Borr Drilling Limited Q4 2025 Earnings Call - Noble 5-Rig Buy and Tender Surge Set Stage for H2 2026 Recovery

Conference Operator: Good day, and thank you for standing by. Welcome to the Borr Drilling Limited Q4 2025 results presentation webcast and conference call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question and answer session. To ask a question during the session, please press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. For the benefit of all participants on the call, please limit yourself to one question and a follow-up, so that everyone is given opportunity to ask questions. Please be advised that today’s conference is being recorded. I would now like to turn the conference over to your speaker, Mr. Bruno Morand, CEO. Please go ahead.

Bruno Morand, CEO, Borr Drilling Limited: Good morning, and thank you for participating in Borr Drilling’s fourth quarter earnings call. I’m Bruno Morand, and with me here today in Dubai is Magnus Vaaler, our Chief Financial Officer. First, covering the required disclaimers, I would like to remind all participants that some of the statements be forward-looking. These matters involves risks and uncertainties that could cause actual results to differ materially from those projecting these statements. I therefore refer you to our latest public filings. For today’s call, I’ll start with a review of Q4 and highlight key developments since the quarter end. Magnus will then review our quarterly and full year financial results. I’ll follow with a deeper look into the commercial execution, and we’ll conclude with some comments on the business outlook. Let’s get started. Before going to the results, I would like to take a moment to recognize our teams around the world.

During the fourth quarter, several of our rigs achieved noteworthy safety milestones. That includes the rigs Ida and Grid, reaching 6 and 3 years LTI free, respectively, and the rigs Gunlord and Grid reaching one year incident-free. Additionally, we’re proud to highlight that our rig, Arabia III, has received an award from Aramco’s offshore department for the rig with the best safety score in 2025. These achievements underscore the team’s commitment to safety, and I would like to take this opportunity to thank each member of Borr Drilling family for their efforts. Now on to the results. Our operational performance in the fourth quarter was solid, with technical utilization of 98.8% and an economic utilization of 97.8%. Fourth quarter operational revenues total $259.4 million.

Adjusted EBITDA of $105.4 million came in line with our expectations, bringing full year adjusted EBITDA to $470.1 million at the top end of the guidance range. This performance underscored the resilience of our organization, which navigated several headwinds in 2025 while delivering strong operational and financial execution. Our fleet contract visibility continues to improve as we reduce remaining open days. Recent awards and extensions have increased 2026 coverage to 80% in the first half and 48% in the second half, including the recently acquired rigs. Since our last quarterly report, we secured new commitments for 7 rigs and expect further coverage gains in the coming months as we progress negotiations on multiple active leads. We believe the jackup market bottom is behind us now, and we see fundamentals recovering gradually as demand increases.

Most notably, in the Middle East, multi-year tenders are in progress for an estimated 13 rigs. In Mexico, we’re seeing better visibility of payments and a more positive operating outlook. These improvements are being supported by financial measures introduced by the government, while at the same time, Pemex announced plans for a 34% year-on-year increase in upstream CapEx and reaffirmed its mandate to raise production. Overall, model jackup market utilization remains steady at approximately 90%. As tenders are awarded and available supplies absorbed, we expect market conditions to firm. Against this backdrop, we’re pleased to have expanded our fleet to the accretive acquisition of 5 premium rigs from Noble. These rigs are highly complementary to our existing portfolio and well suit the capacity to pursue near-term opportunities. Integration is in progress and ahead of expectation.

Looking ahead, market dynamics are setting the stage for improvements in the second half of 2026 and a recovering day rate and earnings visibility into 2027. Before I hand call it to this, I’ll hand the call to Magnus to discuss our financial results.

Magnus Vaaler, CFO, Borr Drilling Limited: Thank you, Bruno. I will now go into some details of the financials of the fourth quarter. Total operating revenues was $259.4 million, a decrease of $17.7 million, or 6.4% from Q3. This is mainly explained by $16 million decrease in day rate revenue, primarily due to rigs transitioning into contracts with lower day rates. The activity level, in terms of total number of operating days, stayed even over the two quarters. A decrease in variable charter revenue explains a further $3.1 million decrease, primarily due to the Grid’s end of contract and its planned transfer to a contract in Angola. These decreases are offset by $1.4 million increase in O&M revenue.

