Borr Drilling has bought a resale jack-up drilling rig at a 50% discount to the original contract.
The Troim-led company has acquired the newbuilding, Hull No. B378 (previously named Hakuryu-15), for $122m from Japan’s BOT Lease Co, an affiliate company of the Bank of Tokyo-Mitsubishi UFJ.
BOT Lease Co originally ordered the unit in 2014 for $240m for operation by Japan Drilling Co, which is undergoing corporate reorganisation due to insolvency.
Delivery had been scheduled for 2016, but instead the unit has been laid up at the Keppel FELS yard in Singapore.
“An important criteria for the transaction was a quick settlement before March 31, 2019 and the acquisition has been fully financed through an expedited establishment of a new secured financing facility arranged by two Nordic banks,” Borr said in a release on Monday.
Borr said the purchase was an “opportunistic deal” to acquire a high-specification rig at a knock-down price.
“The transaction does not indicate that Borr has a strong strategic desire to significantly increase the size of its existing fleet,” the company said.
Hull B378 has been built to the KFELS Super B Bigfoot design and will need approximately six months to be operationally ready from the yard.
The rig is able to drill to depths of 35,000 feet and has 2.2m lbs hook load capacity, a 75-foot cantilever and significant crane capacity.
Borr said these qualities make the unit ideal for drilling deep high-pressure, high-temperature (HPHT) wells.
New contracts
The newly acquired rig is similar in design to the five newbuildings Borr bought from Transocean in June 2017, which were acquired at the much higher price of $216m each.
Two of these five units, Saga and Skald, have since been delivered from the Keppel yard and have received letters of intent (LOIs) for “multi-year contracts at attractive terms”, commencing in the first quarter 2020, Borr said in a fleet update on Monday.
The owner did not reveal any further details, but analysis by VesselsValue.com has linked the contracts to QatarGas.
VV suggested the contracts will each be three years in duration at an all-in day rate in the low $100,000 range, including mobilisation fee, which would generate estimated EBITDA of $20m per rig.
In today's fleet update, Borr Drilling also confirmed that its jack-up rig Mist has been awarded a six-month contract in southeast Asia with an undisclosed operator, commencing in May.
Analysts at Clarksons Platou have said they expect this contract to be with Vestigo Petroleum in Malaysia.
Meanwhile, the LOI signed earlier this month for Borr’s rig Prospector 5 has turned into a firm contract with Neptune Energy in the Netherlands lasting from April to October, according to the fleet update.
Borr only has five of its delivered and active “premium” jack-ups without contract commitments.
