Borr Drilling (NYSE:BORR) reported lower first-quarter revenue and a net loss as delayed rig start-up activity, contract transitions and a credit loss provision weighed on results, while management said contracting momentum has improved the company’s coverage for the remainder of 2026.
Chief Executive Officer Bruno Morand said on the company’s first-quarter 2026 earnings call that Borr delivered technical utilization of 99.4% and economic utilization of 97% during the period. He also highlighted safety milestones across several rigs, including the Gerd, Natt and Mist reaching seven years without lost-time incidents.
Revenue for the quarter was $247 million. Chief Financial Officer Magnus Vaaler said total operating revenue declined $12.4 million, or 4.8%, from the fourth quarter, mainly due to a $15.5 million decrease in dayrate revenue, partly offset by a $3 million increase in bareboat charter revenue.
First-quarter results pressured by Odin delay and credit provision
Vaaler said dayrate revenue declined because reimbursable expenses were $10.4 million lower, and because of fewer operating days combined with lower dayrates for some rigs. Bareboat charter revenue increased as more rigs earned bareboat revenue following Borr’s acquisition of rigs from Noble.
Total operating expenses were $201 million, up $8.9 million from the prior quarter. Vaaler attributed the increase primarily to $4.7 million of higher depreciation following the five-rig acquisition from Noble and $4.6 million of higher rig operating expenses. Rig operating expenses included an $8.4 million credit loss provision, partly offset by lower reimbursable expenses.
Borr posted a net loss of $29 million for the quarter. Adjusted EBITDA was $88.5 million, down $16.7 million from the fourth quarter. Vaaler said the EBITDA result was “highly impacted” by the credit loss provision and by the delayed start-up of the Odin rig.
Morand said the Odin completed its mobilization from Mexico, where operations had initially been expected to start in February. He said the start-up was delayed by disruptions during transit, additional contract preparation work and approvals. Vaaler said the rig recognized no revenue in the first quarter while incurring standard operating expenses. Borr now expects the Odin to begin operations in June, after incurring approximately $10 million of additional contract preparation expenses in addition to standard operating expenses.
Liquidity remains at $480 million after Noble deal
Borr ended the quarter with $246 million in cash and total liquidity of $480 million, including $234 million of undrawn revolving credit facilities. Cash and restricted cash decreased by $133.7 million during the quarter.
Vaaler said the cash decline was primarily tied to $182.9 million used in investing activities, including $175.1 million spent to complete the Noble acquisition in January. The company also incurred $7.5 million of capital expenditures for long-term maintenance expenses and costs. Cash used in investing activities was partly offset by $48.1 million of cash from operating activities, including $6 million of interest payments and $6.7 million of taxes.
Borr completed the five-rig acquisition from Noble for a total purchase price of $360 million, partly financed by $150 million of seller credits. After quarter-end, the company issued $300 million of convertible notes due in 2033. Vaaler said proceeds were mainly used to repurchase and cancel $195.2 million of the company’s 2028 convertible notes, extending the maturity profile by five years. The new convertible notes carry a 3.5% coupon, compared with 5% on the 2028 notes, and have a conversion price of $8 per share.
Contract awards lift 2026 coverage
Morand said Borr has secured eight contract commitments since its last earnings report, representing more than 1,100 days of firm work. Full-year 2026 coverage increased to 71% at an average dayrate of approximately $137,000, while second-half 2026 coverage rose to 65% from 48% at the time of the prior report.
Year to date, Borr has secured 13 new commitments, adding about $274 million to backlog. Morand highlighted several recent awards and extensions:
- Eni extended a contract in Mexico, keeping the Ran committed through September 2026.
- The Sif, recently acquired from Noble, secured a one-well contract offshore Suriname expected to start in July with an estimated duration of 100 days.
- The Prospector 5 secured work with BW Energy in Gabon and is now firmly committed into the second quarter of 2027, with unpriced options extending into 2028.
- The Scout received a 180-day contract with Vestigo in Malaysia.
- The Thor received two contract awards in Vietnam and is now committed into the first quarter of 2027.
Morand said Borr’s contracting strategy remains focused on increasing near-term coverage while balancing dayrates and contract duration.
Management sees improving demand outlook despite Middle East uncertainty
Morand said rising tensions and hostility in the Middle East caused disruptions during the quarter, but Borr navigated them with little financial impact and all personnel remained safe. Following temporary suspensions, all affected rigs were called back to work. The Groa and Forseti have completed contracts in Qatar, while the Forseti remains on a variable charter with its former owner until December 2026.
Management said visible open tender demand in the Middle East has increased to 17 rigs, although near-term activity may face delays. Morand said any resolution of the regional disruptions could release pent-up demand, including work required to restore shut-in wells and related infrastructure.
More broadly, Morand said elevated oil prices and a renewed focus on energy security support the long-term outlook for jackup rigs, although customer planning and budgeting cycles mean activity and dayrate improvements may lag oil price increases by six to 12 months.
In response to analyst questions, Morand said Borr’s priority after recent acquisitions is to secure employment for newly acquired rigs before pursuing further fleet growth. He also said West Africa demand has been tracking positively, particularly in Angola and Nigeria, and that Borr’s high-specification fleet gives it flexibility across regions including West Africa, Mexico, Asia and the Middle East.
Morand said Borr sees signs of new requirements in Malaysia and Vietnam, improving demand in China, and renewed activity signals in Mexico, including stacked rigs returning to work and a fresh market inquiry from PEMEX. Looking to 2027, he said Borr’s availability gives the company flexibility to participate in what management believes could be a stronger contracting environment.
About Borr Drilling (NYSE:BORR)
Borr Drilling is an international offshore drilling contractor providing premium jack-up drilling services to the oil and gas industry. Established in 2016 and incorporated in Bermuda with headquarters in Hamilton, the company is listed on the New York Stock Exchange under the ticker symbol BORR. Borr Drilling focuses exclusively on the ownership and operation of mobile offshore jack-up rigs, catering to exploration and production drilling projects in both mature and emerging hydrocarbon regions.
The company's core business activities encompass the long-term contracting of high-specification jack-up rigs suitable for shallow-to-intermediate water depths.
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