Total operating expenses for the fourth quarter were $192.1 million, an increase of $13.2 million, or 7.4% compared to the third quarter. The increase in cost was primarily due to $11.6 million increase in rig operating and maintenance expenses, attributable to increase in personnel costs, accelerated amortization of deferred costs for the rig hill, and reimbursable expenses.... Overall, for the quarter, we recorded a net loss of $1 million and Adjusted EBITDA of $104.5 million. Looking at full year 2025, net income was $45 million, and full year Adjusted EBITDA came in at $470.1 million, a decrease of 7% compared to 2024. Moving into cash.

Cash increased by $151.9 million in comparison to the prior quarter and is primarily driven by the following: $34.8 million cash from operations, which was, which is after $94.7 million of interest payments and $8.8 million of cash taxes paid. We spent $52.1 million in investing activities, consisting of $36 million deposits for the five rig acquisition and $15.9 million additions to jack-up rigs. And lastly, cash from financing activities was $169.2 million, consisting of $159.3 million net proceeds from the bond issuance, $80.3 million net proceeds from share issuance, net of issuance cost, offset by $70.8 million repayment of debt in the quarter.

The company’s cash and cash equivalents as of December thirty-first were $379.7 million. In addition, we have $234 million of undrawn revolving credit facilities, resulting in total liquidity of $613.7 million. It’s worth noting, after year-end, we completed the five-rig acquisition from Noble and paid $174 million in cash consideration in January. The remaining consideration was settled by way of a $150 million seller credit. We are very pleased with the five-rig acquisition and the accompanying capital market transactions we concluded in December. We completed an offering of an additional $165 million of bonds during 2030, issued at par. In addition, we completed an equity offering, raising gross proceeds of $84 million for the same purpose.

Both transactions saw very high investor interest and were significantly oversubscribed. In December, we also made the first steps to return to the Oslo Stock Exchange through a listing on the Euronext Growth. This decision was made after seeing high investor interest from the Norwegian and European investor base, in addition to strong following by Norwegian sell-side analysts. We are planning on a full uplisting to the main list on Oslo Stock Exchange in the first half of 2026. Then I’ll pass the word back to Bruno.

Bruno Morand, CEO, Borr Drilling Limited: Thank you, Magnus. We have been busy on the contracting front to start the year. Year to date, 2026, we’ve secured five new commitments, adding approximately $145 million to our backlog. Together, with the two contracts we secured in December, this marks seven new commitments since our last quarterly report. I’m pleased to see both short and long-term commitment in this mix. Filling idle space in our 2026 schedule remains a key focus, while at the same time, we’re mindful about positioning our fleet to capitalize on improving market conditions from late 2026 and onwards. I’ll now spend time discussing the commitments we’ve secured since the last quarterly report. In Americas, the Run received a one-well extension with Eni in Mexico. The well has an anticipated duration of 75 days, keeping the rig on firm contract through March 2026.

Eni remains a core customer of ours in Mexico and globally. Ongoing engagements leaves us reassured that we’ll have more positive news soon for the Run. Additionally, the Odin secured a contract for 2 wells, plus an optional well with an undisclosed operator in the United States. The campaign is expected to commence in July 2026, with an estimated firm duration of 120 days. As a result, the Odin is now committed into November, with options that could keep the rig utilized in the U.S. through mid-2027. Staying in Americas, today, we announced a 2-year contract extension for the New York in Mexico, keeping the rig committed into 2028. This extension highlights the strength of our business in Mexico, a market that remains critical to the jack-up industry.

Moving to West Africa, the Knatt secured work with Eni, keeping the rig busy through the end of this month. The rig is scheduled to move to Nigeria in early Q2 to commence its 11-month contract with Shell. In Asia, Brunei Shell extended the Saga contract by an additional 5 months. The Saga is now committed into April 2027, with an additional one-year option remaining available under the contract. In Thailand, the Ida secured a 75-day extension with PTTEP, extending its commitment into the second quarter of this year. Finally, in Vietnam, we have entered into a contract with Thang Long for the Gunlord for a one-well campaign anticipated to commence in May. The well has an estimated duration of 70 days and should place the rig well to find follow-on work in the region.

I remain proud of the continued contracting success, which is a testament to our strong customer relationship and ability to deliver reliable and exceptional operational performance day in and day out. Now, looking ahead, as of today, our 2026 fleet coverage stands at 64%. With the inclusion of 5 newly acquired rigs, our coverage for the first half of the year currently sits at 80%. As a comparison, before factoring these new rigs, this coverage figure would have been approximately 85%. Based on current customer engagements, we’re confident that in the coming months, our fleet will continue to secure commitments and bring our contract coverage above 70%. On a full year basis, we see a pathway that allows contracting days in 2026 to modestly exceed the numbers of days achieved in 2025.

