Borr Drilling Limited

Good morning, and thank you for participating in the Board Earnings Second Quarter Earnings Call. I'm Patrick Schorn, and with me here today in Dubai are Bruno Moran, our Chief Commercial Officer, and Magnus Feiler, our Chief Financial Officer. Next slide, please. 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 inform risks and uncertainties that could cause the deficit to differ materially from those projected in these states. I therefore refer you to our latest public filings. Now before we dive into our second quarter results, I'd like to briefly reference the recent press release announcing both our new financing package and the CEO succession plan. We will cover the financing package in detail during our prepared remarks. a significant step forward in strengthening our capital position and supporting our long-term strategy. I will return to the CEO succession towards the end of the call. Our second quarter results were strong, with technical utilization of 99.6% and an economic utilization of 97.8%. As anticipated, our activity rebounded in the second quarter with 22 out of 24 rigs Revenue increased by 51.1 million this quarter and EBITDA rose by 37.33 million by 39% versus the first quarter of this year, underscoring profitability of the revenue stream. Additionally, 106.5 million free cash flow was generated in the first six months of the year. During the quarter, we have secured significant new awards, including a multi-rigged contract in Asia and a new contract for the Arabian Sea, which is expected to return to our active fleet in September. These contract awards and commitments improve our contract coverage to 84% at an average day rate of 145,000 for 2025 and 47% coverage at an average day rate of 139,000 for 2026. Last month, we took a decisive step to strengthen longer-term financial positions through a comprehensive financing package. This initiative, which included a $102.5 million equity rate and amendments to the size of our revolving credit facilities effectively increase our liquidity by 200 million, which strengthens our balance sheet. We acted proactively to secure financing while market conditions were favorable, reinforcing our ability to execute on our long-term strategy, including disciplined growth and potential industry consolidation. Looking into the third quarter, we see a comparable level of activity as in the second quarter and anticipate a similar performance. As previously indicated in our 2020-25 EBITDA guidance, we are comfortable with the current Bloomberg consensus of approximately 470 million. We are encouraged by the Mexican government's renewed commitment to strengthen Pemex's liquidity and its restated production goal of achieving 1.8 million barrels per day. These actions should also enhance board drilling's liquidity, enabling us to leverage our proven track record of delivering best-in-class wells and uniquely positioning board drilling to ensure incremental drilling activity, particularly particularly on the private investment projects that are expected to play an increasingly important role in the future of Mexico's oil and gas production. I'll pass the call now to Magnus for the second quarter financial commentary. Thank you, Patrick. Thank you, Patrick.

