Exhibit 99.2

UNITED STATES BANKRUPTCY COURT

DISTRICT OF DELAWARE

PROPOSED SUPPLEMENT TO THE DISCLOSURE STATEMENT FOR

MODIFIED SECOND AMENDED JOINT CHAPTER 11 PLAN OF

PARAGON OFFSHORE PLC AND ITS AFFILIATED DEBTORS

THIS IS NOT A SOLICITATION OF ACCEPTANCE OR REJECTION OF THE MODIFIED PLAN. ACCEPTANCES OR REJECTIONS MAY NOT BE RESOLICITED UNTIL A SUPPLEMENT TO THE DISCLOSURE STATEMENT HAS BEEN APPROVED BY THE BANKRUPTCY COURT. THIS SUPPLEMENT TO THE DISCLOSURE STATEMENT IS BEING SUBMITTED FOR APPROVAL BUT HAS NOT BEEN APPROVED BY THE BANKRUPTCY COURT.

(1) The Debtors in these chapter 11 cases, along with the last four digits of each Debtor’s federal tax identification number, as applicable, are: Paragon Offshore plc (6017); Paragon Offshore Finance Company (6632); Paragon International Finance Company (8126); Paragon Offshore Holdings US Inc. (1960); Paragon Offshore Drilling LLC (4541); Paragon FDR Holdings Ltd. (4731); Paragon Duchess Ltd.; Paragon Offshore (Luxembourg) S.à r.l. (5897); PGN Offshore Drilling (Malaysia) Sdn. Bhd. (9238); Paragon Offshore (Labuan) Pte. Ltd. (3505); Paragon Holding SCS 2 Ltd. (4108); Paragon Asset Company Ltd. (2832); Paragon Holding SCS 1 Ltd. (4004); Paragon Offshore Leasing (Luxembourg) S.à r.l. (5936); Paragon Drilling Services 7 LLC (7882); Paragon Offshore Leasing (Switzerland) GmbH (0669); Paragon Offshore do Brasil Ltda.; Paragon Asset (ME) Ltd. (8362); Paragon Asset (UK) Ltd.; Paragon Offshore International Ltd. (6103); Paragon Offshore (North Sea) Ltd.; Paragon (Middle East) Limited (0667); Paragon Holding NCS 2 S.à r.l. (5447); Paragon Leonard Jones LLC (8826); Paragon Offshore (Nederland) B.V.; and Paragon Offshore Contracting GmbH (2832). The Debtors’ mailing address is 3151 Briarpark Drive, Suite 700, Houston, Texas 77042.

Docket No. 613

Date Filed: 8/5/16

SUPPLEMENT TO THE DISCLOSURE STATEMENT, DATED AUGUST 5, 2016

Opportunity to Resubmit Ballots with respect to

the Modified Plan of Reorganization of

PARAGON OFFSHORE PLC, ET AL.

for the holders of outstanding

REVOLVING CREDIT AGREEMENT CLAIMS

SENIOR NOTES CLAIMS

THE DEADLINE TO ACCEPT OR REJECT THE MODIFIED PLAN BY SUBMITTING A BALLOT IS [5:00 P.M.], PREVAILING EASTERN TIME ON [SEPTEMBER 15], 2016, UNLESS EXTENDED BY THE DEBTORS. THE RECORD DATE FOR DETERMINING WHICH HOLDERS OF CLAIMS MAY SUBMIT A VOTE ON THE MODIFIED PLAN IS [APRIL 6], 2016 (THE “VOTING RECORD DATE”). HOLDERS WHO DO NOT WISH TO CHANGE THEIR VOTE DO NOT NEED TO SUBMIT A NEW BALLOT. PRIOR VOTES SUBMITTED TO ACCEPT OR REJECT THE PROPOSED PLAN AND NOT MODIFIED BY THE SUBMISSION OF A NEW BALLOT WILL BE TABULATED AS VOTES TO ACCEPT OR REJECT THE MODIFIED PLAN.

RECOMMENDATION BY THE DEBTORS

The Board of Directors of Paragon Offshore plc (“Paragon Parent”) and the board of directors, managers, members, or partners, as applicable, of each of its affiliated Debtors (as of the date hereof) have unanimously approved the transactions contemplated by the Modified Plan and recommend that all creditors whose votes are being solicited vote to accept the Modified Plan by submitting a Ballot or by foregoing the opportunity to change their prior Ballot. Holders of approximately [  ]% in outstanding principal amount of the Revolving Credit Agreement Claims (defined herein) entitled to vote on the Modified Plan (the “Consenting Revolver Lenders”) and holders of [  ]% in outstanding principal amount of the Senior Notes Claims (defined herein) (the “Consenting Noteholders”) entitled to vote on the Modified Plan have already agreed to support the Modified Plan by submitting a ballot to accept, or forgoing the opportunity to submit a Ballot to reject, the Modified Plan.

HOLDERS OF CLAIMS SHOULD NOT CONSTRUE THE CONTENTS OF THIS SUPPLEMENT TO THE DISCLOSURE STATEMENT AS PROVIDING ANY LEGAL, BUSINESS, FINANCIAL, OR TAX ADVICE AND SHOULD CONSULT WITH THEIR OWN ADVISORS BEFORE VOTING ON THE PLAN.

CERTAIN STATEMENTS CONTAINED IN THIS SUPPLEMENT, INCLUDING STATEMENTS INCORPORATED BY REFERENCE, PROJECTED FINANCIAL INFORMATION, AND OTHER FORWARD-LOOKING STATEMENTS, ARE BASED ON ESTIMATES AND ASSUMPTIONS. THERE CAN BE NO ASSURANCE THAT SUCH STATEMENTS WILL BE REFLECTIVE OF ACTUAL OUTCOMES. FORWARD-LOOKING STATEMENTS ARE PROVIDED IN THIS SUPPLEMENT PURSUANT TO THE SAFE HARBOR ESTABLISHED UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND SHOULD BE EVALUATED IN THE CONTEXT OF THE ESTIMATES, ASSUMPTIONS, UNCERTAINTIES, AND RISKS DESCRIBED HEREIN.

