Borr Drilling Limited (“Borr” or the “Company”) is pleased to announce that it has completed the purchase and taken ownership of the jack-up newbuilding, Hull No. B378 (formerly named Hakuryu-15), for a total consideration of USD122 million from BOT Lease Co., Ltd. The original ordering price of the rig was approximately USD240 million. An important criteria for the transaction was a quick settlement before March 31, 2019 and the acquisition has been fully financed through an expedited establishment of a new secured financing facility arranged by two Nordic banks.
The purchase of Hull B378 should be seen as an opportunistic deal, with the target to acquire a high specification rig at what we consider a very attractive price. The transaction does not indicate that Borr has a strong strategic desire to significantly increase the size of its existing fleet. With a largely homogenous fleet of 30 premium jack-up drilling rigs, the Company has established a foundation which provides strong cost and operating benefits compared to our competitors. Borr’s focus on premium jack-up drilling rigs has made it possible to achieve the strong growth witnessed from 2018, keeping technical utilisation above 99% and keeping an industry leading safety standard.
Hull B378 is a KFELS Super B Bigfoot design and will need approximately six months to be operationally ready from the yard. The rig has 2,200,000 lbs hook load capacity, 75 feet cantilever and significant crane capacity which makes the unit ideal for drilling of deep HPHT wells. The rig is of similar design as the five newbuildings Borr bought from Transocean. Two of these five units have been delivered from the yard and both units have as stated in today’s fleet report received LOIs for multi-year contracts at attractive terms.
Borr believes that the acquired unit is well positioned for contractual work at attractive rates. Market rates for term works for similar units is currently estimated to generate an EBITDA in excess of USD 20 million per year.
This morning, the Company has also announced an updated fleet status report, available on the Company’s website and attached to this release. As disclosed in the report, Borr has now increased the number of contracted and committed units from zero in the beginning of 2017, to a total of 18. The company expects to, based on having 18 rigs in operation, be generating positive cash flow after taking into account operating cost, layup cost for the remaining units and financing cost.
April 1, 2019
The Board of Directors
Borr Drilling Limited
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
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, expected business environment in 2019 including expected offshore spending, expected contracting and operation of our rigs in 2019 and expectation of contracting at favourable rates, expected funding needs, execution of the indicative funding term sheet and entrance into the credit facility 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.
Please visit our website at: www.borrdrilling.com