Borr Drilling NYSE: BORR reported fourth-quarter 2025 operational revenue of $259.4 million and adjusted EBITDA of $105.4 million, with management pointing to solid fleet performance, improved contract visibility for 2026, and what it described as gradually improving jackup market fundamentals.
Chief Executive Officer Bruno Morand said the company delivered “solid” operational results during the quarter, citing technical utilization of 98.8% and economic utilization of 97.8%. He also highlighted multiple safety milestones across the fleet, including the Arabia III receiving an award from Aramco’s offshore department for the best safety score in 2025.
Quarterly results and drivers
Chief Financial Officer Magnus Vaaler said total operating revenue of $259.4 million declined $17.7 million, or 6.4%, from the third quarter, primarily due to a $16 million decrease in dayrate revenue as rigs transitioned to lower dayrate contracts. Vaaler added that the activity level in operating days was flat quarter-over-quarter.
The company also cited a $3.1 million decline in variable charter revenue tied mainly to the Grid ending a contract and preparing for a planned transfer to Angola. Those declines were partially offset by a $1.4 million increase in operating and maintenance (O&M) revenue.
On the cost side, Vaaler said fourth-quarter operating expenses rose to $192.1 million, up $13.2 million, or 7.4%, from the prior quarter. The increase was driven largely by an $11.6 million rise in rig operating and maintenance expenses, which he attributed to higher personnel costs, accelerated amortization of deferred costs for the rig Hild, and reimbursable expenses.
For the quarter, the company reported a net loss of $1 million and adjusted EBITDA of $104.5 million (management also referenced adjusted EBITDA of $105.4 million in prepared remarks). For the full year 2025, net income was $45 million and adjusted EBITDA totaled $470.1 million, which management said was at the top end of its guidance range and down 7% from 2024.
Liquidity, financing, and the Noble rig acquisition
Borr Drilling ended the quarter with cash and cash equivalents of $379.7 million. Vaaler also noted $234 million of undrawn revolving credit facilities, bringing total liquidity to $613.7 million.
Cash increased by $151.9 million versus the prior quarter. Vaaler attributed the change to:
- $34.8 million of cash from operations, after $94.7 million of interest payments and $8.8 million of cash taxes paid
- $52.1 million used in investing activities, including $36 million in deposits related to the acquisition of five rigs and $15.9 million of additions to jack-up rigs
- $169.2 million of cash from financing activities, including $159.3 million of net proceeds from a bond issuance and $80.3 million of net proceeds from a share issuance, partially offset by $70.8 million of debt repayment
After year-end, the company completed the acquisition of five premium rigs from Noble, paying $174 million in cash consideration in January and settling the remaining consideration through a $150 million seller credit. Management characterized the acquisition as “accretive” and said integration was ahead of expectations. Morand said the transaction was expected to be immediately accretive to adjusted EBITDA and to reduce debt per rig.
Vaaler added that the company issued an additional $165 million of 2030 bonds at par and completed an equity offering that raised gross proceeds of $84 million, noting both transactions were significantly oversubscribed. He also said Borr Drilling listed on Euronext Growth in December as a first step toward returning to the Oslo Stock Exchange, with plans to uplist to the main list in the first half of 2026.
Contracting activity and 2026 coverage
Morand said that, year-to-date in 2026, Borr Drilling secured five new commitments adding about $145 million to backlog. Combined with two contracts secured in December, the company cited seven new commitments since its last quarterly report.
Management discussed several specific contract updates:
- Ran: One-well extension with Eni in Mexico (anticipated 75 days), keeping the rig on firm contract through March 2026.
- Odin: Contract for two wells plus an optional well with an undisclosed U.S. operator, expected to start in July 2026 with an estimated firm duration of 120 days; the rig is committed into November 2026, with options that could extend utilization into mid-2027.
- New York: A two-year contract extension in Mexico, keeping the rig committed into 2028.
- Natt: Work with Eni through the end of the current month, then scheduled to move to Nigeria in early Q2 to begin an 11-month contract with Shell.
- Saga: Five-month extension from Brunei Shell, now committed into April 2027, with an additional one-year option remaining.
- Ida: 75-day extension with PTTEP in Thailand, extending the rig into Q2.
- Gunnlod: One-well campaign with Thang Long in Vietnam expected to begin in May, with an estimated 70-day duration.
Morand said the company’s 2026 fleet coverage stood at 64% “as of today,” and that including the five newly acquired rigs, first-half 2026 coverage was 80%. He said the company expected coverage to rise above 70% in the coming months and also sees a pathway for total contracting days in 2026 to “modestly exceed” 2025 levels.
Market commentary: tenders, dayrates, and regional updates
Morand said the company believes the “jackup market bottom is behind us,” with model jackup utilization steady at approximately 90%. He pointed to multi-year tenders in the Middle East estimated at 13 rigs and said improvements in Mexico included better visibility on payments and a more positive operating outlook, alongside Pemex’s announced plans for a 34% year-on-year increase in upstream CapEx and its reaffirmed mandate to raise production.
In Q&A, Morand said the company expects Middle East tenders—particularly those involving Aramco and KOC—to progress toward awards around midyear, with some potentially earlier or later. He also said pricing dynamics typically follow fixtures, and he expects better visibility on pricing as Middle East awards progress, potentially around the third quarter, noting lengthy rig preparation timelines in that region.
On dayrates, Morand said rates had been “walking” sideways in most regions, with some softness in Asia, and emphasized that for 2026 the company’s focus is on utilization and de-risking the schedule, while “2027 is when we turn our focus again, very sharply into economics and rates.”
Regarding idle rigs acquired from Noble, Morand said he was confident the Sif could secure a contract “in the coming months,” while Freyja may take longer, potentially returning to work in the back half of 2026 or early 2027 depending on scope. He also said Borr Drilling expects limited reactivation capital for most stacked rigs, while the Var could require approximately $5 million to $6 million.
On Mexico receivables, Vaaler said payments from Pemex picked up and the company received around $46 million in the fourth quarter. Borr Drilling estimated $90 million to $100 million outstanding at quarter-end, and Vaaler said the company received an additional $23 million in early January. He added that the company has seen indications collections will continue improving and referenced improved payment terms in contract extensions for Galar and Gersemi, including operating cost payments within 45 days and no more than 180 days outstanding for variable rate amounts.
Looking ahead, Morand reiterated that Borr Drilling expects market conditions to improve through the second half of 2026, with a “clear recovery in day rates” in 2027 and beyond, supported by the company’s expanded fleet and improving tender activity.
About Borr Drilling NYSE: BORR
Borr Drilling is an international offshore drilling contractor providing premium jack-up drilling services to the oil and gas industry. Established in 2016 and incorporated in Bermuda with headquarters in Hamilton, the company is listed on the New York Stock Exchange under the ticker symbol BORR. Borr Drilling focuses exclusively on the ownership and operation of mobile offshore jack-up rigs, catering to exploration and production drilling projects in both mature and emerging hydrocarbon regions.
The company's core business activities encompass the long-term contracting of high-specification jack-up rigs suitable for shallow-to-intermediate water depths.
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