FURTHER, READERS ARE CAUTIONED THAT ANY FORWARD-LOOKING STATEMENTS HEREIN ARE BASED ON ASSUMPTIONS THAT ARE BELIEVED TO BE REASONABLE, BUT ARE SUBJECT TO A WIDE RANGE OF RISKS IDENTIFIED IN THIS SUPPLEMENT AND THE DISCLOSURE STATEMENT. DUE TO THESE UNCERTAINTIES, READERS CANNOT BE ASSURED THAT ANY FORWARD-LOOKING STATEMENTS WILL PROVE TO BE CORRECT. THE DEBTORS ARE UNDER NO OBLIGATION TO (AND EXPRESSLY DISCLAIM ANY OBLIGATION TO) UPDATE OR ALTER ANY FORWARD-LOOKING STATEMENTS WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS, OR OTHERWISE, UNLESS INSTRUCTED TO DO SO BY THE BANKRUPTCY COURT.

HOLDERS OF ALLOWED GENERAL UNSECURED CLAIMS WILL NOT BE IMPAIRED BY THE MODIFIED PLAN AND, AS A RESULT, THE RIGHT TO RECEIVE PAYMENT IN FULL ON ACCOUNT OF EXISTING OBLIGATIONS IS NOT ALTERED BY THE MODIFIED PLAN. DURING THE CHAPTER 11 CASES, THE DEBTORS INTEND TO OPERATE THEIR BUSINESSES IN THE ORDINARY COURSE AND WILL SEEK AUTHORIZATION FROM THE BANKRUPTCY COURT TO MAKE PAYMENT IN FULL ON A TIMELY BASIS TO ALL TRADE CREDITORS, CUSTOMERS, AND EMPLOYEES OF ALL AMOUNTS DUE PRIOR TO AND DURING THE CHAPTER 11 CASES.

NO INDEPENDENT AUDITOR OR ACCOUNTANT HAS REVIEWED OR APPROVED THE FINANCIAL PROJECTIONS HEREIN. THE DEBTORS HAVE NOT AUTHORIZED ANY PERSON TO GIVE ANY INFORMATION OR ADVICE, OR TO MAKE ANY REPRESENTATION, IN CONNECTION WITH THE MODIFIED PLAN OR THIS SUPPLEMENT.

THE STATEMENTS CONTAINED IN THIS SUPPLEMENT ARE MADE AS OF THE DATE HEREOF UNLESS OTHERWISE SPECIFIED. THE TERMS OF THE MODIFIED PLAN GOVERN IN THE EVENT OF ANY INCONSISTENCY WITH THE SUMMARIES IN THIS SUPPLEMENT.

THE INFORMATION IN THIS SUPPLEMENT IS BEING PROVIDED SOLELY FOR PURPOSES OF VOTING TO ACCEPT OR REJECT THE MODIFIED PLAN OR OBJECTING TO CONFIRMATION. NOTHING IN THIS SUPPLEMENT MAY BE USED BY ANY PARTY FOR ANY OTHER PURPOSE. ALL EXHIBITS TO THE SUPPLEMENT ARE INCORPORATED INTO AND ARE A PART OF THIS SUPPLEMENT AS IF SET FORTH IN FULL HEREIN.

I.

BACKGROUND AND MODIFIED PLAN

The Debtors submit this Supplement to the Disclosure Statement (the “Supplement”) in connection with the resolicitation of votes on the Modified Second Amended Joint Chapter 11 Plan of Paragon Offshore plc and its Affiliated Debtors, dated August 5, 2016 (the “Modified Plan,” attached hereto as Exhibit A). Capitalized terms used in this Supplement, but not defined herein, have the meanings ascribed to them in the Modified Plan. To the extent any inconsistencies exist between this Supplement and the Modified Plan, the Modified Plan governs. This Supplement supplements the Disclosure Statement for the Second Amended Joint Chapter 11 Plan of Paragon Offshore plc and its Affiliated Debtors (the “Disclosure Statement”) (Docket No. 319) by describing the key modifications incorporated in the Modified Plan and providing updates to the financial projections for the Debtors. This Supplement, in conjunction with the Disclosure Statement, is intended to provide parties with adequate information to determine whether to change their votes on the Modified Plan should they choose to do so.

A.                                    The Chapter 11 Cases

On February 14, 2016 (the “Petition Date”), each of the Debtors commenced with this Court a voluntary case under chapter 11 of the Bankruptcy Code. The Debtors’ chapter 11 cases have been consolidated for procedural purposes only and are being jointly administered pursuant to Rule 1015(b) of the Bankruptcy Rules. The Debtors continue to operate their businesses and manage their properties as debtors in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee, examiner, or statutory committee of creditors has been appointed in these chapter 11 cases.

Additional information regarding the circumstances leading to the commencement of these chapter 11 cases and information regarding the Debtors’ business and capital structure is set forth in the Declaration of Ari Lefkovits in Support of the Debtors’ Chapter 11 Petitions and Related Requests for Relief (Docket No. 17), the Declaration of James A. Mesterharm in Support of the Debtors’ Chapter 11 Petitions and Related Requests for Relief (Docket No. 18), and in the Disclosure Statement.

B.                                    The Proposed Plan

The Debtors and certain creditors holding approximately 95.62% of the Debtors’ Revolving Credit Agreement Claims and approximately 76.88% of the Debtors’ Senior Notes Claims entered into a plan support agreement (the “Plan Support Agreement”). Under the terms of the Plan Support Agreement, the Consenting Creditors (as defined therein) agreed to a deleveraging transaction that would restructure the existing debt obligations of the Debtors in chapter 11 through the Joint Chapter 11 Plan of Paragon Offshore plc and its Affiliated Debtors (Docket No. 11) (the “Initial Plan”) filed on the Petition Date.

On March 24, 2016, the Debtors filed the Amended Joint Chapter 11 Plan of Paragon Offshore plc and its Affiliated Debtors (Docket No. 189) and the Proposed Disclosure Statement for the Amended Joint Chapter 11 Plan of Paragon Offshore plc and its Affiliated Debtors (Docket No. 190).

On April 8, 2016, the Debtors filed the Second Amended Joint Chapter 11 Plan of Paragon Offshore plc and its Affiliated Debtors (Docket No. 241) (the “Proposed Plan”) and the Disclosure Statement.

