UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO

RULE 13A-16 OR 15D-16 UNDER THE SECURITIES

EXCHANGE ACT OF 1934

For the month of May 2016

Commission File Number: 001-36277

North Atlantic Drilling Ltd.

(Translation of registrant's name into English)

Par-la-Ville Place, 4th Floor, 14 Par-la-Ville Road, Hamilton, HM 08, Bermuda

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F [ X ] Form 40-F [ ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ________.

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ________.

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

INFORMATION CONTAINED IN THIS FORM 6-K REPORT

Attached hereto as Exhibit 1 is a copy of the press release, dated May 26, 2016, of North Atlantic Drilling Ltd. (the "Company"), announcing the Company's financial results for the first quarter ended March 31, 2016.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	NORTH ATLANTIC DRILLING LTD. (registrant)

Dated: May 26, 2016	By:	/s/ Georgina Sousa
		Name: Georgina Sousa
		Title: Secretary

EXHIBIT 1

North Atlantic Drilling Ltd. (NADL) – First quarter 2016 results

Highlights from the first quarter

•	North Atlantic Drilling generated first quarter 2016 EBITDA¹ of $87.3 million

•	North Atlantic Drilling reports first quarter 2016 net loss of $6.1 million and net loss attributable to shareholders of $9.9 million. The loss per share was $0.41.

Financial highlights

First quarter 2016 results

Consolidated revenues for the first quarter 2016 were $151.6 million compared to $150.4 million for the fourth quarter of 2015. The primary reason for the increase is the West Phoenix returned to drilling operations on March 6, 2016 after concluding its idle period under contract which began in the fourth quarter.

Operating income for the first quarter was $33.0 million, an increase of $94.1 million compared to the fourth quarter of 2015 operating loss of $61.1 million. The loss in the fourth quarter of 2015 was mainly attributable to the impairment loss on the West Rigel classified as held for sale, totaling $82m. The increase in operating income is also due to the West Phoenix returning to operations as stated above.

Net financial items for the first quarter of 2016 amounted to a charge of $35.1 million. The charge included $26.0 million in interest expenses and foreign exchange loss of $7.3 million, mainly related to the NOK1,500 million bond loan. The fourth quarter of 2015 incurred a net financial charge of $17.7 million, including interest expenses of $23.9 million, gain on financial derivatives of $0.7 million, and gain on foreign exchange of $8.6 million mainly related to the NOK1,500 million bond loan.

The income tax expense for the first quarter was a $4.0 million , compared to a $34.1 million in the fourth quarter of 2015 primarily due to deferred tax liabilities recorded on unremitted earnings in the fourth quarter of 2015.

Net loss for the first quarter was $6.1 million and net loss attributable to shareholders was $9.9 million, resulting in a basic loss per share of $0.41. This is compared to net loss of $112.9 million and a net loss attributable to shareholders of $116.9 million for the fourth quarter of 2015.

Balance sheet as at March 31, 2016

As at March 31, 2016, total assets decreased to $3,157.0 million from $3,255.1 million compared to the previous quarter.

--------------------------------------

¹	EBITDA is defined as 'Earnings Before Interest, Tax, Depreciation and Amortization' and has been calculated by taking operating income plus depreciation, but excluding gains or losses on disposals and impairment charges.

Total current assets decreased to $243.5 million from $286.5 million compared to the previous quarter. The decrease was mainly due to the fall in cash balances, partly offset by an increase in accounts receivables.

Total non-current assets decreased to $2,913.5 million from $2,968.6 million compared to the previous quarter. The decrease was mainly due to depreciation on drilling units.

Total current liabilities decreased to $444.2 million from $494.6 million compared to the previous quarter. The decrease is largely due to the decrease in related party payables and fall in other current liabilities.

Long-term interest bearing debt, including related party debt and current portion, decreased to $2,411.6 million from $2,434.9 million during the quarter. Net interest bearing debt, after deducting cash and cash equivalents, increased to $2,324.2 million from $2,284.0 million. During the first quarter the Company repaid net $42.0 million on the $2 billion credit facility, repaid net $12.0 million on the $475 million credit facility and reduced cash by $63.5 million.

Total equity decreased to $416.6 million from $418.7 million compared to the previous quarter. The decrease is primarily due to the net loss for the quarter, partly offset by other comprehensive gains on the pension plan.

Cash flow

As at March 31, 2016, cash and cash equivalents decreased to $87.4 million from $150.9 million compared to the previous quarter.

For the three-month period ending March 31, 2016, net cash used in operating activities was $15.0 million, net cash provided by investing activities amounted to $2.3 million, and net cash used in financing activities was $53.5 million. Cash from operations compared to the previous period mainly due to an increase in accounts receivables.

Operations

During the first quarter, North Atlantic Drilling had four offshore drilling rigs in operation offshore Norway, one rig returning to operations on March 6, 2016 in the UK sector of the North Sea, and two idle rigs in Norway: the West Navigator and the West Venture. Economic utilization* for the first quarter was 97 percent, compared to 98 percent in the fourth quarter.

Technical utilization for the second quarter 2016 to date is 98%.

Commercial, Revenue Backlog and Newbuild Program

The West Phoenix returned to drilling activities with Total E&P UK Limited on March 6, 2016 after completing its idle period under contract during the winter season. The unit will continue drilling activities through the end of August 2016.

Currently, the Company's revenue backlog is $540 million. Average remaining contract length is approximately 11 months excluding clients' options for extensions.

On December 2, 2015, the Company signed an amendment with Jurong Shipyard for the deferral of the delivery of the semi-submersible drilling unit, the West Rigel, or the Unit. The deferral period lasts until June 2016, following completion of which, the Company and Jurong have agreed to form a joint asset holding company for joint ownership of the Unit, to be owned 23% by the Company and 77% by Jurong, in the event no employment is secured for the Unit and no alternative transaction is completed. Until the end of the deferral period, the Company will continue to market the Unit for an acceptable drilling contract, and the Unit will remain at the Jurong Shipyard in Singapore. The Company and Jurong may also consider other commercial opportunities for the Unit during this period. However, based on current market conditions, management deems the most probable outcome to be that the Unit will be contributed to the joint asset holding company. The West Rigel has no future capex and is classified as an asset held for sale.

Market Development and Outlook

As a result of the decline in oil prices and reductions in oil company expenditures, the North Sea drilling market is currently entering its third year of a downturn. Current marketed utilization in the North Sea for floaters and jack ups is 84% and 93%, respectively. Nearly half of these existing contracts will conclude over the next 12 months. If extensions or new contracts cannot be secured, rig owners will need to decide how to stack idle units (warm or cold) and ultimately if they should scrap their older or less capable units.

Contract awards and tender activity has been slow over the last year, however we are seeing new interest in the North Sea from independent oil companies as the cost basis is being reset for offshore activities. Recent tendering activity has generally been for shorter terms with multiple options which have commencement dates in mid-2017 or later. Interest also continues for drilling services combined with production activities and decommissioning of aging fields. Rig owners are bidding for this available work extremely competitively with a focus on utilization over returns.

In the current environment, units with contracts expiring will likely face challenges securing follow on work. Our first order of priority is working to get units extended, in some cases we may offer reducing the current dayrate. However, this often is not enough to secure an extension due to customer budgetary constraints.

When faced with potential idle periods we first need to consider what other opportunities are in the market at the time, potential work that may be expected in the foreseeable future, the duration and timing of these projects, and the dayrate. In this highly competitive environment there are many units chasing each opportunity, leading to dayrates at, or often below cash flow breakeven levels.

If rates are too low to justify operation we will consider stacking the unit. When determining what dayrate is too low we also take into account preservation, stacking and reactivation cost.

Generally speaking, if a floater is not expected to find a suitable contract for a year or more, economics suggest that cold stacking may be the preferred option. Conversely, if we feel there may be economic work within this time period we will consider warm stacking the unit. For jack-ups there is not a material difference between warm and cold stacking, therefore we will immediately go to minimum crewing levels to preserve cash while idle.

However, we also must consider the strategic impact of these decisions rather than strictly applying the economic view. A floater that is cold stacked will find itself at the back of the queue in a recovery due to the cost of reactivation, and require a higher dayrate than a warm unit.

Our current strategy is to have a sufficient number of units ready for work relative to near term opportunities and strategically positioned to pursue work in an efficient manner. The condition of our units, current classing status and appropriate preservation prior to stacking allows us to minimize expected reactivation costs and remain competitive while preserving cash in the idle period.

Financing update

On April 28, 2016 the Company reached agreement with its banking group to extend its US$2.0 billion credit facility to the end of June 2017 and to temporarily amend certain of Seadrill's financial covenants contained within the Company's secured loan agreement. These amendments are part of a broader package of measures Seadrill Limited, our majority shareholder, is undertaking to refinance and recapitalize the business.

The covenant amendments extend to June 30, 2017 and include resetting the leverage ratio, revising the definition of the equity ratio to exclude the impact of any change to the market value of our rigs, and suspension of the provision that allows lenders to receive a prepayment if rig values decline below a minimum value relative to the loan balance outstanding. As part of this agreement, Seadrill has agreed a set of milestones which provide a timetable for advancing discussions around a longer term solution.

