompanying Notes to the Consolidated Financial Statements.
Annual Report 2025 | Consolidated Financial Statements | 20
Consolidated Statements of Changes in Equity
(in thousands of $, except number of shares)
2025
2024
Number of shares outstanding
Balance at beginning of period
303,215,392
182,677,107
Shares issued
—
120,538,285
Balance at end of period
303,215,392
303,215,392
Share capital
Balance at beginning of period
151,608
91,339
Shares issued
—
60,269
Reduction in nominal value of shares
—
—
Balance at end of period
151,608
151,608
Additional paid in capital
Balance at beginning of period
580,214
565,613
Shares issued
—
14,328
Stock option
771
273
Balance at end of period
580,985
580,214
Accumulated other comprehensive income (loss)
Balance at beginning of period
(53)
(110)
Other comprehensive income
780
57
Balance at end of period
727
(53)
(in thousands of $, except number of shares)
2025
2024
Retained deficit
Balance at beginning of period
(285,604)
(219,947)
Net loss
(102,665)
(65,657)
Balance at end of period
(388,269)
(285,604)
Total equity
345,051
446,165
See accompanying Notes to the Consolidated Financial Statements.
Annual Report 2025 | Notes | 21
Notes
Notes to the Consolidated Financial Statements
1.  GENERAL
Northern Ocean was incorporated under the laws of Bermuda on 3 March, 2017.
The Company's primary purpose is to engage in offshore contract drilling services
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 one semi-submersible rig,
Deepsea Mira which is currently operating under a drilling contract with a
subsidiary of Shell plc. ("Shell") off the coast of West Africa.
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 evaluated all of our activity through 30 April, 2026, being the date these
financial statements were issued, and concluded that no subsequent events have
occurred that would require recognition in the financial statements.
Going concern
These consolidated financial statements are prepared under the going concern
assumption.
Deepsea Mira is currently operating under a drilling contract with a subsidiary of
Shell off the coast of Namibia and is expected to remain in West Africa through
the contract term.
The Company had a remaining estimated firm revenue backlog of $17 million as
of 31 December, 2025.
The Company continues to have a positive outlook on Northern Ocean's ability to
obtain further profitable contracts, with the Company continuing ongoing
dialogues with potential customers in the West Africa region and other harsh
environment markets.
As the Deepsea Mira currently has no long term backlog, the Group's financial 
position is reliant on securing additional drilling contracts for the rig. This 
situation 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.
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.
Annual Report 2025 | Notes | 22
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 rig. 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 rig. 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.
Deferred contract costs
Certain direct and incremental costs incurred for upfront preparation, initial
mobilization and modifications of contracted rig 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.
Annual Report 2025 | Notes | 23
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.
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
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 rig, 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.
Annual Report 2025 | Notes | 24
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
USD or the NOK, as the majority of expenditures are denominated in USD or
NOK. The Company's reporting currency is USD. 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 31 December,
2025, the NOK strengthened against the USD 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.
Fuel
Fuel is stated at the lower of cost and net realizable value. Cost is determined on
a first-in, first-out basis.
Recently adopted accounting standards
The Company adopted no new accounting standard in the period.
3.  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
There have been no significant accounting pronouncements issued in 2025 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 $)
2025
2024
Dayrate revenue
199,141
222,121
Amortization of deferred revenue
43,608
18,934
Demobilization revenue
7,544
3,152
Add-on revenue
21,622
8,378
Contract revenue
271,915
252,585
Dayrate revenue
Dayrate revenue earned from the Deepsea Bollsta and Deepsea Mira drilling
contracts.
Annual Report 2025 | Notes | 25
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.
Demobilization revenue
The Company may receive fees from its customers for the demobilization of our
rig. 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.
Add-on revenue
This balance consists of 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 revenue and costs for these services are
reported on a gross basis under rig operating expenses and contract revenue
respectively.
The following table provides information about the composition of amortization
of deferred revenue:
(in thousands of $)
2025
2024
Balance at beginning of period
3,860
14,633
Deferred revenue accruing in the period
39,748
8,191
Amortization of deferred revenue
(43,608)
(18,964)
Balance at the end of period
3,860
3,860
Short-term deferred revenue
—
3,860
Long-term deferred revenue
—
—
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 $2.5 million is held
as deferred revenue in relation to the NOx grant, split between short-term and
long-term.
