Borr Drilling Limited - Contracting Update

Rhea-AI Summary

Borr Drilling Limited announces new contract commitments totaling 495 days and $82.2 million in contract revenue for three premium jack-up rigs. The company's fleet contract coverage for 2024 stands at 87% with firm commitments and priced options.

Positive

• Borr Drilling Limited secures new contract commitments for three premium jack-up rigs.
• Contracts total 495 days and $82.2 million in revenue.
• BW Energy extends contract for the 'Norve' by approximately two months.
• The 'Mist' secures a contract extension in Thailand for 12 months.
• The 'Thor' receives a binding Letter of Award for work in Southeast Asia.
• Fleet contract coverage for 2024 is at 87% with firm commitments and priced options.

Negative

• None.

Market Research Analyst

The announcement by Borr Drilling Limited of securing new contract commitments represents a significant influx of revenue and an increase in fleet utilization. With an additional $82.2 million in contract revenue, the company strengthens its financial stability and showcases its ability to retain and attract clients in the competitive oil and gas drilling sector. The extension and new contracts also reflect positively on the company's operational reliability and the market demand for their services.

Industry implications include the potential for increased investor confidence in Borr Drilling's stock, given the substantial contract coverage of 87% for 2024. This high percentage suggests a reduced risk profile for the company and may influence the stock's performance positively. Additionally, the announcement might impact competitors as it demonstrates Borr Drilling's market presence and could potentially lead to a reevaluation of market shares within the industry.

Financial Analyst

The disclosed figures of $82.2 million in revenue for 495 days of service indicate a daily rate of approximately $166,000 per rig, which is a crucial metric for profitability in the drilling industry. This rate should be compared with industry standards to assess Borr Drilling's pricing power and cost efficiency. Investors should also consider the implications of the contract extensions and new awards on the company's future cash flows and earnings potential.

It is essential to analyze the financial health of Borr Drilling in the context of these new contracts, including their debt levels, liquidity and capital expenditures. The company's ability to secure long-term contracts may be indicative of a strategic advantage in maintaining a steady revenue stream, which is vital for servicing any outstanding debt and funding operational needs.

Energy Sector Analyst

The announcement underscores the ongoing demand for premium jack-up rigs, which are essential for offshore drilling operations. The fact that Borr Drilling has managed to secure contracts in Southeast Asia, where energy demand is growing, could be an indicator of the region's economic activity and the potential for further expansion in the energy sector. The binding Letter of Award for work in Southeast Asia, in particular, highlights the strategic importance of the region for energy companies.

The global energy landscape is also a factor to be considered, as fluctuations in oil prices and the push towards renewable energy sources can impact the demand for drilling services. Borr Drilling's ability to secure contracts amidst these variables suggests a resilient business model and adaptability to changing market conditions.

HAMILTON, Bermuda, Feb. 12, 2024 /PRNewswire/ -- Borr Drilling Limited (the "Company") (NYSE: BORR) (OSE: BORR) is pleased to announce new contract commitments totaling 495 days and $82.2 million in contract revenue for three of its premium jack-up rigs, excluding mobilization and demobilization compensation.

Firstly, BW Energy has extended the contract for the "Norve" by approximately two months through July 2024.

The "Mist" has secured a contract extension from a subsidiary of Valeura Energy in Thailand. The contract extension covers a firm term of 12 months starting in direct continuation to the current contract and will maintain the rig contracted through August 2025.

The "Thor" has received a binding Letter of Award from an undisclosed customer for work in Southeast Asia. This award will cover a firm scope of two wells, with an anticipated duration of 70 days, and is expected to commence in Q3 2024 in direct continuation of its current commitment.

Following these new contracts, the Company's fleet contract coverage is 87% for 2024, including firm commitments and priced options.

Hamilton, Bermuda

12 February 2024

Forward looking statements

This press release includes forward looking statements, which do not reflect historical facts and may be identified by words such as "will", "anticipate" and similar expressions and include statements relating to LOAs,  contract duration and value and expected start and end dates, and other non-historical statements. Such forward looking statements are subject to risks, uncertainties, contingencies and other factors could cause actual events to differ materially from the expectations expressed or implied by the forward-looking statements included herein, including risks related to  contracting, including our ability to convert LOAs into contracts, the final terms and start dates of such contracts, actual performance under drilling contracts, the risk that backlog may not be realized, and other risks and uncertainties described in the section entitled "Risk Factors" in our most recent annual report on Form 20-F and other filings with the Securities and Exchange Commission. Such risks, uncertainties, contingencies and other factors could cause actual events to differ materially from the expectations expressed or implied by the forward -looking statements included herein. These forward-looking statements are made only as of the date of this release. We do not undertake to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

CONTACT:

Questions should be directed to: Magnus Vaaler, CFO, +44 1224 289208

View original content:https://www.prnewswire.com/news-releases/borr-drilling-limited--contracting-update-302059367.html

SOURCE Borr Drilling Limited

What is the total contract revenue announced by Borr Drilling Limited?

Borr Drilling Limited announced new contract commitments totaling $82.2 million.

Which rigs received contract extensions?

The 'Norve', 'Mist', and 'Thor' rigs received contract extensions.

What is the current fleet contract coverage for Borr Drilling Limited in 2024?

The company's fleet contract coverage for 2024 is at 87% with firm commitments and priced options.

Who extended the contract for the 'Norve' rig?

BW Energy extended the contract for the 'Norve' rig.

Where will the 'Thor' rig be working under the new award?

The 'Thor' rig will be working in Southeast Asia under the new award.