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The Chairman of the Board, Paal Kibsgaard, commented: "The jack-up market
tightened further in the third quarter, with strong tendering activity,
improving dayrates and a strengthening market outlook for 2020. We continued to
execute well throughout our rig operations, as well as on our rig activation
program. Over the past two years, we have brought 16 rigs into operation, with
an additional three rigs presently committed to commence work. With a further 12
modern rigs left to be contracted, of which 7 are still to be delivered, we are
in a strong market position, both in terms of capacity and the age profile of
our fleet.
The third quarter financial results were in line with our expectations and
continued to be impacted by significant rig activation capex. Still, we are
pleased to report that operating cash-flow now covers the full SG&A, stacking
cost and the servicing of our debt. We have approached our lending banks,
seeking an adjustment of the book equity and liquidity covenants, and also the
yard, to potentially delay delivery schedules for some of the remaining rigs. We
are optimistic that agreements will be reached in the near future. This will
further strengthen the company’s liquidity and provide considerable financial
flexibility for further rig activations. Based on the current dayrates of around
$100k/day, and operating expenses of around $50k/day, we aim to generate around
$500 million per year in gross cashflow before interest when all of our rigs are
employed. This clearly shows the cashflow potential for Borr in the coming
years, which the Company is fully focused on realising."
Highlights in the third quarter 2019
. Total operating revenues of $102.7 million, net loss of $79.2 million and
Adjusted EBITDA of $13.8 million for the third quarter of 2019 vs $1.5 million
in the second quarter of 2019
. Technical utilisation for the operating rigs was 99.1% in the third quarter
and 99.0% for the first nine months of 2019
. Economical utilisation for the operating rigs was 95.2% in the third
quarter and 95.3% for the first nine months of 2019
. Company completed an initial public offering on the New York Stock Exchange
under the ticker BORR, issuing 5,750,000 shares at a price of $9.30 per share
. Commenced two 18-month contracts for two premium newbuild jack-up rigs with
Pemex in Mexico in August 2019, under an integrated services model, bringing the
total number of rigs in operation to 16
Subsequent events
. In October, Paal Kibsgaard, the former Chairman and CEO of Schlumberger,
was appointed as the new Chairman of the Board, replacing Tor Olav Trøim, who
continues to serve on the Board as Deputy Chairman. Mr Kibsgaard will in his
initial year, serve as executive Chairman, focused on strengthening the
Company’s organization, operating processes and its integrated service offering.
. Since the previous quarterly results release in August 2019, the Company
has been awarded contracts, LOAs and extensions for 6 rigs with a combined
revenue backlog of approximately $169 million. Total additional backlog added
year to date of approximately $465 million
. In October, the company took delivery of the new build jack-up rig “Hermod”
from the Keppel FELS shipyard in Singapore
. In November 2019, the Company sold marketable securities, resulting an
estimated total realised loss of $16.4 million, and improving the liquidity
position by $20.2 million
The full report is available in the enclosed file
November 26, 2019
The Board of Directors
Borr Drilling Limited
Hamilton, Bermuda
Questions should be directed to:
Svend Anton Maier: Chief Executive Officer, Borr Drilling Management, +47
41427129
Rune Magnus Lundetræ: Chief Financial Officer, Borr Drilling Management, +47
90088411
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” and similar expressions
and include expectations regarding industry trends including activity levels in
the jack-up rig 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 and potential to generate
significant cash at current day rates, delivery of newbuilds including expected
delivery timing, expected ability to sell or finance currently unencumbered rigs
and expected valuation, strategy and plans with respect to investments in third
party securities, contract backlog, expected contracting and operation of our
jack-up rigs and contract terms included estimated duration of contracts,
expectations with respect to contracting available rigs including warm stocked
rigs, expected ability to generate cash from operations, expected completion of
sales of rigs the Company has agreed to sell, expected results in the rest of
2019, including expected strong growth in Adjusted EBITDA in coming quarters and
expectation Adjusted EBITDA will cover operational and finance costs, strategy
with respect to asset base, expected business environment including statements
made under “Market” and “Outlook” above, 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, improvement of cash flow per rig in operation post
activation, remediation of advances, expected activation costs of rigs,
expectations about our ability to find contracts for and activate our rigs not
currently in operation, expectations with respect to amendments to our loan
facility, expected industry trends including with respect to demand for and
expected utilization of rigs, 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. In
addition to the important factors and matters discussed elsewhere in this
report, important factors that, in our view could cause actual results to differ
materially from those discussed in the forward looking statements are included
in our most recent annual report and in the section entitled “Risk Factors” in
our filings with the Securities and Exchange Commission.
Kilde
