Borr deepens loss, prepares for upside
Borr Drilling Limited, the oilfield services company based in Bermuda, has reported a net loss of $165.3 million in the second quarter.
That is an increase in loss of $114 million compared with the first quarter of 2022, mainly attributable to an impairment loss in Q2 of $124.4 million due to a letter of intent entered into in June for the sale of three new-build rigs, resulting in a decrease in net loss quarter-on-quarter of $10.4 million when excluding impairment.
Total operating revenues were $105.3 million, an increase of $23.3 million or 28 per cent compared with the first quarter.
Cash and cash equivalents were $29.7 million at the end of the second quarter, a decrease of $20.5 million from the end of the first quarter of which $15.9 million was used on rig activations.
Adjusted EBITDA was $37 million, an increase of $15.6 million or 73 per cent compared with the first quarter.
Borr raised net proceeds of $3.6 million under the at-the-market programme during the quarter.
Year to date, Borr has been awarded 14 new contracts, extensions, exercised options and letters of awards representing 5,610 days, or 15.4 years, and $650.2 million of potential revenue (including mobilisation revenues but excluding options).
The company has reached agreements in principle with all secured creditors to defer all secured debt to 2025 subject to raising equity and the boards' and credit committees' approvals and final documentation.
CEO Patrick Schorn said: "Second quarter performance clearly demonstrates the compounding impact of improving day rates combined with incremental activity, resulting in a top-line increase of 28 per cent with an EBITDA fall through of 73 per cent, while still being in the early stages of this upcycle.
“Our operational team has remained very focused on bringing out additional rigs to meet our customers' requirements. We are on track to have all 23 rigs contracted by year-end and currently the day rates are increasing faster than previously anticipated.”
He added: “With the tight availability of marketed rigs, a limited number of new builds left at shipyards, and opportunities to deploy additional rigs presenting themselves on a weekly basis, we reiterate our belief that demand for modern jack-ups is expected to outstrip supply in the coming quarters.
“We are confident that the current commodities' price levels in combination with the structurally under supplied oil and gas market, is the right foundation for a long-term and strong bull market for modern jack-up rigs.”