I will now go into some more details for the quarter, which were positively impacted by the increase in activity and the number of races working in comparison to the prior quarter. Total operating revenues is $7.7 million for the second quarter, an increase of $51.1 million for 21% compared to the first quarter. Included in this Include a rate of revenues and a rate of revenues 36.3 million, 6.3 million, primarily due to the number of operating days for Bali and the tour. Variable charter revenues increase by 12.7 million, 12.7 million of Arabia One, of Arabia One. They'll contract and the commencement of the Galarne Regersone in Mexico. And lastly, management contract revenue increased by 2.1 million, primarily due to the recommencement of the GALAD. Total operating expenses were 171.2 million for the second quarter, for the second quarter, an increase of 49.4 million compared to the first quarter. This is also due to the volume of the four re-operating expenses, around 12.4 million. This, in total, gives us an operating income of $5 million, which is a $36.3 million, or 60% increase from the prior quarter. Further below the operating income line is the total financial expenses, decreasing by $6.3 million, mainly due to decrease in finance to the Mexico state, and the first quarter, with no comparable in the second quarter, in addition to positive FX movements. Income tax expense increased by 7.8 million, primarily due to a one-off asset for the Canada during the quarter, and decreased in tax expense in Africa. All of the above results in a net income of 1 million and 1 million of 52 million compared to the 2 million compared to the previous quarter. Adjusted EBITDA was 133.2 million, resetting by 1 million, 739 million, or 39%. Now moving into liquidity. Our free cash position at the end of Q2 was 92.4 million. In addition, we had 150 million undrawn under our revolving credit system, resulting in a total available liquidity of 242.4 million. Cash decreased by 77.8 million in comparison to the prior quarter, explained by the following. Net cash provided by operating activities were 6.3 million. This was highly impacted by 98.3 million in cash payment, which we make semi-annually on our senior secured bonds. Additionally, 20.8 million of income taxes were paid in the quarter. The cash flow from operating activities in the quarter is impacted by working capital bills. However, this is expected due to several reasons. First of all, First of all, we continue to see delays in collections in Mexico. However, due to reasons, positive development initiatives by the Mexican government, we expect this to improve in the second part of the year. Additionally, we have increased income experience, increased revenue, and that shows our results in the start-ups for new contracts in Bali, Iran, and Arabia 1, where services have been performed, but not yet. In addition, certain ring contract rates increased compared to the previous quarter. Net cash used in these investing activities was $13.4 million, the price of jacket position primarily as a result of long-term activation. We still expect maintenance capex levels for the year around $50 million. And in addition to these $50 million, a large portion of the contract preparation and activation costs for the RIG Valley were able to capitalize and classify as capex, as opposed to deferring expenses, as we normally do for contract startups. This is due to the RIG being a new build commencing its first contract. Lastly, net cash used in financing activities were 70.7 million, which relates to the semi-annual debt repayments on our senior secured notes due in 2028 and 2030. It's also worth adding that year-to-date, our free cash flow generation was 106.5 million. As Patrick summarized, in July, we announced an initiative to significantly strengthen our balance sheet and increase liquidity of approximately 200 million through an equity raise of 102.5 million and increases in revolving credit facilities of 84 million and a reduction in the minimum liquidity covenants. With these transactions, the Q2 pro forma liquidity increases to approximately 425 million, which consists of 192 million cash and 234 million in available RCS capacity. This strengthened liquidity position provides a solid foundation for pursuing opportunistic transactions and supporting future growth. With this, I will pass the word over to Bruno.

