Borr Drilling Limited · NYSE:BORR
Borr Drilling — Investor Presentation (July 2021)
18 slides from Borr Drilling's investor presentation, Jul 7, 2021
Slide 1: Borr Drilling Limited Investor Presentation
Borr Drilling Limited Investor Presentation 7 July 2021 |
Slide 2: Forward looking statements
Forward looking statements This presentation includes forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties. All statements other than statements of historical facts are forward-looking
Slide 3: Introduction
Introduction Large modern Jack-up rig fleet Growing backlog • 13 active rigs • Added $458M YTD 2021 • 10 rigs available at average day-rate over $85K • 5 rigs under construction Estimated liquidity runway until Cash break-even from operations • With 13 active rigs we estimate cash 2023 debt maturiti
Slide 4: Modern fleet with global footprint and customer base
Modern fleet with global footprint and customer base Global Presence Customer base 13 10 5 28 Contracted Available Under Total rigs Construction 2 1 5 4 6 2 5 3 Source: Company data 4|
Slide 5: Well positioned and ready to benefit from the expected market recovery
Well positioned and ready to benefit from the expected market recovery Significant growth potential remains Strong track record of operation and activations # rigs 0 5 10 15 20 25 30 35 New Build Activations Technical 5 Rigs 4 Rigs 1 Rig Borr Drilling Utilization 10 5 (%) 15 available units 100% Com
Slide 6: The strength of Jack-up drilling
The strength of Jack-up drilling Drivers & Returns Customer base centered around NOC Growth in key markets # rigs 353 13 • In previous cycles Majors/Super 100% 180 Majors set the pace Demand +110 rigs 160 +200% • This cycle, the National Oil 80% Companies are expected to set the 140 54 pace – partic
Slide 7: Oil macro is improving for shallow water
Oil macro is improving for shallow water Oil price has recovered ($/brl) US shale shows discipline (BHI oil rig count) Inventories drawing significantly 76 773 623 -0.4 64 -0.5 -0.5 -0.6 -0.7 59 372 -1.2 -1.3 -1.6 -1.8 -1.9 -2.0 -2.0 Avg Brent last 4 Avg Brent 2019 Current Brent Avg last 4 years 201
Slide 8: 2021 strong pick-up in demand – improving visibility for 2022
2021 strong pick-up in demand – improving visibility for 2022 500 # rigs Marketed Supply Contracted Significant upside potential Middle East Anticipated additional demand of rig 450 acquisitions and contracts of 30+ units (2022 / 2023) 416 ONGC 400 40+ rigs Incremental demand of 3 to 5 rigs 375 pote
Slide 9: Path to recovery in rates
Path to recovery in rates Current utilization levels last seen in May 2019 Avg. Brent Avg. Brent Modern Rig # rigs $63.9/bbl $68.4/bbl Rates >$100k? 390 Modern Rig 91% 380 89% Rates ~$100k 89% 370 87% 360 Marketed utilisation 85% 350 83% 82% 83% 340 81% 330 In 8 months: Utilization +7% 320 79% Contr
Slide 10: Activity recovering – Borr Drilling with strong increase in backlog
Activity recovering – Borr Drilling with strong increase in backlog YTD May’21 industry fixtures1 already surpassed 2020FY levels Borr active in contracting2 Rig Years # Fixtures Days pr rig (total fleet) Day pr rig (contracted fleet) Days fixed pr rig 450 401 120 fixtures 400 113 yrs 350 111 yrs 30
Slide 11: Newbuild orderbook all but gone – Borr controlling 25% of remaining supply
Newbuild orderbook all but gone – Borr controlling 25% of remaining supply The market has absorbed a majority of newbuilds Competitive newbuilds at only 20 units # rigs # rigs A significant amount of rigs have already been put to work Borr has contracts for 5 of these units giving access to 25% of s
Slide 12: Streamlining Mexico operations and improving liquidity
Streamlining Mexico operations and improving liquidity Prior to sale of shares in IWS After sale of shares in IWS 5 rigs – bareboat contracts Drilling JVs Drilling JVs Borr will obtain 2% Perfomex I & II Perfomex I & II additional shareholding 49% - Borr 51% - Borr in the Drilling JVs 5 rigs – dayra
Slide 13: Attractive cost structure
Attractive cost structure Illustrative scenarios of operating cash break-even1 in 2021 at different activity levels ($m in 2021) # rigs working Day-rate equivalent 8 13 18 23 Idun, Saga, Gunnlod, P1, P5, Norve, + Galar, Gersemi, Grid, Odin, Njord + Groa, Gerd, Ran, Frigg, Mist +Gyme, Thor, Hermod, H
Slide 14: Extending debt maturity and capex through the anticipated trough of the cycle
Extending debt maturity and capex through the anticipated trough of the cycle Pre May 2020 – Debt profile Current debt profile $m $m $m 1,400 3,500 1,400 3,500 No scheduled debt amortisation before 2023 1,200 3,000 1,200 3,000 1,000 2,500 1,000 2,500 800 2,000 800 2,000 600 1,500 600 1,500 400 1,000
Slide 15: Debt levels in perspective
Debt levels in perspective Assumptions Illustrative $k/day implied cost of debt 180 ▪ Average debt per delivered rig $85 million $k/day ▪ Average debt including undelivered rigs with newbuild capex 160 commitment is $93 million Average last 20 years $140k/day 140 ▪ Average age of delivered fleet is
Slide 16: Illustrative Cash Flow Potential
Illustrative Cash Flow Potential “EBITDA” at various dayrate levels in Borr Drilling $m pr rig Peak 70 15y average 31 17 10 $/day 80 100 140 250 Potential at different dayrate levels with $280m $476m $868m $1,960m 28 rigs *Assumes $50k/day in operating costs to also cover rig’s portion of G&A/overhe
Slide 17: In conclusion
In conclusion • Youngest fleet – strong operations team – first class operational performance • Clear runway to first debt maturities in 2023 with continued activity of 13 rigs and collections remaining on track • Robust backlog increase in 2021 of $458m as of end of May – operationally cash breakev
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