The following table provides information about the composition of the accrued
demobilization revenue:
(in thousands of $)
2025
2024
Balance at beginning of period
752
—
Accrual of demobilization revenue
—
3,152
Demobilization payments received
(752)
(2,400)
Balance at the end of period
—
752
Short-term accrued revenue
—
752
Long-term accrued revenue
—
—
The following table provides information about receivables from contracts
outstanding at year-end:
(in thousands of $)
2025
2024
Accounts receivable, net
23,505
47,410
Unbilled receivables
1,513
7,556
Receivables from contracts with customers
25,018
54,966
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.
Annual Report 2025 | Notes | 26
5. RIG OPERATING EXPENSES
The following table provides information about the composition of rig operating
expenses:
(in thousands in $)
2025
2024
Daily operating expenses
154,394
148,409
Maintenance projects
20,028
5,142
Amortization of deferred costs
63,900
33,337
Accrued demobilization costs
—
4,248
Other
2,905
15,180
Rig operating expenses
241,227
206,316
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
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.
Other
Balance primarily consists of the cost of fuel sold at contract commencement and
withholding taxes payable in Namibia.
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.
The following table provides information about the deferred costs to fulfill a
contract with customers;
(in thousands of $)
2025
2024
Balance at beginning of period
2,200
27,073
Cost additions
61,700
8,464
Amortization
(63,900)
(33,337)
Balance at the end of period
—
2,200
Short-term deferred costs
—
2,200
Long-term deferred costs
—
—
6. IMPAIRMENT
On 17 November 2025 the Group entered into an agreement to sell Deepsea
Bollsta to a subsidiary of Odfjell Drilling for cash settlement of $480 million, with
effective date 15 December 2025. The rig was classified as assets held for sale
from 17 November 2025 until completion of the sale on 15 December 2025.
Depreciation of the rig has been calculated up until 17 November 2025. From 17
November 2025 the rig has been measured at the lower of carrying amount and
fair value less costs to sell, resulting in an impairment loss of $13.1 million. In
addition to the impairment loss of $13.1 million, Deferred cost and Deferred
revenue relating to the Equinor contract for Deepsea Bollsta, $59.3 million and
$38.2 million respectively, has been charged to the income statement in Q4 2025.
Annual Report 2025 | Notes | 27
7. INTEREST EXPENSE
Interest expense remained relatively stable around $15 million per quarter, from
the first through third quarter, with minor fluctuations broadly reflecting
movements in SOFR during 2025. In the fourth quarter, it decreased significantly
to $10.1 million, primarily due to a shift from PIK to cash interest payments on
the Sterna facility, combined with the prepayments described in Notes 14 and 15,
resulting in lower expected interest costs going forward.
8.  INCOME TAXES
Bermuda
Under current Bermuda law, the Company is 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 31 March,
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, Cyprus 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.
9.  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 of $, except number of shares)
2025
2024
Net loss
(102,665)
(65,657)
Weighted average number of ordinary shares
(in thousands)
303,215
283,071
10.  RESTRICTED CASH
The restricted cash as of 31 December 2025, of $0.2 million (31 December 2024,
$0.1 million) consists of cash withheld for a guarantee to NIS and payroll taxes.
Annual Report 2025 | Notes | 28
11.  DRILLING UNITS
Movements in the carrying value of drilling units in the years ended 31 December
2025 and 2024 may be summarized as follows:
(in thousands of $)
Cost
Accumulated
depreciation
Net carrying
value
Balance at December 31, 2023
1,066,716
(143,156)
923,560
Retirement of assets
(18,631)
18,631
—
Additions
55,403
—
55,403
Depreciation
—
(49,914)
(49,914)
Balance at December 31, 2024
1,103,488
(174,440)
929,049
Retirement of assets
(596,563)
117,833
(478,730)
Additions
57,755
—
57,755
Depreciation
—
(68,231)
(68,231)
Balance at December 31, 2025
564,680
(124,838)
439,841
No interest costs were capitalized during the years ending 31 December, 2025 or
31 December 2024.
Retirement of assets
This category represents previously capitalized assets which have been retired
from use, and therefore removed from the fixed asset register.