By deferring our credit facility, amending a number of covenants and removing the risk of facility prepayments related to declining rig values, we have established a more stable platform to pursue and conclude negotiations with our stakeholders. We are pleased with the support shown by our banking group and Seadrill Limited, and continue to make good progress on negotiating a broader package of measures intended to significantly improve liquidity and bridge us to a recovery in the sector.

We expect to conclude a broader package of measures by the year end.

Forward Looking Statements

This report includes forward looking statements. Such statements are generally not historical in nature, and specifically include statements about the Company's plans, strategies, business prospects, changes and trends in its business and the markets in which it operates. These statements are made based upon management's current plans, expectations, assumptions and beliefs concerning future events impacting the Company and therefore involve a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, which speak only as of the date of this news release. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to offshore drilling market conditions, including supply and demand, day rates, customer drilling programs and effects of new rigs on the market, contract awards and rig mobilizations, contract backlog, dry-docking and other costs of maintenance of the drilling rigs in the Company's fleet, the cost and timing of shipyard and other capital projects, the performance of the drilling rigs in the Company's fleet, delay in payment or disputes with customers, our ability to successfully employ our drilling units, procure or have access to financing, ability to comply with loan covenants, liquidity and adequacy of cash flow from operations, fluctuations in the international price of oil, international financial market conditions including the international financial crisis, changes in governmental regulations that affect the Company or the operations of the Company's fleet, increased competition in the offshore drilling industry, and general economic, political and business conditions globally. Consequently, no forward-looking statement can be guaranteed. When considering these forward-looking statements, you should keep in mind the risks described from time to time in the Company's filings with the SEC, including its Annual Report on Form 20-F.

The Company undertakes no obligation to update any forward looking statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict all of these factors. Further, the Company cannot assess the impact of each such factors on its business or the extent to which any factor, or combination of factors, may cause actual results to be materially different from those contained in any forward looking statement.

May 26, 2016

The Board of Directors

North Atlantic Drilling Ltd.

Hamilton, Bermuda

Questions should be directed to North Atlantic Management AS represented by:

Scott McReaken: Chief Financial Officer

North Atlantic Drilling Ltd

INDEX TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited Consolidated Statements of Operations for the three months ended March 31, 2016 and 2015	F-2

Unaudited Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2016 and 2015	F-3

Unaudited Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015	F-4

Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015	F-5

Unaudited Consolidated Statements of Changes in Equity for the three months ended March 31, 2016 and 2015	F-6

Notes to Unaudited Consolidated Financial Statements	F-7

F-1

North Atlantic Drilling Ltd

Unaudited Consolidated Statements of Operations

for the three months ended March 31, 2016 and 2015

(In millions of US$)

	Three month period ended March 31,
	2016			2015
Operating revenues
Contract revenues		146.5			189.8
Reimbursable revenues		5.1			2.2
Total operating revenues		151.6			192.0

Gain on disposal *		2.4			—

Operating expenses
Vessel and rig operating expenses *		50.3			81.2
Reimbursable expenses		4.8			1.7
Depreciation		56.7			55.5
General and administrative expenses *		9.2			16.7
Total operating expenses		121.0			155.1

Operating income		33.0			36.9

Financial items
Interest expense *		(26.0	)		(24.6	)
Loss from derivative financial instruments		—			(34.3	)
Foreign exchange (loss)/gain		(7.3	)		14.4
Other financial items *		(1.8	)		(1.4	)
Total financial items		(35.1	)		(45.9	)

Loss before income taxes		(2.1	)		(9.0	)
Income tax expense		(4.0	)		(2.3	)
Net loss		(6.1	)		(11.3	)

Net income to non-controlling interest		3.8			4.1
Net loss attributable to the shareholders of the Company		(9.9	)		(15.4	)

Basic loss per share (US$) **		(0.41	)		(0.64	)
Diluted loss per share (US$) **		(0.41	)		(0.64	)

*	Includes transactions with related parties. Refer to Note 17 - Related Party Transactions.

**	As a result of the stock split and capital reduction, the earnings per share and declared dividends per share have been retrospectively adjusted. Refer to Note 14 for more information.

See accompanying notes that are an integral part of these Consolidated Financial Statements.

F-2

North Atlantic Drilling Ltd

Unaudited Consolidated Statements of Comprehensive Loss

for the three months ended March 31, 2016 and 2015

(In millions of US$)

	Three month period ended March 31,
	2016		2015
Net loss	(6.1	)	(11.3	)

Other comprehensive income/(loss), net of tax:
Unrealized actuarial gain relating to defined benefit pension scheme	5.3		9.5
Unrealized loss on interest rate swaps in the variable interest entities	(1.6	)	(1.3	)
Other comprehensive income net of tax	3.7		8.2

Total comprehensive loss for the period	(2.4	)	(3.1	)

Total comprehensive income attributable to non-controlling interests	2.2		2.8
Total comprehensive loss attributable to the shareholders	(4.6	)	(5.9	)

Note: All items of other comprehensive income / (loss) are stated net of tax.

See accompanying notes that are an integral part of these Consolidated Financial Statements.

F-3

North Atlantic Drilling Ltd

Unaudited Consolidated Balance Sheets

as of March 31, 2016 and December 31, 2015

(In millions of US$ except for share, and per share data)

	March 31, 2016			December 31, 2015
ASSETS
Current assets
Cash and cash equivalents		87.4			150.9
Restricted cash		4.2			6.5
Accounts receivables, net		130.2			99.3
Related party receivables		3.6			4.7
Other current assets		18.1			25.1
Total current assets		243.5			286.5
Non-current assets
Drilling units		2,683.7			2,738.0
Non-current assets held for sale		128.4			128.4
Deferred tax assets		9.2			7.5
Other non-current assets		92.2			94.7
Total non-current assets		2,913.5			2,968.6
Total assets		3,157.0			3,255.1
LIABILITIES AND EQUITY
Current liabilities
Current portion of long-term debt		210.4			210.4
Related party liabilities		10.3			39.8
Trade accounts payable		11.4			12.3
Tax payable		30.1			20.3
Other current liabilities		182.0			211.8
Total current liabilities		444.2			494.6
Non-current liabilities
Long-term interest bearing debt		1,910.2			1,903.5
Long-term debt to related party		291.0			321.0
Deferred taxes		52.3			57.7
Pension liabilities		23.1			37.4
Other non-current liabilities		19.6			22.2
Total non-current liabilities		2,296.2			2,341.8
Equity
Common shares of par value US$0.10 per share: 24,114,232 shares outstanding at March 31, 2016 (December 31, 2015: 24,114,232 shares outstanding)		2.4			2.4
Additional paid-in capital		49.2			49.2
Contributed surplus		2,037.6			2,037.6
Contributed deficit		(1,188.4	)		(1,188.4	)
Accumulated other comprehensive loss		(18.4	)		(23.7	)
Accumulated deficit		(494.5	)		(484.9	)
Total Shareholder's equity		387.9			392.2
Non-controlling interest		28.7			26.5
Total equity		416.6			418.7
Total liabilities and equity		3,157.0			3,255.1

See accompanying notes that are an integral part of these Consolidated Financial Statements.

F-4

North Atlantic Drilling Ltd

Unaudited Consolidated Statement of Cash Flows

for the three months ended March 31, 2016 and 2015

(In millions of US$)

	Three month period ended March 31,
	2016			2015
Cash flow from operating activities
Net loss		(6.1	)		(11.3	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation		56.7			55.5
Amortization of deferred loan charges		2.0			2.0
Amortization of tax assets		2.3			2.0
Share based compensation expense		0.3			—
Unrealized (gain)/loss related to financial derivatives		(7.3	)		20.3
Unrealized foreign exchange loss/(gain) on long-term interest bearing debt		9.3			(14.3	)
Payments for long-term maintenance		(2.3	)		(7.4	)
Deferred income tax		(7.1	)		(0.5	)

Changes in operating assets and liabilities:
Trade accounts receivables		(30.9	)		84.3
Trade accounts payables		(0.9	)		5.8
Short-term related party receivables and liabilities		(8.8	)		64.4
Other receivables and other assets		2.6			1.7
Other liabilities		(18.7	)		(62.0	)
Deferred revenue		(6.1	)		(2.3	)
Net cash (used in)/provided by operating activities		(15.0	)		138.2

Cash flow from investing activities
Additions to newbuildings	—		(11.4	)
Additions to rigs and equipment	—		(1.5	)
Changes in restricted cash	2.3		2.2
Net cash provided by/(used in) investing activities	2.3		(10.7	)

Cash flow from financing activities
Installment paid on long-term interest bearing term debt	(53.5	)	(103.5	)
Net cash used in financing activities	(53.5	)	(103.5	)

Effect of exchange rate changes on cash and cash equivalents	2.7		(1.4	)

Net (decrease)/increase in cash and cash equivalents	(63.5	)	22.6
Cash and cash equivalents at the beginning of the period	150.9		116.2
Cash and cash equivalents at the end of the period	87.4		138.8

See accompanying notes that are an integral part of these Consolidated Financial Statements.

