Borr Drilling Limited has announced that it has been awarded letters of acceptance (LoAs) for work in the Asia Pacific region for two of its premium jack ups, of which one is a newbuild being activated. The contracts’ estimated duration, excluding options, will be for 365 days and 200 days respectively. The rigs are expected to commence contracts in the third quarter of 2020.
The company has received notices of early termination of contracts from Exxon Mobil for the rigs Gerd and Groa which are working in Nigeria under contracts originally committed until April 2021 and May 2021, respectively. The contracts for both rigs require 180 days notice for early termination. Borr Drilling is in discussions with Exxon Mobil with regards to planning the discontinuity of operations for both rigs following the early termination notices.
The company has received notice to stop operations for the Norve, working in Gabon for BW Energy. The rig finished operations in early April 2020, around 3 months before previously estimated.
Borr Drilling has also received a notice of early termination for the semi-submersible MSS1, which finished its contract on 25 March 2020, 1 month earlier than previously estimated. The rig is entitled to an early termination fee as per contract provisions.
Following its campaign with Neptune, the Prospector 5 has safely arrived in Harwich. The company received notification from its follow-on customer, Perenco, electing not to proceed with the previously announced contract for the rig. The rig is scheduled to commence operation for CNOOC in the North Sea between September and November 2020.
The net impact of the new contracts and the early termination of the existing contracts is estimated to affect the total revenue backlog negatively by approximately USD 16 million.
Furthermore, the rigs Odin and Galar have commenced operation for Pemex during Q1 2020, and the Njord is expected to commence operations with Pemex shortly. The rig Saga commenced operation in Vietnam for ENI in February 2020.
Borr Drilling is experiencing the impact of current unprecedented market conditions and the global market reaction to the COVID-19 pandemic, in particular as a result of the practical issues arising from government-imposed travel restrictions, border closures and quarantines.
The company reports it has managed to keep fleet utilisation to 99.5%, year to date, during these challenging times.