Borr Drilling Limited

Thank you. Good morning, and thank you for participating in the Board Drilling Third Quarter 2023 Earnings Call. I'm Patrick Schorn, talking to you from Bermuda, and with me here today is Magnus Fahler, our Chief Financial Officer, and Bruno Morand, our Chief Commercial Officer. Next slide, please. First, covering the required disclaimers. I would like to remind all participants that 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, please. The third quarter was characterized by strong operational performance with technical utilization for the quarter above 99%, revenue increasing by 2%, and our adjusted EBITDA increasing to 88.2 million, which is 5% over the second quarter's results. Our backlog quality continues to improve. Year-to-date, we have secured 12 new commitments, adding $728 million to our revenue backlog at an implied average day rate of $161,000 per day. We continue to experience positive developments in utilization in the global jack-of-market, particularly for modern rigs, where marketed utilization stands at approximately 94%. Day rates have continued to appreciate as demonstrated by our latest previously announced fixtures for the Prospector 5, the Nat and the Iden. In addition, we are pleased to announce a 15-month extension for the Sculpt at a daily rate of $165,000 per day. DERAN and HILT have recently commenced their new contracts bringing the operating fleet to 21 rigs. We expect GERT to commence its new contract in early December 2023 at which point all of our 22 delivered rigs will be operating. I'm also pleased with the conclusion of our refinancing and the issuance of 1.54 billion of secured nodes with maturities in 2028 and 2030. This completes the refinancing of all our secured debt and provides the company with a solid long-term capital structure. We've also announced that the board intends to implement a regular quarterly dividend starting at 5 cents per share, which is subject to required approvals in a special general meeting to be held the 22nd of December, 2023. For 2024, we maintain our estimated range of adjusted EBITDA for full year 24 to be between $500 to $550 million. Magnus will now step you through the financial details of the third quarter. Thank you, Patrick.

We're now on the slide key financial Q3. The Q3 2023 revenues were 191.5 million, an increase of 4 million or 2% from the second quarter. The 4 million increase comprised of an increase in day rate revenues of 5.3 million, offset by a decrease in bare boat income from Mexico joint ventures of 1.3 million. So the overall increase in the revenues were primarily due to higher day rates for our rigs. Rig operating and maintenance expenses were 85.8 million for the third quarter, a decrease of 3.7 million compared to the second quarter. The decrease is primarily a result of a decrease in amortization of deferred costs. The total financial expenses net were 50 million for the quarter, which is in line with the previous quarter. and the net income for the quarter was 0.3 million. Our adjusted EBITDA was 88.2 million, an increase of 4.2 million, or 5% compared to Q2. Our free cash position at the end of Q3 was 94.4 million. Cash increased by 10.6 million in comparison to the prior quarter and is primarily a result of 34.5 million cash provided in operating activities, 9.6 million net proceeds from the sale of shares under our ATM program, 10.3 million repayment of debt, and 23.4 million cash costs for additions to Jacob rigs, which is primarily activation costs for our rigs HILD and Arabia 3. Then moving into the next slide. As Patrick said, we're very pleased to have completed our refinancing for all the company's secured debt now in November 2023 by the issuance of a total of 1.54 billion secured notes with a duration of five and seven years. Following this, our main debt maturities are in 2028 and 2030. The refinancing provides a stable foundation for the company going forward and increased flexibility from an operational point of view and provides the possibility for distributions to our shareholders. Additionally, we have secured a 180 million senior secured facility, which includes 150 million revolving credit facility and a 30 million guarantee facility. Lastly, The delivery installment for our two remaining new bills, VAL and VAR, in 2024, are largely funded by a commitment from the shipyard of 130 million of debt per week. With this, I would like to turn the word over to Bruno Morand, our Chief Commercial Officer.

Thanks, Magnus. I'd like to provide a brief update on the jacket market in our most recent contracting and fleet developments. Checkup utilization levels have continued to increase since our last report. In particular, the market utilization for modern rigs has now reached 94%, with the total number of contracted rigs climbing to 300. Modern rigs availability continues to tighten and is now in high single-digit territory, excluding rigidly stranded and sanctioned tinted assets. Amidst this tight market, we continue to experience a marked recovery in day rate levels for modern jet cops. I'll later provide some commentary about our most recent fixtures that illustrate that. Based on the current tenders and discussions with our customers about their future requirements, we see strong indications of an undersupplied market condition developing in the second half of 2024 and into 2025. Incremental demand is visible across most regions and specifically strong in Southeast Asia, India, Middle East and West Africa. But we note as well some interesting pockets of activity developing in the Mediterranean. In line with the views we have shared in our earlier presentations, shipyard order books remain at record low levels and unlikely to provide any relief to the supply and demand imbalance. The remaining competitive new units in China are largely expected to be absorbed by the domestic market. We believe these conditions will continue to support an increasing day rate environment, particularly for young and high-performing rigs, placing board drilling in a unique position to benefit from these developments. Year-to-date, we have secured 12 new mutual contracts, LOIs and LOAs, adding $728 million in total revenues and 12.3 re-years to our backlog. This represents a weighted average day rate of $161,000 per day, which continues to be industry-leading. In addition to the long-term commitments previously disclosed for the rigs Prospector 5 and 9 in Congo, Tor in Indonesia, and Aydin in Thailand, I would like to highlight new commitments recently secured for our rigs Gunlot and Scald. The Gunlot, which is due to complete its current contract in January 24, has now secured a binding LOA for a 120-day program in Malaysia with an undisclosed customer. This new commitment will start in direct continuation to this current contract and should maintain the rate contracted until May 2024. We have ongoing discussions with customers in the region and anticipate further commitment for the gun laws in the near future. The Scalp has secured a 15-month extension with PTTP in Thailand at a rate of $165,000 per day. This extension will maintain the rate firm contracted until September 2025. I highlight that the IDEM and Scald are both modern rigs with extensive offline capabilities, which combined with our experienced crews, enable our customers to materially reduce their weld times and costs. The recent awards by PTTEP for these rigs and market-leading rigs are a strong testament of the superior performance and value creation enabled by our modern rig fleet. Beyond these recent awards, I would like to note that the rigs Arabia III, Hewes, and Ron have recently commenced new contracts, increasing our operating rig count to 21. The GERD is in final stages of contract preparation and is expected to commence its new contract in early December. At each point, all of our delivered rigs will be operating and generating revenues for the company. For further information about our fleet, I'll refer you to the latest fleet status report made available on our company's website. The company's total revenue backlog currently stands at approximately $1.9 billion and an equivalent rate of $137,000 per day. The recent contract awards secured by the company contribute to improve our backlog, both in total volume and quality. In terms of future fleet coverage, our firm contract and price options cover approximately 84% of our available days in 2024, providing strong revenue visibility for the year. With a positive demand outlook for our rigs and continue to improve rig environment, our near-term revenue feasibility and long-term operating leverage places Board Drilling in a unique position to benefit from this market dynamic and create significant value for our shareholders. On this note, I'd like to hand the call back over to Patrick. Thank you, Bruno.