On April 11, 2016, the Court entered an order approving the Disclosure Statement (the “Disclosure Statement Order”) as containing adequate information. In accordance with the Disclosure Statement Order, the Debtors solicited votes from the holders of Claims in Class 3 (Revolving Credit Agreement Claims) and Class 5 (Senior Notes Claims), the Classes entitled to vote on the Proposed Plan. As set forth in more detail in the materials filed by the Debtors in support of confirmation, the Debtors’ two

impaired Classes voted overwhelmingly to accept the Proposed Plan, while an additional seven (7) Classes were deemed to accept the Proposed Plan. A single constituency, the lenders under the Secured Term Loan Agreement whose loan is reinstated under the Proposed Plan, objected to the Proposed Plan, arguing, among other things, that the Debtors’ financial projections (the “Projections”) did not include sufficient cushion to account for a prolonged downturn in the commodities markets and, as a result, the Debtors would be unable to achieve their projected contract utilization and dayrate levels. A confirmation hearing with respect to the Proposed Plan commenced on June 21, 2016 (the “Confirmation Hearing”). During the course of the Confirmation Hearing, both the Debtors and the Term Loan Agent presented evidence and expert testimony regarding the expected performance of the offshore oilfield services industry, the commodities markets, and the Debtors’ actual performance compared to the Business Plan in the Disclosure Statement.

C.                                    The Modified Plan

The Projections in the Disclosure Statement represent the Debtors’ business plan. The Debtors submit that the business plan is reasonable and achievable. To address considerations raised during the Confirmation Hearing with respect to the feasibility of the Debtors’ Proposed Plan, the Debtors have prepared an update to the Projections reflecting actual financial results through June 30, 2016, during which period the Debtors outperformed the business plan, and the impact of certain known contracting delays. In addition, the Debtors have prepared a downside sensitivity case (the “Downside Sensitivity”) to the Projections illustrating the additional liquidity and financial covenant flexibility required to operate the Debtors’ business if the expected market recovery were to be delayed an additional 12 to 18 months (for a total of approximately four (4) years) from what was contemplated under the original projections-including if both dayrates and utilization rates for the Debtors’ offshore drilling rigs were significantly lower than expected in the business plan. The Debtors together with the Consenting Creditors negotiated certain modifications to the Proposed Plan that establish cushions and additional flexibility even in a downside scenario. The resulting changes to the treatment of the Revolving Credit Agreement Claims and the Senior Notes Claims under the Modified Plan provide the Debtors sufficient additional liquidity and covenant flexibility to operate through a downturn should one continue well into 2018.

The Restructuring will leave the Debtors’ business intact under Paragon Parent and substantially de-lever it, providing for the reduction of approximately $1.1 billion of the Debtors’ existing debt and approximately $60 million of the Debtors’ annual cash interest expense upon the completion of the Restructuring. This deleveraging will enhance the Debtors’ long-term growth prospects and competitive position and allow the Debtors to emerge from their chapter 11 cases (the “Chapter 11 Cases”) as reorganized entities better positioned to withstand a depressed market for offshore contract drilling.

Below is a summary of the changes to the treatment of the Revolving Credit Agreement Claims and the Senior Notes Claims under the Modified Plan. Greater detail on the treatment for all Classes is provided in the Modified Plan.

Treatment of Class 3 (Revolving Credit Agreement Claims). Exhibit A to the Modified Plan (Modifications to Amended and Restated Credit Agreement) outlines revisions to the covenants under the form of Amended and Restated Credit Agreement filed as Exhibit A to the Amended Supplement to Second Amended Joint Chapter 11 Plan of Paragon Offshore Plc and Its Affiliated Debtors (Docket No. 470) including

·                  reducing the requirement to maintain minimum liquidity from $110 million to $103 million, subject to a sixty (60) day grace periods so long as minimum liquidity remains greater than or equal to $88 million; and

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·                  delaying the testing of the maximum net leverage ratio and minimum interest coverage ratio until the first quarter of 2019 and thereafter setting a 10% cushion against the downside sensitivity.

Please refer to Exhibit A to the Modified Plan for further details of the modifications to the treatment of Revolving Credit Agreement Claims. The anticipated approximate percentage of recovery for holders of Revolving Credit Agreement Claims is 100%. A detailed discussion of the analysis underlying the estimated recoveries, including the assumptions underlying such analysis, is set forth in the Valuation Analysis in Section VIII of the Disclosure Statement.

Treatment of Class 5 (Senior Notes Claims). The Modified Plan changes the treatment of Class 5 (Senior Notes Claims) by

·                  reducing the Cash payment to be provided to Class 5 (Senior Notes Claims) on the Effective Date from $345 million to $285 million,

·                  removing the 2016 Deferred Cash Payment and 2017 Deferred Cash Payment from the consideration provided to Class 5 (Senior Notes Claims),

·                  providing for the right to receive the New Notes; and

·                  increasing the number of Parent Ordinary Shares allocated from thirty-five percent (35%) to forty-seven percent (47%) of the total outstanding ordinary shares of Paragon Parent as of the Effective Date.

In connection with the Plan, Reorganized Paragon will be issuing $60.0 million in aggregate principal amount of New Notes due May 31, 2021.

Reorganized Paragon will issue the New Notes under an indenture (the “New Notes Indenture”) between itself and U.S. Bank National Association, in its capacity as trustee to the New Notes. A form of the New Notes Indenture will be filed as an exhibit to the Form T-3/A, which Paragon Parent intends to file with the SEC prior to the commencement of the resolicitation.

The summary below describes the anticipated principal terms of the New Notes. It does not purport to be a complete description of the terms and conditions thereof, certain terms and conditions of which have not yet been determined.

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(2) Credit Agreement to have MFN to any affirmative covenants, change of control or merger type covenant, including with respect to definitions used therein.

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The anticipated range of the approximate percentage of recovery for holders of Senior Notes Claims is 58.2% - 77.8%. Senior Notes Claims’ recoveries are increased under the Modified Plan by the New Notes, which are valued at face value for the purpose of this analysis, and by the additional shares they will receive. This consideration offsets the reduction in upfront cash payment to Senior Notes Claims and the removal of the 2016 and 2017 Deferred Cash Payments. A detailed discussion of the analysis underlying the estimated recoveries, including the assumptions underlying such analysis, is set forth in the Valuation Analysis in Section VIII of the Disclosure Statement.

D.                                    Noble Settlement Agreement Amendment

On April 29, 2016, Paragon Parent entered into a definitive settlement agreement (the “Noble Settlement Agreement”) with Noble Corporation plc (“Noble”). As previously disclosed, upon effectiveness of the Noble Settlement Agreement, Noble will provide direct bonding in fulfillment of the requirements necessary to challenge tax assessments in Mexico relating to Paragon Parent’s business for the tax years 2005 through 2010 (the “Mexican Tax Assessments”) and Noble will be responsible for all of the ultimate tax liability for Noble legal entities and 50% of the ultimate tax liability for Paragon Parent’s legal entities following the defense of the Mexican Tax Assessments. In consideration for this support, the Paragon Parent has agreed to release Noble, fully and unconditionally, from any and all claims in relation to Paragon Parent’s separation from Noble. On August 5, 2016, Paragon Parent entered into a binding term sheet with respect to an amendment to the Noble Settlement Agreement (the “Noble Settlement Agreement Amendment”) is attached as Exhibit B to the Modified Plan. Pursuant to the Noble Settlement Agreement Amendment, Noble has agreed that any amount Paragon Parent owes Noble under the Noble Settlement Agreement in respect of the Mexican Tax Assessments (including Paragon Parent’s share of costs and expenses for contesting such assessments) may be paid in the form of a note up to an aggregate amount of $5 million.

