Borr Drilling — Investor Presentation 2018

Mar 22, 2018

Borr Drilling – Every crisis creates opportunities

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Content Content - from 0 to 49 rigs in 15 months

Private placement of USD 250million

Footer Footer 22 March 2018

Important information and disclaimer

This presentation has been prepared by representatives of Borr Drilling Limited (the "Company") and is general background information about the Company's activities current as at the date of this presentation. Information in this presentation, including forecast financial information, should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities or other financial products or instruments and does not take into account your particular investment objectives, financial situation or needs. Before acting on any information you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent financial advice. All securities and financial product or instrument transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments and, in international transactions, currency risk.

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Contemplated equity offering to finance the acquisition of Paragon Offshore

Transaction overview

• Borr Drilling intends to raise up to USD 250m through issuing 54m new common shares at USD 4.60 per share
• The proceeds from the contemplated equity offering will be used to finance the acquisition of Paragon Offshore and general corporate purposes
• Borr Drilling has offered to purchase all outstanding shares in Paragon Offshore for a total price of USD 232.5m
• The offer period expires on 24 March 2018 and is expected to close on 27 March 2018, subject to satisfaction of the conditions
• After completion of the Paragon Offshore acquisition, Borr Drilling will own 49 rigs and be the largest owner of premium jack-up drilling rigs in the world with 24 premium units (including newbuilds)
• Companies that are close associates of Mr. Tor Olav Trøim have in total subscribed for shares equivalent to USD 20m
• Mr Fredrik Halvorsen has subscribed for shares equivalent USD 10m

Sources and uses of funds

	USDm
Sources
Contemplated equity offering	250.0

Paragon Offshore for a total price of USD 232.5m	Uses
- The offer period expires on 24 March 2018 and is expected to close on 27 March 2018, subject to satisfaction of the	Paragon Offshore equity consideration	232.5 8.8 8.7 250.0
conditions	Payment for Jindal settlement 1
 After completion of the Paragon Offshore acquisition, Borr Drilling will own 49 rigs and be the largest owner of premium jack-up drilling rigs in the world with 24 premium units (including newbuilds)	Cash available for other investments and general corporate purposes
	Total

Note (1): Reference is made to press release by Paragon Offshore 22 March. As part of the purchase consideration, any litigation settlement with Jindal was to be compensated in the purchase price. This is cash in Paragon's account which is settled dollar for dollar against the increased purchase price.

Significant upside potential from investing at cycle trough

Share price performance for drillers from cycle trough to next peak¹

Investing at the trough in historical cycles has generated significant returns

Source: DNB Markets, Bloomberg, FactSet

Footer Footer Note (1): Cycle periods based on drilling peers price index trough and to next peak: 1980s – 1986 to 1990, 1990s – 1992 to 1997, 2000s – 2002 to 2008

50% of the fleet is more than 30 years

Rigs over 30 years will be scrapped – Rigs over 15 years excluded from tenders

Delivered Newbuilds

Source: Borr Drilling

We have spent the last 15 months building the leading jack-up drilling company

Footer Footer NC = Non-core NCS = Non-core, sold for scrap NCW = Non-core, rigs with contract / LOI received Description: Note (1): Excluding non-core semi-sub (MSS1)

Best assets acquired at rock-bottom prices

Source: DNB Markets, IHS Petrodata

Footer Footer Note (1): Jack-ups delivered ex yard in 2001 or later; listed owners only; Seadrill excl. Chinese newbuilds and non-consolidated entities

Don't fix rigs too early

Rates recover quickly when the market turns

Activity is recovering Anecdotes from the last cycle

GSF Constellation I (now Atla, 400 ft from 2003):

• 3-year contract with BP in April, signed early 2004 @ USD 75k
• In 12-15 months, rates more than doubled
• Rig extended for 2 years with BP in 2007 @ USD 220k

~USD 80m lost on contracting too early

Tonala (375 ft from 2004) of Perforadora:

• 3.5-year contract with PEMEX signed early 2004 @ USD 54k
• Market rates moved to USD 100k in 1 year and high 100s in 2 years
• Rig re-contracted to PEMEX late 2006 @ USD 185k

~USD 115m lost on contracting too early

"The jackup tender pipeline is exploding…" Comments from SEB research report February 2018

When a major oil co comes to the market for 3 rigs for start up end-2019, that tells you everything

Source: DNB Markets, IHS Petrodata

Limited premium jack-up capacity left

Increase in jack-up rig count in past cycles

Currently only 37 premium jack-ups available from international operators, of which Borr Drilling controls 16