In parallel, and as I noted by various industry analysts, tender activity is entering levels not seen since January 2023. According to information from Petrodata, there are approximately 120 rig years on the tender and pre-tender phase for opportunities commencing within the next 12 months, and based on operator schedules, we anticipate that meaningful amount of these will be awarded by mid-2026. Should this materialize, we believe that several of the awarded rigs will need to undertake lengthy contract preparations, leading to a boost in utilization from this year. Noting the strength of the tendering pipeline, coupled with current utilization levels, I remain optimistic that the foundation is set for a positive momentum as we progress to 2026.

To close, I would like to reiterate key points around our 2025 execution and leave you with some thoughts on the business outlook. At the beginning of last year, we indicated that we were comfortable with consensus for full year Adjusted EBITDA that stood at $460 million. During the year, however, we faced unforeseen headwinds, including temporary contract suspensions and sanction-related contract terminations. We responded by leaning into the Borr Drilling platform, which continues to be our competitive advantage. We fill the white space through close customer relationships, deep market knowledge, and our track record of safe and reliable execution. As a result, we delivered full year Adjusted EBITDA of $470 million, which was at the top of our final guidance range.

Further, in 2025, we took decisive action and completed successful equity and debt transactions that strengthened our liquidity and positioned the company to pursue consolidation opportunities. Then in December, we announced the accretive acquisition of 5 premium jackups. We act opportunistically and bought these assets at an attractive price at a point in the cycle when demand is improving. We expect the transaction to be immediately accretive to Adjusted EBITDA and to reduce our debt per rig. Looking ahead, we expect market conditions to continue improving through the second half of 2026, with ongoing dynamics supporting a clear recovery in day rates in 2027 and beyond. Our expanded fleet will provide us with scale and operational flexibility, providing Borr Drilling to deliver long-term value to our shareholders. With that, I’ll now turn the call over to Q&A.

Conference Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Once again, please press star one one for any question and wait for your name to be announced. To withdraw your question, please press star one one again. For the benefit of all participants on the call, please limit yourself to one question and a follow-up so that everyone is given an opportunity to ask their questions. Please stand by while we compile the Q&A roster. This will take a few moments. Thank you. We are now going to proceed with our first question. The question comes from the line of Scott Kuba from Citigroup. Please ask your question.

Scott Kuba, Analyst, Citigroup: Yes, good morning. Appreciate all the detail this morning, and the tendering pipeline boost is certainly encouraging. I’m curious on the outlook of the two acquired rigs that are idle, the Sif and the Freya. Do you have any line of sight to securing contracts on those two?

Bruno Morand, CEO, Borr Drilling Limited: Hey, Scott, great to have you online, and thanks for the question. Indeed, great question. We are looking at a pipeline of opportunities for both rigs. What is interesting is, as I said in the remarks, I think the capability of these rigs is very well suited for the pipeline of tenders that we referred to. At the moment, we feel quite confident that the Sif will have a contract for it in the coming months that will put the rig back into the operating fleet in relatively short term. In the case of Freya, I do think that it may take a bit longer, but as I said, the pipeline in the second half of the year continues to strengthen.

So I would think about that rig probably going to work sometime in the back end of 2026 or potentially early 2027, depending on the scope is assigned to.

Scott Kuba, Analyst, Citigroup: Great. Apologies, I jumped on a minute late, so apologies I missed this, but just thoughts on you know how you know EBITDA shapes up during the year. Consensus you know is close to $440 million. You know just some initial thoughts on the achievability of that level of EBITDA.

Bruno Morand, CEO, Borr Drilling Limited: Yeah, for sure, Scott. I think at this stage, it’s still probably a bit too early for us to provide kind of a formal, formal guidance. What I can share, as I said, is that the outlook continues to improve and, and the team is working really hard to make sure that we de-risk and, and cover the days in 2026. What I’ll share, which is not far from what I mentioned during the last call, the outlook for 2026 right now seems to indicate that we should be able to achieve, or we have a pathway to achieve, a activity level in contracting days that is modestly higher than 2025. And when I say that, I’m referring to a 24-rig to 24-rig, with the Noble acquired rigs or the recently acquired rigs being an upside to that.