Thank you, Magnus. Year to date, Board Drilling has secured 14 new contract commitments, adding $318 million to our backlog. Several of these new commitments include options with the potential to significantly extend their duration and earn its visibility. Since our last report, we've secured high-quality contracts backed by our market-leading operational performance. In Vietnam, we received a multi-rig award from Hongmong for our rig store and gumball, totaling approximately 500 days, including priced options. Both contracts are expected to commence in early Q4 in direct continuation of the rig-rig-rigging contracts, clearly demonstrating our ability to eliminate idle time and maximize asset utilizations. These awards strengthen our market position in Vietnam, where we see near-term demand growth in Southeast Asia. In the Middle East, the RIG Arabia II received a 500-day contract expected to commence in early September, enabling the RIG to return to the active fleet. While the standard has been awarded on a competitive basis, the RIG's track record of high performance allowed us to collaborate with the customer around certain performance incentives which could result in day rate uplifts of up to 10% to 15%. In Mexico, the RON had a 100-day option exercised by ENI, keeping the rate contracted into early 26. As part of this extension, the parties agreed to add another set of options to their contract that if exercised would result in full year coverage for 2026. And lastly, in June, the OLDN received a notice of suspension by PMAX, Following this, we secured a letter of intent from an independent oil company in Mexico for an approximately 75-day program expected to commence in late August. In addition to these awards, we have converted the previously announced LOAs for the Scout in Thailand and the Norva in West Africa into contracts. As you note in our fleet status report, the award associated with the Norva in West Africa has now been assigned to the NAT contract. which will enable us to optimize scheduling flexibility and maximize revenue days. On the back of the recent contracts, our 2025 kit coverage has now reached a robust 84% at an average day rate of 145. This is in line with our earlier targets of achieving 80% to 85% coverage in the year, and we see potential for further improvements as we have line of sight of additional contracts for the rigs NAT and P1, which still has open capacity this year. Our 2026 coverage, including price options, now stand at 47%, a 12-point improvement since our last report. Mexico remains a significant and strategically important part of our portfolio, representing circa 20% of our available coverage in 2026. The announcements made by the Mexican government last week provide us with increased confidence in sustained rate demand and contract stability for a raising country. I'll cover these in more detail in a few minutes. From a macro perspective, the oil and gas sector continues to contend with a complex global environment recently shaped by regional conflicts, uncertainty over global trade tariffs, and OPEC's accelerated rollback of its 2.2 million barrels per day voluntary costs. Regional conflicts have continued to underwrite the fragility of the global oil and gas supply chains, with escalations in the Middle East causing Brent prices to reach highs of 75 in June and reviving discussions about the importance of pragmatic government policies, as illustrated by the Dutch government's reinstated commitment to develop local gas and New Zealand's reversal of its prior ban on new offshore licenses. Despite this complex environment, Brent crude prices have remained resilient. averaging approximately 68 in Q2, a level that continues to support the development of shallow water projects, which offer some of the lowest break-evens and faster cash flow generation to our customer. Looking specifically at jackups, global utilization has remained generally steady, with modern rate market utilization holding above 90%. Day rates have continued to experience downward pressure as the market works to absorb the excess capacity resulting from the salary suspensions. While more than half of the modern rig capacity from this suspension has been absorbed, we estimated that less than 10 modern units remain available and competitive in international markets. Positively, visible incremental demand in the Middle East, particularly in Kuwait and the neutral zone, points towards a significant part of this oversupply being absorbed in the near future. While we acknowledge that these projects have experienced delays due to supply chain constraints and complex procurement processes, Recent orders of long lead items provide increased confidence that they remain on track to materialize in 26 and 27. Additionally, we are encouraged by recent data points relating to Arunco EPCI tender awards and nearing awards for an estimated total of $8 billion surpassing 2024 levels. These awards cover key projects such as Zulus and Marjan, and are understood to include several wellhead plaza farms. With jackup activity in Saudi already back to 2019 level, we believe further development of these projects are supportive of long-term incremental demand in the kingdom. In Southeast Asia and West Africa, demand has continued to track positively. Since the beginning of the year, contracted jackup count in these regions has increased by 10 rigs. While the inflow of rigs from the Middle East to both regions has pressure raised in recent opportunities, and more markedly in Southeast Asia, supply and demand in these regions is fundamentally balanced for modern units. In Mexico, we're encouraged by the government's renewed focus on strengthening Phemex liquidity and to restate the goal of achieving 1.8 million barrels per day in production. The government has laid out a clear plan, including a $12 billion debt offering to refinance short-term obligations, and another $13 billion facility to provide funding for PMAC's current and future projects. Given our track records of delivering best-in-class wells, BOR is uniquely positioned to capture incremental work, especially on private investment projects, which are projected to contribute to one-quarter of the country's production by 2033. The bottom line is this. Stronger liquidity at PMAC is a clear positive for BOR drilling. As supply and demand continue to rebalance, retirement activity has now resumed as owners of old assets face challenges to find suitable and economic redeployment opportunities. So far this year, according to IHS, four units have been retired and several others are being held for sale. We expect the dynamic to accelerate, particularly in the context of ongoing industry consolidation. In short, while near-term volatility may continue, the long-term fundamentals of the Jacob market remain compelling. Demand for oil and gas to support global energy needs is expected to continue to grow and support investment. Shallow water projects represent a sizable portion of global production, characterized by attractive break-even prices, short cash flow cycles, and relatively low emissions. With an aging global fleet and no new builds in sight, the supply of Jacob should continue to provide supporting high utilization levels and economics. We are consistently delivering our commercial strategy, maximizing 2025 backlog and building 2026 coverage while support our customers through the dynamic cycle. With that, I'll hand the call back to Patrick.