E.                                    Amendment to Plan Support Agreement

In connection with the negotiation of the Modified Plan, the Consenting Creditors and the Debtors have agreed to amend certain terms of the Plan Support Agreement including to extend the milestone dates for confirmation of the Modified Plan and the Effective Date of the Modified Plan. The following are the amended milestones:

·                  the Bankruptcy Court must confirm the Modified Plan by October 31, 2016;

·                  the Effective Date of the Modified Plan must occur by December 15, 2016;

·                  the Debtors must file the Motion of Debtors Pursuant to 11 U.S.C. §§ 105(a), 362, and 365(a) and Bankruptcy Rules 4001 and 6006 for Authority to (I) Assume Plan Support Agreement and

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(II) Modify the Automatic Stay [Docket No.   ] (the “PSA Motion”), seeking approval of the Plan Support Agreement as amended by that Amendment dated as of [August _, 2016], by August 5, 2016;

·                  the PSA Motion must be approved by the Court by September 9, 2016.

WHERE TO FIND ADDITIONAL INFORMATION: Paragon Parent currently files quarterly and annual reports with, and furnishes other information to, the Securities and Exchange Commission (“SEC”). Copies of any document filed with the SEC may be obtained by visiting the SEC website at http://www.sec.gov and performing a search under the “Company Filings” link. Each of the following filings is incorporated as if fully set forth herein and is a part of this Disclosure Statement. Later information filed with the SEC that updates information in the filings incorporated by reference will update and supersede that information:

·                  Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC on March 11, 2016

·                  Form 10-Q for the quarter ended June 30, 2016, filed with the SEC on [August 9, 2016]

·                  Forms 8-K filed with the SEC on July 29, 2016 and August 8, 2016.

II.

VOTING PROCEDURES AND REQUIREMENTS

A.                                    Modification of Votes

As a result of the changes to the treatment of Class 3 Revolving Credit Agreement Claims and Class 5 Senior Note Claims, holders of Revolving Credit Agreement Claims and Senior Notes Claims are being afforded the opportunity to submit a ballot to vote, if one had not been previously submitted, or to submit a ballot to change their vote, to accept or reject the Modified Plan. Holders who do not wish to change their vote do not need to submit a new Ballot. Prior votes submitted to accept or reject the Proposed Plan and not modified by the submission of a new Ballot will be tabulated as votes to accept or reject the Modified Plan.

Before submitting a Ballot, each holder of an Allowed Revolving Credit Agreement Claim or an Allowed Senior Notes Claim as of the Record Voting Date (an “Eligible Holder”) should carefully review the Modified Plan attached hereto as Exhibit A. All descriptions of the Plan set forth in the Disclosure Statement and this Supplement are subject to the terms and conditions of the Modified Plan.

Holders of Unimpaired Claims and Interests in classes deemed to accept the Modified Plan are not entitled to vote and will not receive a Ballot. Such holders will instead receive the Notice of Non-Voting Status.

B.                                    Voting Record Date and Voting Deadline

Ballots will be provided for holders of Voting Claims as of April 6, 2016 (the “Voting Record Date”) to vote to accept or reject the Modified Plan.

Each Ballot contains detailed voting instructions and sets forth in detail, among other things, the deadlines, procedures, and instructions for voting to accept or reject the Modified Plan, the Voting Record Date for voting purposes, and the applicable standards for tabulating Ballots. Holders who do not wish to change their prior vote do not need to submit a Ballot. Prior votes to accept or reject the Proposed Plan will be tabulated as votes to accept or reject the Modified Plan.

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The Debtors have engaged Kurtzman Carson Consultants (“KCC”) as their voting agent (the “Voting Agent”) to assist in the transmission of voting materials and in the tabulation of votes with respect to the Plan. IN ORDER FOR YOUR VOTE TO BE COUNTED, YOUR VOTE MUST BE RECEIVED BY THE VOTING AGENT AT THE APPLICABLE ADDRESS SET FORTH BELOW ON OR BEFORE THE VOTING DEADLINE OF 5:00 P.M., PREVAILING EASTERN TIME, ON [SEPTEMBER 15], 2016, UNLESS EXTENDED BY THE DEBTORS. IF YOU HOLD SENIOR NOTES CLAIMS THROUGH A NOMINEE, PLEASE FOLLOW THE INSTRUCTIONS PROVIDED BY YOUR NOMINEE FOR RETURNING YOUR VOTING INSTRUCTIONS. UNLESS OTHERWISE INSTRUCTED, PLEASE RETURN YOUR BENEFICIAL HOLDER BALLOT TO YOUR NOMINEE OR YOUR VOTE WILL NOT BE COUNTED.

Delivery of a Ballot by facsimile, e-mail or any other electronic means will not be accepted. Ballots must be returned by the Voting Deadline with an original signed copy to:

By First Class Mail, Overnight Courier or Personal Delivery:

FOR YOUR VOTE TO BE COUNTED, YOUR BALLOT MUST BE ACTUALLY RECEIVED BY THE VOTING AGENT NO LATER THAN [SEPTEMBER 15], 2016 AT 5:00 P.M. (PREVAILING EASTERN TIME).

ANY BALLOT THAT IS EXECUTED AND RETURNED BUT WHICH DOES NOT INDICATE EITHER AN ACCEPTANCE OR REJECTION OF THE MODIFIED PLAN OR INDICATES BOTH AN ACCEPTANCE AND A REJECTION OF THE MODIFIED PLAN WILL NOT BE COUNTED. THE DEBTORS, IN THEIR SOLE DISCRETION, MAY REQUEST THAT THE VOTING AGENT ATTEMPT TO CONTACT SUCH VOTERS TO CURE ANY SUCH DEFECTS IN THE MODIFIED BALLOTS. UNLESS A PRIOR VOTE WAS SUBMITTED FOR THE PROPOSED PLAN, THE FAILURE TO VOTE DOES NOT CONSTITUTE A VOTE TO ACCEPT OR REJECT THE MODIFIED PLAN. ALL PRIOR VOTES CAST AND NOT MODIFIED BY THE SUBMISSION OF A NEW BALLOT WILL BE TABULATED AS A VOTE TO ACCEPT OR REJECT THE MODIFIED PLAN. AN OBJECTION TO THE CONFIRMATION OF THE MODIFIED PLAN, EVEN IF TIMELY SERVED, DOES NOT CONSTITUTE A VOTE TO ACCEPT OR REJECT THE MODIFIED PLAN.

