Tor Olav Troim's Borr Drilling is to drill new offshore wells in Mexico, following the award of a new contract by Petroleos Mexicanos (Pemex).
Nine new wells will be drilled under the contract, which will deploy Borr’s two brand-new PPL 400 jack-up rigs Grid and Gersemi, both of which were delivered in 2018.
Borr said it will collaborate with its partner and leading shareholder Schlumberger to provide end-to-end drilling and oilfield services during the Pemex contract.
Rune Magnus Lundetae, Borr's chief financial officer, told TradeWinds the contract will generate earnings equivalent to around $100,000 per day for the whole project, including services.
The 18-month contract will commence in the middle of this year and does not include extension options.
Reactivation
Maintaining utilisation of its drilling fleet remains a balancing act for Borr, with units commencing new contracts while others are finishing them without options for renewal.
Grid and Gersemi have been warm stacked since they were delivered from Sembcorp Marine’s PPL Shipyard in Singapore last year.
Excluding these units, eight of Borr's 19 “premium” jack-ups are currently warm stacked, mostly in Singapore, according to the company's latest fleet update, published 1 March.
Borr is in “advanced negotiations” for contracts for two other laid-up premium jack-ups, the 2018-built KFELS Super B Bigfoot Class rigs Saga and Skald, the update said.
Another laid-up rig, the 2018-built jack-up Prospector 5, has signed a letter of intent with an undisclosed operator for work in the offshore Netherlands from April to October this year.
Lundetae would not be drawn into commenting on whether firm contracts had been signed for Prospector 5, or whether negotiations were underway for any of the company's other drilling units.
Contracts for three other jack-up rigs will expire by the end of June and do not include options for extension.
Stack, scrap or stick?
Four of Borr’s older units, all built between 1991 and 2003, are cold stacked and two of them are not being marketed.
"We'll let you know as and when something happens, but right now there's no plan for sale or scrapping [of the older units]," Lundetae told TradeWinds.
Despite the number of laid-up rigs, Borr has no plans to delay delivery of the eight jack-ups it has under construction at the KFELS shipyard in Singapore, Lundetae told TradeWinds on Friday.
Almost all the newbuildings are scheduled for delivery in 2020, with the KFELS Super B Bigfoot Class rig Hild due to arrive in October this year.
The company sold 17 jack-ups last year, which resulted in a $17.5m gain.
2018 saw Borr’s revenues grow from $100,000 in 2017 to $164.9m for the full-year 2018, but the company’s operating expenses trebled over the same period to $353.2m.
This caused Borr to post a loss of $190.9m in 2018, compared with a $88m loss in 2017.
