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Highlights in the Fourth Quarter of 2020
. Total operating revenues of $60.2 million, net loss of $46.7 million and
Adjusted EBITDA of $6.6 million for the fourth quarter of 2020.
. On October 5, 2020, equity offering raised total proceeds of $27.5 million.
A subsequent offering closed on November 30, 2020, raising an additional $5.3
million.
. The Company entered into agreements to divest its remaining three non-core
drilling rigs for total gross proceeds of $17.5 million.
Subsequent events
. In January, the Company finalized the terms and executed agreements with
certain of its creditors for the previously announced liquidity improvement plan
and completed an equity offering raising gross proceeds of $46 million.
. The Company has been awarded eight new contracts/LOAs/LOIs or contract
extensions since the start of the fourth quarter 2020 to the date of this
report.
CEO, Patrick Schorn commented:
"In the fourth quarter 2020 and up until the end of January 2021, our main focus
has been to complete the previously announced liquidity improvement plan,
including restructuring of the debt maturities, interest payments and capex
delivery payments. We are pleased to have reached a solution with our
stakeholders, which allows the Company to focus on its customers, safe and
efficient operations and continue to deploy our fleet in a strengthening market.
With oil prices above $60/bbl we anticipate seeing a stronger market developing
going forward.
Even though we received broad support for the liquidity improvement plan,
concluded in January, we are convinced that some opportunities remain to further
improve our capital structure and liquidity in 2021. Part of the future
liquidity improvement also will have to come from our Mexico operations. In
order to achieve this we are pursuing several independent initiatives intended
to allow us to improve the cash distributions from the JV operations in Mexico
back into Borr Drilling. We are pleased to announce the award of new contracts
with key customers, and the extension of current contracts.
In Mexico, on of the integrated well services JVs has been awarded contract
extension from Pemex which will keep the five rigs the Company has in the region
active until the end of 2021. Additionally, the Company has entered into a multi
-year contract for one of its currently active rigs in Thailand, with a
strategically important customer in the region.
The fourth quarter financials were impacted by the lower activity at the start
of the quarter, and higher expenses related to the COVID pandemic (approximately
$6 million for the quarter). However, the activity since the third quarter is
increasing, with three previously idle rigs having started new contracts in the
fourth quarter, and three more expected to commence operations in the first half
of 2021."
The full report, financial statements and Fleet Status Report is available in
the enclosed file to this release.
February 26, 2021
The Board of Directors
Borr Drilling Limited
Hamilton, Bermuda
Questions should be directed to:
Magnus Vaaler: CFO, +47 22483000
Forward looking statements
This announcement includes forward looking statements. Forward looking
statements are, typically, statements that do not reflect historical facts and
may be identified by words such as “anticipate”, “believe”, “continue”,
“estimate”, “expect”, “intends”, “may”, “should”, “will”, “likely” and similar
expressions and include expectations regarding industry trends including
activity levels in the jack-up rig and oil industry, expectations as to global
jack-up rig count and expected tenders and demand levels, strategy with respect
to deployment of rigs, expectations on trends and potential in day rates,
delivery of newbuilds including expected delivery timing, strategy and plans
with respect to investments in joint ventures, contract backlog, expected
contracting and operation of our jack-up rigs and contract terms including
estimated duration of contracts, expectations with respect to contracting
available rigs including warm stacked rigs, expected ability to generate cash
from operations, or extend our liquidity runway, ability to attract additional
capital, thereby strengthening the group’s overall liquidity and financial
position, expected results in the first quarter of 2021, strategy with respect
to asset base, expected business environment and market upturn including
statements made under “Market” and “Outlook” above, expected payments from
Pemex, expected funding needs and ability to meet obligations for newbuilds,
expected increase in tenders for jack-up rigs, global jack-up rig count,
increase in demand from IOCs and NOCs, increases in oil production by geography,
expected returns for oil companies, ability to fix rig rates at current market
prices, competitive advantages from joint ventures, generation of free cash
flow, remediation of advances, expectations with respect to amendments to our
finance facilities, expected industry trends including with respect to demand
for and expected utilization of rigs, expectations as to the role of Borr
Drilling in any industry consolidation, and other non-historical statements. The
forward-looking statements in this announcement are based upon various
assumptions, many of which are based, in turn, upon further assumptions, which
are, by their nature, uncertain and subject to significant known and unknown
risks, contingencies and other factors which are difficult or impossible to
predict and which are beyond our control. 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. There are important factors that could cause our actual
results, level of activity, performance, liquidity or achievements to differ
materially from the results, level of activity, performance or achievements
expressed or implied by these forward-looking statements including risks
relating to our industry and business and liquidity, the risk of delays in
payments to our Mexican JVs and consequent payments to us, the risk that our
customers do not comply with their contractual obligations, including payment or
approval of invoices for factoring, risks relating to industry conditions and
tendering activity, risks relating to the agreements we have reached with
lenders, risks relating to our liquidity, risks that the expected liquidity
improvements do not materialize or are not sufficient to meet our liquidity
requirements and other risks relating to our liquidity requirements, risks
relating to cash flows from operations, the risk that we may be unable to raise
necessary funds through issuance of additional debt or equity or sale of assets;
risks relating to our loan agreements and other debt instruments including risks
relating to our ability to comply with covenants and obtain any necessary
waivers and the risk of cross defaults, risks relating to our ability to meet
our debt obligations and obligations under rig purchase contracts and our other
obligations as they fall due and other risks described in our working capital
statement, risks relating to future financings including the risk that future
financings may not be completed when required and future equity financings will
dilute shareholders and the risk that the foregoing would result in insufficient
liquidity to continue our operations or to operate as a going concern and other
risks factors set forth under “Risk Factors” in our filings with the U.S.
Securities and Exchange Commission and prospectuses filed with the Norwegian
NSA.
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