F-5

North Atlantic Drilling Ltd

Unaudited Consolidated Statements of Changes in Equity

for the three months ended March 31, 2016 and 2015

(In millions of US$)

	Share capital		Additional paid-in capital		Contributed surplus		Contributed deficit			Accumulated earnings/(deficit)			Accumulated OCI			Total Shareholder's equity			NCI			Total equity
Balance at December 31, 2014		1,205.7		48.6		834.3		(1,188.4	)		(390.1	)		(58.6	)		451.5			10.1			461.6
Other comprehensive income/(loss)		—		—		—		—						9.5			9.5			(1.3	)		8.2
Net (loss)/income		—		—		—		—			(15.4	)		—			(15.4	)		4.1			(11.3	)
Balance at March 31, 2015		1,205.7		48.6		834.3		(1,188.4	)		(405.5	)		(49.1	)		445.6			12.9			458.5

Balance at December 31, 2015		2.4		49.2		2,037.6		(1,188.4	)		(484.9	)		(23.7	)		392.2			26.5			418.7
Share based compensation		—				—		—			0.3			—			0.3			—			0.3
Other comprehensive income/(loss)		—		—		—		—			—			5.3			5.3			(1.6	)		3.7
Net (loss)/income		—		—		—		—			(9.9	)		—			(9.9	)		3.8			(6.1	)
Balance at March 31, 2016		2.4		49.2		2,037.6		(1,188.4	)		(494.5	)		(18.4	)		387.9			28.7			416.6

See accompanying notes that are an integral part of these Consolidated Financial Statements.

Dividends per share

During the three months ended March 31, 2016, and 2015, the Company did not declare any dividends.

F-6

North Atlantic Drilling Ltd

Notes to Unaudited Consolidated Financial Statements

Note 1 – General information

North Atlantic Drilling Ltd ("North Atlantic Drilling") is an offshore drilling contractor in the North Atlantic Area providing harsh environment drilling services to the oil and gas industry. North Atlantic Drilling was formed as a wholly owned subsidiary of Seadrill Limited ("Seadrill" or the "Parent") on February 10, 2011 under the laws of Bermuda to acquire certain continuing businesses of Seadrill in the North Atlantic region. The Company was registered on the Norwegian Over The Counter (N-OTC) list on February 24, 2011. On January 29, 2014 the Company was listed on the New York Stock Exchange. Following the Initial Public Offering in January 2014, Seadrill owned 70.4% of the Company.

As of March 31, 2016, North Atlantic Drilling owned seven offshore drilling units, consisting of one drillship, three jack-up drilling rigs and three semi-submersible drilling rigs. In addition one semi-submersible, the West Rigel, is classified as an asset held for sale as of March 31, 2016.

As used herein, and unless otherwise required by the context, the terms the "Company", "we", "Group", "our", "us" and words of similar import refer to North Atlantic Drilling and its consolidated companies. The use herein of such terms as group, organization, we, us, our and its, or references to specific entities, is not intended to be a precise description of corporate relationships.

Basis of presentation

The accompanying unaudited interim consolidated financial statements have been prepared on the same basis as the Company's audited financial statements and, in the opinion of management, include all material adjustments, consisting only of normal recurring adjustments that are considered necessary for a fair statement of the Company's financial statements in accordance with generally accepted accounting principles in the United States of America (US GAAP). The accompanying unaudited interim consolidated financial statements do not include all of the disclosures required in complete annual financial statements. These interim financial statements should be read in conjunction with our annual report on form 20-F for the year ended December 31, 2015. The amounts are presented to the nearest hundred thousand United States dollar (US dollar), unless stated otherwise.

Significant accounting policies

The accounting policies adopted in the preparation of the unaudited interim financial statements are consistent with those followed in the preparation of our annual audited consolidated financial statements for the year ended December 31, 2015 unless otherwise included in these unaudited interim financial statements as separate disclosures.

Note 2 - Recent Accounting Pronouncements

Recently Adopted Accounting Standards

In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which changes guidance related to both the variable interest entity ("VIE") and voting interest entity ("VOE") consolidation models. With respect to the VIE model, the standard changes, among other things, the identification of variable interests associated with fees paid to a decision maker or service provider, the VIE characteristics for a limited partner or similar entity, and the primary beneficiary determination. With respect to the VOE model, the ASU eliminates the presumption that a general partner controls a limited partnership or similar entity unless the presumption can otherwise be overcome. Under the new guidance, a general partner would largely not consolidate a partnership or similar entity under the VOE model. The Company adopted this ASU effective January 1, 2016. The adoption of this ASU did not impact the Company's consolidated financial statements and related disclosures.

F-7

In April 2015, the FASB issued ASU 2015-05, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Fees Paid in a Cloud Computing Arrangement, which provides explicit guidance about a customer's accounting for fees paid in a cloud computing arrangement. Under the ASU, if a cloud computing arrangement includes a software license, then the software license element of the arrangement should be accounted for consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the arrangement should be accounted for as a service contract. The Company adopted this ASU prospectively to arrangements entered into, or materially modified beginning January 1, 2016. The adoption of this ASU did not impact the Company's consolidated financial statements and related disclosures.

In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments. The amendments in this update require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The guidance further requires that the acquirer record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date and present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The Company adopted this ASU effective January 1, 2016 with prospective application. The adoption of this ASU did not impact the Company's consolidated financial statements and related disclosures.

Recently Issued Accounting Standards

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which provides new authoritative guidance on the methods of revenue recognition and related disclosure requirements. This new standard supersedes all existing revenue recognition requirements, including most industry-specific guidance. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The new standard also requires additional qualitative and quantitative disclosures. In April 2015 the FASB proposed to defer the effective date of the guidance by one year. Based on this proposal, public entities would need to apply the new guidance for annual and interim periods beginning after December 15, 2017, and shall be applied, at the Company's option, retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted until periods beginning after December 15, 2016. The Company is in the process of evaluating the impact of this standard update on its consolidated financial statements and related disclosures.

In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which provides new authoritative guidance with regards to management's responsibility to assess an entity's ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. The ASU will be effective for all entities in the first annual period ending after December 15, 2016 (December 31, 2016 for calendar year-end entities) and early adoption is permitted. The Company is in the process of evaluating the impact of this standard update on its consolidated financial statements and related disclosures.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which made targeted improvements to the recognition and measurement of financial assets and financial liabilities. The update changes how entities measure equity investments that do not result in consolidation and are not accounted for under the equity method and how they present changes in the fair value of financial liabilities measured under the fair value option that are attributable to their own credit. The new guidance also changes certain disclosure requirements and other aspects of current US GAAP. The guidance will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years and early adoption is permitted in some cases. The Company is in the process of evaluating the impact of this standard update on its consolidated financial statements and related disclosures.

F-8

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The update requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements. It also offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of cash flows arising from leases. The guidance will be effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years and early adoption is permitted. The Company is in the process of evaluating the impact of this standard update on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). The update clarifies principal vs agent accounting of the new revenue standard. The guidance will be effective for annual and interim periods beginning after December 15, 2017, and shall be applied, at the Company's option, retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted until periods beginning after December 15, 2016. The Company is in the process of evaluating the impact of this standard update on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The update simplifies the accounting for share based payment transactions. The guidance will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years and early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements and related disclosures.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing. The update provides more clarification about identifying performance obligations and licensing. The guidance will be effective for annual and interim periods beginning after December 15, 2017, and shall be applied, at the Company's option, retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. Early adoption is not permitted until periods beginning after December 15, 2016. The Company is in the process of evaluating the impact of this standard update on its consolidated financial statements and related disclosures.

Note 3 – Segment information

The Company provides harsh environment offshore drilling services to the oil and gas industry. The Company's performance is reviewed by the chief operating decision maker as one reportable segment, mobile units.

Revenues from the following customers accounted for more than 10% of the Company's consolidated revenues:

(In millions of US$)	Three month period ended March 31,
	2016			2015
Statoil		37	%		48	%
ExxonMobil		32	%		21	%
Conoco Phillips		22	%		18	%
Total		8	%		12	%
Centrica		1	%		—	%
Others		—	%		1	%
Total		100	%		100	%

F-9

Geographic segment data

Revenues are attributed to geographical segments based on the country of operations for drilling activities; that is, the country where the revenues are generated. The following presents the Company's total operating revenue by geographic area:

(In millions of US$)	Three month period ended March 31,
	2016		2015
Norway		140.3		168.6
United Kingdom		11.3		23.4
Total		151.6		192.0

As of March 31, 2016, one of the Company's drilling units, with a net book value of $635.6 million, was located in the United Kingdom, all other units were located in Norway. As of December 31, 2015, one of the Company's drilling units, with a net book value of $643.6 million, was located in the United Kingdom and all other units were located in Norway. Asset location at the end of the period is not necessarily indicative of the geographic distribution of the revenues or operating profits generated by such assets during the period.

