Borr Drilling Limited · NYSE:BORR
Borr Drilling — Investor Presentation (May 2020)
11 slides from Borr Drilling's investor presentation, May 21, 2020
Slide 1: Extending runway with minimum $315m in improved liquidity to 2022
Borr Drilling Limited Extending runway with minimum $315m in improved liquidity to 2022 May 21, 2020
Slide 2: Important information
Important information THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THE SECURITIES REFERRED TO HEREIN IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION, E
Slide 3: Key components of the improved liquidity package
Key components of the improved liquidity package ▪ The proposed deal includes the following key elements: + Rescheduling of yard commitments + Deferral of debt amortization + Conversion of cash interest to pay-in-kind (PIK) interest + Amendment of covenants = Total estimated improvement in liquidity
Slide 4: Amended financing creates very low cash-breakeven rates for 2020e and 2021e
Amended financing creates very low cash-breakeven rates for 2020e and 2021e Required 2021e bareboat contribution per jack-up and # of jack-ups in operation to cover direct cash costs 100.0 90.0 Bareboat contribution, 15 year average, jack-ups 80.0 Needed bareboat per jack-up $k/day # of jack-ups in
Slide 5: Mexico integrated contracts – learning curve has improved operations
Mexico integrated contracts – learning curve has improved operations First wells behind schedule – recovery for geologic event Last wells significantly ahead of schedule 0 0 0 Planned time: 80 days Planned time: 58 days Planned time: 58 days Planned time: 44 days 500 Actual time: 180 days Actual tim
Slide 6: Attractive entry point – solid upside
Attractive entry point – solid upside The value case The cash-flow case 250 12.0 80 70 70 200 10.0 9.8x 60 $m in EBITDA per jack-up 8.0 $m per jack-up 150 50 EV/EBITDA 6.0 40 5.8x 100 31 30 4.0 Borr implied value 17 20 50 3.1x 1.4x 2.0 10 10 0 - 0 1 3 5 7 9 11 13 15 17 19 21 23 25 80 100 140 250 Day
Slide 7: Historic dayrates give support to debt service
Historic dayrates give support to debt service Estimated historic bareboat contribution per premium jack-ups vs required rate for debt service 200 Fully invested net debt $2,600m # units 28 180 Average net debt per rig $92.9m Average age of fleet1 3 160 Age when debt is 0 20 years 140 Amort per rig
Slide 8: Shallow water oil production - quick payback – driven by NOCs
Shallow water oil production - quick payback – driven by NOCs Jack-up demand is mainly brownfield – 75% NOCs Core NOCs are drilling significantly more today 3% 2% # jack-ups contracted P&A 200 3 months 6 months 8% Workover Global demand by type of OilCo 180 Jack-up Floater 27% 1 year 13% Infill dril
Slide 9: The global jack-up fleet is old – modern rigs will likely get utilisation
The global jack-up fleet is old – modern rigs will likely get utilisation Modern jack-ups gaining market share Historic jack-up demand vs age of supply Modern jack-up rig count Standard jack-up rig count 600 # jack-ups 300 254 Total fleet 522 1968 – 2000 Stacked standard units -55 167 rigs 250 Stand
Slide 10: Could oil market be similar to 1998? – “Asian flu” created the upturn
Could oil market be similar to 1998? – “Asian flu” created the upturn Oil prices bottomed when inventories peaked Next 6 year – dayrates went to $230k/day Similarities to 1999 cycle 40 $k/day # NB delivered 2950 35 300 50 2850 1998/99 2020 30 2750 Day-rates + 400% 45 OECD oil inventory ~2,800 ~3,400
Slide 11: Oil the best performing sector last month – turning point?
Oil the best performing sector last month – turning point? Oil services in context1) Lessons from the last cycle2) Energy weighting in % of technology3) $bn $m 1400 100% 1278 90% 87% 1200 80% 1000 70% 60% 800 50% 600 40% 400 30% 20% 19% 200 87 10% 11% 3 0 0% Value oil Market cap Market cap produced