Borr Drilling — Investor Presentation 2018

Nov 21, 2018

Borr Drilling Limited Company presentation Q3 2018 Results 21 November 2018

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Highlights

• Operating revenues of US\$49.7 million, EBITDA* of negative US\$10.3 million and net loss of US\$39.1 million
• Secured six new contracts since last reporting date, including three newbuilds, adding total backlog of approximately 88 months
• Commenced contracts for the premium jack-up rig "Prospector 5", the standard jack-up rig "C20051" and the premium jack-up rig "Mist" in August, September and November, respectively
• Realised gains of US\$25 million from the sale of forward contracts in a listed company in Q3 and Q4 2018 combined. (Q3: US\$9.2 million Q4: US\$16 million)
• Completed the sale of the standard jack-up rig L1112 (Ed Holt) in October 2018 for retirement from the international jack-up rig fleet
• Took delivery of three newbuilds from PPL Shipyard in July, September and October
• Announced activations of seven newbuilds and reactivation of one premium jack-up year to date

The Comany uses certain financial information calculated on a basis other than in accordance with accounting principles generally accepted in the United States (US GAAP) including EBITDA. EBITDA as used herein represent net loss less: depreciation and impairment of non-current assets, amortisation of contract backlog, net financials, gain from bargain purchase and income tax expense. EBITDA is included as a supplemental disclosure because the Company believes that the measure provides useful information regarding the Company's operational performance.

Key Financials Q3 2018

Income Statement
USDm	YTD 2018	Q3 2018	Q3 2017
Operating revenues	111.4	49.7	-
Gain on disposals	17.5	-	-
Rig operating and maintenance expenses	(120.6)	(45.7)	(9.4)
Depreciation and impairments	(55.7)	(21.5)	(8.0)
Amortisation of contract backlog	(15.7)	(9.7)	-
G&A	(23.5)	(9.7)	(7.5)
Restructuring costs	(31.9)	(4.6)	-
Total operating expenses	(247.4)	(91.2)	(24.9)
Operating loss	(118.5)	(41.5)	(24.9)
Net financial items	2.2	4.5	15.3
Gain from bargain purchase	38.1	-	-
Loss be fore tax	(78.2)	(37.0)	(9.6)
Tax	(2.0)	(2.0)	-
Net (loss) attributable to non-contr. interests	(0.2)	0.1	-
Net loss for the period attributable to shareholders of Borr
Drilling Limited	(80.0)	(39.1)	(9.6)
Basic loss per share (\$/share)	(0.155)	(0.073)	(0.031)

Comments Q3 2018

• On average 8.6 operating rigs in the third quarter
• Rig operating and maintenance expenses for the operating rigs was US\$36.9 million in the quarter
• Restructuring cost of US\$4.6 million is a cost accrual related to the Paragon acquisition
• Net financial items includes realised and unrealised gain on forward contracts of US\$9.2 million and US\$3.5 million, respectively

Key Financials Q3 2018

Balance Sheet Key Numbers

Comments

USDm	Q3 2018	Q2 2018	Q4 2017
Total assets	2,790.5	2,652.2	1,672.3
Total liabilities	1,138.5	953.9	179.4
Total equity	1,652.0	1,698.3	1,492.9
Cash and cash equivalents	40.6	54.0	164.0
Restricted cash	21.2	32.1	39.1

• Increase in total assets due to delivery of the two newbuildings "Groa" and "Gyme"
• Long term debt increased mainly due to US\$174.0 in delivery financing for the two newbuildings "Groa" and "Gyme"
• Total available free liquidity at the end of the third quarter was US\$210.6 million, including undrawn revolving credit facility of US\$170.0 million. This compares to US\$224.0m in Q2.

Fleet Status Report November 2018

	Fleet summary
	Operating/ Committed	Available	Cold Stack	Under Construction
Premium Jack-Ups 29	9	9	2	9
Standard Jack-Ups 6	4		2
Total Jack-Ups 35
Semi - Submersible 1	1
Total Fleet 36	14	9	4	9

Fleet main movements and operations

• Strong technical utilisation on the operating rigs of 99.2% in Q3 2018
• Converted previously announced LOI/LOAs into firm contracts:
• Gerd / Groa: Exxon Nigeria (24 months each)
• Natt: First E&P Nigeria (24 months)
• Norve: Undisclosed (10 months)
• Ran: Spirit Energy UK (11 months)
• Mist: Kris Energy Thailand (3-4 months)
• New contract secured for the "Norve" with RGE (2 months)
• Commenced contracts for the "Prospector 5", the "C20051", and the "Mist" in August, September and November, respectively
• Newbuilds: took delivery of the "Groa" in July, "Gyme" in September and "Natt" in October
• The standard jack-up "L1112" was divested in October 2018