Note 4 – Taxation

The effective tax rate for the three months ended March 31, 2016 and 2015 was -190.5% and -25.6%, respectively. The income tax expense increased $1.7 million for the three months ended March 31, 2016 as compared to the three months ended March 31, 2015. The increase is primarily attributable to change in estimate of tax expense initially recognized related to a prior reporting period.

Note 5 – Earnings per share

The computation of basic earnings per share ("EPS") is based on the weighted average number of shares outstanding during the period. Diluted EPS includes the effect of the assumed conversion of potentially dilutive instruments.

The components of the numerator for the calculation of basic and diluted EPS are as follows:

(In millions of US$)	Three month period ended March 31,
	2016			2015
Net loss attributable to shareholders		(9.9	)		(15.4	)
Effect of dilution		—			—
Diluted net loss attributable to stockholders		(9.9	)		(15.4	)

F-10

The components of the denominator for the calculation of basic and diluted EPS are as follows:

(In millions of US$)	Three month period ended March 31,
	2016			2015
				Restated*
Basic loss per share:
Weighted average number of common shares outstanding		24.1			24.1

Diluted loss per share:
Weighted average number of common shares outstanding		24.1			24.1
Effect of dilution		—			—
Diluted numbers of shares		24.1			24.1

Basic loss per share (US$)		(0.41	)		(0.64	)
Diluted loss per share (US$)		(0.41	)		(0.64	)

* As a result of the stock split and capital reduction on December 30, 2015, the earnings per share has been retrospectively adjusted. Refer to Note 14 for more information.

Note 6 – Accounts receivable

Accounts receivable are presented net of allowances for doubtful accounts. The allowance for doubtful accounts receivables at March 31, 2016 was $2.1 million (December 31, 2015: $12.1 million).

The Company did not recognize any bad debt expense in 2016 and 2015, but has instead reduced contract revenue for the disputed amounts.

Note 7 – Other current assets

(In millions of US$)	March 31, 2016		December 31, 2015
Reimbursable amounts due from customers		3.6		7.4
Deferred tax effect of internal transfer of assets – current portion		9.1		9.1
Prepaid expenses		4.0		5.3
Derivative financial instruments ⁽¹⁾		—		1.5
VAT receivables		1.3		1.8
Other		0.1		—
Total other current assets		18.1		25.1

⁽¹⁾	Derivative financial instruments consist of unrealized gain on interest rate swaps. Additional disclosure has been provided in Note 18.

F-11

Note 8 – Newbuildings

(In millions of US$)	Three months ended March 31, 2016		Year ended December 31, 2015
Opening balance at the beginning of the period		—		172.6
Additions		—		37.8
Re-classified as held for sale		—		(210.4	)
Closing balance at the end of the period		—		—

The additions in 2015 relate to the West Rigel and include capitalized interest expenses.

As of December 2, 2015, the West Rigel, with book value of $210.4 million, was reclassified as an asset held for sale. Refer to Note 21 for more information.

Note 9 – Drilling units

(In millions of US$)	March 31, 2016			December 31, 2015
Cost		4,118.5			4,116.1
Accumulated depreciation		(1,434.8	)		(1,378.1	)
Net book value		2,683.7			2,738.0

Depreciation expense for the three months ended March 31, 2016 was $56.7 million ($55.5 million for the three months ended March 31, 2015).

Note 10 – Other non-current assets

(In millions of US$)	March 31, 2016		December 31, 2015
Deferred tax effect of internal transfer of assets - Long-term portion		90.6		92.9
Other		1.6		1.8
Total other non-current assets		92.2		94.7

F-12

Note 11 – Debt

As of March 31, 2016 and December 31, 2015, the Company had the following debt facilities:

(In millions of US$)	March 31, 2016			December 31, 2015
Credit facilities:
US$2,000 facility		1,158.3			1,200.0
US$475 facility (SFL Linus)		391.9			354.0
Total credit facilities principal		1,550.2			1,554.0

Bonds:
NOK1,500 bond*		179.7			170.6
US$600 bond **		600.0			600.0
Total bonds principal		779.7			770.6

Related party loans:
Loan from related party		94.6			125.0
Total debt principal		2,424.5			2,449.6

Less: current portion of long term debt		(218.1	)		(218.1	)
Less: Related party share of long term debt		(291.0	)		(321.0	)
Long-term portion of debt principal		1,915.4			1,910.5

* Seadrill is the owner of 5.5% of the bond, this portion is presented as a related party liability in the Company's consolidated balance sheet. Refer to Note 17 - Related party transactions.

** Seadrill is the owner of 31.1% of the bond, this portion is presented as a related party liability in the Company's consolidated balance sheet. Refer to Note 17 - Related party transactions.

The tables below show the debt issuance costs that are netted against the current and long-term debt for each of the periods presented:

Outstanding debt as at March 31, 2016
(In $ millions)	Principal outstanding		Less: Debt Issuance Costs			Total Debt
Current portion of long-term debt		218.1		(7.7	)		210.4
Long-term portion of debt		1,915.4		(5.2	)		1,910.2
Related party share of long term debt		291.0		—			291.0
Total external debt		2,424.5		(12.9	)		2,411.6

Outstanding debt as at December 31, 2015
(In $ millions)	Principal outstanding		Less: Debt Issuance Costs			Total Debt
Current portion of long-term debt		218.1		(7.7	)		210.4
Long-term portion of debt		1,910.5		(7.0	)		1,903.5
Related party share of long term debt		321.0		—			321.0
Total external debt		2,449.6		(14.7	)		2,434.9

F-13

The outstanding external and related party debt as of March 31, 2016 is repayable as follows:

(In millions of US$)	Twelve months ending March 31, 2016
2017		218.1
2018		1,039.2
2019		827.2
2020		245.4
2021		—
2022 and thereafter		94.6
Total debt principal		2,424.5

Credit facilities

$2,000 million senior secured credit facility

In April 2011, the Company entered into a $2,000 million senior secured credit facility to fund the Company's acquisition of West Phoenix, West Navigator, West Alpha, West Epsilon, West Venture, and West Elara. The $2,000 million senior secured credit facility has a 6 year term payable quarterly with a balloon payment of $950 million at maturity. The loan bears interest of Libor plus 2.0% per annum.

$475 million secured term loan

In October 2013, SFL Linus Ltd entered into a $475 million secured term loan and revolving credit facility with a syndicate of banks to fund the acquisition of West Linus, which has been pledged as security. SFL Linus Ltd drew down on the loan at the delivery date of the rig in February 2014. The facility bears interest of LIBOR plus 2.75% and matures in June 2019. During the three months ended March 31, 2016 repayments were $(12) million. In addition during the three months ended March 31, 2016, SFL Linus Ltd drew down $50.0 million on the revolving credit tranche of the facility. Subsequently the VIE repaid balances due to Ship Finance, a related party, thus reducing the consolidated related party net debt.

Bonds

NOK 1,500 million senior unsecured bond

On October 30, 2013, a NOK1,500 million senior unsecured bond was issued with maturity date October 2018. The bond bears interest at 3-months NIBOR plus a margin of 4.40%. The bond was subsequently swapped to US dollars with a fixed rate of 6.18% per annum until maturity. As at March 31, 2016, Seadrill is the holder of 5.5% of the bond, which amounts to $9.8 million (December 31, 2015: 5.5% or $9.4 million).

$600 million senior unsecured bond

On January 31, 2014, a $600 million senior unsecured bond was issued with maturity date January 2019. The notes bear a fixed coupon of 6.25%. As at March 31, 2016, Seadrill is the holder of 31.1% of the bond, which amounts to $186.6 million (December 31, 2015: 31.1% or $186.6 million).

Related party loans

SFL Linus Ltd

Ship Finance granted SFL Linus Ltd a loan of $195 million in June 2013. The maturity date is June 30, 2029. SFL Linus Ltd repaid $70 million in 2014, and the outstanding balance as of March 31, 2016 is $95 million, as the Company has presented receivable balances (current assets) of $30.4 million due to the right of offset in the loan agreement. The proceeds of this loan were used to finance the acquisition of the West Linus. Refer to Note 20 for more information.

F-14

Covenants on credit facilities and unsecured bonds

Our credit facilities generally contain financial covenants as well as security provided to lenders in the form of pledged assets.

The full list of the Company's covenants are disclosed in the annual report on 20-F for the year ended December 31, 2015.

The Company's NOK 1,500 million senior unsecured bond, $2,000 million Senior Secured Credit Facility, and $475 million secured term loan are guaranteed by Seadrill. The financial covenants relating to these loans are Seadrill's financial covenants, which are measured at the Seadrill consolidated level. The guarantee fee charged by Seadrill is 0.3% per annum of the outstanding principal.