C.                                    Solicitation Package and Voting Procedures

The Debtors are providing copies of this Supplement (including all exhibits and appendices) and related materials and a Ballot (collectively, a “Solicitation Package”) to record holders of the Revolving Credit Agreement Claims and Senior Notes Claims. Record holders of Senior Notes Claims may include Nominees. If such entities do not hold Senior Notes Claims for their own account, they must provide copies of the Solicitation Package to their customers that are the Eligible Holders thereof as of the Voting Record Date. Any Eligible Holder of Senior Notes Claims who has not received a Ballot should contact

(3) If you receive a Class 5 Beneficial Ballot, please return such Beneficial Ballot to your Nominee.

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his, her, or its Nominee, or the Voting Agent. The Notes Trustee will not vote on behalf of its respective holders. Each Eligible Holder of the Senior Notes Claims must submit its own Ballot.

Holders of Revolving Credit Agreement Claims and Senior Notes Claims should provide all of the information requested by the Ballot. Holders of Revolving Credit Agreement Claims and Senior Notes Claims should complete and return all Ballots received in the enclosed, self-addressed, postage-paid envelope provided with each such Ballot either to the Voting Agent or their Nominee, as applicable.

1.              Beneficial Holders

An Eligible Holder who holds Senior Notes Claims as a record holder in its own name and wishes to change their prior vote to accept or reject the Proposed Plan should vote on the Modified Plan by completing and signing a beneficial holder ballot (a “Beneficial Holder Ballot”) and returning it directly to the Voting Agent on or before the Voting Deadline using the enclosed self-addressed, postage-paid envelope. An Eligible Holder who holds Senior Notes Claims as a record holder in its own name and does not wish to change their prior vote to accept or reject the Proposed Plan does not need to submit a Ballot. ALL PRIOR VOTES CAST AND NOT MODIFIED BY THE SUBMISSION OF A NEW BENEFICIAL HOLDER BALLOT WILL BE TABULATED AS A VOTE TO ACCEPT OR REJECT THE MODIFIED PLAN.

An Eligible Holder holding the Senior Notes Claims in “street name” through a Nominee and wishes to change their prior vote to accept or reject the Proposed Plan may vote on the Modified Plan by one of the following two methods (as selected by such Eligible Holder’s Nominee):

·                  Complete and sign the enclosed Beneficial Holder Ballot. Return the Beneficial Holder Ballot to your Nominee as promptly as possible and in sufficient time to allow such Nominee to process your instructions and return a completed Master Ballot to the Voting Agent by the Voting Deadline. If no self-addressed, postage-paid envelope was enclosed for this purpose, contact the Voting Agent for instructions; or

·                  Complete and sign the pre-validated Beneficial Holder Ballot (as described below) provided to you by your Nominee. Return the pre-validated Beneficial Holder Ballot to the Voting Agent by the Voting Deadline using the return envelope provided in the Solicitation Package.

Any Beneficial Holder Ballot returned to a Nominee by an Eligible Holder will not be counted for purposes of acceptance or rejection of the Modified Plan until such Nominee properly completes and delivers to the Voting Agent that Beneficial Holder Ballot (properly validated) or a Master Ballot casting the vote of such Eligible Holder.

If any Eligible Holder owns the Senior Notes Claims through more than one Nominee, such Eligible Holder may receive multiple mailings containing the Beneficial Holder Ballots. The Eligible Holder should execute a separate Beneficial Holder Ballot for each block of the Senior Notes Claims that it holds through any particular Nominee and return each Beneficial Holder Ballot to the respective Nominee in the return envelope provided therewith. Eligible Holders who execute multiple Beneficial Holder Ballots with respect to the Senior Notes Claims in a single class held through more than one Nominee must indicate on each Beneficial Holder Ballot the names of all such other Nominees and the additional amounts of such Senior Notes Claims so held and voted, in addition to any Secured Term Loan Claims voted.

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2.              Nominees

A Nominee that, on the Record Voting Date, is the record holder of the Senior Notes Claims for one or more Eligible Holders can obtain the votes of the Eligible Holders of such Senior Notes Claims, consistent with customary practices for obtaining the votes of securities held in “street name,” in one of the following two ways:

(a)                                 Pre-Validated Ballots

The Nominee may “pre-validate” a Beneficial Holder Ballot by (i) signing the Beneficial Holder Ballot and indicating on the Beneficial Holder Ballot the name of the Nominee and DTC Participant Number, (ii) the amount and the account number of the Senior Notes Claims held by the Nominee for the Eligible Holder, and (iii) forwarding such Beneficial Holder Ballot, together with the Disclosure Statement, a pre-addressed, postage-paid return envelope addressed to, and provided by, the Voting Agent, and other materials requested to be forwarded, to the Eligible Holder for voting. The Eligible Holder must then complete the information requested in Item 2, Item 3, and Item 4 of the Beneficial Holder Ballot, and return the Beneficial Holder Ballot directly to the Voting Agent in the pre-addressed, postage-paid return envelope so that it is RECEIVED by the Voting Agent on or before the Voting Deadline. A list of the Eligible Holders to whom “pre-validated” Beneficial Holder Ballots were delivered should be maintained by Nominees for inspection for at least one year from the Voting Deadline.

