Pacific Drilling Announces Consent Solicitation for 7.25% Senior Secured Notes Due 2017

LUXEMBOURG–(BUSINESS WIRE)–Pacific Drilling S.A. (NYSE: PACD) (together with its subsidiaries, the
“Company”) today announced that its wholly-owned subsidiary Pacific
Drilling V Limited (the “Issuer”) has commenced a consent solicitation
in respect of its 7.25% Senior Secured Notes due December 1, 2017 (the
“Notes”) on the terms and subject to the conditions set forth in the
confidential consent solicitation statement dated July 5, 2017 (the
“Consent Solicitation Statement”) pursuant to which the Issuer is
soliciting the consent of the holders of Notes to an extension of the
maturity date of the Notes to June 1, 2018 in order to give the Company
more time to negotiate a refinancing transaction or undertake a holistic
restructuring with all of its creditors (the “Solicitation”).

The Solicitation is being made only to holders of Notes that are either
(i) “qualified institutional buyers” as defined in Rule 144A under the
U.S. Securities Act of 1933 (the “Securities Act”), (ii) institutional
accredited investors within the meaning of Rule 501 under the Securities
Act or (iii) outside the United States, and are not, and are not acting
for the account or benefit of any “U.S. person”, as defined in Rule 902
under the Securities Act (each an “Eligible Holder”).

The Solicitation solicits consents with respect to two paths for
consummation of the extension of maturity of the Notes, depending on the
level of participation by the Noteholders and whether the Company is
able to obtain consents from certain of its lenders.

If the Issuer receives valid consents from Noteholders holding at least
95% of the outstanding principal amount of the Notes (disregarding Notes
held by the Issuer or its affiliates) (the “Minimum Threshold
Condition”) and all other conditions of the Solicitation have been
satisfied or waived by the Company (in its sole discretion), the Company
intends to implement the maturity extension either (a) out-of-court by
amending the Indenture and the Notes or (b) by a Scheme of Arrangement
(as defined, and on the terms described, below). If the Company
implements the maturity extension out-of-court, the Issuer will amend
the Indenture and the Notes to (i) extend the maturity date of all Notes
held by consenting Noteholders to June 1, 2018, (ii) release all
security in respect of all Notes held by Noteholders that do not consent
and (iii) make certain other related amendments to the Indenture.
Following the out-of-court transaction, the Notes held by holders that
do not consent will be unsecured obligations of the Issuer and will have
their current maturity, while the Notes held by consenting holders will
continue to be secured by the same collateral that currently secures the
Notes, on the same terms, but with the amended maturity date. The Issuer
may lower the Minimum Threshold Condition in its sole discretion so long
as the minimum threshold is not lower than 66 2/3% of the outstanding
principal amount of the Notes (disregarding the Notes held by the Issuer
or its affiliates).

Whether or not the Minimum Threshold Condition has been satisfied, the
Company reserves the right (at any time and in its sole discretion) to
terminate the Solicitation and implement the maturity extension by
applying to the Eastern Caribbean Supreme Court in the Territory of the
Virgin Islands (the “Court”) to implement the maturity extension
pursuant to a scheme of arrangement under Part IX of the BVI Business
Companies Act 2004 (the “Scheme of Arrangement”). The Issuer will only
pursue a Scheme of Arrangement if (i) the Company or its affiliates have
received the necessary waivers or consents from certain of the Company’s
lenders for the Issuer to commence a Scheme of Arrangement and (ii) the
Issuer believes that it is reasonably likely to obtain the consents of
the Noteholders required to effect the Scheme of Arrangement. Under the
Scheme of Arrangement, the Indenture would be amended to extend the
maturity date of the Notes from December 1, 2017 to June 1, 2018, which
amendment would apply to and be binding on all Notes. The terms of the
Notes will not be otherwise affected by the Scheme of Arrangement.

The early consent period for the Solicitation will expire at 5:00 p.m.
(eastern time) on July 19, 2017 and the Solicitation will expire at 5:00
p.m. (eastern time) on August 2, 2017, in each case, unless extended or
earlier terminated by the Company.

The Solicitation is subject to certain conditions as set forth in the
Solicitation Statement.

About Pacific Drilling

With its best-in-class drillships and highly experienced team, Pacific
Drilling is committed to becoming the industry’s preferred
high-specification, floating rig drilling contractor. Pacific Drilling’s
fleet of seven drillships represents one of the youngest and most
technologically advanced fleets in the world. For more information about
Pacific Drilling, including its current Fleet Status, please visit www.pacificdrilling.com.