Thank you, Bruno. Now I'd like to discuss our CEO succession plan. Effective September 1, Bruno Morand will succeed me as Chief Executive Officer. At that time, I will transition to the role of executive chairman. This is the culmination of a multi-year succession plan, developing close partnership with our board of directors. I'm very pleased that the board has selected Bruno to lead board drilling into its next chapter. While many of you already know him, let me take a moment to highlight his background. Bruno is a 20-year veteran of the offshore drilling industry, with a strong track record in operational management, project execution, marketing, and customer relationship development. Prior to joining Board Drilling in 2017, he held senior roles with international offshore drilling companies, giving him broad exposure to global markets and operational complexity. Since joining Board Drilling, He has been deeply involved in managing the relationships with our key clients and strategic partners and has contributed significantly to our operational and commercial progress. His dynamic leadership, customer focus, and strategic insight position him to advance our current priorities and unlock new growth. To our shareholders, I want to underscore that this transition is not just about continuity. It's also about accelerating our momentum. Bruno brings a fresh yet experienced perspective that will be invaluable as we navigate evolving market dynamics and pursue new avenues of growth. Alongside this leadership change, I'm pleased to share updates to our board composition. Firstly, our founder and current chairman, Mr. Torolof Troim, will remain on the board as a director, ensuring continuity of our founding vision. Mr. Dan Raben will become our lead independent director, ensuring continuity of objective and independent governance. And Mr. Tiago Moradvili, founder and chief investment officer of Granular Capital and a longstanding shareholder, will be joining our board. Mr. Moradvili brings deep financial acumen and a strong shareholder perspective, which will help to further sharpen our focus on long-term value creation. These changes significantly strengthen our board's capabilities and align with our strategic vision for long-term success. The combined experience and diverse expertise of this group will support the leadership team in driving innovation, performance, and shareholder returns. Now, as I reflect on the past seven years, initially as a director and subsequently as CEO, I'm incredibly proud of what we have built together. During that time, we have assembled a world-class leadership team, expanded our presence in key markets, and established Board Drilling as the leading international jack-up drilling contractor. The strong foundation we stand on today is a direct result of the hard work and dedication of our employees, the continued support of our customers, and the confidence of our shareholders. and I sincerely thank each one of them for that. Looking ahead to this next chapter, I'm excited about the path ahead for board drilling, and I'm confident in our ability to deliver on our long-term vision and create value for our shareholders. Thank you. Ladies and gentlemen, we are now ready to go to Q&A.

Thank you. And as a reminder, to ask a question, you will need to press star, one, and then one, on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please kindly ask one question and possibly a follow-up question at a time to leave room for other participants. If you do not have any further questions, you can please rejoin the queue. If you wish to ask a question via the webcast, please type it in into the question box and submit One moment for our first question, please. It's coming from the line of Eddie Kim with Barclays. Please proceed.

Hi, good morning. Just wanted to get an update on where things stand in Mexico. It's certainly great to see the Mexican government raising debt so Pemex can hopefully pay their suppliers like yourselves. But from an operational perspective, do you think the worst is sort of behind us in Mexico? You have, I believe, five jackups drilling for Pemex currently, most of which are coming off contract in the first half of next year. Just curious, what's your confidence level on extensions for these jackups and And looking even further ahead, how do you see maybe a Pemex rig count trending from here over the next, let's say, 12 to 18 months?

Very good, Eddie. Thanks for the question. Bruno here. So let me tackle that in small chunks here. But in the positive, what we know is the government announced the $13 billion facility, which is clearly earmarked to support vendor payments. for projects that are current and future in the PMAX portfolio. And there has been a hint that in 2026 there will be a similar facility that will come to support PMAX in getting back behind the strategy. So that is positive. It's hard to comment more. I think it's going to take a little bit of time for agreements to be put in place. There's obviously banking agreements associated before. revenues or revenue start to come through, but there seems to be a very clear pathway for that. So that is very positive, very positive for us. In terms of activity, what we see in Mexico at the moment is less about PMAIC's desire to continue with activity, and it's more about their ability to continue to pay vendors and sustainably continue operation. I think with the funding, the desire and the work scope has been there. and that the payment should enable now some of that activity to return in quite short near term. It is indeed positive. I think it does paint a better picture in a clear environment for us in Mexico going forward. We do have ongoing discussions about new contracts for multi-year work on our rigs, and we are quite optimistic and positive that we'll see those coming to a conclusion in very short term. So we'll update you more as we move along, but I think the optimism is certainly there.