(b)                                 Master Ballots

If the Nominee elects not to prevalidate Beneficial Holder Ballots, the Nominee may obtain the votes of Eligible Holders by forwarding to the Eligible Holders the unsigned Beneficial Holder Ballots, together with the Disclosure Statement, a pre-addressed, postage-paid return envelope provided by, and addressed to, the Nominee, and other materials requested to be forwarded. Each such Eligible Holder must then indicate his, her, or its vote on the Beneficial Holder Ballot, complete the information requested on the Beneficial Holder Ballot, review the certifications contained on the Beneficial Holder Ballot, execute the Beneficial Holder Ballot, and return the Beneficial Holder Ballot to the Nominee. After collecting the Beneficial Holder Ballots, the Nominee should, in turn, complete a Master Ballot compiling the votes and other information from the Beneficial Holder Ballots, execute the Master Ballot, and deliver the Master Ballot to the Voting Agent so that it is RECEIVED by the Voting Agent on or before the Voting Deadline. All Beneficial Holder Ballots returned by Eligible Holders should either be forwarded to the Voting Agent (along with the Master Ballot) or retained by Nominees for inspection for at least one year from the Voting Deadline. EACH NOMINEE SHOULD ADVISE ITS ELIGIBLE HOLDERS TO RETURN THEIR BENEFICIAL HOLDER BALLOTS TO THE NOMINEE BY A DATE CALCULATED BY THE NOMINEE TO ALLOW IT TO PREPARE AND RETURN THE MASTER BALLOT TO THE VOTING AGENT SO THAT IT IS RECEIVED BY THE VOTING AGENT ON OR BEFORE THE VOTING DEADLINE.

3.              Miscellaneous

All Ballots must be signed by the holder of record of the Revolving Credit Agreement Claims or Senior Notes Claims, as applicable, or any person who has obtained a properly completed Ballot proxy from the record holder of the Revolving Credit Agreement Claims or Senior Notes Claims, as applicable, on such date. For purposes of voting to accept or reject the Modified Plan, the Eligible Holders of the Senior Notes Claims will be deemed to be the “holders” of the claims represented by such Senior Notes. If you return more than one Ballot voting different Revolving Credit Agreement Claims, the Ballots are not voted in the same manner, and you do not correct this before the Voting Deadline, those Ballots will not be counted. If you return more than one Ballot voting different Senior Notes Claims, the Ballots are not

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voted in the same manner, and you do not correct this before the Voting Deadline, those Ballots will not be counted. An otherwise properly executed Ballot (other than a Master Ballot) that attempts to partially accept and partially reject the Modified Plan will likewise not be counted. If you cast more than one Ballot voting the same Claim(s) before the Voting Deadline, the last valid Ballot received on or before the Voting Deadline will be deemed to reflect your intent, and thus, to supersede any prior Ballot. If you cast Ballots received by KCC on the same day, but which are voted inconsistently, such Ballots will not be counted.

The Ballots provided to Eligible Holders will reflect the principal amount of such Eligible Holder’s Claim; however, when tabulating votes, the Voting Agent may adjust the amount of such Eligible Holder’s Claim by multiplying the principal amount by a factor that reflects all amounts accrued between the Record Date and the Petition Date including, without limitation, interest.

Except as provided below, unless the Ballot is timely submitted to the Voting Agent before the Voting Deadline together with any other documents required by such Ballot, the Debtors may, in their sole discretion, reject such Ballot as invalid, and therefore decline to utilize it in connection with seeking confirmation of the Modified Plan.

4.              Fiduciaries And Other Representatives

If a Beneficial Holder Ballot is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation, or another acting in a fiduciary or representative capacity, such person should indicate such capacity when signing and, if requested, must submit proper evidence satisfactory to the Debtors of authority to so act. Authorized signatories should submit the separate Beneficial Holder Ballot of each Eligible Holder for whom they are voting.

UNLESS THE BALLOT OR THE MASTER BALLOT IS SUBMITTED TO THE VOTING AGENT ON OR PRIOR TO THE VOTING DEADLINE, SUCH BALLOT WILL BE REJECTED AS INVALID AND WILL NOT BE COUNTED AS AN ACCEPTANCE OR REJECTION OF THE PLAN; PROVIDED, HOWEVER, THAT THE DEBTORS RESERVE THE RIGHT, IN THEIR SOLE DISCRETION, TO REQUEST THE BANKRUPTCY COURT TO ALLOW SUCH BALLOT TO BE COUNTED.

5.              Agreements Upon Furnishing Ballots

The delivery of an accepting Ballot pursuant to one of the procedures set forth above will constitute the agreement of the creditor with respect to such Ballot to accept (i) all of the terms of, and conditions to, this Solicitation; and (ii) the terms of the Plan including the injunction, releases, and exculpations set forth in Sections 10.5, 10.6, and 10.7 therein. All parties in interest retain their right to object to confirmation of the Plan pursuant to section 1128 of the Bankruptcy Code, subject to any applicable terms of the Plan Support Agreement or Term Sheet.

6.              Change of Vote

Any party who has previously submitted to the Voting Agent prior to the Voting Deadline a properly completed Ballot may revoke such Ballot and change its vote by submitting to the Voting Agent prior to the Voting Deadline a subsequent, properly completed Ballot for acceptance or rejection of the Modified Plan.

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D.                                    Waivers of Defects, Irregularities, etc.

Unless otherwise directed by the Bankruptcy Court, all questions as to the validity, form, eligibility (including time of receipt), acceptance, and revocation or withdrawals of Ballots will be determined by the Voting Agent and/or the Debtors, as applicable, in their sole discretion, which determination will be final and binding. The Debtors reserve the right to reject any and all Ballots submitted by any of their respective creditors not in proper form, the acceptance of which would, in the opinion of the Debtors or their counsel, as applicable, be unlawful. The Debtors further reserve their respective rights to waive any defects or irregularities or conditions of delivery as to any particular Ballot by any of their creditors. The interpretation (including the Ballot and the respective instructions thereto) by the applicable Debtor, unless otherwise directed by the Bankruptcy Court, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with deliveries of Ballots must be cured within such time as the Debtors (or the Bankruptcy Court) determines. Neither the Debtors nor any other person will be under any duty to provide notification of defects or irregularities with respect to deliveries of Ballots nor will any of them incur any liabilities for failure to provide such notification. Unless otherwise directed by the Bankruptcy Court, delivery of such Ballots will not be deemed to have been made until such irregularities have been cured or waived. Ballots previously furnished (and as to which any irregularities have not theretofore been cured or waived) will be invalidated.

III.

