Borr Drilling — Earnings Release 2019

Nov 26, 2019

Borr Drilling Limited Announces Results for the Third Quarter 2019

Borr Drilling Limited Announces Results for the Third Quarter 2019

Hamilton, Bermuda, November 26, 2019: Borr Drilling Limited ("Borr", "Borr

Drilling" or the "Company") announces unaudited results for the three and nine

months ending September 30, 2019.

The Chairman of the Board, Paal Kibsgaard, commented: "The jack-up market

tightened further in the third quarter, with strong tendering activity,

improving dayrates and a strengthening market outlook for 2020. We continued to

execute well throughout our rig operations, as well as on our rig activation

program. Over the past two years, we have brought 16 rigs into operation, with

an additional three rigs presently committed to commence work. With a further 12

modern rigs left to be contracted, of which 7 are still to be delivered, we are

in a strong market position, both in terms of capacity and the age profile of

our fleet.

The third quarter financial results were in line with our expectations and

continued to be impacted by significant rig activation capex. Still, we are

pleased to report that operating cash-flow now covers the full SG&A, stacking

cost and the servicing of our debt. We have approached our lending banks,

seeking an adjustment of the book equity and liquidity covenants, and also the

yard, to potentially delay delivery schedules for some of the remaining rigs. We

are optimistic that agreements will be reached in the near future. This will

further strengthen the company's liquidity and provide considerable financial

flexibility for further rig activations. Based on the current dayrates of around

$100k/day, and operating expenses of around $50k/day, we aim to generate around

$500 million per year in gross cashflow before interest when all of our rigs are

employed. This clearly shows the cashflow potential for Borr in the coming

years, which the Company is fully focused on realising."

Highlights in the third quarter 2019

.    Total operating revenues of $102.7 million, net loss of $79.2 million and

Adjusted EBITDA  of $13.8 million for the third quarter of 2019 vs $1.5 million

in the second quarter of 2019

.    Technical utilisation for the operating rigs was 99.1% in the third quarter

and 99.0% for the first nine months of 2019

.    Economical utilisation for the operating rigs was 95.2% in the third

quarter and 95.3% for the first nine months of 2019

.    Company completed an initial public offering on the New York Stock Exchange

under the ticker BORR, issuing 5,750,000 shares at a price of $9.30 per share

.    Commenced two 18-month contracts for two premium newbuild jack-up rigs with

Pemex in Mexico in August 2019, under an integrated services model, bringing the

total number of rigs in operation to 16

Subsequent events

.    In October, Paal Kibsgaard, the former Chairman and CEO of Schlumberger,

was appointed as the new Chairman of the Board, replacing Tor Olav Trøim, who

continues to serve on the Board as Deputy Chairman. Mr Kibsgaard will in his

initial year, serve as executive Chairman, focused on strengthening the

Company's organization, operating processes and its integrated service offering.

.    Since the previous quarterly results release in August 2019, the Company

has been awarded contracts, LOAs and extensions for 6 rigs with a combined

revenue backlog of approximately $169 million. Total additional backlog added

year to date of approximately $465 million

.    In October, the company took delivery of the new build jack-up rig "Hermod"

from the Keppel FELS shipyard in Singapore

.    In November 2019, the Company sold marketable securities, resulting an

estimated total realised loss of $16.4 million, and improving the liquidity

position by $20.2 million

The full report is available in the enclosed file

November 26, 2019

The Board of Directors

Borr Drilling Limited

Hamilton, Bermuda

Questions should be directed to:

Svend Anton Maier: Chief Executive Officer, Borr Drilling Management, +47

41427129

Rune Magnus Lundetræ: Chief Financial Officer, Borr Drilling Management, +47

90088411

Forward looking statements

This announcement includes forward looking statements. Forward looking

statements are, typically, statements that do not reflect historical facts and

may be identified by words such as "anticipate", "believe", "continue",

"estimate", "expect", "intends", "may", "should", "will" and similar expressions

and include expectations regarding industry trends including activity levels in

the jack-up rig industry, expectations as to global jack-up rig count and

expected tenders and demand levels, strategy with respect to deployment of rigs,

expectations on trends and potential in day rates and potential to generate

significant cash at current day rates, delivery of newbuilds including expected

delivery timing, expected ability to sell or finance currently unencumbered rigs

and expected valuation, strategy and plans with respect to investments in third

party securities, contract backlog, expected contracting and operation of our

jack-up rigs and contract terms included estimated duration of contracts,

expectations with respect to contracting available rigs including warm stocked

rigs, expected ability to generate cash from operations, expected completion of

sales of rigs the Company has agreed to sell, expected results in the rest of

2019, including expected strong growth in Adjusted EBITDA in coming quarters and

expectation Adjusted EBITDA will cover operational and finance costs, strategy

with respect to asset base, expected business environment including statements

made under "Market" and "Outlook" above,  expected funding needs and ability to

meet obligations for newbuilds, expected increase in tenders for jack-up rigs,

global jack-up rig count, increase in demand from IOCs and NOCs, increases in

oil production by geography, expected returns for oil companies, ability to fix

rig rates at current market prices, competitive advantages from joint ventures,

generation of free cash flow, improvement of cash flow per rig in operation post

activation, remediation of advances, expected activation costs of rigs,

expectations about our ability to find contracts for and activate our rigs not

currently in operation, expectations with respect to amendments to our loan

facility, expected industry trends including with respect to demand for and

expected utilization of rigs, and other non-historical statements. The forward

-looking statements in this announcement are based upon various assumptions,

many of which are based, in turn, upon further assumptions, which are, by their

nature, uncertain and subject to significant known and unknown risks,

contingencies and other factors which are difficult or impossible to predict and

which are beyond our control. Such risks, uncertainties, contingencies and other

factors could cause actual events to differ materially from the expectations

expressed or implied by the forward-looking statements included herein. In

addition to the important factors and matters discussed elsewhere in this

report, important factors that, in our view could cause actual results to differ

materially from those discussed in the forward looking statements are included

in our most recent annual report and in the section entitled "Risk Factors" in

our filings with the Securities and Exchange Commission.