April 2016 Amendments to Senior Secured Credit Facilities

On April 28, 2016, Seadrill and the Company executed temporary amendment agreements in respect of all their senior secured credit facilities. The maturity of our $2 billion senior secured credit facility has been extended to the end of June 2017. In addition, the key terms and conditions of these agreements are as follows:

•

Equity ratio: Seadrill is required to maintain a total equity to total assets ratio of at least 30.0%. Prior to the amendment, both total equity and total assets are adjusted for the difference between book and market values of drilling units, as determined by independent broker valuations. The amendment removes the need for the market value adjustment from the calculation of the equity ratio until June 30, 2017.

•

Leverage ratio: the Seadrill is required to maintain a ratio of net debt to EBITDA. Prior to the amendment the leverage ratio had to be no greater than 6.0:1, falling to 5.5:1 from October 1, 2016, and falling again to 4.5:1 from January 1, 2017. The amendment retains the ratio at 6.0:1 until December 31, 2016, and then increases to 6.5:1 between January 1, 2017 and June 30, 2017.

•

Minimum-value-clauses: Seadrill's and the Company's secured bank credit facilities contain loan-to-value clauses, or minimum-value-clauses ("MVC"), which could require the Seadrill and the Company prepay a portion of the outstanding borrowings should the value of the drilling units securing borrowings under each of such agreements decrease below required levels. This covenant has been suspended.

•

Minimum Liquidity: The aggregated minimum liquidity requirement for the group to maintain cash and cash equivalents of at least $150 million has been increased to $250 million.

Additional undertakings:

•

Further process: Seadrill and the Company have agreed certain undertakings on a temporary basis while further discussions with lenders under its senior secured credit facilities are ongoing.

•

Restrictive undertakings: Seadrill and the Company has agreed to additional near-term restrictive undertakings applicable during this process, including (without limitation) limitations in respect of:

◦

dividends, share capital repurchases and new total return swaps;

◦

incurrence and of certain indebtedness

◦

investments in, extensions of credit to or the provision of financial support for non-wholly owned subsidiaries;

◦

investments in, extensions of credit to or the provision of financial support for joint ventures or associated entities;

◦

acquisitions;

◦

dispositions;

◦

prepayment, repayment or repurchase of any debt obligations;

◦

granting security; and

◦

payments in respect of newbuild drilling units,

in each case, subject to limited exceptions.

•

Other changes and provisions:

◦

Undrawn availability: Seadrill and the Company have agreed to refrain from borrowing any undrawn commitments under its senior secured credit facilities.

◦

Fees: The Company has agreed to pay certain fees to its lenders in consideration of these extensions and amendments.

F-15

These extensions and amendments are designed to provide Seadrill and the Company and the banking group with a period of stability and certainty while a more comprehensive financing package is agreed. Seadrill and the Company intend to further communicate these financing plans this year.

The Company is in compliance with all covenants as at March 31, 2016.

Note 12 – Other current liabilities

(In millions of US$)	March 31, 2016		December 31, 2015
Derivative financial instruments ⁽¹⁾		115.6		124.5
Accrued interest expense		12.4		17.9
Accrued expenses		15.3		22.5
Employee withheld taxes, social security and vacation payment		15.6		18.7
Withheld business taxes		3.4		6.6
Short term portion of deferred revenues		19.7		21.6
Total other current liabilities		182.0		211.8

⁽¹⁾	Derivative financial instruments consist of unrealized losses on interest rate swaps, cross currency swaps and foreign exchange rate forwards. Additional disclosure has been provided in Note 18.

Note 13 – Other non-current liabilities

(In millions of US$)	March 31, 2016		December 31, 2015
Deferred revenue		15.7		19.9
Derivative financial instruments ⁽¹⁾		3.9		2.3
Total other non-current liabilities		19.6		22.2

⁽¹⁾	Derivative financial instruments consist of unrealized losses on interest rate swaps, which are hedge accounted. Additional disclosure has been provided in Note 18.

Note 14 – Share capital

	March 31, 2016					December 31, 2015
Common shares of US$0.10 par value each	Shares			US$ millions		Shares			US$ millions
Authorized share capital		100,000,000			10.0		100,000,000			10.0

Issued and fully paid share capital		24,351,618			2.4		24,351,618			2.4
Treasury shares held by Company		(237,386	)		—		(237,386	)		—
Outstanding shares in issue		24,114,232			2.4		24,114,232			2.4

F-16

Note 15 – Accumulated Other Comprehensive Loss

(In millions of US$)	March 31, 2016			December 31, 2015
Actuarial loss relating to pension		(18.4	)		(23.7	)
Total accumulated other comprehensive loss, net of tax		(18.4	)		(23.7	)

For actuarial loss related to pension, the accumulated applicable amount of deferred income taxes related to companies domiciled in Norway, where the tax rate is 25%, amounted to $6.0 million at March 31, 2016 (December 31, 2015 $7.9 million).

Note 16 – Pension benefits

The Company has a defined benefit pension plan covering substantially all employees in Norway. A significant part of this plan is administered by a life insurance company. In addition, the Company has a defined contribution plan for all new onshore employees. Under this scheme, the Company contributes to the employee's pension plan amounts ranging from five to eight percent of the employee's annual salary.

For onshore employees in Norway, continuing with the defined benefit plans, the primary benefits are retirement pension of approximately 66% of salary at retirement age of 67 years, together with a long-term disability pension. The retirement pension per employee is capped at an annual payment of 66% of the total of 12 times the Norwegian Social Security Base. Most employees in this group may choose to retire at 62 years of age on a pre-retirement pension. Offshore employees in Norway have retirement and long-term disability pension of approximately 60% of salary at retirement age of 67. Offshore employees on mobile units may choose to retire at 60 years of age on a pre-retirement pension.

The expenses for our defined benefit pension plans for the three month period ended March 31, 2016 and 2015 were as follows:

	Three month period ended March 31,
(In millions of US$)	2016			2015
Benefits earned during the period		1.6			4.0
Interest cost on prior years' benefit obligation		0.8			1.0
Gross pension cost for the period		2.4			5.0
Expected return on plan assets		(0.8	)		(0.9	)
Administration charges		0.2			0.2
Net pension cost for the period		1.8			4.3
Social security cost		0.3			0.5
Amortization of actuarial losses		0.4			0.9
Total net pension cost		2.5			5.7

Employer Contributions

In the three months period ended March 31, 2016 and 2015, contributions of $8.8 million and $12.5 million, respectively, were made to the defined benefit pension plans.

F-17

The funded status of the defined benefit plan

(In millions of US$)	As at March 31, 2016			As at December 31, 2015
Projected benefit obligations		125.4			129.8
Plan assets at market value		(105.2	)		(97.0	)
Accrued pension liability exclusive social security		20.2			32.8
Social security related to pension obligations		2.9			4.6
Accrued pension liabilities		23.1			37.4

Change in benefit obligations

(In millions of US$)	Three months ended March 31, 2016			Year ended December 31, 2015

Benefit obligations at beginning of the period		129.8			186.5
Current service cost		1.6			12.2
Interest cost		0.8			3.5
Change in unrecognized actuarial (gain) / loss		0.4			(20.0	)
Settlement		(14.0	)		(20.2	)
Benefits paid		(0.6	)		(1.9	)
Foreign currency translations		7.4			(30.3	)
Benefit obligations at end of the period		125.4			129.8

Change in pension plan assets

(In millions of US$)	Three months ended March 31, 2016			Year ended December 31, 2015

Fair value of plan assets at beginning of the period		97.0			113.8
Expected return on plan assets		0.8			3.2
Change in unrecognized actuarial loss		1.5			—
Administration charges		(0.2	)		(0.8	)
Contribution by employer		8.8			11.7
Settlement		(7.4	)		(11.2	)
Benefits paid		(0.6	)		(1.9	)
Foreign currency translations		5.3			(17.8	)
Fair value of plan assets at end of the period		105.2			97.0

During the three months ended March 31, 2016, and also during the three months ended March 31, 2015, a number of employees left the Company and as a result the defined benefit scheme transferred the pension liability for these employees to the life insurance company administering the scheme. The difference between the reduction in benefit obligation and the plan assets transferred to the life insurance company has been recognized within "Other comprehensive income". The settlement is not deemed to be significant in the context of the overall scheme and as such net unrecognized actuarial losses have not been recycled as a result of the settlement.

F-18

Note 17 – Related party transactions

The Company transacts business with the following related parties, being companies in which Seadrill's principal shareholder, Hemen Holdings Ltd. (herein referred to as "Hemen"), and companies associated with Hemen, have a significant interest:

- Seadrill

- Ship Finance International Limited ("Ship Finance")

- Frontline Management (Bermuda) Limited ("Frontline")

- Seatankers Management AS ("Seatankers")

- Archer Limited ("Archer")

- Sevan Drilling Limited ("Sevan")

The Company has entered into the following significant agreements with related parties:

Seadrill transactions

$600 million senior unsecured bond

Seadrill is the holder of 31.1% of the $600 million bond, which amounts to $186.6 million (December 31, 2015: 31.1% or $186.6 million). The bond was entered into in January 2014 with a fixed coupon of 6.25% and matures in January 2019. Interest due to Seadrill for the three months ended March 31, 2016 was $2.9 million (three months ended March 31, 2015: $2.8 million).