SUPPLEMENTAL FINANCIAL INFORMATION

The Debtors believe that the Modified Plan meets the feasibility requirement set forth in section 1129(a)(11) of the Bankruptcy Code (see Section XIII.C hereof), as confirmation is not likely to be followed by liquidation or the need for further financial reorganization of the Debtors or any successor under the Modified Plan. In connection with the development of the Modified Plan and for the purposes of determining whether the Modified Plan satisfies the feasibility standard, the Debtors analyzed their ability to satisfy their financial obligations while maintaining sufficient liquidity and capital resources. Based on their business plan, the Debtors have prepared financials for 2015 and the Projections for 2016 through 2019 (the “Projection Period”), as set forth below. In addition, the Debtors have prepared the Downside Sensitivity. The Debtors do not, as a matter of course, publish their business plans or strategies, projections or anticipated financial position. Accordingly, the Debtors do not anticipate that they will, and disclaim any obligation to, furnish updated business plans or Projections to holders of Claims or other parties in interest after the Confirmation Date, or to include such information in documents required to be filed with the SEC or otherwise make such information public, unless required to do so by the SEC or other regulatory bodies pursuant to the provisions of the Modified Plan. In connection with the development of the Modified Plan, the Projections and the Downside Sensitivity were prepared by the Debtors, with the assistance of their advisors, to present the anticipated impact of the Modified Plan. The Projections and the Downside Sensitivity assume that the Modified Plan will be implemented in accordance with its stated terms. The Projections are based on forecasts of key economic variables and may be significantly impacted by, among other factors, oil and natural gas prices, expectations regarding future commodity prices, the level of activity of oil and natural gas exploration, development, and production globally, demand for drilling services, competition and supply of competing rigs, changes in the political environment of the countries in which the Paragon Group operates, regulatory changes, and/or a variety of other factors. Consequently, the estimates and assumptions underlying the Projections are inherently uncertain and are subject to material business, economic, and other uncertainties. Therefore, such Projections, estimates, and assumptions are not necessarily indicative of current values or future performance, which may be significantly less or more favorable than set forth herein. The Projections and Downside Sensitivity included herein were last updated on August 3rd, 2016.

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The Projections should be read in conjunction with the significant assumptions, qualifications, and notes set forth below.

THE DEBTORS PREPARED THE PROJECTIONS AND THE DOWNSIDE SENSITIVITY WITH THE ASSISTANCE OF THEIR ADVISORS. THE DEBTORS DID NOT PREPARE SUCH PROJECTIONS TO COMPLY WITH THE GUIDELINES FOR PROSPECTIVE FINANCIAL STATEMENTS PUBLISHED BY THE AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS AND THE RULES AND REGULATIONS OF THE SEC. EXCEPT FOR PURPOSES OF THIS DISCLOSURE STATEMENT, THE DEBTORS DO NOT PUBLISH PROJECTIONS OF THEIR ANTICIPATED FINANCIAL POSITION OR RESULTS OF OPERATIONS.

MOREOVER, THE PROJECTIONS AND DOWNSIDE SENSITIVITY CONTAIN CERTAIN STATEMENTS THAT ARE “FORWARD-LOOKING STATEMENTS” WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. THESE STATEMENTS ARE SUBJECT TO A NUMBER OF ASSUMPTIONS, RISKS, AND UNCERTAINTIES, MANY OF WHICH ARE BEYOND THE CONTROL OF THE DEBTORS, INCLUDING THE IMPLEMENTATION OF THE MODIFIED PLAN, THE CONTINUING AVAILABILITY OF SUFFICIENT BORROWING CAPACITY OR OTHER FINANCING TO FUND OPERATIONS, ACHIEVING OPERATING EFFICIENCIES, EXISTING AND FUTURE GOVERNMENTAL REGULATIONS AND ACTIONS OF GOVERNMENTAL BODIES, INDUSTRY-SPECIFIC RISK FACTORS, AND OTHER MARKET AND COMPETITIVE CONDITIONS. HOLDERS OF CLAIMS AND INTERESTS ARE CAUTIONED THAT THE FORWARD-LOOKING STATEMENTS SPEAK AS OF THE DATE MADE AND ARE NOT GUARANTEES OF FUTURE PERFORMANCE. ACTUAL RESULTS OR DEVELOPMENTS MAY DIFFER MATERIALLY FROM THE EXPECTATIONS EXPRESSED OR IMPLIED IN THE FORWARD-LOOKING STATEMENTS, AND THE DEBTORS UNDERTAKE NO OBLIGATION TO UPDATE ANY SUCH STATEMENTS.

THE PROJECTIONS, WHILE PRESENTED WITH NUMERICAL SPECIFICITY, ARE NECESSARILY BASED ON A VARIETY OF ESTIMATES AND ASSUMPTIONS WHICH, THOUGH CONSIDERED REASONABLE BY THE DEBTORS, MAY NOT BE REALIZED AND ARE INHERENTLY SUBJECT TO SIGNIFICANT BUSINESS, ECONOMIC, INDUSTRY, REGULATORY, LEGAL, MARKET, AND FINANCIAL UNCERTAINTIES AND CONTINGENCIES, MANY OF WHICH ARE BEYOND THE REORGANIZED DEBTORS’ CONTROL. THE DEBTORS CAUTION THAT NO REPRESENTATIONS CAN BE MADE OR ARE MADE AS TO THE ACCURACY OF THE PROJECTIONS OR TO THE REORGANIZED DEBTORS’ ABILITY TO ACHIEVE THE PROJECTED RESULTS. SOME ASSUMPTIONS INEVITABLY WILL BE INCORRECT. MOREOVER, EVENTS AND CIRCUMSTANCES OCCURRING SUBSEQUENT TO THE DATE ON WHICH THE DEBTORS PREPARED THESE PROJECTIONS MAY BE DIFFERENT FROM THOSE ASSUMED, OR, ALTERNATIVELY, MAY HAVE BEEN UNANTICIPATED, AND THUS THE OCCURRENCE OF THESE EVENTS MAY AFFECT FINANCIAL RESULTS IN A MATERIALLY ADVERSE OR MATERIALLY BENEFICIAL MANNER. EXCEPT AS OTHERWISE PROVIDED IN THE MODIFIED PLAN OR THIS DISCLOSURE STATEMENT, THE DEBTORS AND REORGANIZED DEBTORS, AS APPLICABLE, DO NOT INTEND AND UNDERTAKE NO OBLIGATION TO UPDATE OR OTHERWISE REVISE THE PROJECTIONS TO REFLECT EVENTS OR CIRCUMSTANCES EXISTING OR ARISING AFTER THE DATE HEREOF OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. THEREFORE, THE PROJECTIONS MAY NOT BE RELIED UPON AS A GUARANTEE OR OTHER ASSURANCE OF THE ACTUAL RESULTS THAT WILL OCCUR. IN DECIDING WHETHER TO VOTE TO ACCEPT OR REJECT THE MODIFIED PLAN, HOLDERS OF CLAIMS MUST MAKE THEIR OWN DETERMINATIONS AS TO THE REASONABLENESS OF SUCH

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ASSUMPTIONS AND THE RELIABILITY OF THE PROJECTIONS AND SHOULD CONSULT WITH THEIR OWN ADVISORS.

