Growing demand and higher rates fuel the flames of Borr Drilling’s hopes for further financial boost

January 25, 2023, by Melisa Čavčić

Offshore drilling contractor Borr Drilling has disclosed its updated 2022 and 2023 financial guidance, showing a significant improvement in both cases. Thanks to the market improvement, the firm expects to continue reaping the benefits of higher day rates and fleet utilisation in the foreseeable future.

Borr Drilling announced updates to its preliminary revenue and EBITDA guidance for 2022 and 2023 on Tuesday, 24 January 2022. The firm expects to record revenues of $435 – $450 million and adjusted EBITDA of $152 – $162 million for 2022, compared to the previous guidance for revenue between $375 – $400 million and adjusted EBITDA of $115 – 140 million.

According to the company, this implies estimated 4Q 2022 revenues between $140 – $155 million, and 4Q 2022 adjusted EBITDA of between $50 – $60 million. The cash and cash equivalents balance at year-end 2022 is estimated to be ~$105 million, highlights Borr Drilling.

Furthermore, the firm underscores that it is important to bear in mind that the financial preliminary guidance for 4Q and 2022 is based on estimates, and the financial results are not finalised. In addition, the results are also subject to audit, and as such are subject to change.

Patrick Schorn, CEO of Borr Drilling, remarked: “Borr Drilling has been through a transformational journey the last years, activating and putting 21 rigs successfully to work and significantly strengthening the company’s balance sheet. The outlook for the industry and our company is continuing to improve, which is likely to lead to further increased utilisation and higher day rates.”

Based on current contracts and projections for new contracts, the offshore drilling contractor expects to generate revenues of $740 – $780 million and adjusted EBITDA of $360 – $400 million in 2023, compared to the previous guidance for adjusted EBITDA of $290 – 330 million.

Regarding Borr Drilling’s most recent deals, it is worth noting that the company received a letter of award (LOA) earlier this month for one of its premium jack-up drilling rigs from an undisclosed company in Latin America.

Additionally, the firm secured new long-term deals for two jack-up rigs at the end of December 2022 with undisclosed oil and gas companies in the Middle East and Southeast Asia.