$85 million Revolving Credit Facility

Seadrill provided the Company with an unsecured revolving shareholder loan of $85 million. No drawdowns were outstanding on this facility as at December 31, 2014 and no drawdowns were made during 2015. The facility matured in January 2015. Interest and commitment fee charged relating to the shareholder loan from Seadrill for the three months ended March 31, 2016 amounted to $0.0 million (three months ended March 31, 2015: $0.1 million).

NOK 1,500 million senior unsecured bond

Seadrill is the holder of 5.5% of the NOK1,500 bond loan, which amounts to $9.8 million (December 31, 2015: 5.5% or $9.4 million). Interest due to Seadrill for the three months ended March 31, 2016 was $0.1 million (three months ended March 31, 2015: $0.1 million).

Financial covenants and debt guarantees

In February 2015, the Company received approval from its Norwegian Bondholders to amend the Bond Agreement for its NOK 1,500 million Norwegian Bond maturing in 2018. Under the terms of the agreement, Seadrill will provide a guarantee for the Bond Issue in exchange for amendments to the covenant package, principally replacing the current financial covenants with the financial covenants within Seadrill's NOK bonds. Additionally, the Company received approval to amend the covenants in its $2 billion credit facility and the Ship Finance $475 million term loan and revolving credit facility. Under the terms of the agreements, Seadrill provides a guarantee for the credit facilities in exchange for amendments to the covenant package, principally replacing the Company's existing financial covenants with financial covenants within Seadrill's secured credit facilities. As such there are no longer separate financial covenants contained within the Company's credit facilities or bond agreements. The guarantee fee charged by Seadrill is 0.3% per annum of the outstanding principal. The total guarantee fee for the three months ended March 31, 2016 was $1.3 million (December 31, 2015: $0.6 million). These fees are classified with "other financial items" on the statement of operations.

F-19

Performance guarantees

Seadrill provides performance guarantees in connection with the Company's drilling contracts, and charges the Company an annual fee of 1% of the guaranteed amount to provide these guarantees. The total amount of such guarantees was $200.0 million at March 31, 2016 and $225 million at December 31, 2015. The incurred fee was $0.5 million and $0.6 million for the three months ended March 31, 2016 and 2015, respectively. These fees are classified with "other financial items" on the statement of operations. The Company has agreed to reimburse Seadrill for all claims made against Seadrill under the performance guarantees.

Management services

North Atlantic Management provides all day-to-day management functions to the Company and its subsidiaries in accordance with the terms of the General Management Agreement. North Atlantic Management has contracted Seadrill Management Ltd to provide corporate and senior management services in accordance with the terms of the Management and Administrative Services Agreement. The agreement can be terminated by either party at 90 days notice. In consideration of the services provided to the Company, the Company pays Seadrill a fee that includes the operating costs attributable to the Company plus a margin of 8%. For the three month period ended March 31, 2016 and 2015, Seadrill had charged North Atlantic Management a total fee of $4.0 million and $6.1 million, respectively, for providing the services under the Management and Administrative Services Agreement.

Sale of spare parts

During the three months ended March 31, 2016, North Atlantic Rigel Ltd, the wholly owned subsidiary of the Company that currently owns the investment in the West Rigel, sold certain spare parts to Seadrill. The parts were sold for a consideration of $2.4 million, representing the historical purchase price of the spare parts. The book value of the spare parts was written down to nil during the year ended December 31, 2015, when the West Rigel was classified as an asset held for sale and the carrying value of these spare parts was considered to be not recoverable. Consequently, a gain on disposal of $2.4 million has now been recognized in the Company's statement of operations during the period.

Archer transactions

Engineering Services

North Atlantic Drilling received certain technical vessel and rig services from subsidiaries of Archer Ltd. The charged amount was $0.8 million and $1.0 million for the three months period ended March 31, 2016 and 2015, respectively. These amounts are included in vessel and rig operating expenses. Archer is a company in which Seadrill is a large shareholder.

Transactions with Sevan Drilling

Management services

Pursuant to the secondment agreement with Sevan Drilling our Chief Financial Officer has been seconded to North Atlantic Management from Sevan Drilling Management AS, a subsidiary of Seadrill and Sevan Drilling Limited. The fee was $0.2 million, nil for the three months period ended March 31, 2016 and 2015, respectively.

Transactions with Frontline

Management Services

The Company and its subsidiaries incorporated in Bermuda receive corporate secretarial and certain other administrative services applicable to the jurisdiction of Bermuda from Frontline Management (Bermuda) Ltd. The fee was less than $0.1 million and $1.0 million for the three month period ended March 31, 2016 and 2015, respectively. Frontline Management (Bermuda) Ltd. is a wholly owned subsidiary of Frontline Ltd., a company in which Hemen Holding Limited is a large shareholder.

Transactions with Seatankers

Management services

The Company receives corporate management and director services through Seatankers Management Norway AS. The fee was less than $0.1 million, for the three month periods ended March 31, 2016 and 2015, respectively. Seatankers Management Norway AS a company which is an affiliate of Hemen.

F-20

Ship Finance transactions

Sale and leaseback contract

The Company entered into sale and leaseback transaction with SFL Linus Ltd, a Ship Finance subsidiary, for the jack-up rig, West Linus, in June 2013. The West Linus was sold for a total consideration of $600 million and then chartered back to North Atlantic Drilling on a bareboat charter in a period of 15 years. Under the sale and leaseback transaction North Atlantic Drilling was granted four repurchase options for the unit. The West Linus was delivered from the yard in February 2014. Ship Finance also has an option to sell the rig back to North Atlantic Drilling at the end of the charter period. As at March 31, 2016, the unit is reported under Drilling Units in the Company's balance sheet. Additional disclosure about the VIE has been provided in Note 20.

$125 million Loan Facility:

Ship Finance granted the VIE company, SFL Linus Ltd, an unsecured loan of $195 million in June 2013 to be repaid at the earlier of June 30, 2029 or date of sale of the West Linus rig. The proceeds of this loan were used to finance the acquisition of the West Linus. The loan did not bear interest until the rig was delivered from the yard. The loan was reduced to $125 million in the period ended March 31, 2014. As at March 31, 2016 the outstanding balance of the loan is $125 million (December 31, 2015: $125 million) and is presented as long term debt to related parties on our balance sheet. The facility bears an interest rate of 4.5% per annum. Interest charged for the three month period ended March 31, 2016 was $1.4 million (three month period ended March 31, 2015: $1.4 million).

Related Party Balances

(In millions of US$)	March 31, 2016		December 31, 2015
Related party receivables
Seadrill		3.6		4.7
Total related party receivables		3.6		4.7

Related party payables
Seadrill		10.3		16.6
Ship Finance International		—		23.2
Total related party payables		10.3		39.8

Long term debt to related party
US$600 Bond, Seadrill Ltd share 31.1%		186.6		186.6
NOK1,500 Bond, Seadrill Ltd share 5.5%		9.8		9.4
Long term related party loan from Ship Finance *		94.6		125.0
Total long term debt to related party		291.0		321.0

Receivables and payables with related parties arise when the Company pays an invoice on behalf of a related party and vice versa. Receivables and payables are generally settled monthly in arrears.

Other than the loans specifically mentioned, the amounts due to and from Seadrill Limited and its subsidiaries under business operations are unsecured, interest-free and intended to be settled in the ordinary course of business.

The Company presents balances due to/from Ship Finance on a net basis, due to the fact there is a right of offset established in the long-term loan agreements, and the balances are intended to be settled on a net basis. As at March 31, 2016 the Company has presented receivable balances (current assets) of $30.4 million have been offset against the Long-term debt due to related parties (non-current liabilities) of $125.0 million. As at December 31, 2015, nil was offset.

F-21

Note 18 – Risk management and financial instruments

The majority of the Company's gross earnings from our drilling units are receivable in US dollars and the majority of the Company's other transactions, assets and liabilities are denominated in US dollars, the functional currency of the Company. However, the Company has operations and assets in countries with currency other than US dollars and incurs expenditures in other currencies, causing its results from operations to be affected by fluctuations in currency exchange rates, and to the impact of changes in currency exchange rates on primarily NOK denominated debt. The Company is also exposed to changes in interest rates on floating interest rate debt. There is thus a risk that currency and interest rate fluctuations may have a positive or negative effect on the value of the Company's cash flows.

Interest rate risk management

The Company's exposure to interest rate risk relates mainly to its floating interest rate debt and balances of surplus funds placed with financial institutions. This exposure is managed through the use of interest rate swaps. The Company's objective is to obtain the most favorable interest rate borrowings available without risking exposure to fluctuating interest rates. Surplus funds are generally placed in fixed deposits with reputable financial institutions, yielding higher returns than are available on overnight deposits in banks. Such deposits generally have short-term maturities, in order to provide the Company with flexibility to meet all requirements for working capital and capital investments. The extent to which the Company utilizes interest rate swaps and other derivatives to manage its interest rate risk is determined by the net debt exposure.

