Borr Drilling Limited (BDRILL) Announces Third Quarter 2018 Results

Hamilton, Bermuda, November 21, 2018: Borr Drilling Limited (“Borr” or the “Company”) announces results for the three and nine months ended September 30, 2018

Highlights in the third quarter 2018
• Operating revenues of US$49.7 million, EBITDA of negative US$10.3 million and net loss of US$39.1 million
• Technical utilisation for the operating rigs was 99.2%
• The premium jack-up rig “Prospector 5” and the standard jack-up rig “C20051” commenced its new contracts in the quarter
• Secured contract for the premium jack-up rig “Ran” for a 14 wells campaign of approximately 11 months duration in the North Sea
• Started activation of three newbuild jack-up rigs and reactivation of the “Ran”
• Took delivery of the premium jack-up rigs “Groa” in July and “Gyme” in September from PPL Shipyard
• Realised gain of US$9.2 million from the sale of forward contracts in a listed offshore drilling company

Subsequent events
• Secured two firm contracts for the newbuild premium jack-up rigs “Groa” and “Gerd” with Exxon in Nigeria, adding backlog of 48 months excluding options
• Secured contract for the newbuild premium jack-up rig “Natt” with First E&P in Nigeria, adding total backlog of 24 months excluding options
• Secured two firm contracts for the premium jack-up rig “Norve”, adding total backlog of approximately 12 months
• Secured firm contract for the premium jack-up rig “Mist”, adding total backlog of approximately three months
• Realised US$16.0 million in cash proceeds from sale of forward contracts in a listed offshore drilling company
• Completed the sale of the standard jack-up rig “L1112” (“Ed Holt”) in October 2018 for retirement from the international jack-up rig fleet
• Decision to start activating four additional newbuild jack-up rigs
• Took delivery of the premium jack-up rig “Natt” in October from PPL Shipyard

Consolidated Statement of Operations (Financial Performance & Operating Results)

Three months ended September 30, 2018

Operating revenues were US$49.7 million for the three months ended September 30, 2018 (US$ nil for the three months ended September 30, 2017). On average, 8.6 rigs were operating during the third quarter 2018.

Total operating expenses were US$91.2 million for the three months ended September 30, 2018 (US$24.9 million for the three months ended September 30, 2017). Total operating expenses consists of rig operating and maintenance expenses, depreciation, amortisation, general and administrative expenses, and restructuring costs.

Rig operating and maintenance expenses, including stacking costs, were US$45.7 million for the three months ended September 30, 2018 (US$9.4 million for the three months ended September 30, 2017), an increase of US$36.3 million compared to the three months ended September 30, 2017. The increase is primarily driven by operating expenses of US$36.9 million for the operating rigs during the third quarter 2018, including US$1.6 million relating to amortisation of mobilisation costs.

Depreciation and impairment of non-current assets, including amortisation of contract backlog, were US$31.2 million for the three months ended September 30, 2018 (US$8.0 million for the three months ended September 30, 2017). Depreciation in the third quarter 2018 increased by US$13.5 million compared to the third quarter 2017 as a result of a larger fleet of jack-up rigs. In addition, US$9.7 million was recognised as amortisation of revenue backlog from the Paragon acquisition.

General and administrative expenses were US$9.7 million for the three months ended September 30, 2018 (US$7.5 million for the three months ended September 30, 2017).

Restructuring costs were US$4.6 million for the three months ended September 30, 2018 (US$ nil for the three months ended September 30, 2017) and relates to a cost accrual for vacating excess Paragon offices with remaining lease obligations.

Net financial income was US$4.5 million for the three months ended September 30, 2018 (US$15.3 million for the three months ended September 30, 2017). The financial items for the third quarter 2018 relate to realised and unrealised gain on forward contracts of US$9.2 million and US$3.5 million, respectively, interest expense net of capitalised interest of US$5.2 million, negative fair value adjustment of the Call Spread derivative related to the convertible bonds of US$1.7 million, and other financial expenses of US$1.4 million. The Call Spread derivative is recorded at fair value in the financial statements on a quarterly basis until maturity.

Income tax expense for the three months ended September 30, 2018 was US$2.0 million (US$ nil million for the three months ended September 30, 2017).

The Consolidated Financial Statements and the full report is available in the enclosed files.

Borr Q3 2018 BOD Report (https://mb.cision.com/Public/16983/2678574/bea0b9f59d89c4c6.pdf)

Consolidated Financial Statements Q3 2018 (https://mb.cision.com/Public/16983/2678574/ba5fb622310adcbd.pdf)

Please visit our website at: www.borrdrilling.com

November 21, 2018
The Board of Directors
Borr Drilling Limited
Hamilton, Bermuda

Questions should be directed to:
Svend Anton Maier: Chief Executive Officer, Borr Drilling Management DMCC
+ 971 4 448 7501

Rune Magnus Lundetræ: Chief Financial Officer, Borr Drilling Management DMCC
+ 971 58 864 3915

Disclaimer
The information in this communication is for informational purposes only and shall not constitute, or form a part of, an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities.

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, trends in oil prices, the suitability of our fleet in the existing environment, utilization levels, delivery of newbuilds, and contract backlog 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. Although Borr Drilling Limited believes that these assumptions are reasonable, they 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.

The information, opinions and forward-looking statements contained in this announcement speak only as of the date hereof and are subject to change without notice.

About Borr Drilling Limited
Borr Drilling Limited is an international drilling contractor incorporated in Bermuda in 2016 and listed on the Oslo Stock Exchange from August 30, 2017. The Company owns and operates jack-up rigs of modern and high specification designs and provides services focused on the shallow water segment to the offshore oil and gas industry worldwide.

Borr Q3 2018 BOD Report