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1. Company Snapshot

1.a. Company Description

Borr Drilling Limited operates as an offshore drilling contractor to the oil and gas industry worldwide.It owns, contracts, and operates jack-up rigs for operations in shallow-water areas, including the provision of related equipment and work crews to conduct oil and gas drilling and workover operations for exploration and production.The company serves oil and gas exploration and production companies, such as integrated oil companies, state-owned national oil companies, and independent oil and gas companies.


As of December 31, 2021, it operated a fleet of 23 jack-up drilling rigs.The company was formerly known as Magni Drilling Limited and changed its name to Borr Drilling Limited in December 2016.Borr Drilling Limited was incorporated in 2016 and is based in Hamilton, Bermuda.

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1.b. Last Insights on BORR

Borr Drilling Limited's recent performance was negatively impacted by a lack of clarity on its Q4 2024 earnings, as the company delayed its financial results release until February 19, 2025. The delayed earnings release may have contributed to market uncertainty and volatility. Furthermore, the company's collections update in Mexico, announced on January 30, 2025, was a positive development, but its timing may have been overshadowed by the delayed earnings release. Additionally, the company's dividend declaration on February 19, 2025, was a positive development, but its impact may have been limited by the overall market uncertainty.

1.c. Company Highlights

2. Borr Drilling's Q3 2025 Results: A Strong Performance Amidst a Recovering Jack-up Market

Borr Drilling Limited reported a robust Q3 2025, with revenue increasing by $9.4 million quarter-over-quarter and adjusted EBITDA rising 2% to $135.6 million, resulting in a margin of 48.9%. The company's earnings per share (EPS) came in at $0.1, beating estimates of -$0.02424. The strong operational performance was underscored by the high utilization rates of its rigs, with 23 out of 24 rigs active, technical utilization at 97.9%, and economic utilization at 97.4%. As CEO Bruno Morand noted, the company's focus on operational excellence and safety culture has been instrumental in its success.

Publication Date: Nov -30

📋 Highlights
  • Revenue and EBITDA Growth:: Q3 revenue rose by $9.4 million QoQ, with adjusted EBITDA up 2% to $135.6 million (48.9% margin).
  • High Utilization Rates:: 97.9% technical and 97.4% economic utilization across 23 active rigs (24 total).
  • Backlog and Contract Growth:: Secured 22 new contracts, adding $625 million to backlog, with 85% 2025 fleet coverage at $145k avg. day rate.
  • Market Outlook and Expansion:: Anticipates Saudi jack-up rig count to reach 60–70 by 2027; entered US Gulf, Angola, and renewed Mexico contracts.
  • Pemex Receivables Progress:: Collected $17 million from Pemex in October, with improved payment terms reducing future exposure.

Operational Highlights

The company has seen significant contract wins and extensions, including three contract extensions in Mexico and new commitments in the Gulf of America and Angola. These additions have contributed to a substantial backlog, with year-to-date new commitments adding $625 million. The fleet coverage for 2025 has reached 85% at an average day rate of $145,000, and 2026 coverage stands at 62%. The company's presence in key markets, such as Saudi Arabia and Mexico, positions it well for future growth.

Market Outlook and Trends

Borr Drilling's management is optimistic about the jack-up market's prospects, believing it has bottomed out. The company expects increased demand for rigs, particularly in regions like Saudi Arabia, where the jack-up rig count is anticipated to rise to the high 60s or 70s by 2027. The growing demand for natural gas is also seen as a positive factor, with the company participating in several gas projects worldwide. However, some projects have been impacted by the political situation in Malaysia.

Valuation and Financial Metrics

Considering Borr Drilling's current valuation, the stock trades at a P/E Ratio of 14.59, P/B Ratio of 0.78, and EV/EBITDA of 6.17. The company's adjusted EBITDA guidance for full-year 2025 is in the range of $455 million to $470 million. Analysts estimate a revenue growth of -2.2% for the next year. With a relatively young fleet and a focus on maintaining a high-quality fleet, Borr Drilling is well-positioned to capitalize on the recovering market.

Challenges and Opportunities

The company faces challenges related to Pemex payment issues in Mexico, but has made progress in collecting receivables, with $17 million received in October. New contract terms are expected to reduce exposure to such issues going forward. Borr Drilling is also monitoring the impact of sanctions on its operations and is focused on compliance. The company sees opportunities in new markets, such as Angola, and is open to consolidation opportunities while prioritizing deleveraging its balance sheet.