Interest rate swap agreements not qualified for hedge accounting

As at March 31, 2016, the Company had interest rate swap agreements with an outstanding principal amount of $900 million (December 31, 2015: $1,300 million). The agreements do not qualify for hedge accounting, and accordingly any changes in the fair values of the swap agreements are included in the consolidated statement of operations under "Loss from derivative financial instruments." The total fair value of the interest rate swaps outstanding at March 31, 2016 amounted to a gross and net liability of $28.6 million, and an asset of nil (December 31, 2015: gross and net liability $25.9 million, and an asset $1.5 million).

The Company's outstanding interest rate swap agreements as of March 31, 2016 were as follows:

Outstanding principal	Receive rate	Pay rate	Length of contract
(In US$ millions)
100	3 month LIBOR	2.74%	May 2012 - May 2017
200	3 month LIBOR	2.57%	June 2012 - June 2017
100	3 month LIBOR	2.56%	June 2012 - June 2017
100	3 month LIBOR	2.17%	Aug 2012 - Aug 2017
100	3 month LIBOR	2.17%	Aug 2012 - Aug 2017
100	3 month LIBOR	1.15%	Dec 2012 – Dec 2019
200	3 month LIBOR	2.92%	Mar 2016 - Mar 2021

Interest rate hedge accounting

The Ship Finance subsidiary consolidated by the Company as a VIE, SFL Linus Ltd, (refer to Note 20 - Variable Interest Entities) has entered into interest rate swap agreements in order to mitigate its exposure to variability in cash flows for future interest payments on the loan taken out to finance the acquisition of West Linus. These interest rate swaps qualify for hedge accounting and any changes in their fair value are included in "Other comprehensive income". Below is a summary of the notional amount, fixed interest rate payable and duration of the interest rate swaps.

F-22

Outstanding principal	Receive rate	Pay rate	Length of contract
(in US$ Millions)
186.0	3 month LIBOR	1.77%	Dec 2013 - Dec 2018
4.0	2 month LIBOR	2.01%	Mar 2014 - Nov 2018
4.0	1 month LIBOR	2.01%	Mar 2014 - Oct 2018

The total fair value of the interest rate swaps outstanding at March 31, 2016 amounted to a liability of $3.9 million (December 31, 2015: a liability of $2.3 million). In the three month period ended March 31, 2016, the above VIE Ship Finance subsidiary has recorded fair value losses on interest rate swaps of $1.6 million (three month period ended March 31, 2015: $1.3 million fair value losses). Gain or loss is recorded by the VIE in "Other comprehensive income" but due to its ownership by Ship Finance this is allocated to "Non-controlling interest" in our statement of changes in equity. Any change in fair value resulting from hedge ineffectiveness is recognized immediately in earnings. The VIE, and therefore North Atlantic Drilling, did not recognize any gain or loss due to hedge ineffectiveness in the consolidated financial statements during the three month period ended March 31, 2016 and 2015.

Cross currency interest rate swaps not qualified for hedge accounting

At March 31, 2016 the Company had outstanding cross currency interest rate swaps with a principal amount of $253.5 million (December 31, 2015: $253.5 million). These agreements do not qualify for hedge accounting and accordingly any changes in the fair values of the swap agreements are included in the consolidated statement of operations under "Loss from derivative financial instruments". The total fair value of cross currency interest rate swaps outstanding at March 31, 2016 amounted to a liability of $86.7 million (December 31, 2015: a liability of $98.6 million). The fair value of the cross currency interest rate swaps are classified within "Other current liabilities" in the balance sheet.

Foreign currency risk management

The Company uses foreign currency spot and forward contracts to manage its exposure to foreign currency risk on certain assets, liabilities and future anticipated transactions. Such derivative contracts do not qualify for hedge accounting treatment and are recorded in the balance sheet under "Other current assets" if the contracts have a net positive fair value, and under "Other current liabilities" if the contracts have a net negative fair value. As at March 31, 2016, the Company had one forward contract to sell $10 million at an exchange rate of NOK 8.52, maturing in June 15, 2016. As at March 31, 2016, the fair value of the outstanding foreign currency forward amounted to a liability of $0.3 million. The Company had no foreign currency forward contracts outstanding as at December 31, 2015.

The gains and losses of the derivatives recognized in the Statement of Operations, which include net interest settlements on the agreements, were as follows:

(In millions of US$)	Three month period ended March 31,
	2016			2015
Interest rate swaps		(9.4	)		(10.1	)
SFL Linus Interest rate swaps		(0.6	)		(0.8	)
Cross currency interest rate swap agreements		10.3			(20.6	)
Foreign currency agreements		(0.3	)		(2.8	)
Total Derivatives Gain/(Loss)		—			(34.3	)

F-23

Fair values

The carrying value and estimated fair value of the Company's financial instruments at March 31, 2016 and December 31, 2015 are as follows:

	March 31, 2016				December 31, 2015
(In millions of US$)	Fair value		Carrying value		Fair value		Carrying value
Cash and cash equivalents		87.4		87.4		150.9		150.9
Restricted cash		4.2		4.2		6.5		6.5
Current portion of long-term debt		218.1		218.1		218.1		218.1
Long-term floating rate debt		1,332.1		1,332.1		1,335.9		1,335.9
$600 million fixed interest bond		125.0		413.4		222.7		413.4
NOK 1,500 million floating interest bond		51.1		169.9		83.5		161.2
$600 million fixed interest bond - owned by related party		56.5		186.6		100.6		186.6
NOK 1,500 million floating interest bond - owned by related party		3.0		9.8		4.8		9.4
Long term fixed interest loan to related party		94.6		94.6		125.0		125.0

The carrying value of cash and cash equivalents, which are highly liquid, and restricted cash, is a reasonable estimate of fair value and categorized at level 1 on the fair value measurement hierarchy.

The fair value of the current and long-term portion of floating rate debt is estimated to be equal to the carrying value since it bears variable interest rates, which are reset regularly and usually in the range between every one to six months. This debt is not freely tradable and cannot be purchased by the Company at prices other than the outstanding balance plus accrued interest. The Company has categorized this at level 2 on the fair value measurement hierarchy.

The fair value of the $600 million bond and the NOK 1,500 million are based at the price it is trading at on March 31, 2016 and December 31, 2015. The Company has categorized this at level 1 on the fair value measurement hierarchy.

The fair value of the loan provided by Ship Finance to SFL Linus Ltd is estimated to be equal to the carrying value as the loan was entered into on arm's length terms and accrues interest which is repaid quarterly. This debt is not freely tradable and cannot be purchased by the Company at prices other than the outstanding balance plus accrued interest. The Company has categorized this at level 2 on the fair value measurement hierarchy.

Financial instruments that are measured at fair value on a recurring basis:

		March 31, 2016				December 31, 2015
(In millions of US$)	Fair value hierarchy	Fair value		Carrying value		Fair value		Carrying value
Assets
Interest rate swaps - current assets	Level 2		—		—		1.5		1.5

Liabilities
Currency forward contracts - short term liabilities	Level 2		0.3		0.3		—		—
Interest rate swaps - short term liabilities	Level 2		28.6		28.6		25.9		25.9
Interest rate swaps qualified for hedge accounting - long term liabilities	Level 2		3.9		3.9		2.3		2.3
Cross currency swap - short term liabilities	Level 2		86.7		86.7		98.6		98.6

F-24

US GAAP emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, US GAAP establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within levels one and two of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within level three of the hierarchy).

Level one input utilizes unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Level two inputs are inputs other than quoted prices included in level one that are observable for the asset or liability, either directly or indirectly. Level two inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability, other than quoted prices, such as interest rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals. Level three inputs are unobservable inputs for the asset or liability, which are typically based on an entity's own assumptions, as there is little, if any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability.

The fair values of interest rate swaps, cross currency swaps and forward exchange contracts are calculated using well-established independent valuation techniques, using the income method approach, applied to contracted cash flows and LIBOR, NIBOR and STIBOR interest rates as of March 31, 2016.

As of March 31, 2016 and December 31, 2015 liabilities or assets related to financial and derivative instruments are presented at gross amounts where the Company does not have the right of offset. The amounts are included in our fair value table above.

Credit risk

The Company has financial assets, including cash and cash equivalents, restricted cash, other receivables and certain amounts receivable on derivative instruments, mainly forward exchange contracts and interest rate swaps. These assets expose the Company to credit risk arising from possible default by the counterparty. The Company considers the counterparties to be creditworthy financial institutions and does not expect any significant loss to result from non-performance by such counterparties. The Company, in the normal course of business, does not demand collateral.

The credit exposure of interest rate swap agreements, currency option contracts and foreign currency contracts is represented by the fair value of contracts with a positive fair value at the end of each period, reduced by the effects of master netting agreements. It is the Company's policy to enter into master netting agreements with the counterparties to derivative financial instrument contracts, which give the Company the legal right to discharge all or a portion of amounts owed to a counterparty by offsetting them against amounts that the counterparty owes to the Company.

Concentration of Risk

There is a concentration of credit risk with respect to cash and cash equivalents as most of the amounts are deposited with Nordea Bank Finland Plc and Danske Bank A/S. The Company considers these risks to be remote.

