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Borr Drilling Limited (BORR) stock surged in the premarket – Here’s why?

Borr Drilling Limited (BORR) experienced an incline of 5.66% in the premarket. However, the last trading session closed at $1.06 with a decline of 0.93%.


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Second Quarter 2021 Financial Results

BORR announced second-quarter 2021 financial results on 31st August 2021. According to the report:

  • $54.8 million in total operating sales, up 13% from the first quarter of 2021.
  • A $21.7 million drop in revenue from equity method investments, principally connected to the IWS JVs in Mexico, contributed to a net loss of $59.9 million, an increase of $5.5 million over the first quarter of 2021.
  • In the first quarter of 2021, adjusted EBITDA was $3.7 million, up to $14.4 million from the previous period.
  • In June, the Company signed a Memorandum of Understanding (MOU) to sell its stake in the IWS JVs in order to simplify operations in Mexico and enhance liquidity. In August 2021, the deal was finalized, and $26.5 million in cash was released.
  • Pemex collections to our Mexico JVs have significantly improved.
  • In late August 2021, the Company signed two LOA/LOIs for two rigs in West Africa for a total of two years plus options, which were previously undisclosed.
  • Lastly, the Company has been granted 28 new contracts, extensions, executed options, and LOA/LOIs in 2021, totaling 6,398 days of possible backlog and $542 million in earnings

At-The-Market Offering of up to $40 Million

On 6th July 2021, BORR announced that it has created an “at-the-market program” and entered into an Equity Distribution Agreement dated July 6, 2021, with Clarksons Platou Securities, Inc., as our sales representative. This will help the company to offer and sell up to $40 million of our ordinary shares to be listed on the New York Stock Exchange from time to time. The Company will offer and sell its common stock through Clarksons Platou Securities, Inc. as its sales agent at any time and from time to time, in accordance with the provisions of the Equity Distribution Agreement. The sales agent may acquire shares of our common stock as a principal or as an agent on our behalf.

The Company and Clarksons Platou Securities, Inc., as sales agents, may sell our common shares in regular brokers’ transactions through the New York Stock Exchange at market prices, in block transactions, or as otherwise negotiated between the Company and Clarksons Platou Securities, Inc. The securities may be sold at current market prices, at prices that are linked to current market prices, or at negotiated prices.

Entering MoU to streamline Mexico operations and improve liquidity

On 15th June 2021, BORR has five rigs delivering integrated well services for Pemex for joint ventures that are jointly held with our Mexican partner. Pemex has received an added output of about 125,000 barrels of oil per day from 21 wells drilled since the services began in May 2019. The most recent discussion with Pemex management yielded a very positive assessment of the operation’s performance and cost-efficiency.

The integrated well services joint ventures have received a request for the program to be extended, and the five Borr Drilling rigs are scheduled to be used until the end of 2022. In accordance with this extension, BORR and Mexican’s partners have agreed to make certain modifications to the joint ventures’ structures. This includes Mexican partner purchasing Borr Drilling’s 49 percent interest in the integrated services JVs Opex and Akal.

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