12.  OTHER CURRENT ASSETS
Other current assets at 31 December 2025 and 2024, are summarized as follows:
(in thousands in $)
2025
2024
Deposit held
35
35
VAT receivable
3,370
600
Other
1,045
1,338
Short-term portion of deferred assets
—
—
4,449
1,973
Short-term portion of deferred assets
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 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 firm term of the related drilling contract.
Other
This category principally consists of prepayments for insurance and operational
costs.
Annual Report 2025 | Notes | 29
13.  OTHER CURRENT LIABILITIES
Other current liabilities at 31 December 2025 and 2024, are summarized as
follows:
(in thousands in $)
2025
2024
Accounts payable
9,440
12,586
Accrued administrative expenses
2,039
1,602
Accrued operating expenses
34,255
9,522
Other payables
12,231
17,703
Accrued interest expense
510
5,570
Contract demobilization liability
140
878
VAT liability
691
878
59,306
48,739
Other payables
Other payables primarily consist of withholding, corporate and value added taxes
due to the Namibian and Congolese tax authorities.
14.  DEBT
Debt due to non-related parties as of 31 December 2025 and 2024, are
summarized as follows
(in thousands of $)
2025
2024
U.S. dollar denominated floating rate debt:
  $200.0 million term loan facility - Deepsea Mira
—
126,923
  $200.0 million term loan facility - Deepsea
Bollsta
—
134,615
  $50.0 million term loan facility - Deepsea Mira
and Deepsea Bollsta
—
38,462
Total debt - gross of deferred charges
—
300,000
Short-term portion of debt issuance costs
—
(50)
Long-term portion of debt issuance costs
—
(994)
Total debt -net of deferred charges
—
298,956
Short-term debt
—
14,950
Long-term debt
—
284,006
$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. Outstanding amount at the beginning of the year was $126.9 million and
the facility had a final maturity date in June 2026.
The loan was secured by a mortgage on Deepsea Mira and contained certain
financial covenants on a consolidated basis, which required a certain equity ratio,
positive working capital and a minimum liquidity amount.
In connection with the sale of Deepsea Bollsta on 15 December 2025, NOL
prepaid the outstanding loan amount under this facility, reducing the principal
balance to zero. The facility was subsequently cancelled.
$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. Outstanding amount at the beginning of the year was $134.6 million
and the facility had a final maturity date in June 2026.
Annual Report 2025 | Notes | 30
The loan was secured by a mortgage on Deepsea Bollsta and contained certain
financial covenants on a consolidated basis, which required a certain equity ratio,
positive working capital and a minimum liquidity amount.
In connection with the sale of Deepsea Bollsta on 15 December 2025, NOL
prepaid the outstanding loan amount under this facility, reducing the principal
balance to zero. The facility was subsequently cancelled.
$50.0 million senior secured term loan facility - Deepsea Mira and Deepsea
Bollsta
In 2019, as part of a revision in the bank facility, a new revolving credit facility of
up to $50.0 million was made available to the Company. In all other material
respects, the revised bank facility (including the additional revolving credit
facility) had similar terms as the initial facility, including financial covenants and
interest rates. With the loan amendment in June 2024 $11.4 million of this
facility was repaid. Outstanding amount at the beginning of the year was $38.6
million and the facility had a final maturity date in June 2026.
In connection with the sale of Deepsea Bollsta on 15 December 2025, NOL
prepaid the outstanding loan amount under this facility, reducing the principal
balance to zero. The facility was subsequently cancelled.