So I think that’s the simple way to think. I think activity level will track slightly higher than it did in 2024. Now, let’s see how the rates mature in 2026, particularly in the second half, and that should leave us in a position to provide better guidance in the coming quarters.

Scott Kuba, Analyst, Citigroup: Okay. I appreciate the color. Thank you. I’ll turn it back.

Bruno Morand, CEO, Borr Drilling Limited: Thank you, Scott.

Conference Operator: We are now going to proceed with our next question. The question comes from the line of Greg Lewis from BTIG. Please ask your question.

Greg Lewis, Analyst, BTIG: Yeah. Hey, thank you, and good afternoon or good morning, and thanks for taking my questions. You know, Bruno, I did have kind of a like a question, you know, around what you’re seeing in the Middle East. I mean, clearly, you know, part of what drove the last or the more recent softness in the market was, you know, the laying down of rigs and just kind of a slowdown in overall Middle East activity. It kind of like, I guess there’s been some rumblings about tenders coming to market for us, it seems like some time now.

Any sense for when we could actually see some of these, you know, talked about tenders in the Middle East, actually, you know, not necessarily have the rigs start working, but when we could start seeing maybe some rigs be contracted around some of that?

Bruno Morand, CEO, Borr Drilling Limited: Yeah. No, and, and thanks, thanks for joining, Greg. Very fair question. When we were talking about some of these tenders in, in the fourth quarter, in our November call, we were looking at that, anticipating them to be out. At the moment, the larger ones that we were expecting, including Aramco and KOC, are in progress, and in fact, KOC is in full, tender evaluation from what we understand, and the Aramco still in tender submission phase. So this is very actual, this is very real, very tangible. There are a few more prospects in the region that we’ve been expecting to come to the tender pipeline, including KOC, which is not yet fully, developed, but, that should come in the next couple of months, we would think.

As I mentioned earlier in the call. The outlook at the moment, based on the conversations that we have had with their customers, is that they should be planning to award sometime around midyear, maybe some a bit earlier, some slightly later, but by midyear, I think that visibility will have formed quite nicely. So that’s, that’s why, what one of the reasons why we feel excited. That’s a large volume of work coming from those tenders, and it’s probably worth to highlight that not all of it, but a portion of these requirements, not only are large volume, but they require very specific technical capabilities, right? And we feel the fleet that we have, particularly with the recent acquisitions placed as well, to evaluate, and we’ll see. There are long-term tenders.

For us, it’s a very interesting body of work, but it has to make sense from a pure commercial standpoint as well. In any case, once that volume gets absorbed in the market, whether directly awards to us, but see, or just to the peer group, it will put a lot of tightness in the market, which I think is what everyone is looking forward to.

Greg Lewis, Analyst, BTIG: Okay, super helpful. Thanks for that, Bruno. Hey, congrats on the Noble acquisitions. Clearly, you know, not transformational for the fleet, but definitely gives you a nice boost. You know, it does look like we are at an inflection point or the cycle is turning, and I guess what I’m kind of curious about is, you know, how you think about and is there room where the fleet is today to potentially acquire more rigs? And really, you know, I don’t know how deep you want to get into that conversation, but I am kind of curious around, I mean, it’s not Capital anymore, it’s I guess they call it Seatrium.

You know, they still have some rigs that, you know, I guess they’re operating some, some jackups from, from, you know, previous orders from other customers. They have these rigs. Is there any kind of, is there any kind of when could we see these rigs are... I mean, are they being-- do you have any sense for if these rigs are being actively marketed for sale? And, and yeah, I mean, I, I guess that’s, that’s kind of it and, and, and where we kind of think pricing is now for a, a premium rig in the second market?

Bruno Morand, CEO, Borr Drilling Limited: Yeah. No, very good, Greg. Let me tackle maybe the question on the Seatrium rigs first. You said rigs, but I understand that there’s one of them that had been operating with Aramco before and was returned to the yard. I think the rest of them are either committed through BBCs or have been sold. I think it’s probably fair to assume that the rig gets offered in the Middle East or tenders. It was a rig that was with Aramco before, and it has specifications and complies with the requirements, so I would expect that rig to eventually be offered in that tender. From experience, we know that the Singaporeans are not really in the business of selling rigs cheap, and they probably see the market responding, and they will have expectations.

