EQUINOX OFFSHORE ACCOMMODATION LIMITED

FOURTH QUARTER RESULTS

5 March 2012

Equinox Offshore Accommodation Limited (“Equinox”or the“Company”) presents its financial results for the period ending 31 December 2011.

An update on the status of the Company’s activities is also set out below.

The update on status is to be read in conjunction with the fourth quarter results, which follow the announcement.

ARV1 – Angola Project Status and Next Project

The Company is presently working to secure the immediate mobilisation of the ARV1 from Angola to Singapore. The exit process has been more time consuming than expected, however it is hoped that the process of securing the necessary local consents and approvals is now completed and that the vessel will sail imminently.

Once mobilised from Angola, the vessel will transit to Singapore where she will undergo some maintenance and repair work, as well as some contract specific modifications and a statutory drydocking, prior to her next charter.

The Company is now involved in tender processes which are at an advanced stage in relation to the vessel’s next charter.

The most likely charter for the vessel is for an initial firm period of two years expected to commence in the second quarter of 2012. The Company believes it will secure a higher dayrate under that charter than that under the Xikomba charter.

Work is also ongoing in relation to the recovery of charter fees and related amounts owing from the Xikomba project.

ARV2 – Status

The Company is also involved in discussions regarding multiple potential scopes of work for the ARV2, subject to a conversion process which will involve some repair works and project specific modifications.

There are a substantial number of large infrastructure projects commencing in the southern hemisphere for which the ARV2, once converted, is ideally suited, with its large accommodation capacity, rapid transit speed, undercover work facilities and specially designed safety features.

The projects include opportunities requiring commencement within the third and fourth quarters of 2012.

ARV3 – Brazil Contract

The Company is pleased to report that the conversion of the ARV3 is progressing well at Sembawang Shipyard, in accordance with both schedule and budget.

The Company believes that there are significant charter opportunities for conversions similar to the ARV3, and is currently in discussions with several oil companies regarding firm upcoming requirements.

General Financing Requirements

The Company is working on raising the capital necessary to fund the ARV1 works and the recovery proceedings, and to finance the ARV3 project. A full announcement will be made regarding the financing plans in the near future.

Unaudited Financial Results For

The 4thQuarter Ended

31 December 2011

Contents:

1) Consolidated income statementpg 4

2) Consolidated balance sheetpg 5

3) Consolidated cashflow statementpg 7

4) Statement of changes in equitypg 8

1)Unaudited Consolidated Income Statement

Commentary on Income Statement for the 3rdQuarter ended 30 September 2011

The ARV1 continued her 3rd quarter charter hire with Technoil on the Xikomba project, and recorded charter hire revenue of USD 9.2 million for 4th quarter 2011. With this, she has contributed total revenue USD 25.7 million revenue for the year 2011.

Direct costs of USD16.2 million for the year comprise mainly ARV1 depreciation,of USD7.5 million,USD3.4 million of crew and crew related expenses and USD5.2 millionin vessel running expenses, stores and spares etc.

Despite improvement in the profit level since the end of the 2nd quarter, however, there is a provision of USD26.4 million on recovery of the total amount owing by the charterer, and therefore the 4th quarter saw a net loss of USD25.6 million. As the amount owing by the charterer has been outstanding since August 2011, with no recovery of any amount in that period, the Company has taken the conservative approach to record a provision on the full recovery of amounts owing.

As noted in the accounts for the last quarter, advice received confirms that the Company has a strong case with regard to the legitimacy of amounts owed and the Company is planning recovery proceedings accordingly. The provision reflected in the accounts does not reflect the Company’s level of confidence in its ability to recover the outstanding amounts in due course.

2)Unaudited Consolidated Balance Sheet

Commentary on Balance Sheets

Equity

Shareholders’ equity was USD40 million as at the end of 4Q11 compared to USD84.5 million at the end of previous financial year. The decline of USD44 million in the equity resulted from the net losses incurred for the year, including most significantly the USD26.4 million provision of doubtful recovery from the charterer at the end of the accounting period.

Liabilities

Current liabilities increased from USD57.9 million as at last year end to USD86.9 million as at 31 December 2011. The increases were due to the:

  • net result of the issuance of new bond of USD82.9 million and the repayment of existing USD34.4 million bond;
  • increasein trade creditors to USD8.9 million due to vessel operating expenses;
  • reduction in other creditors due to the repayment of yard loan from the proceeds of the bond; and
  • acquisition of the vessel ARV3 and the mobilization cost incurred in respect of that vessel to Sembawang shipyard in Singapore. The resulted expenditure together with the first phase conversion cost was funded by a bridging loan from Sembawang Shipyard. This has amounted to USD55.4 million to date.

Fixed Assets

As at the 4th quarter 2011, net fixed assets amounted to USD190 million which comprised the ARV1, MV Normandy and the newly acquired ARV3.

Given the upcoming charter opportunities for the ARV1 and ARV2, the strong market for accommodation vessels and the relative lack of supply of other available units, there has been no adjustment made to the valuation of the ARV1 or ARV2. Despite this, the Company notes that the value of the assets are, to a significant extent, dependent on the assets being utilised under a charter agreement, and the terms of such a charter agreement. For this reason, adjustment may be made in the future, depending on the charter arrangements concluded for the vessels in the near term.

Current Assets

As at year end, current assets amounted to USD12 million.This comprises USD7.3 million bank balance, and USD4.7 million deposits and other debtors.

3)Unaudited Consolidated Cashflow Statement

Commentary on Cash Flow

As at the end of 4th quarter, the cash balance was USD7.3 million, a slight decrease of USD0.5 million from the previous quarter.As at the end of reporting period, USD6.6 million was held on escrow for a bond interest repayment.

The net cash changes were mainly due to:

  • the purchase of ARV3 funded through a bridging loan from Sembawang Shipyard;
  • cash flow used in the operating activity amounting to USD3.8 million, mainly due to the changes in working capital of USD24.3 million and the net cash flow used in the operating activities of USD20.5 million; and
  • interest expenses being mainly the interest accrued on bond and amortisation of bond discount.

4)Statement of changes in equity for the quarter ended 31.12.2011

Commentary on Group’s changes in equity for the quarter ended 30 June 2011

The group’s net equity decreased from USD65.7 million as at 1 October2011 to USD40 million as at the year end. The decrease of USD25.6 was mainly due to provision of USD26.4 million on recovery of amount owing by the charterer of the ARV1, and the USD0.75 million profit achieved in 4th quarter 2011.

Submitted by:

Board of Directors

Equinox Offshore Accommodation Limited

For queries regarding this announcement contact: +65 6372 8730

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