The Projections and the Downside Sensitivity should be read in conjunction with the assumptions, qualifications, and explanations set forth in the Disclosure Statement, this Supplement, the Modified Plan, and any Plan Supplement, in their entirety, and the historical consolidated financial statements (including the notes and schedules thereto).

PROJECTED INCOME STATEMENT

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PROJECTED BALANCE SHEET

PROJECTED CASH FLOW STATEMENT

A.                 Assumptions to the Projections

1.              Note on Updates to Projections

Since the approval of the Disclosure Statement by entry of the Disclosure Statement Order dated April 11, 2016, the Debtors have updated the Projections to incorporate actual results through June 2016, modifications to treatment of certain creditors as contemplated in the Modified Plan and the impact of certain known contracting delays. The aggregate impact of these updates is to decrease projected 2016

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revenue by $4 million, increase projected adjusted EBITDA by $73 million, and increase 2016 projected cash flow by $120 million.

2.              General Assumptions

Overview. Paragon Parent, along with its Debtor and non-Debtor subsidiaries, contracts standard and high specification offshore drilling rigs on a dayrate basis to leading national, international, and independent oil and gas companies. The Debtors principally operate in Mexico, Brazil, the North Sea, Africa, the Middle East, and India.

Presentation. The Projections are presented on a consolidated basis, including estimates of operating results for Debtor and non-Debtor entities, combined.

Methodology. In developing the Projections, the Debtors reviewed their fleet’s current contracted status and made an assessment of whether or not these contracts were likely to continue and an assessment of future speculative contracts. The forecast was developed on an individual rig basis and the Debtors evaluated the likelihood of each of their rigs being utilized over the forecast period.

Plan Consummation. The Projections assume that the Plan will be confirmed or consummated on or about September 30, 2016.

3.              Assumptions With Respect to the Projected Income Statement

Revenues. In the Projections, revenues are forecasted by rig based on expected dayrates, utilization and operating efficiency for existing contracts and future speculative contracts.

Operating Costs. Operating costs are projected based on historical daily regional operating costs (adjusted for cost reduction efforts) and expected utilization of each rig based on current contracts and expectations regarding future speculative contracts.

General and Administrative. General and administrative costs (“G&A”) are primarily comprised of labor costs and other expenses associated with the Debtors’ corporate overhead. The amount of G&A is based on historical G&A costs, adjusted for cost reduction efforts.

Depreciation and Amortization. Depreciation and amortization reflects the anticipated depreciation and amortization of the existing fleet, based on current net book values.

Interest Expense. Interest expense post-emergence is forecasted based on the Amended and Restated Credit Agreement and Secured Term Loan, as more fully described in the Plan and the exhibits thereto.

Income Tax (Expense) Benefit. Income tax is estimated based on the jurisdictional mix of Debtors’ projected revenue.

Restructuring Expenses. Restructuring expenses (included in Unusual Events) include costs related to the recapitalization process, including but not limited to professional fees, claims administration and other items. Estimated amounts are based on the terms of contracts and historical precedent.

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4.                              Assumptions with Respect to the Projected Balance Sheet and Projected Statement of Cash Flows

Working Capital Working capital assumptions are based on historical days sales outstanding and historical days payable as well as historical levels of prepaid and other current assets and current liabilities.

Pro Forma Adjustments Related to Emergence. The September 2016 Balance Sheet included in the Projections presents a pro forma view of September 2016, assuming the effect of certain adjustments related to the Debtors’ emergence from bankruptcy in accordance with the terms of the Modified Plan. These adjustments primarily relate to the paydown and conversion of the Revolving Credit Facility to a term debt facility and the corresponding change in interest rates on the term debt facility as well as the payoff of the Senior Notes for cash, a portion of the Debtors’ equity, and the New Notes. Interest on the New Notes is payable in cash, in equity or in kind, subject to certain restrictions under the Amended and Restated Credit Agreement and the New Notes indenture. For illustrative purposes, the Projections assume interest will be paid in cash, whenever permitted under the Amended and Restated Credit Agreement.

Capital Expenditures. Projections for capital expenditures were prepared with consideration of the needs of Debtor’s fixed assets. Capital expenditures primarily relate to sustaining capital needs to maintain each rig in proper working condition as well as capital required for customer related upgrades and other shipyard projects and repairs, including the requirements of special periodic surveys on each rig. Capital expenditures also include capitalized corporate expenditures such as certain information technology expenditures required to maintain Debtors’ information technology equipment and software.

B.                 Downside Sensitivity

1.              Overview

In order to address feasibility concerns that have arisen over the course of these chapter 11 proceedings, the Debtors have created the Downside Sensitivity, which illustrates the Debtors’ financial performance under a conservative scenario where the market recovery takes 12 to 18 months longer than originally projected and if both dayrates and rig utilization are significantly lower than expected under the Projections.

In the Downside Sensitivity, the Debtors materially lower their dayrate and rig utilization assumptions and significantly extend the market downturn compared to what is forecast under the Projections. Under these assumptions, the cumulative revenue and EBITDA from 2016 through 2019 would be 23% and 46% lower, respectively, in the Downside Sensitivity than in the Projections. Cumulative revenue in the Downside Sensitivity scenario would be $770 million lower than the Projections, and cumulative EBITDA would be $591 million lower than the Projections. The adjustments reflected in the Downside Sensitivity include:

·                          Lower Dayrates: On average from 2017 - 2019, the Downside Sensitivity includes forecasted dayrates approximately 20% lower than the Projections; average forecasted dayrates in the Downside Sensitivity remain flat for 1.5 years.

·                          Lower Rig Utilization: The Downside Sensitivity illustratively assumes rigs come back online more slowly than currently envisioned under the Projections. The Downside Sensitivity does not reach first quarter 2016 levels (21 rigs) until the fourth quarter of 2018, a delay in rig utilization of 1.5 years, as compared with the Projections.

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·                          A Prolonged and Gradual Recovery: Positive cash generation begins in the first quarter of 2019, as compared with the fourth quarter of 2017, a delay of 1.25 years versus the Projections

The Downside Sensitivity, in line with the Projections, also incorporates actual results through June 2016 and the impact of known near-term contracting delays.

2.              Financial Statements Under the Downside Sensitivity

The following tables summarize income, balance sheet and cash flow information under the Downside Sensitivity through 2019.

PROJECTED INCOME STATEMENT

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PROJECTED BALANCE SHEET