Great. Great. Thank you. My follow-up is just on potential M&A. So you have a lot more dry powder now than you did three months ago. You mentioned potentially targeting some opportunistic transactions. Could you expand on that a bit for us? Are you looking to target maybe some larger corporate M&A? I know we had a a big merger announcement recently in the sector or more targeting smaller kind of asset purchases? And are you looking to target specific regions? Just curious on your thoughts on the opportunities and what you're looking for.

Yeah, Eddie, I think, I mean, part of the answer is probably already what you said in that with the recent announcements that have been done, any bit of color that we give probably immediately identifies exact direction and candidates of where we're thinking and how we're thinking about it. So given the fact that there have been some moves and some signs of consolidation in the market already, I think it's very difficult to comment in further detail. I think that the key maybe takeaway is that we look forward to see more consolidation in the space. We believe that the time is right for it, and we believe that that will go hand in hand potentially with actions that we will see happening in the deep water space as well. Out of all of that, I do think that there is going to be some interesting assets that might fall off, and that might be interesting for us as well. As you maybe remember from the Paragon, acquisition that we did. When we acquire, we also have no problem, provided that the valuation is right, that we cut up, in some cases, a significant amount of rigs that are not of the profile any longer that fit with our fleet. So we certainly look as well at parts of the market where we could rationalize further. But I think we'll have to leave it at that as additionally commentary, just because, I mean, the space where we operate in is relatively small and some others have made moves already. So I think we'll just have to keep our eye open here in the months to come and see how this space develops further.

Understood. Sounds good. Patrick? You navigated the company through some very challenging times, so a job well done, and I wish you the best in your next chapter.

Thank you.

Thank you. Our next question comes from the line of Doug Becker with Capital One. Please proceed.

Thank you. Patrick, you mentioned private investment projects are expected to play an increasing role in Mexico. Just wanted some color on the current status of private projects. Historically, it's been able to find – it's been difficult to find agreements that are suitable for all the parties. So just a little color in what milestones should we be keeping an eye out for that might show a broader acceleration here.

Yeah, I'll ask Bruno to give a bit more color on this, Doug.

Very good. Thanks for the question, Doug. No, the private investment is a reality in Mexico at the moment. If you look at our fleet, one of our rigs in Mexico, as we speak, is operating in a field called the Baca Blum, which is a private investment project. And the way to think about it, these are basically, in general, fields that are already identified by PMAX and sometimes relatively mature that are then assigned to a private investment group that has a 15-year timeline to develop these fields. and get remunerated for the additional production that they can get out of these fields. So it seems to be a quite attractive value proposition. It's one that incentivizes performance and at the same time reduces a bit of the strain on PMAC's balance sheet to fund some of these projects. Equally important is that these projects allow the investment group to actually get paid from production and consequently minimize as well some of the exposure to the PMAC's payment cycle. So that's a quite interesting thing. In terms of scale, the one that we're participating at the moment is the first one in country and started very successfully. In the recent plans from DMACC that were released last week, they have now a target and ambition to see those projects represent about a quarter of the total country production by 2033 and about 450,000 barrels a day at that point in time. So there's It's quite a significant growth expected and certainly a type of project that will value or benefit performance-oriented contractors like ourselves.

That definitely sounds encouraging. Maybe a quick one for Magnus. It wasn't clear to me, are you currently having conversations around the PEMEX accounts receivable being paid or is it just that the funding is coming in and obviously that bodes well?

Yes, thanks, Doug. I think it is a recent thing that we have received from Mexico through the announcements they have made, and we clearly stated they have $13 billion of financing program to pay their suppliers and vendors for work conducted in 2025, which makes us believe in the in that the payments will pick up in Mexico because we have seen that they have actually actioned this financing now. Although they have talked about it for a long time, at least now we see the action.