Fleet Update

Contracted and Future Contracted Rigs (14)

	Location	2018		2019			2020				2021
Rig Name		Q1 Q2	Q3 Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
					Premium Jack-Ups
Mist	Thailand			Kris Energy
Frigg 1	Nigeria	Total			Operating with option to extend
Prospector 5 1	United Kingdom	Available - Warm Stacked	Nexen
Prospector 1 1	Netherlands	Available - Warm Stacked		Tulip
Gerd	Singapore / Nigeria	Un der		Activation & Mobilization Exxon									Operating with option to extend
Groa	Singapore / Nigeria			Activation & Mobilization	Exxon									Operating with option to extend
Ran 1	Netherlands / United Kingdom			Activation & Mobilization	Spirit Energy
Norve	Gabon / Cameroon / West Africa BW Energy Dussafu		Perenco			RoyalGate Undisclosed
Natt	Singapore / Nigeria			Activation & MobilizationFirst E&P									Operating with option to extend
					Standard Jack-Ups
C20051	Netherlands	Perenco	Total
Dhabi II	United Arab Emirates	NDC (ADOC)
B152	United Arab Emirates	NDC (ADOC)
B391	United Kingdom	Spirit Energy							Up to 13 option wells (425 days)
					Semi-Submersible
MSS1	United Kingdom	TAQA						Up to 5 option wells (375 days)
		Contract			Option				Available				Under Construction

Fleet Update continued

Available (9), Under Construction (9) and Cold Stacked (4)

Rig Name	Location	2018				2019					2020				2021
		Q1 Q2 Q3	Q4	Q1	Q2		Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3
					Premium Jack-Ups
Galar	Singapore	Available - Warm Stacked
Gersemi	Singapore	Available - Warm Stacked
Grid	Singapore	Available - Warm Stacked
Gunnlod	Singapore	Available - Warm Stacked
Gyme	Singapore	Available - Warm Stacked
Idun	Singapore	Available - Warm Stacked
Odin	Singapore	Available - Warm Stacked
Saga	Singapore	Available - Warm Stacked
Skald	Singapore	Available - Warm Stacked
					Jack-Ups Under Construction
Njord	PPL shipyard, Singapore	Rig Delivery in January - 2019
Hild	KFELS shipyard, Singapore	Rig Delivery in October - 2019
Heimdal	KFELS shipyard, Singapore	Rig Delivery in January - 2020
Hermod	KFELS shipyard, Singapore	Rig Delivery in April - 2020
Huldra	KFELS shipyard, Singapore	Rig Delivery in July - 2020
Tivar	KFELS shipyard, Singapore	Rig Delivery in July - 2020
Heidrun	KFELS shipyard, Singapore	Rig Delivery in October - 2020
Vale	KFELS shipyard, Singapore	Rig Delivery in October - 2020
Var	KFELS shipyard, Singapore	Rig Delivery in December - 2020
					Cold Stacked Jack-Ups
Atla	United Arab Emirates
Balder	Cameron
Baug 1	United Kingdom	Not Marketed
Eir 1	United Kingdom	Not Marketed
		Contract			Option					Available				Under Construction

8

Market Update

Marketed Utilization continues to trend upwards… Modern JUs approaching critical levels ¹

Source: IHS Petrodata ¹ Modern Jackups build after 2000

Regional Marketed Utilization and Fleet Size in key jack-up markets

Modern rigs built after 2000

Source: IHS Petrodata, Independent Cantilever (IC) Jackups built after 2000

Oil Co free cash-flow is strong – capex levels to improve

Source: Graph 1 - Rystad Energy UCube, Free cash flow available for investors Source: Graph 2 – SEB E&P survey

You need to drill to get oil

1) Shallow water production

Tender activity improving – confidence in contracting activity

• Increase largely driven by NOCs making demand less oil price sensitive
• Several tenders initiated in a lower oil price environment than today
• Anticipated that approximately 35 to 40 of these requirements represent new rig demand which could equate to an increase in utilization of up to 8%
• Borr is well-positioned to compete in several of these opportunities and leverage on its modern and competent fleet

Estimated utilization increase based on 37 new rig requirements and a total delivered fleet of 467 IC units. Simple estimation considering maitained activity levels in other projects and attrition level to match number of new builds coming into the active fleet.