OSLO, Norway, June 15, 2021 /PRNewswire/ -- Borr Drilling
Limited (the "Company", "Borr Drilling") (NYSE: BORR) and
(OSE: BORR) has five rigs working for joint ventures which are
jointly owned with our Mexican partner providing integrated well
services for Pemex. The services commenced in May 2019 and have provided Pemex with an
incremental production of approximately 125,000 barrels of oil per
day from 21 wells drilled so far. In our most recent meeting with
Pemex management we have received a very favourable review of the
performance and the cost efficiency of this operation. The
integrated well services joint ventures have received a request for
extension of this program, which in turn is expected to employ the
five Borr Drilling rigs until the end of 2022.
In connection with this extension, the Company and our Mexican
partner have entered into a Memorandum of Understanding ("MoU") to
make certain changes in the structures of the joint ventures, where
our Mexican partner will buy Borr Drilling's 49% stake of the
integrated services JVs Opex and Akal (the "IWS JVs"). The
transaction is expected to free up a gross amount of $28 million for Borr Drilling, representing
historic profits in the IWS JVs and some settlements of other
payables, which is incremental to the dayrate earnings resulting
from the provision of drilling services.
Simultaneously, Borr Drilling will acquire an incremental 2%
stake of the joint ventures performing drilling services (the
"Drilling JVs") from the Mexican partner, and by that hold a 51%
majority ownership position. The Drilling JVs will continue to earn
day rates from its main customers Opex and Akal through regular
drilling contracts. This will streamline the Company's
Mexican operation, reduce our risk, and over time lead to a more
stable cash-flow. The Company expects to close the transaction
within the third quarter of 2021.
As of the end of Q1 2021, Borr Drilling reported a receivable
balance of $30.3 million from its
related parties, mainly representing bareboat revenue and other
earnings due from the Drilling JVs. In addition, the Drilling JVs
has a positive working capital balance and retained profits
attributable to Borr Drilling. The $28
million gross settlement for the transaction is in addition
to this amount.
The cash generated by the Company's 13 operating rigs is
expected to cover the finance, stacking and G&A cash cost for
the third quarter 2021. Additionally, with improved regularity in
payments from Pemex, continued operation of Borr Drilling's rigs in
Mexico until 2022, the proceeds
from the sale of the IWS JVs, and an overall activity for the
Company in excess of 13 rigs should provide the Company with
sufficient liquidity runway until the current debt maturities in
2023. The Company is also optimistic about re-activations of
additional warm stacked rigs due to improved market conditions.
Hamilton, Bermuda
15 June 2021
This press release includes forward looking statements, which do
not reflect historical facts and may be identified by words such as
"potentially", "expected", "should" and "will" and similar
expressions and include statements relating to the commencement of
closing of the transaction, receivable balances, retained profit
and working capital, gross settlement, the operating margin of 13
operating rigs to cover the finance, stacking and G&A cash
costs for the third quarter 2021, regularity of payments from
Pemex, contracts of rigs, sufficient liquidity runway until the
current debt maturities in 2023, improved market conditions and
other non-historical matters. Such forward-looking statements are
subject to risks, uncertainties and other factors could cause
actual events to differ materially from the expectations expressed
or implied by the forward-looking statements included herein and
other factors described in the section entitled "Risk Factors" in
our prospectuses and filings with the Securities and Exchange
Commission. These forward-looking statements are made only as of
the date of this release. We do not undertake to update or revise
the forward-looking statements, whether as a result of new
information, future events or otherwise.
Contact:
Magnus Vaaler
ir@borrdrilling.com
Phone: +47 22 48 30 0
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SOURCE Borr Drilling Limited