John, that's what I was getting at. Thank you very much.

Thank you. One moment for our next question. That comes from Frederick Steen with Clarkson Securities. Please proceed.

Hey, Patrick and team. And yeah, Patrick and Bruno, I guess it's fair to say congrats to you both if you view it as a double promotion here. So looking forward to continuing discussions in the years ahead as well, although in slightly different roles for the two of you. With that said, I am wanted i think mexico has been been well covered already but just maybe to magnus before i move to my main question what's the amount of outstanding receivables that relates to pemex on your balance sheet at the moment yeah so um currently we have around 60 65 million dollars of outstanding variables payments

from Mexico, which follows our comment in the first quarter where we received 120 million of cash receivables, which took down our receivable balance by approximately 75 percent, and then adding on the bearables that we have earned in the meantime. So that gets you to mid-60 million dollars.

Okay. No, that's very helpful. Thanks. Then with Mexico out of the way, I wanted to talk about the market in general and through that focusing a bit on Saudi. I think you said in the previous remarks that you feel quite comfortable that there's some incremental demand in the Middle East in other countries than Saudi, but that at some point Saudi will also add incrementally to its rig count. there's been some I think market reports of the last week that Saudi has contacted I think all their eight rig owners that have supplied offshore rigs for them to inquire about rig availability on suspended rigs and just wanted to you know hear if you have any commentary around that because there's not that much you know, that's needed on the demand side to potentially accelerate rates a bit. So, you know, anything helps on that front.

Yeah, indeed, indeed, Frederik. And so you heard the commentaries and they reflect what we've seen as well. I think at operational level, we have had previous discussions with Aramco about updating them, the status of the rig that operated with them earlier and what it would take to have them back. But I must say that these conversations so far have been very much on an operational level and not in a contractual basis. Obviously, we've said before that we expected Aramco to eventually come back to the market. Aramco is a very strong engineering company. At one point in time, when they designed that they needed another 40 rigs, certainly wasn't by a mistake in a calculation. They know that that demand is there. And I think that they encountered some issues with timing, maybe related to capital constraints in the kingdom. And we said before in several occasions that we expected that demand to eventually come back. It's fair to say that estimating Aramco's actions and timeline is far from an easy thing. And I think we're not going to be the ones trying to put a prediction on what happens. But indeed, I think the talks about the status of the rigs, as well as the positive new flows on the EPCI side in terms of award starts to give us a bit of a brighter picture for the kingdom. We are aware of reports talking about Aramco potentially bring rigs in the first quarter next year. That's not something we have particularly heard from Aramco. We'll have to watch. I think the moment seems to be coming closer and closer to the time that Aramco could be needing rigs. And as you said, I think any movements from Aramco at this stage with an oversupply that is not that significant will be very welcome and supportive to the market. So we'll have to see what happens in the coming weeks and months.

Thank you. That's a very good caller. Just a bit more broadly on your 2026 coverage, including options now, you're close to 50% at rates that are going to be higher than where the market is today. I see you working, and Mexico is definitely a part of this, of course, but as you're working with your coverage for 2026, how are you prioritizing utilization versus pushing day rates in the environment that you're in at the moment?

Nothing changed in terms of our strategy, Freddie. We're still looking at optimizing the utilization of our assets. We know that a rig idle has a significant impact to our economics, and it's important that we optimize the earnings potential of these rigs, and utilization remains king in a current environment. We do have a fair bit of rollovers as we walk into 2026. So irrespective of the improvement sentiment about the market being in an upwards position, or potentially start an upward trend, I think we're well positioned to capture an upside as it comes, but we'll focus at the moment in making sure that we have the best possible utilization for our fleet.

All right, and just one super quick follow-up on some rig specifics. You said that the NUT will now take the place of the Nureba for the work starting in late 2026. the NORVA has options at that point. Should we interpret the rig swap as that there's a high likelihood that those NORVA options will be executed or is there some other factors to consider? Thanks.