There is a concentration of credit risk with respect to revenue as the Company has customers that represent more than 10% of total revenues. Refer to Note 3 - Segment Information for an analysis of the Company's revenue by customer.

F-25

Note 19 – Commitments and contingencies

Pledged assets

The book value of assets pledged under mortgages and overdraft facilities as at March 31, 2016 was $2,683.7 million.

Newbuilding Commitments

As of March 31, 2016, the Company no longer has any contractual commitments for the West Rigel semi-submersible rig, due to the arrangements made with the shipyard. Refer to Note 21 for more information.

Legal Proceedings

From time to time we are a party, as plaintiff or defendant, to lawsuits in various jurisdictions for demurrage, damages, off-hire and other claims and commercial disputes arising from the construction or operation of our drilling units, in the ordinary course of business or in connection with our acquisition or disposal activities. Other than as disclosed below, we believe that the resolution of such claims will not have a material impact individually or in the aggregate on our operations or financial condition. Our best estimate of the outcome of the various disputes has been reflected in our financial statements as of March 31, 2016.

In December 2014, a purported shareholder class action lawsuit, Fuchs et al. v. Seadrill Limited et al., No. 14-cv-9642 (LGS)(KNF), was filed in US Federal District Court in the Southern District of New York, alleging, among other things, that Seadrill and certain of its executives made materially false and misleading statements in connection with the payment of dividends. In January 2015, a second purported shareholder class action lawsuit, Heron v. Seadrill Limited et al., No. 15-cv-0429 (LGS)(KNF), was filed in the same court on similar grounds. In March 2015, a third purported shareholder class action lawsuit, Glow v. Seadrill Limited et al., No. 15-cv-1770 (LGS)(KNF), was filed in the same court on similar grounds. On March 24, 2015, the court consolidated these complaints into a single action. On June 23, 2015 the court appointed co-lead plaintiffs and co-lead counsel and ordered the co-lead plaintiffs to file a single consolidated amended by complaint by July 23, 2015.

The amended complaint was filed on July 23, 2015 including North Atlantic Drilling as a defendant. It alleges, among other things, that Seadrill Limited, North Atlantic Drilling and certain of our and its executives made materially false and misleading statements in connection with the payment of dividends, the failure to disclose the risks to the Rosneft transaction as a result of various enacted government sanctions and the inclusion in backlog of $4.1 billion attributable to the Rosneft transaction.

Defendants filed their Motion to Dismiss the Complaint on October 13, 2015. The plaintiffs, in turn, filed their Opposition to the Motion to Dismiss on November 12, 2015 and Defendants filed the Reply Brief on December 4, 2015. Although we intend to vigorously defend this action, we cannot predict the outcome of this case, nor can we estimate the amount of any possible loss. Accordingly, no loss contingency has been recognized within the Company's financial statements.

In addition, the Company has received voluntary requests for information from the US Securities and Exchange Commission concerning, among other things, statements in connection with its payment of dividends, inclusion of contracts in the Company's backlog, and its contracts with Rosneft.

Other Matters

North Atlantic Drilling, and all other offshore contractors that are members of the Norwegian Shipowners' Association, lost a Norwegian court case in July 2015 concerning the pension rights of night shift compensation for offshore workers. The case has been appealed to the Supreme Court of Norway by the members of the Norwegian Shipowners' Association, and the hearings are expected to be held in June 2016. Due to the uncertainty of the appeal we cannot predict the outcome of this case, nor can we estimate the amount of any possible loss. Accordingly, no loss contingency has been recognized within the Company's financial statements as at March 31, 2016.

In February 2016 the Company was notified of customer claims that are potentially material to our financial statements. After an initial assessment including advice from external counsel, the Company fully refutes the validity of these claims and will take appropriate actions related to our position. The client has withheld amounts from invoice payments due in the first quarter of 2016, which total $36.2 million. No provision has been recognized in relation to these claims.

F-26

Note 20 - Variable Interest Entity (VIE)

As of March 31, 2016, the Company leased a jack-up rig from the VIE under a capital lease. The shares in North Atlantic Linus Ltd, which owned the jack-up rig, was sold by the Company to Ship Finance Ltd on June 30, 2013, while the West Linus rig was simultaneously leased back by the Company on a bareboat charter contract for a term of 15 years. The Company has four options to repurchase the unit during the charter period, and an obligation to purchase the asset at the end of the 15 year lease period.

The Company has determined that the Ship Finance subsidiary, which owns the rig, is a VIE, and that North Atlantic Drilling is the primary beneficiary of the risks and rewards connected with the ownership of the rig and the charter contract. Accordingly, the VIE is consolidated in our financial statements. The Company did not record any gain or loss from the sale of the shares, as the assets and liabilities continued to be reported at its original cost in the Company's balance sheet at the time of the transaction. At March 31, 2016, the asset is reported under Drilling unit in the Company's balance sheet. Refer also to Note 17 - Related party transactions for additional details about the sales and leaseback contract.

The following table gives a summary of the sale and leaseback arrangement, as of March 31, 2016:

Unit	Effective from	Sale value (in US$ millions)	First repurchase option (in US$ millions)	Month of first repurchase option	Last repurchase option (in US$ millions)	Month of last repurchase option
West Linus	June 30, 2013	600	370	On the 5th anniversary*	170	On the 15th anniversary*

* Anniversaries of the Drilling Contract Commencement Date

Ship Finance has a right to require North Atlantic Drilling to purchase the rig on the 15^th anniversary for the price of $100 million if North Atlantic Drilling doesn't exercise the final repurchase option.

The bareboat charter rate is set on the basis of a Base LIBOR Interest Rate for the bareboat charter contract, and thereafter adjusted for differences between the LIBOR fixing each month and the Base LIBOR Interest Rate for the contract. A summary of the bareboat charter rate per day is given below. The amounts shown are based on the Base LIBOR Interest Rate. These lease costs are eliminated on consolidation.

		(In thousands of US$)
Unit	Base LIBOR interest rate	2017	2018	2019	2020	2021
West Linus	1%	222	222	173	140	140

F-27

The assets and liabilities in the accounts of the VIE as at March 31, 2016 are as follows:

(In millions of US$)	March 31, 2016			December 31, 2015

Investment in Finance Lease		518.9			530.4
Amounts due from related parties		—			0.2
Total assets		518.9			530.6

Current portion of long-term debt		51.4			51.4
Short-term related party liability		—			23.2
Total current liability		51.4			74.6

Interest bearing debt		340.4			302.3
Long-term debt due to related parties		94.6			125.0
Derivative instruments - payable		3.9			2.3
Total non-current liabilities		438.9			429.6

Accumulated Other Comprehensive Income		(3.7	)		(2.1	)
Retained earnings		32.3			28.5
Total stockholders' equity		28.6			26.4

Total liabilities and stockholders' equity		518.9			530.6

Book value of the drilling unit in the Company's consolidated accounts		554.0			559.1

F-28

Note 21 - Asset held for Sale

On December 2, 2015, the Company signed an amendment with Jurong Shipyard ("Jurong") for the deferral of the delivery of the semi-submersible drilling unit, the West Rigel (the "Unit"). The deferral period lasts until June 2016, following completion of which, the Company and Jurong have agreed to form a Joint Asset Holding Company for joint ownership of the Unit, to be owned 23% by the Company and 77% by Jurong, in the event no employment is secured for the Unit and no alternative transaction is completed. Until the end of the deferral period, the Company will continue to market the unit for an acceptable drilling contract, and the Unit will remain at the Jurong Shipyard in Singapore. The Company and Jurong may also consider other commercial opportunities for the Unit during this period. However, based on current market conditions, management deems the most probable outcome to be that the Unit will be contributed to the Joint Asset Holding Company.

As a result, the Company classified the West Rigel drilling unit as "Held for Sale" in the Company's Balance Sheet. This resulted in a loss being recognized in the year ended December 31, 2015 of $82.0 million, which was the difference between the net book value of the unit of $210.4 million, compared to the expected recoverable value of the Company's investment in the Joint Asset Holding Company of $128.4 million. The loss was recognized in "Loss on disposal" in the Statement of Operations.

(In millions of US$)	Three months ended March 31, 2016		Year ended December 31, 2015
Opening balance at the beginning of the period		128.4		—
West Rigel newbuild investment, classified as held for sale		—		210.4
Loss on disposal		—		(82.0	)
Closing balance at the end of the period		128.4		128.4

Note 22 - Subsequent Events

Amendments to our secured credit facilities

On April 28, 2016 the Company executed an amendment to the covenants contained within its secured credit facility. The amendment, among other things, amends the requirements and definitions of the equity ratio, leverage ratio, minimum-value-clauses, and minimum liquidity covenants. These amendments are in place until June 30, 2017. In addition the maturity date of the $2,000 million senior secured credit facility has been amended from April 15, 2017 to June 30, 2017. Refer to "Note 11. Long-term debt -Covenants contained within our debt facilities" for more information.

F-29

North Atlantic Drilling Ltd. 6-K