Source: Borr Drilling, DNB Markets

Jack-ups are good business

Key assumptions - 24 premium jack-ups in operation EV / EBITDA³& FCFE yield

Dayrate scenario		Current market day rate	Avg. cash break-even for peers	Avg. historical 10yrs	Avg. historical 5yrs	Last 10 year peak	21	20.5	EV/EBITDA (x)		FCFE yield (Pct.)		80%
Historical day rates	USD/d	70,000	98,000	145,000	150,000	250,000			8.5
							8					65%
Earnings utilisation	Pct.	98 %	98 %	98 %	98 %	98 %	7						60%
Opex & G&A1	"	49,000	49,000	49,000	49,000	49,000	6
Number of rigs		24	24	24	24	24	5			4.3			40%
							4			29%	4.1
P&L							3				31%
Revenue	USDm	601	841	1,245	1,288	2,146						2.0	20%
Opex	"	-403	-403	-403	-403	-403	2
G&A	"	-26	-26	-26	-26	-26	1		13%
EBITDA	"	172	412	816	858	1,717		4%
Interest2	"	-58	-58	-58	-58	-58	0	Current market	Avg. cash	Avg. historical	Avg. historical	Last 10	0%
Tax1	"	-24	-34	-50	-52	-86			break-even for peers	10yrs	5yrs	year peak
Free cash flow	"	90	321	708	749	1,574		70,000	98,000	145,000	150,000	250,000

Source: DNB Markets

Footer Footer Note (1): Illustrative - Assuming opex and G&A 25-30% below peers, using mid-range; 4% tax on revenue Note (2): Assumed total debt of USD 1.0bn at LIBOR (3m avg) + 350bps with no amortization Note (3): Estimated fully invested enterprise value of USD 3.5bn, and share price of USD 4.60 per share

Paragon Offshore – strong operational track record

Prospector 1 Prospector 5

Content Content

+ 30 x non-core rigs (29 standard jack-ups, 1 semi-sub) and strong North-sea presence

Borr Drilling to secure cost efficiency gains in Paragon Offshore

Approved bidder for Saudi Aramco¹

Footer Footer Source; DNB Markets, IHS Petrodata, Paragon Offshore Note (1): Secured while in Chapter 11

Paragon Offshore – attractive price

Paragon Offshore transaction

Experienced and aligned board

Board and main sponsors have ~USD630m invested, owning ~29%

The Borr lifecycle

Source: Borr Drilling, Bjørn Giaever & Fredrik Halvorsen

Why invest in Borr Drilling

1990s

Cycle trough Next peak

+1,541%

Source: DNB Markets, IHS Petrodata, Bloomberg, FactSet

13%

Avg. cash breakeven for peers

4%

4

2

0

Footer Footer Note (1): Cycle periods based on drilling peers price index trough and to next peak: 1980s – 1986 to 1990, 1990s – 1992 to 1997, 2000s – 2002 to 2008 Note (2): See slide 10 for assumptions

Avg. historical 10yrs

Current market Last 10

31%

Avg. historical 5yrs

2.0

year peak

0%

20%

+595%

2000s

Borr Drilling fleet status report

Fleet status report

Premium jack-ups
						2018			2019			2020
Name	Country	Oil Company	Delivered	Design	Water depth	Q1 Q2 Q3 Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
Atla	UAE		2003	F&G JU-2000	400	Available - Warm stacked
Balder	Cameroon		2004	F&G JU-2000	400	Available - Warm stacked
Idun	Singapore		2013	KFELS Super B	350	Available - Warm stacked
Ran2	Netherlands		2013	KFELS Super A	400	Available - Warm stacked
Galar	Singapore		2017	PPL Pacific Class 400	400	Available - Warm stacked
Saga	Singapore		2018	KFELS Super B	400	Available - Warm stacked
Gerd	Singapore		2018	PPL Pacific Class 400	400	Available - Warm stacked
Gersemi	Singapore		2018	PPL Pacific Class 400	400	Available - Warm stacked
Prospector 5	UK		2014	F&G JU-2000	400	LOI received for 2H 2018/Q1 2019
Prospector 1	NL/UK	ONE	2013	F&G JU-2000	400
Odin	Thailand	BBC to Transocean	2013	KFELS Super B	350
Grid	Singapore		2018	PPL Pacific Class 400	400
Skald	Singapore		2018	KFELS Super B	400
Norve	Gabon	BW Energy Dussafu	2011	PPL Pacific Class 400	400
Gunnlod	Singapore		2018	PPL Pacific Class 400	400
Groa	Singapore		2018	PPL Pacific Class 400	400
Gyme	Singapore		2018	PPL Pacific Class 400	400
Mist	Thailand	BBC to Transocean	2013	KFELS Super B	350
Natt	Singapore		2018	PPL Pacific Class 400	400
Frigg	Nigeria	Total	2013	KFELS Super A	400
Njord	Singapore		2019	PPL Pacific Class 400	400
Tivar	Singapore		2019	KFELS Super B	400
Vale	Singapore		2020	KFELS Super B	400
Var	Singapore		2020	KFELS Super B	400

Non core, rigs with contract / LOI received

						2018						2019		2020
Name	Country	Oil Company	Delivered	Design	Water depth	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4	Q1	Q2	Q3	Q4
MSS1 (semi)	UK	Taqa	1979	Off. Comp SCP M2	1,500
C20051	DK	Perenco	1982	CFEM T-2005C	360
B391	UK	Spirit Energy	1981	BMC Europe Class	390
HZ1	DK	Private	1981	NAM Nedlloyd-C	250		LOI received for Q4 2018/Q1 2019
B152	UAE	ADOC	1982	BMC 150	150
Dhabi II	UAE	ADOC	1980	BMC 150	150
L1112	India	ONGC	1981	Levingston 111-C	300
								Commitment			Option				At yard/under construction