#Bermuda #Hamilton #Borr Drilling #Contracts #jack-up rigs

Borr Drilling Limited's Recent Contracting Updates

Borr Drilling Limited (NYSE: BORR) has made an exciting announcement regarding new contract commitments for four of its premium jack-up rigs. This development marks a significant milestone for the company, as it now has a total of 23 contracted rigs out of its fleet of 24, illustrating a strong demand for its services in the competitive offshore drilling market.

The new contracts come with a combined duration of approximately 1,300 days and are expected to generate over $129 million in revenue. This aligns with Borr Drilling's strategy of enhancing its near-term fleet utilization, demonstrating the company’s proactive approach in securing revenue visibility. With these new agreements, Borr has increased its contract coverage to an impressive 84% for 2025, with an average dayrate of $144,000, and 45% for 2026 at an average dayrate of $141,000.

Contract Details

In the Middle East, the rig 'Arabia II,' which is currently warm stacked, has received a binding Letter of Award from an undisclosed customer. The contract is expected to begin in September 2025, providing a firm duration of 500 days along with an additional option for 200 days. Notably, this contract also includes a performance incentive, rewarding the rig for achieving superior operational performance.

Meanwhile, in Southeast Asia, two rigs, 'Thor' and 'Gunnlod,' have been awarded contracts from another undisclosed client. The 'Thor' rig is set for a well-based program lasting approximately 240 days, starting in October 2025, while 'Gunnlod' is scheduled to begin a 100-day program in September 2025 after its current contract ends. Each of these contracts includes optional provisions that extend their potential operation by an additional 80 days.

In Mexico, Rig 'Odin' is currently facing a 30-day temporary suspension from PEMEX, effective as of early June. In light of this, Borr Drilling has pursued alternative options and recently secured a Letter of Intent from an independent oil company in Mexico. This agreement outlines a 60-day accommodation program commencing in July, with priced options for drilling that may extend the rig's operation through the second quarter of 2026. Following this recent development, the company has successfully committed four out of its seven rigs in Mexico to independent customers.

For the year to date, Borr Drilling has locked in 13 new commitments, equating to around 3,010 potential contract days and a remarkable $366 million in anticipated contract revenue, including both firm terms and priced options.

Looking Forward

In a constantly evolving market, Borr Drilling's ability to secure substantial contracts indicates a robust operational capacity and a strong foothold in the offshore drilling industry. The company's strategy to maintain high utilization rates for its rigs while expanding its client base positions it favorably for sustained growth. This growth not only reflects the demand for offshore drilling services but also emphasizes Borr Drilling's capability to adapt and thrive amidst challenges that arise in the global energy sector.

These developments are pivotal for stakeholders, as they signify Borr Drilling's commitment to enhancing operational performance and delivering value to its customers. The company is slated to continue monitoring market conditions and opportunities for expansion, ensuring it remains at the forefront of the industry.

Moving forward, Borr Drilling intends to capitalize on these new contracts by focusing on maximizing efficiency and operational excellence. Investors and market observers alike will be keenly watching how these contract commitments will translate into performance metrics over the coming quarters.