Borr Drilling Limited

Good morning and thank you for participating in the Board Drilling Third Quarter 2022 Earnings Call. I'm Patrick Schorn talking to you from Bermuda and with me here today is Magnus Fahler, our CFO. Next slide. First, covering the required disclaimers. Here we go. I would like to remind all participants Some of the statements will be forward-looking. These matters involve risks and uncertainties that could cause actual results to differ materially from those projected in these statements. I therefore refer you to our latest public filings. Next slide. I'm pleased with our performance this quarter. With continued operational success, we have further optimized our cost lines, leading to an improved adjusted EBITDA, while our revenues were up only slightly. Apart from executing on the current operations in the field, the technical team also completed the activation of several of our rigs that have started operation in the fourth quarter. With the extra capacity coming online, we expect the fourth quarter revenue to be at least 25% higher than what we have generated in the third quarter. Our fleet of 24 rigs has gone through some adjustments after the sell-off of four units related to our recent refinance. resulting in a delivered fleet of 22 units, of which 20 are currently contracted. Apart from these 22, we have two further units in the shipyard to be delivered in 2025. Our cash position at the end of the quarter was high during the equity raise that was completed in relation to our recent finance as well. Magnus will now step you through some of the details of the third quarter.

Thanks, Patrick. We're now on the Next slide, key financial Q3 2022. The Q3 2022 revenue came in at 107.9 million in the quarter, an increase of 2.6 million or 2.5% compared to Q2 2022. This was split in 90.5 million in day rate revenues for our regular contracts and 17.4 million in related party revenue, which is bearable earnings in our Mexico joint ventures. Rig operating and maintenance expenses for Q3 was 60.4 million, a decrease of 5.1 million from Q2. The decrease is mainly due to a decrease in amortization of deferred costs. Impairment of non-current assets for the third quarter was 7.3 million, a decrease of 117.1 million compared to the second quarter. Impairment recognized in the quarter relates to the rig GIMI as the rig was classified as held for sale in Q3. The impairment in the second quarter related to the three new build rigs at Keppel, which we have agreed to sell. Total financial expenses net was 54.1 million in the third quarter, an increase of 17.2 million. The increase is primarily a result a $7.5 million one-off costs related to a financing fee, a $4.3 million increase in interest expenses, $3.1 million decrease in interest income, and $2.2 million increase in FX losses. The net loss for the quarter was $54.9 million, a decrease of $110.4 million from Q2. Excluding impairment, our net loss increased by $6.7 million. The adjusted EBITDA for the quarter was $43.9 million, which is an increase of $6.9 million, or 19% from the second quarter of 2022. As Patrick mentioned, our free cash position at the end of the quarter was high, $279 million, and our restricted cash was $7 million. Our free cash increased by $249.3 million in comparison to the prior quarter and is primarily driven by The cash proceeds generated from operating activities of $9.3 million, which includes the impact of $9.9 million cash interest paid and the payment of $7.5 million financing fee. Cash used in fixed asset additions of $20.4 million, mainly driven by activations of three rigs, and $260.4 million of net proceeds from our August 2022 equity offerings.

Moving to the next slide.