So I’m not sure if they get sold, but I do expect that there will be people looking at those rigs and trying to place them. Now, on the broader M&A picture, the answer I have for you is probably not very different than what we said in a call in the last quarter. I think we have an operating platform that is very well recognized around the globe, including very well recognized by our customers, and that gives us a chance to look into M&A opportunities and see how we strengthen that platform further. For us, we continue to think about consolidation very selectively. It’s not consolidation and growth for the sake of growth. We would have to look complementary to our fleet, and I think less likely to be looking at individual asset things.

We wanna see things that could potentially help us continue to transform and consolidate the sector. Now, we said it before with 24 rigs, and I have to emphasize again, now with 29, we think we have a very interesting fleet size. We have scale in pretty much every key market around the globe. So growth is something that we’ll look opportunistically, but I don’t think it necessarily composes a core to our strategy. I think we have a good operational platform to do so if the opportunity comes, but we’ll look at that very opportunistically.

Frederick Steen, Analyst, Clarkson Securities: Super helpful. Thank you very much.

Conference Operator: We are now going to proceed with our next question. The question comes from the line of Frederick Steen from Clarkson Securities. Please ask your question.

Frederick Steen, Analyst, Clarkson Securities: Hey, Bruno, Magnus. Hope you are well, and as always, thank you for good prepared remarks. I wanted to dig a bit deeper into what’s going on with the market at the moment, and I think we share a view that it’s exciting times. Tenders are up, and utilization will likely point upwards as well. On the back of that, I was hoping you could give a bit more color on how you kind of specifically see rate development trajectory going forward. Because typically there will be, I guess, first you’ll see the tenders, then you’ll see the awards, and then you’ll see the day rates.

So, any color on when you think we’ll see this higher activity level starting to, you know, really make an impact on bidding levels across the globe? Thanks.

Bruno Morand, CEO, Borr Drilling Limited: Yeah, fair question, Frederick. And what we have seen over the last, and we’ve been very open about it in the last few months, is that rates have been walking in most regions a bit sideways. I think in some regions like Asia, maybe a bit downwards a little bit, but it has been fairly contained. For us, the way we think about 2026 at the moment is utilization is obviously in the forefront, particularly for opportunities that we have that are short term in nature, that helps us seal the gap, help us de-risk the execution during a Now, what does it take for the market to change? You’re absolutely right. I think fixtures comes first, then rates come second.

As we said, a large volume of the work that is in the tender pipeline at the moment is driven by the Middle East. We currently anticipate that these awards will start coming out during the second quarter, mid-year, thereabout. And what is interesting, as I mentioned in the prepared remarks, is that Middle East tenders generally require a fairly lengthy preparation process for the rig. So basically means that once we see awards coming through, those rigs are effectively out of the market for a given month and until they actually can be deployed. So I expect that the pricing dynamic starts to progress once those tenders conclude, or shortly after those tenders conclude, which would imply that we’re looking at, you know, Q3 is when we’ll probably have better visibility of build dynamics playing out. That’s my best guess.

As I said earlier, for 2026, name of the game for us is really de-risk the outlook, make sure that the fleet is occupied. I think 2027 is when we turn our focus again, very sharply into economics and rates.

Frederick Steen, Analyst, Clarkson Securities: No, that’s very clear. And just to follow up on that, and I guess you kind of partially answered it, but in terms of recontracting your fleet now, while I, you know, definitely appreciate that, you know, 2026 is a utilization game for you, do you have any kind of strategy around what type of contract length you would kind of go for at the current time? You know, are you on short contracts to reprice that when the market starts accelerating again, or do you still want to have, like, a base load of longer term contracts, if and when they are available?

And, like as a side question to that, since the current Middle East tenders are long in nature, and, you know, I would assume that you would be interested in at least in some of them, are there any changes to Saudi Aramco contracting terms, you think? You know, obviously, we’re referencing suspension ability, for the kingdom as we saw two years ago. Thanks.

Bruno Morand, CEO, Borr Drilling Limited: Yeah. So let me break it down here, Frederick. To your first part of the question, yeah, with a 29 rig fleet, we, we obviously have to have a mix of short and long-term contracts. It’s obviously important that we have a baseline of backlog. Clearly, as we have regions where day rates push closer to kind of cash costs, cash operating costs, we don’t want to be securing these contracts in long term, and we’re looking for opportunities to close gaps as best as we can. Some of the regions that, that the margins are still a bit more stretched and more interesting, we’re obviously more flexible in extending the duration of the contract a bit, a bit longer. And that depends a lot on the opportunities.

