Slide 1: Q2 2019 results presentation
Borr Drilling Limited Q2 2019 results presentation 29 August 2019
Slide 2: Important information and disclaimer
Important information and disclaimer This presentation (the “Presentation”) has been prepared by Borr Drilling Limited (the “Company”) and sets forth general background information about the Company's activities current as at the date hereof. Information in this Presentation, including forecast fina
Slide 3: Highlights
Highlights ▪ Operating revenues of $86.6 million, net loss of $103.2 million and Adjusted EBITDA of negative $4.9 million for the second quarter of 2019 ▪ Technical utilization for the operating rigs was 98.8% in the second quarter and 99.0% for the first six months of 2019 ▪ The results include $31
Slide 4: Key Financials Q2 2019
Key Financials Q2 2019 Income Statement Comments Q2 2019 ▪ Operating revenues increase was mainly due to the commencement of USDm YTD 2019 Q2 2019 Q1 2019 contracts for five rigs in the quarter and improved rates on MSS1 ▪ Gain on disposals related to sale of the standard rigs “Baug” and Operating r
Slide 5: Key Financials Q2 2019
Key Financials Q2 2019 Balance Sheet Key Numbers Movements in 2019 ▪ Total assets increased by US$282.3 million primarily due to USDm Q2 2019 Q1 2019 Q4 2018 - Acquisition of “Thor” at the end of March 2019 - Delivery of the newbuilding “Njord” in January Total assets 3,196.0 3,098.4 2,913.7 Offset
Slide 6: Fleet Status Report August 2019
FLEET SUMMARY Fleet Status Report August 2019 Contractual Developments Operating / Under Available Cold Stack Committed Construction Premium Jack-Ups 30 12 8 2 8 Standard Jack-Ups 4 2 1 1 * 2 Total Jack-Ups 34 Semi - Submersible 1 1 Total Fleet 35 15 9 3 8 Other Fleet Updates Time Rig Client Contrac
Slide 7: Is offshore drilling obsolete?
Is offshore drilling obsolete? Value of oil produced offshore per year1 Value public offshore drilling industry Offshore is ~3x size of renewables USDbn/year USDbn MMBOE/day 700 700 100 590 90 600 600 80 500 500 70 390 60 400 400 50 300 300 40 30 200 200 20 Deep water 100 100 10 32 Shallow water 9 0
Slide 8: Day-rates up – share price down
Day-rates up – share price down Borr Drilling # rigs operating Day-rates up – share price down USDk/day 16 BDRILL share price in USD 40 120 BDRILL Dayrates (RHS) 14 35 100 12 30 80 10 25 8 20 60 6 15 40 4 10 20 2 5 0 0 0 Dec-17 Jun-18 Dec-18 Jun-19 Jan 2017 Jul 2017 Jan 2018 Jul 2018 Jan 2019 Jul 20
Slide 9: Jack-up market is a growth market
Jack-up market is a growth market – shallow water the place to be US onshore rig count Floater rig count Jack-up rig count 1100 200 375 190 365 1050 180 355 170 345 1000 160 335 950 150 325 140 315 900 130 305 120 295 850 110 285 800 100 275 “As offshore momentum builds, shallow water rig activity g
Slide 10: The jack-up market is growing
The jack-up market is growing Core countries are drilling significantly more today Rig intensity going up # Jack-ups # Jack-ups pr mmboe production – Saudi-Arabia 140 Outstanding and 14 expected tenders 2000: 2 Jack-ups needed for 1m/day production 2019: 12 Jack-ups needed for 1m/day production 120
Slide 11: Mexico activity coming back
You need to drill to get oil – Mexico activity coming back Mexican production is dropping due to less drilling Activity is coming back now 60 Mexico Crude Production (kbpd) 2400 50 2300 2200 40 2100 2000 30 52 Awarded 15 1900 15 contracts 20 Uncovered 9 1800 1700 25 10 19 19 1600 1500 0 Jan-15 Jan-1
Slide 12: Market trends confirming the modern rig strategy
Market trends confirming the modern rig strategy Marketed Utilization continues to trend upwards… Modern JU availability is tight 100 Marketed Utilization (%) Modern (>=2000) 95 Supply and Demand matrix Standard (<2000) 89% # of rigs 90 Modern rigs Average 85 Total fleet 295 80 75 Not marketed 12 70
Slide 13: Why modern jack-ups?
Why modern jack-ups? Large part of the fleet is old Old rigs are not qualified for key tenders NOC 2018 tender ( 1 – 2 Rigs) Delivered jack-ups1 “Competitive fleet” Age requirement: 2008 or newer 90 QatarGas 2019 tender (6 – 8 rigs) >40% of the fleet is more than 30 years old Age requirement: 2011 o
Slide 14: Visible incremental demand
Jack-up rig count set to surpass 400 Current contract rig count of 365 units set to increase by at least another 40 Visible incremental demand Middle-East 16 South East Asia 10 Mexico 11 West Africa 5 India 3 Rest of the world ? Total >40 Source: 14 |
Slide 15: Yard supply quickly diminishing
Yard supply quickly diminishing Only 21 rigs with same standard as the Borr rigs left – 7 smaller units 120 100 80 60 40 20 0 Jan-17 Current China Singapore RoW Source: IHS 15 |
Slide 16: Singapore newbuilds premium day-rates
Singapore newbuilds premium day-rates – low activation cost Borr Drilling is generating year 1 EBITDA > capex – the others struggle to cover capex over contract period 80 72 70 60 50 40 40 40 40 30 20 18 15 13 11 10 9 10 0 Borr Singapore NB RigCo cold stacked RigCo CJ-46 RigCo CJ-46 RigCo 116E Ready
Slide 17: Significant cash-flow potential
Significant cash-flow potential Run-rate illustrative EBITDA and cash-flow Day rate scenario Current market Average 10y Last 10y peak Day-rate USD/day 100,000 145,000 250,000 Utilisation Pct 98% 98% 98% Opex and G&A USD/day 50,000 50,000 50,000 # rigs working 30 30 30 Revenue USDm 1,073 1,556 2,683
Slide 18: Summary
Summary ▪ Jack-up rig count increased from 296 to 365 since 2017 - 89% utilization of marketed modern rigs ▪ Stranded rigs in shipyards down from 103 to 28 ▪ Visible demand for at least 40 incremental rigs ▪ Borr has commenced contracts for 8 modern units from March to August 2019 ▪ Currently positi
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