Well, there is that, Freddy. I think that the work that we've been doing on a NORVA has a good potential for the options to be exercised. And we said before that we think quite a few of our options have a potential to be exercised. Now, what equally is important as well is that the customer that has that re-contract on the NAT now has indicated a desire to potentially move that work earlier, subject to a few constraints and long lead items. So obviously having that work moved to the NAT allows us to potentially bring that forward if the customer is able to achieve an accelerated schedule. And that obviously would be very beneficial for the customer in terms of earlier production. but equally very beneficial for us in terms of improving our coverage for the year.

All right. That's very clear. Then I say thank you to you all and congrats again, Bruno, too, in particular on the role, new role.

Thanks, Roger.

Thank you. Our next question comes from the line of Dan Cutts with Morgan Stanley. Please proceed.

Hey, thank you and congrats Bruno and Patrick. Best of luck in the new roles. I wanted to ask about a couple of, I guess, a bit more emerging opportunities in the shallow water space or at least areas that historically haven't been thought of as growth areas. The first is on gas activity. Are there any ore rigs that are doing work in gas plays currently? And I think, Bruno, you mentioned a couple of positive developments, one of which was the Dutch government looking to develop more local gas. And you mentioned New Zealand as well. I'm not sure if that was a gas or oil opportunity or both. But just basically trying to get a sense of any work you're doing now in gas basins and any customer conversations or – opportunities you see for gas work moving forward. Thank you.

Very good, Dan. And indeed, we do have a sizable portion of our fleet that has been working in gas. I think if you think specifically about larger pockets, we have done a significant amount of work with E&I in Congo that is largely focused on LNG. and a very interesting project. We, at some point in time, had three rigs operating with ENI in that project. And then we do have other projects around the globe that involve gas, including the North Sea in the Netherlands, specifically, as I mentioned, which has a reinstated commitment to support the local gas development. We have been working very closely with ONEDS in the North Sea on a very interesting development, one of the largest gas fields to be developed in North Sea in recent years. While the new flow is positive, the project has faced some challenges on permitting timeline, but we do expect that to be back in a schedule very, very soon. So gas is part of what we do around the globe. Our rigs are very capable and suitable for that, and it is a decent chunk of our portfolio.

Great. That's really helpful. Thank you for that. And then next one probably for Bruno as well. It's more on the type of work that the bore fleet or that the shallow water fleet globally more broadly is doing and any kind of trends that you're seeing there. But basically it's, you know, as kind of global oil and gas basins mature, you're hearing a lot more service companies talking about mature field work or, you know, more greenfield versus brownfield. But, yeah, I was just wondering if you could share any thoughts on what you're seeing in terms of trends in, you know, development versus that kind of more mature focused intel and prevention type work. Thanks.

Yeah, fair. And it's fair to say that a large chunk or the largest lion's share of the work that we do is development work. So basically in discovered and somewhat mature fields. And I think that that's going to stay. I think that's one of the beauties of the shallow water market is that a lot of these projects have infrastructure in place. And even if you're doing some near-field developments, we can bring barrels to the pipeline relatively quick. We have seen, though, an increase in uptick in investment for exploration projects in some areas more so than others. So if you think about Asia, we do see now more and more coming to the pipeline in terms of future exploration work in places such as, for example, Malaysia. And equally in West Africa, it has been a quite significant part of our portfolio, whether it's complete greenfield developments or whether it's near-field new exploration programs as we've seen, for instance, with BWE in West Africa. So we are participating in both. We do think that in the coming years, more investment in exploration will be required. There has been very subdued investment in exploration in the last couple of years. But we are placed to basically develop work both in exploration and development work.

Great. Really helpful and congrats again to you both. I'll turn it back. Thank you so much.

Thank you. Our next question comes from Greg Brody with Bank of America. Please proceed.

Hey, guys. Just a few sort of subtle questions as a lot was covered. You alluded to that the NET has some opportunity to move up some work. but as the way the contract stands today, there's a decent amount of white space between the inclusion of the current contract. How do you think about the use of that rig and the options there? You mentioned the opportunity to have it go to work early. I'm curious how much early and are there other opportunities?

