Borr Drilling Limited - Update on contracts and operations
Borr Drilling Limited (the “Company”) (NYSE: “BORR”, OSE: “BDRILL”) is pleased
to announce that it has been awarded LOAs for work in the Asia Pacific region
for two of its premium jack ups, of which one is a newbuild being activated. The
contracts’ estimated duration, excluding options, will be for 365 days and 200
days respectively. The rigs are expected to commence contracts in the third
quarter of 2020.
The Company has received notices of early termination of contracts from Exxon
Mobil for the rigs “Gerd” and “Groa” which are working in Nigeria under
contracts originally committed until April 2021 and May 2021, respectively. The
contracts for both rigs require 180 days notice for early termination. The
Company is in discussions with Exxon Mobil with regards to planning the
discontinuity of operations for both rigs following the early termination
The Company has received notice to stop operations for the “Norve”, working in
Gabon for BW Energy. The rig finished operations in early April 2020, around
three months before previously estimated.
The Company has received a notice of early termination for the semi-submersible
“MSS1” which finished its contract on 25 March 2020, one month earlier than
previously estimated. The rig is entitled to an early termination fee as per
Following its campaign with Neptune, the “Prospector 5” has safely arrived in
Harwich. The Company received notification from its follow-on customer, Perenco,
electing not to proceed with the previously announced contract for the rig. The
rig is scheduled to commence operation for CNOOC in the North Sea between
September and November 2020.
The net impact of the new contracts and the early termination of the existing
contracts is estimated to affect the total revenue backlog negatively by
approximately USD 16 million.
Furthermore, the rigs Odin and Galar have commenced operation for Pemex during
Q1 2020, and the Njord is expected to commence operations with Pemex shortly.
The rig Saga commenced operation in Vietnam for ENI in February 2020.
Borr Drilling is experiencing the impact of current unprecedented market
conditions and the global market reaction to the COVID-19 pandemic, in
particular as a result of the practical issues arising from government-imposed
travel restrictions, border closures and quarantines. Safety is our primary
focus and we have implemented changes to working arrangements to protect
everyone working on our rigs and at our onshore sites. We also respect similar
arrangements put in place by our customers and suppliers to safeguard the safety
and well-being of their personnel. Some of our customers are unable to continue
safe operations in the current circumstances, are experiencing difficulties in
their respective supply chains and have announced cost-saving initiatives.
Further, a number of Customers have contractual rights in place to suspend
operations in certain circumstances, and we could be subject to further
suspension notices in light of market conditions. At this stage the Company
cannot predict with reasonable accuracy the duration of such suspensions if
exercised or the impact on the Company.
The Company is pleased to see that we have managed to keep a solid technical
utilisation for the fleet in these challenging times of 99.5% YTD. The Board and
Management want to thank the organisation for great efforts to meet the many
logistical challenges and keep a safe operation in this difficult environment.
April 13, 2020
Borr Drilling Limited