There are regions that could be a bit more competitive at times, but certain tenders within that region that have particular requirements that are well suited for the fleet, and we look into how we optimize these things. So there’s obviously a quite strong combination of flex factors playing out at the moment. Now, in terms of the second question on Aramco, yes, the tender is still ongoing, so let’s see where we land. It does seem that in the tender documentation, Aramco has made some of the terms a bit more flexible, particularly some of the provisions around termination that were of a concern since the last round of suspension and terminations.

They indicated some flexibility to discuss a few terms, I think mainly on the technical side, maybe not so much on the commercial side, but they do indicate some flexibility to discuss. So let’s see how the tender progresses, and where we land in that discussion.

Magnus Vaaler, CFO, Borr Drilling Limited: ... All right, thank you very much. Have a good day.

Bruno Morand, CEO, Borr Drilling Limited: Thank you, Frederick.

Conference Operator: We are now going to proceed with our next question. The question is from the line of Truls Olsen from Sandling Securities. Please ask your question.

Truls Olsen, Analyst, Sandling Securities: Thank you. Good afternoon, Bruno and Magnus. A couple of questions from me, starting off in Mexico, you collected a bit, call it extra, from Pemex or OpEx, if you will. Now, you are obviously confident about more collect regular payments coming from Pemex in Mexico this year. How should we think about this, and what’s the current level of outstanding on your balance sheet?

Bruno Morand, CEO, Borr Drilling Limited: Hey, hey, Truls, thanks for the question. I thought we’d go the whole call without a question for Magnus, so I’ll let him tackle this one.

Magnus Vaaler, CFO, Borr Drilling Limited: Yeah, thanks. Thanks, Bruno, and Truls. So yeah, as you said, we have come back to payments from Pemex has picked up over the past quarter, and we actually received around $46 million in total in the fourth quarter. So we estimate we had around $90 million-$100 million outstanding at the end of the quarter. Also, in the beginning of January, we received a further $23 million, so that is bringing the outstanding balance further down. So I think this is very positive to see. We see also peers, other companies, reporting the normalization of collections, and the indications we have from Mexico is that it will continue into 2026, and that they’re preparing for a new payment plan with the government to tackle 2026 invoices.

So I think we’re positive about the development. I think also, as we noted in our previous contracting update, is that the contract extensions for the Galar and Garsemi include improved payment terms with our counterparty. So we’re guaranteed to have payments of operating costs within 45 days and no more than 180 days of outstanding variable rate. So we are also improving on the terms towards our counterparty.

Truls Olsen, Analyst, Sandling Securities: Thanks. That’s great to hear, and I would expect those terms to be included on the rig and the letter of intent as well.

Bruno Morand, CEO, Borr Drilling Limited: No, no, Truls, I think the, the rig that got extended right now continues on, the historical contract structure-

Truls Olsen, Analyst, Sandling Securities: Okay.

Bruno Morand, CEO, Borr Drilling Limited: - which is on a pay-one-day basis. However, as Magnus pointed out, we do have encouraging signs that payments will reach a better normalization going forward.

Truls Olsen, Analyst, Sandling Securities: Okay. Okay, thank you. Good to hear. What on another topic, and obviously, it’s boring to talk about day rates, but it ultimately remains important, if you will. I mean, the spread seems to be very high at the moment, obviously, Asia and Middle East being more competitive than West Africa. Are other moving parts to think about? I mean, you talked briefly about terms, you’re discussing or are being discussed with Aramco, if you will, in terms of that tender batch there. How do you see that sort of progressing or moving elsewhere, the TNIs, if you will?

Bruno Morand, CEO, Borr Drilling Limited: Yeah, yeah, and I think the dynamics in our contracting is always very fluid. We’re always kind of pushing and pulling on terms and conditions of the contract with the customers. So it’s normal to the cycle, Truls. I would say that today, there’s not a huge focus from our customers in trying to renegotiate terms. I think that the terms are being fairly solid in the cycle so far. The discussion’s obviously been a lot about rates, and as you pointed out, in some regions, there’s a bit more competitive pressure, some other less pressures. Like, if I look at regions like the North Sea, for example, they have very well-established frameworks for contracting. I don’t think that we’ve been spending a huge amount of time revisiting provisions with the customers.

Keep in mind that we very frequently are talking about customers that are repeat customers for Borr, and we do have a well-established framework in this contract. So that takes a little bit of the pressure in negotiating terms, both on our side and the customer side. But inevitably, there’s always a commercial push and pull, all the negotiations that mature through the cycles.