Deferred charges
(in thousands of $)
2025
2024
Debt arrangement fees
2,080
2,080
Accumulated amortization
(2,080)
(1,036)
—
1,044
15.  RELATED PARTY DEBT
Debt due to related parties as of 31 December 2025 and 2024, are summarized
as follows
(in thousands of $)
2025
2024
U.S. dollar denominated fixed rate debt:
  $100.0 million term loan facility
—
—
  $50.0 million term loan facility
—
—
  $215.0 million credit loan facility
100,000
231,840
Total debt
100,000
231,840
Short-term debt
—
—
Long-term debt
—
231,840
Total debt
—
231,840
The outstanding debt as of 31 December 2025, is repayable as follows:
(in thousands in $)
Year 1
100,000
Year 2
—
Year 3
—
Thereafter
—
100,000
All related party debt is repayable to Sterna Finance Ltd. ("Sterna").
At the start of 2024, 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
Annual Report 2025 | Notes | 31
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 and June 2025.
In connection with the sale of Deepsea Bollsta on 15 December 2025, NOL
prepaid part of the outstanding loan amount under this facility, reducing the
principal balance to $100 million. Simultaneously with the bank debt described in
Note 12 being prepaid the loan was secured by a first priority mortgage on
Deepsea Mira.
Assets pledged
(in thousands of $)
2025
2024
Drilling units
439,855
—
The Company is in compliance with the covenants set out in the agreement with
Sterna.
16.  SHARE CAPITAL
As at 31 December 2025, 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.
17.  FAIR VALUES
The carrying value and estimated fair value of the Company's financial
instruments as of 31 December 2025 and 2024 are as follows:
2025
2024
(in thousands of $)
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
Assets:
Cash and cash equivalents
37,510
37,510
42,751
42,751
Restricted cash
169
1
3
5
169
138
138
Liabilities:
Floating rate debt
—
—
298,956
297,214
Related party long-term debt
—
—
231,840
247,278
Related party short-term debt
100,000
99,002
—
—
The estimated fair value of financial assets and liabilities are as follows:
2025
(in thousands of $)
Fair
Value
Level 1
Level 2
Level 3
Assets:
Cash and cash equivalents
37,510
37,510
—
—
Restricted cash
169
169
—
—
Liabilities:
Floating rate debt
—
—
—
—
Related party long-term debt
—
—
—
—
Related party short-term debt
99,002
99,002
—
—
Annual Report 2025 | Notes | 32
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
—
—
—
—
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.
18.  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 34.3% of the Company's outstanding ordinary shares at 31
December, 2025.
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.;
– 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”);
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 $0.5
million in the year ended 31 December 2025 (2024: $0.6 million).
A summary of short-term balances due to related parties at 31 December 2025
and 2024 is as follows:
(in thousands of $)
2025
2024
Sterna
100,000
—
A summary of long-term balances due to related parties at 31 December, 2024
and 2023 is as follows:
(in thousands of $)
2025
2024
Sterna
—
231,840
Annual Report 2025 | Notes | 33
19.  COMMITMENTS AND CONTINGENCIES
As of 31 December 2025, the Company had no capital commitments.
20.  SHARE BASED COMPENSATION
On 20 August 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 11 September 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.
The first part of the granted share options totalling 3,166,667, vested in August
and September 2025 and with the share price being below the exercise price of
NOK 12.00 per share, no options were declared.
As of 31 December 2025, 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-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-26
3.62%
88.33%
September 2024 Tranche
1,000,000
12.00
Sep-27
3.45%
108.18%
Total
6,333,333
The fair value of share options granted 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 31 December
2025, 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
in 2025
3,166,667
12.00
1.7
0
Outstanding at
December 31,2025
6,333,333
12.00
1.2
N/A
Annual Report 2025 | Notes | 34
A summary of the status of the Company's non-vested shares as of 31 December 
2025, and changes during the year ended 31 December 2025, 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
Vested 2025
3,166,667
0.19
Non-vested at December 31,2025
6,333,333
0.19
As of 31 December 2025, there was $0,7 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 1.2 years. The total share-based compensation expense recognized in
administrative expenses during the year ended 31 December 2025, was $0.5
million (2024: $0.3 million).
There were no cash flow effects resulting from share option activity during the
year ended 31 December 2025, or the prior year.
21.  SUBSEQUENT EVENTS
On 31 January 2026, Deepsea Mira completed its contract with Rhino Resources
Ltd. On 29 March 2026, the rig commenced operations under the Shell contract
announced on 11 December 2025.
Annual Report 2025 | Notes | 35
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