Borr Drilling Limited - Contracting and Fleet Updates

Rhea-AI Summary

Borr Drilling (NYSE: BORR) has announced significant contract updates for its premium jack-up rigs. The company has secured new awards for rigs 'Thor', 'Gerd', and 'Norve' with a combined duration of 774 days and estimated contract revenues of $120 million, excluding mobilization fees.

Three previously suspended rigs in Mexico ('Galar', 'Grid', and 'Gersemi') have received re-mobilization notices and will resume operations in Q2 2025. Additionally, rigs 'Arabia I' and 'Vali' have commenced their long-term contracts, enabling the company to invoice approximately $48 million in lump-sum mobilization revenues.

With these developments, six rigs that were idle during Q1 2025 will resume operations, positioning the company for improved utilization, revenue, and EBITDA starting Q2 2025.

Positive

• Secured $120 million in new contract revenues across three rigs
• Reactivation of three suspended rigs in Mexico
• $48 million in immediate mobilization revenues from two long-term contracts
• Six idle rigs returning to operations, improving fleet utilization

Negative

• Three rigs were previously suspended in Mexico during Q1 2025
• 'Norve' contract award subject to customer's Final Investment Decision
• Multiple rigs were idle during Q1 2025, impacting Q1 performance

Insights

Offshore Drilling Analyst

Borr Drilling's latest operational update represents a significant positive development for the offshore jack-up drilling contractor in a recovering market. The company has secured $120 million in new contract revenues across three rigs with a substantial 774 days of backlog, while also receiving re-mobilization notices for three previously suspended units in Mexico.

The re-activation of six idle rigs in the coming quarter effectively solves Borr's primary near-term challenge - the underutilization that likely hampered Q1 performance. With dayrates for premium jack-ups typically ranging from $100,000 to $150,000, bringing these units back to work represents a meaningful revenue catalyst.

Particularly noteworthy is the $48 million in lump-sum mobilization revenues from the Brazil and Libya contracts. These upfront payments should significantly strengthen Borr's cash position in Q2, addressing potential liquidity concerns that often arise when multiple rigs remain idle.

The Southeast Asia and West Africa contract wins demonstrate Borr's ability to secure work across diverse geographic markets, reducing regional concentration risk. The one-year firm program for "Gerd" and the potential 11-month campaign for "Norve" (pending FID) provide visibility into 2026, though investors should note the conditional nature of the latter contract.

These developments suggest Borr is successfully navigating the jack-up market recovery, with clear signals of improving fundamentals that should translate to stronger financial performance beginning in Q2 2025.

HAMILTON, Bermuda, April 8, 2025 /PRNewswire/ -- Borr Drilling Limited (the "Company") (NYSE: BORR) is pleased to announce new contract commitments for three of its premium jack-up rigs and additional fleet updates.

Highlights

• Secured new awards for the rigs "Thor", "Gerd" and "Norve" with an expected combined duration of 774 days and estimated contract revenues of approximately $120 million, excluding mobilization and demobilization fees.
• Received re-mobilization notices for the rigs "Galar", "Grid" and "Gersemi", which were previously suspended in Mexico.
• Commencement of long-term contracts for the rigs "Arabia I" and "Vali" enabling the Company to invoice approximately $48 million in lump-sum mobilization revenues.
• With the above developments, six of our rigs that were idle for part or the whole of Q1 2025 are set to resume operations, laying the foundation for a significant improvement in utilization, revenue and EBITDA starting in Q2 2025 and beyond.

Contracting Updates

In Southeast Asia, the "Thor" has received a binding Letter of Award from Vietsovpetro in Vietnam.  The award covers a firm scope of three wells, with an anticipated duration of 75 days, and is expected to commence in April 2025.  Consequently, the rig's previously announced program, originally set to begin in May will now commence in July, in direct continuation of this Vietsovpetro program. With these adjustments, the rig is now expected to remain under contract through September 2025.  

In West Africa, the "Gerd" has secured a binding Letter of Award from Foxtrot in Ivory Coast for a one-year firm program, scheduled to begin in late Q4 2025.

Additionally, in West Africa, the "Norve" has received a Letter of Award from an undisclosed operator for a campaign with an expected duration of 11 months, set to commence in the second half of 2026. The final contract remains subject to the customer's Final Investment Decision (FID), anticipated in Q2 2025.

Fleet Developments

In Mexico, we have received a re-mobilization request from our customer for the rigs "Galar", "Grid" and "Gersemi", with mobilization to their next operating locations expected in mid-April 2025. Operations on these units are anticipated to resume shortly thereafter, within the second quarter of 2025. These three rigs were previously suspended as reported on January 15, 2025 and will continue operations on Pemex assets under the same contractual terms.  Notably, the Galar will be deployed in the Bacab-Lum field, which will be developed by an affiliate of our customer under a private investment structure.

Additionally, the rigs "Arabia I" and the newbuild "Vali" have started earning day rate revenues under their long-term contracts with Petrobras in Brazil and Mellitah Oil and Gas in Libya, respectively. In connection with the commencement of these contracts, the Company will invoice approximately $48 million in lump-sum mobilization revenues.

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", "expect", "estimate", "anticipate" and similar expressions and include statements relating to contract awards, letter of awards, 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 start dates of such contracts, the risk that contract backlog and revenue potential will not materialize as expected, actual performance under drilling contracts, the risk that backlog may not be realized, the risk that improvement in utilization, revenue and EBITDA starting in Q2 2025 and beyond will not materialise 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

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SOURCE Borr Drilling Limited

FAQ

What is the total value of Borr Drilling's new contract awards for Thor, Gerd, and Norve rigs?

The new contracts have an estimated value of $120 million, excluding mobilization and demobilization fees, for a combined duration of 774 days.

When will Borr Drilling's suspended Mexican rigs resume operations?

The rigs Galar, Grid, and Gersemi are expected to resume operations in Q2 2025, with mobilization starting in mid-April 2025.

How much mobilization revenue will BORR receive from Arabia I and Vali contracts?

Borr Drilling will invoice approximately $48 million in lump-sum mobilization revenues from these two contracts.

What is the duration of Thor's new contract with Vietsovpetro in Vietnam?

The Thor rig's contract covers three wells with an anticipated duration of 75 days, starting in April 2025.

How long is the Gerd rig's new contract in Ivory Coast?

The Gerd rig has secured a one-year firm program with Foxtrot in Ivory Coast, scheduled to begin in late Q4 2025.