Truls Olsen, Analyst, Sandling Securities: Understood. Thank you. And the final one for me, as we think about those rigs that you currently have not secured any work for, I mean, the one which perhaps stands out a bit more than the other ones is the Var. Should we think about that as probably the last one to find work, given that it’s been sort of inactive previously or coming from yard, if you will?

Bruno Morand, CEO, Borr Drilling Limited: Yeah, I think it’s a fair statement, Truls. I think that when I look at the pipeline and the things that we’re pursuing at the moment, in near term, I would think or hope that we will have commitments for the Heid and the Sif. They’ve been operating until recently. We have a pipeline of opportunity for them, so that’s the most obvious movement in the near future. I do think that the Var and the Freya are rigs that will probably come a bit later, probably kind of back end of this year, early next year, with some focus on some of the developments in the Middle East that will likely create the catalyst to deploy those rigs. But that’s probably a fair way to think about it.

Truls Olsen, Analyst, Sandling Securities: ... Understood. Good stuff. Thank you, guys. Keep up the good work.

Bruno Morand, CEO, Borr Drilling Limited: Thank you.

Conference Operator: We are now going to take our next question. The question comes from the line of Joshua Jane from Daniel Energy Partners. Please ask your question.

Joshua Jane, Analyst, Daniel Energy Partners: Thanks for taking my questions. First one, I just wanted to follow up on Scott’s question a little bit. As you talked about an asset that is stacked, potentially coming back to work, how are you thinking about requirements from a return perspective in an initial contract to get a rig up and running today after it’s been stacked? Maybe you could just elaborate on that a little bit.

Bruno Morand, CEO, Borr Drilling Limited: Yeah, thanks, Joshua. And the answer to your question may vary a little bit from rig to rig. I’m thinking in our case, except for the Var, all of the rigs either been working until recently or are rigs that will be rolling off contract. At this stage, we don’t expect any meaningful CapEx, including those rigs to work. The Var would probably require a bit more, probably somewhere close to $5-$6 million, somewhere in that ballpark. So for the rigs that require a little CapEx, the calculation becomes a bit easier, and it’s probably less a question of just off-the-gate economics and more balance of the opportunity pipeline. We certainly don’t want to have a rig going back to work to just work for a very short amount of time and then come idle again.

It kind of defeats the purpose, and it hardly ever generates sufficient economics. So balancing between feasibility of a pipeline and rate is obviously significant. But for the fleet that we have at the moment, the CapEx component or reactivation component is not a big factor, because, as I said, these rigs either been operating until recently or are rigs that are normally rolling off contract as we go along.

Joshua Jane, Analyst, Daniel Energy Partners: Thanks for that. Then I’m gonna ask the Venezuela question, I guess, a little bit differently. Any thoughts on what you’re seeing and hearing there in the region? And if things are calmer there or quieter, just given geographic proximity, does that further open up Trinidad, Colombia, and Guyana a bit more for the shallow water market? Maybe you could speak to that a little bit.

Bruno Morand, CEO, Borr Drilling Limited: Yeah. And Trinidad has been a fairly busy jackup market over the years. There’s still some opportunities around that. Suriname, there has been a few opportunities in discussion. It’s mostly exploration work, and some of it is a bit further far in the future. Colombia has had some work in the past and has been quiet. I do think that as things calm down in the region, some of the operators may be a bit more compelled to go. Do I see a near-term large volume of rig requirements in the region? That’s probably not the way I would put it.

But, I think the moment you start getting a couple of jobs in places like Suriname and Colombia, then it starts to become interesting to see how you can put a scope together that supports a rig. Generally, it’s a region that requires rigs with larger capabilities, which is obviously very interesting for our fleet, but I wouldn’t think that is a large play.

Joshua Jane, Analyst, Daniel Energy Partners: Understood. Thanks for taking my questions.

Bruno Morand, CEO, Borr Drilling Limited: Thanks, Joshua.

Conference Operator: Thank you. That concludes the question and answer session. I want to hand back to Mr. Bruno Morand for closing remarks.

Bruno Morand, CEO, Borr Drilling Limited: Thank you. That concludes our call. Appreciate the interest in the company, and I look forward to speaking to you again next quarter.

Conference Operator: This concludes today’s conference call. Thank you all for participating. You may now disconnect your lines. Thank you.