IMPORTANT NOTICE

Neither the Solicitation, the transactions contemplated thereby, the
Notes mentioned herein nor the guarantee of Pacific Drilling S.A. in
respect thereof have been, and neither will be, registered under the
Securities Act or any state securities laws and may not be offered or
sold in the United States absent registration or applicable exemption
from the registration requirements under the Securities Act and
applicable state securities laws.

Full details of the terms and conditions of the Solicitation are set out
in the Solicitation Statement and documents relating thereto. Documents
relating to the Solicitation, including the Solicitation Statement, will
only be distributed to Eligible Holders who complete and return an
eligibility form confirming that they are either (i) “qualified
institutional buyers” as defined in Rule 144A under the Securities Act,
(ii) institutional accredited investors within the meaning of Rule 501
under the Securities Act or (iii) outside the United States, and are
not, and are not acting for the account or benefit of any “U.S. person”,
as defined in Rule 902 under the Securities Act. Eligible Holders who
desire to complete an eligibility form should contact Global Bondholder
Services Corporation (GBSC), the Tabulation Agent and Information Agent
for the solicitation, by email at [email protected]
or by telephone at +1-866-470-4200.

If a holder of Notes is not an Eligible Holder, such holder will not be
able to participate in the Solicitation unless an applicable exemption
from the registration requirements under the Securities Act and other
applicable law is available. In the event of questions, such holder
should contact the Company.

This press release does not constitute or form a part of any offer or
solicitation to purchase or subscribe for securities. The Solicitation
is being made solely pursuant to the Solicitation Statement and only to
such persons in such jurisdictions as is permitted under applicable law.

Forward-Looking Statements

Certain statements and information contained in this press release
constitute “forward-looking statements” within the meaning of the safe
harbor provisions of the Private Securities Litigation Reform Act of
1995, and are generally identifiable by the use of words such as
“believe,” “estimate,” “expect,” “forecast,” “ability to,” “plan,”
“potential,” “projected,” “target,” “would,” or other similar words,
which are generally not historical in nature.

Forward-looking statements express current expectations or forecasts of
possible future results or events, including future financial and
operational performance; revenue efficiency levels; market outlook;
forecasts of trends; future client contract opportunities; contract
dayrates; business strategies and plans and objectives of management;
estimated duration of client contracts; backlog; ability to repay
indebtedness; expectations regarding potential future covenant defaults
on long-term indebtedness; expected capital expenditures and projected
costs and savings; and statements with respect to actions the Company or
the Issuer intend to take with respect to the Solicitation.

Although the Company and the Issuer believe that the assumptions and
expectations reflected in their forward-looking statements are
reasonable and made in good faith, these statements are not guarantees
and actual future results may differ materially due to a variety of
factors. These statements are subject to a number of risks and
uncertainties, many of which are beyond the Company’s and the Issuer’s
control.

Important factors that could cause actual results to differ materially
from expectations include: the global oil and gas market and its impact
on demand for services; the offshore drilling market, including reduced
capital expenditures by clients; changes in worldwide oil and gas supply
and demand; rig availability and supply and demand for
high-specification drillships and other drilling rigs competing with the
Company’s fleet; costs related to stacking of rigs; the Company’s and
the Issuer’s ability to enter into and negotiate favorable terms for new
drilling contracts or extensions; possible cancellation, renegotiation,
termination or suspension of drilling contracts as a result of market
changes or other reasons; the Company’s and the Issuer’s substantial
level of indebtedness; the Company’s ability to obtain waivers or
amendments to its maximum leverage ratio covenant at the end of the
third quarter of 2017 if necessary, or with respect to other potential
future debt covenant defaults; the Company’s and the Issuer’s ability to
continue as a going concern and any potential bankruptcy proceeding; the
Company’s and the Issuer’s ability to repay debt and adequacy of and
access to sources of liquidity; and the other risk factors described in
the Company’s filings with the SEC, including the Company’s Annual
Report on Form 20-F and Current Reports on Form 6-K. These documents are
available through our website at www.pacificdrilling.com
or through the SEC’s Electronic Data and Analysis Retrieval System at www.sec.gov.

Neither the Company nor the Issuer undertakes any obligation to publicly
update or revise any forward-looking statements after the date they are
made, whether as a result of new information, future events or otherwise.

Contacts

Pacific Drilling
John Boots, +352 26 84 57 81
[email protected]