Borr Drilling Limited - Contracting update

Rhea-AI Summary

Borr Drilling has secured a new contract for its premium jack-up rig 'Norve' with a returning customer in West Africa. The contract, scheduled to begin in Q3 2025 following the completion of the Marathon Oil contract, includes five firm wells with an estimated duration of 320 days. The agreement also includes options for up to five additional wells at mutually agreed prices. This new commitment will add $58 million to Borr's contract revenue backlog, excluding options, mobilization, and demobilization compensation.

Positive

• Secured new 320-day contract worth $58 million
• Contract includes options for five additional wells
• Continuous utilization of rig with no gap between contracts

Negative

• None.

Insights

Financial Analyst

The new contract for Borr Drilling's "Norve" rig represents significant revenue visibility and operational stability. The $58 million contract backlog, excluding options and additional fees, translates to a daily rate of approximately $181,250 for the 320-day commitment. This rate reflects robust demand in the jack-up market, particularly in West Africa. The contract's structure, featuring five firm wells with five optional wells, provides upside potential while maintaining base revenue security. Securing work in direct continuation of the existing Marathon Oil contract eliminates idle time and associated costs, optimizing fleet utilization. The timing of this announcement, well in advance of the Q3 2025 start date, demonstrates strong market fundamentals and operators' willingness to secure premium assets early.

Market Research Analyst

This contract win signals continued strength in the offshore drilling market, particularly for premium jack-up rigs. West Africa remains a key growth region for offshore activities and Borr's success in securing a repeat customer validates their operational excellence and market positioning. The contract's duration and optional wells suggest operators are planning for sustained drilling campaigns, indicating confidence in long-term energy demand. For Borr Drilling, maintaining high fleet utilization is important given their modern fleet and capital structure. The timing and terms of this contract align well with market expectations of sustained dayrate improvements through 2025, supporting the company's financial trajectory.

HAMILTON, Bermuda, Dec. 9, 2024 /PRNewswire/ -- Borr Drilling Limited (NYSE: BORR) (OSE: BORR) is pleased to announce a new contract commitment for its premium jack-up rig "Norve" with a repeat customer in West Africa. This work is in direct continuation of the Marathon Oil contract and is estimated to commence in Q3 2025. The contract is for five wells firm, with an anticipated duration of 320 days, plus up to five optional wells at mutually agreed prices. This commitment adds an additional $58 million in contract revenue backlog, excluding options, mobilization and demobilization compensation. 

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" 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, 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

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SOURCE Borr Drilling Limited

FAQ

What is the value of Borr Drilling's new contract for the Norve rig in West Africa?

The new contract for the Norve rig is worth $58 million, excluding options, mobilization and demobilization compensation.

When will Borr Drilling's new West Africa contract for the Norve rig commence?

The contract is estimated to commence in Q3 2025, following the completion of the Marathon Oil contract.

How long is the duration of BORR's new contract for the Norve rig?

The contract has a firm duration of 320 days for five wells, with options for up to five additional wells.