3. NewsRoom

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Borr Drilling Limited (BORR) Q3 2025 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

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Borr Drilling Limited Announces Third Quarter 2025 Results

Nov -05

Source: prnewswire.com

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Borr Drilling Limited - Contract Terminations

Oct -24

Source: prnewswire.com

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Borr Drilling Limited - Invitation to Webcast and Conference Call for Q3 2025 Results

Oct -15

Source: prnewswire.com

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Borr Drilling: Mexico Momentum And Middle East Demand Drive Growth

Oct -02

Source: seekingalpha.com

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Borr Drilling Limited - Presentation at Pareto Securities' 32nd annual Energy Conference

Sep -10

Source: prnewswire.com

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Borr Drilling downgraded to Sell from Hold at SEB Equities

Sep -01

Source: https://thefly.com

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Borr Drilling Limited (BORR) Q2 2025 Earnings Call Transcript

Aug -14

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Dayrate

Expected Growth: 4.5%

Increasing demand for oil and gas, coupled with a shortage of drilling rigs, drives growth in dayrate revenue for Borr Drilling Limited. Rising energy prices and exploration activities in deepwater and ultra-deepwater regions also contribute to the growth.

Reconciling Items

Expected Growth: 4.5%

Increasing demand for oil and gas, coupled with Borr Drilling Limited's expanding fleet and strategic partnerships, drives growth in reconciling items, ensuring accuracy and transparency in financial reporting.

7. Detailed Products

Drilling Rigs

Borr Drilling Limited offers a range of drilling rigs for onshore and offshore operations, designed for efficient and safe drilling operations.

Well Intervention Services

The company provides a comprehensive range of well intervention services, including coiled tubing, wireline, and pumping services.

Drilling and Completion Fluids

Borr Drilling Limited offers a range of drilling and completion fluids designed to optimize drilling performance and minimize environmental impact.

Casing and Tubing Running Services

The company provides casing and tubing running services, ensuring safe and efficient installation of casing and tubing strings.

Drilling and Well Engineering Services

Borr Drilling Limited offers drilling and well engineering services, including well design, planning, and execution.

8. Borr Drilling Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Borr Drilling Limited is medium due to the availability of alternative drilling services and equipment.

Bargaining Power Of Customers

The bargaining power of customers for Borr Drilling Limited is low due to the company's strong market position and limited customer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Borr Drilling Limited is medium due to the availability of multiple suppliers for drilling equipment and services.

Threat Of New Entrants

The threat of new entrants for Borr Drilling Limited is high due to the relatively low barriers to entry in the drilling services market.

Intensity Of Rivalry

The intensity of rivalry for Borr Drilling Limited is high due to the competitive nature of the drilling services market and the presence of several established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 63.35%
Debt Cost 16.71%
Equity Weight 36.65%
Equity Cost 16.71%
WACC 16.71%
Leverage 172.88%

11. Quality Control: Borr Drilling Limited passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
PHX Energy

A-Score: 7.0/10

Value: 8.7

Growth: 7.2

Quality: 5.9

Yield: 10.0

Momentum: 2.5

Volatility: 7.3

1-Year Total Return ->

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Precision Drilling

A-Score: 5.0/10

Value: 8.5

Growth: 6.6

Quality: 5.6

Yield: 0.0

Momentum: 4.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Borr Drilling

A-Score: 4.4/10

Value: 8.6

Growth: 8.2

Quality: 4.6

Yield: 2.0

Momentum: 1.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Ensign Energy Services

A-Score: 4.2/10

Value: 9.3

Growth: 4.9

Quality: 3.0

Yield: 0.0

Momentum: 3.5

Volatility: 4.3

1-Year Total Return ->

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Independence Contract Drilling

A-Score: 3.7/10

Value: 10.0

Growth: 3.8

Quality: 2.4

Yield: 0.0

Momentum: 5.0

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
Nabors

A-Score: 3.4/10

Value: 9.3

Growth: 3.8

Quality: 5.1

Yield: 0.0

Momentum: 0.5

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

4.3$

Current Price

4.3$

Potential

-0.00%

Expected Cash-Flows