Borr Drilling adds $35 million to backlog with potential for even more work

Offshore drilling contractor Borr Drilling has added about $35 million to its backlog following new contract awards for its jack-up rig fleet amid increased activity in the shallow water jack-up drilling market.

Borr said in its fleet status report on Monday that it has entered into a new contract, an extension and received a letter of award (LOA), adding $35.1 million and over approximately 480 days to the total backlog, with good prospects for additional backlog on these units.

The previously announced LOI for the Norve rig, which is currently warm stacked, has been converted into contact for two wells plus one option with BW Energy which is expected to start operations in Gabon during April 2021.

In Asia, the Idun rig has been awarded an LOA from an unnamed operator to start operations in the first quarter of 2021, increasing the number of active rigs for the company in Asia to a total of four. The contract’s estimated duration, excluding options, is for a period up to 12 months.

Borr also announced a contract amendment on the Prospector 1 with the existing customer, One Dyas, for three optional wells, of which one has already been exercised.

In addition, the Prospector 1 has received an LOI from an unnamed operator for four wells plus options for operations in the North Sea, which has an estimated period of seven months. This job is expected to start in April 2021 and end in October 2021.

According to Borr, the recent awards will bring the total number of committed and contracted rigs up to 13.

Borr said it encouraged about this increased activity in the shallow water jack-up drilling market.

The rig owner has four additional warm stacked rigs that can be brought into operation without significant activation capex.

Borr is negotiating terms with Pemex for an extension to the current contract covering five rigs contracted under the Integrated Well Services business model, with an aim to secure incremental work throughout 2021 in Mexico.

It is however important for the JV and Borr Drilling that the working capital situation in Mexico improves, which is a key point in the negotiations on further work, Borr concluded.

To remind, Borr is part of four joint ventures in Mexico with a 49 per cent ownership.

Two of the JVs provide Integrated Well Services (IWS) and the other two provide contract drilling services to the IWS business on fixed day rates. IWS in turn provides integrated well services to Pemex.

As reported last November, Borr has been seeing payment delays for its jack-ups operating in Mexico for Pemex.