Borr Drilling — Earnings Release 2021

Aug 31, 2021

Borr Drilling Limited Announces Preliminary Results for the Second Quarter of 2021

Borr Drilling Limited Announces Preliminary Results for the Second Quarter of 2021

Hamilton, Bermuda, August 31, 2021: Borr Drilling Limited ("Borr", "Borr

Drilling" or the "Company") announces preliminary unaudited results for the

three and six months ended June 30, 2021.

Highlights second quarter of 2021

· Total operating revenues of $54.8 million, an increase of 13% compared to

the first quarter of 2021

· Net loss of $59.9 million, an increase of $5.5 million compared the first

quarter of 2021, impacted by a $21.7 million decrease in income from equity

method investments, mainly related to the IWS JVs in Mexico

· Adjusted EBITDA of $3.7 million, an increase of $14.4 million compared to

the first quarter of 2021

· In June, entered into a MoU to sell the Company's ownership in the IWS JVs

to streamline Mexico operations and improve liquidity. The transaction was

completed in August 2021 and released $26.5 million net in cash

· Substantially improved cash collections from Pemex to our Mexico JVs

· In late August 2021, the Company entered into two LOA/LOIs which have

previously not been announced for two rigs in West Africa for a total duration

of two years plus options

· In 2021 to the date of this report, the Company has been awarded 28 new

contracts, extensions, exercised options and LOA/LOIs, representing 6,398 days

of potential backlog and $542 million in revenues, excluding unexercised

optional periods

CEO, Patrick Schorn commented:

"We have seen a steady improvement in operations during the second quarter of

2021 with 13 rigs working at quarter end. Following our significant contract

wins year to date, we have added approximately $542 million in revenues to our

backlog. In our fleet we have an additional ten delivered rigs that can be

deployed in an improving market, and a further five rigs still to be delivered

by the Keppel FELS shipyard.

Based on ongoing negotiations expected to be concluded in the coming weeks, we

anticipate having 17 rigs operating and generating revenue by year end. Against

a backdrop of elevated oil prices, rig demand reverting to and outpacing pre

-pandemic levels and rig supply naturally reducing, we are well positioned to

benefit from the current environment, and on the way to having all of our 23

delivered rigs working by the end of 2022. The Company should generate positive

cash from operations after paying cash interest cost at the current level of 13

rigs operating at contracted rates for a full quarter. This provides us with a

solid foundation going forward.

Following improved collections in our Mexican joint ventures and the sale of our

stake in the integrated well services joint ventures ("IWS JVs"), we have

received $42.4 million from our Mexico operations year to date. The transaction

has allowed us to release working capital while simultaneously securing

additional work for our five rigs in the country until the end of 2022. Due to a

substantial improvement in collections from Pemex in Mexico during 2021,

combined with the new arrangement whereby we participate only in joint ventures

providing drilling services, we expect increased regularity of cash payments

from our Mexico JVs.

The resulting liquidity improvement from the release of cash in Mexico coupled

with cash from operations and encouraging market signals means that both

management and the board are focusing on further improving our capital structure

post 2023. Specific initiatives have been taken with the target of securing a

long-term capital structure solution. We expect these, in combination with

additional rig activations and rigs in operation, to further strengthen our

operating cash flows and financial position going forward."

Management Discussion and Analysis

The discussion below compares the results of the second quarter of 2021 to the

results of the first quarter of 2021.

In $ million  Q2 - 2021 Q1 - 2021 Change ($) Change (%)

Total operating 54.8 48.4 6.4 13%

revenues

Rig operating and (47.4) (48.8) 1.4 (3)%

maintenance expenses

General and (7.8) (11.7) 3.9 (33)%

administrative expenses

Total operating (81.6) (88.9) 7.3 (8)%

expenses

Adjusted EBITDA 3.7 (10.7) 14.4 -

Income / (loss) from (5.7) 16.0 (21.7) -

equity method

investments

Net loss (59.9) (54.4) (5.5) 10%

Cash and cash 32.4 49.0 (16.6) (34)%

equivalents

Total equity 973.5 1,027.9 (54.4) (5)%

Three months ended June 30, 2021 compared to the three months ended March 31,

2021

Total operating revenues for the second quarter of 2021 were $54.8 million, an

increase of $6.4 million compared to the first quarter of 2021, consisting of

$49.4 million in dayrate revenues and $5.4 million in related party revenues.

Dayrate revenues increased by $2.0 million quarter on quarter due to more rig

operating days for the rigs "Prospector 1", "Norve" and "Idun" as a result of

commencing contracts, offset by less operating days for "Mist" as it ended its

contract in the second quarter, as well as a lower dayrate for "Gunnlod" and

less operating days for "Natt". Related party revenues from the Company's JVs in

Mexico increased by $4.4 million quarter on quarter as the amendment of the

joint venture agreements in the first quarter of 2021 did not impact the second

quarter, with the increase partly offset by an increase in standby time on two

rigs during the second quarter.

Rig operating and maintenance expenses were $47.4 million for the second quarter

of 2021, a decrease of $1.4 million compared to $48.8 million for the first

quarter of 2021.

General and administrative expenses were $7.8 million for the second quarter of

2021, a decrease of $3.9 million compared to the first quarter of 2021. The

decrease is mainly due to lower corporate overhead costs as well as lower legal

costs, which in the first quarter of 2021 were related to amendments to our

credit agreements.

Adjusted EBITDA for the second quarter 2021 was $3.7 million, an increase of

$14.4 million compared to the first quarter of 2021.

The full report and financial statements are available in the files enclosed to

this release.

August 31, 2021

Hamilton, Bermuda

Questions should be directed to:

Magnus Vaaler, Chief Financial Officer, +47 22 48 30 00

This information is subject to disclosure requirements pursuant to section 5-12

of the Norwegian Securities Trading Act.