Very good. And we're working on a set of opportunities, not one only, but a set of opportunities, Greg. And we have been working on both a project that could have a commencement this year, optimizing our coverage for this year, as well as some projects in the region for the earlier part of 2026. So if we're successful on these and we've been inching closer and closer, that would provide a very nice bridge over to the work that we already have assigned for the rig. But we'll have to see as things materialize in the coming weeks. I feel optimistic that we'll be able to have most of that white space, if not all of it, contracted for that rig and a nice utilization for that rig in West Africa.

And you mentioned the exploration uptick. One of your peers has alluded to the fact that some of that maybe trying to take advantage of short-term availability of rigs to go after some concepts. Do you see those opportunities potentially in lower day rates just to put more rigs to work in the interim, or do you feel like the day rates are holding up for those opportunities?

Yeah, and indeed, I think that the theme of the industry has been obviously protecting coverage, and that has led, as I mentioned in an earlier notes to more aggressive behaviors in different regions more markedly than others. If I think about the not specifically that we were talking about in West Africa, it's important to note that in West Africa, what we have experienced over the quarters is that a lot of the customers are extremely focused on getting rigs that are in the region and particularly have a very strong reputation for operational delivery. We oftentimes are looking at programs that are slightly shorter in nature. And I think our customers understand that predictable results, good operational efficiency, stacks up higher than costing, and the risk that sometimes comes with taking a less known name or maybe a rig outside of the region. So we will continue to balance that. I feel confident that for now the rate structure that we see in West Africa is pretty well maintained.

And just to turn to Mexico, I know there are a lot of questions asked there. I appreciate that all the capital raised and the facility they set up and their goals of Mexico are to encourage oil production and growth. Has the government communicated to you directly on sort of timing around resuming receivables, anything like that, or is this more you looking at the general policy statements and actions?

Yeah, no, we have not discussed anything directly with the government. Obviously, keeping in mind that our work in Mexico is not directly through PMAX, it's through a local conglomerate that we have been partners with. And therefore, I wouldn't expect that communication to have come directly to us. What we know is that they have been talking to local banks and institutions to start putting things in place. And the government themselves have indicated that they expect payments to be starting now in Q3. So we'll have to watch. Obviously, they've been working on a quite comprehensive solution for Mexico. We know that the regulatory and the bureaucratic state of the country sometimes force these things to take a bit more time than what we hope for. But nonetheless, the indications are positive that the flow of money should be sooner rather than later.

And then just the last one, obviously the equity raises create a lot of optionality for you. I'm curious if you think about that capital raise to potentially address some debt opportunistically. Is that a possibility?

I think we will obviously see how our liquidity will evolve throughout the year, especially with with Mexico in mind, and also on the day rates going into 2026 and how we fill up our coverage. But it's definitely something that we have as a tool in our capital allocation box and that we will consider. And recently, the debt has been trading below par, and it's obviously very attractive for us to look at buying back bonds. after the capital raise in the recent weeks that the bonds are back at par, which we obviously view as positive. I think it's also good for us to have this strength of good liquidity on the balance sheet. It puts us in a position of strength where we can act on other strategic opportunities that might come up. We've been talking about potential acquisitions or M&As. So I think it's just, we see it's valuable to have a strong position with our balance sheet as we have it today.

Makes sense. Thanks for the time, guys. Thank you.

Thank you. And this concludes the Q&A session. I will pass it back to Patrick Schorn for closing remarks.

Thank you, operator. So a few comments in conclusion. We delivered a strong Q2 adjusted EBITDA of $133.2 million and expect a similar activity and performance for the third quarter. In July, we have proactively strengthened the balance sheet and are now well positioned to execute on our long-term strategy. For the full year 2025, we're on track to deliver the consensus estimate of approximately $470 million in adjusted EBITDA. And Bruno Morant will be the CEO effective September 1, and I wish him all the best in doing that. Ladies and gentlemen, thank you very much.

And this concludes our conference. Thank you for participating. You may now disconnect.