PresentationGood day, everyone, and welcome to the Paratus Energy Investor Call. Please note that this event is being recorded. [Operator Instructions]Robert JensenGroup CEO & Director Good day, everyone. This will be the second call that we have today given that we thought we had just concluded one before realizing it was not live. So apologies to everyone waiting. But welcome to this investor call for Paratus Energy Services Limited relating to today's announced sale of our Jack-up business, Fontis Energy ...

Borr Drilling Limited (NYSE:BORR) is one of the 11 Best High Volume Penny Stocks to Buy Now. On March 11, 2026, SEB Equities analyst Kim Andre Uggedal downgraded Borr Drilling Limited (NYSE:BORR) to Hold from Buy with a $5.45 price target, citing valuation and saying the recovery in the jack-up market is already reflected in the share price. On March 9, 2026, Borr Drilling provided an operational update following hostilities in the Arabian Gulf, where the company has four jack-up rigs deployed across Sau ...

Company Overview - Borr Drilling Limited is a global offshore drilling contractor specializing in shallow-water jack-up rigs, focusing on efficiency and safety [6] - The company operates a significant fleet and generates revenue primarily through long-term contracts with oil and gas companies, charging for rig usage, crew services, and operational support [9] - As of February 17, 2026, Borr Drilling's market capitalization is $1.37 billion, with a revenue of $1.02 billion and a net income of $75.30 million [4] Recent Developments - On February 17, 2026, Mason Capital Management LLC disclosed a new position in Borr Drilling Limited, acquiring 2,182,136 shares valued at approximately $8.79 million [2][3] - This new position represents 1.57% of Mason Capital's reportable assets under management as of December 31, 2025 [3] - Borr Drilling's stock price was $5.43 on February 17, 2026, reflecting a 78.6% increase over the prior year, significantly outperforming the S&P 500 by 62.68 percentage points [3] Market Context - The recent success of Borr Drilling's stock is attributed to the rising demand for jack-up drilling rigs, driven by increasing crude oil prices [10][11] - Over the last 12 months, Borr's stock has advanced by approximately 150%, indicating strong market performance [10]

Core Insights - The offshore drilling industry is being closely monitored, with a focus on forecasting future revenues based on backlog data [1] - Company fundamentals, industry-specific data, and broader economic trends are the primary basis for analysis [1] - Company presentations are designed to present data favorably, and no presentations have advised selling stock [1] Company Analysis - Noble's recent earnings report was highlighted for its backlog scrutiny, indicating its importance in revenue forecasting [1] - Transocean's performance is also under consideration, suggesting it may be a key player in the industry [1] Industry Trends - The analysis emphasizes the importance of backlog in predicting future revenues within the offshore drilling sector [1] - The approach taken is to rely on comprehensive data rather than solely on company presentations, which may be biased [1]

Company Overview - Borr Drilling Limited provides offshore drilling services, focusing on the ownership and operation of jack-up rigs for shallow-water oil and gas exploration and production [5] - The company generates revenue by contracting rigs and related services to oil and gas companies, charging for rig time, equipment, and work crews [5] Financial Performance - Borr Drilling reported a revenue of $1.02 billion and a net income of $75.30 million for the trailing twelve months (TTM) [4] - The company has a dividend yield of 4.03% as of February 20, 2026 [4] - As of the same date, shares of Borr Drilling were priced at $5.95, reflecting a 95% increase over the past year [3][4] Market Activity - GeoSphere Capital Management acquired 1,385,000 shares of Borr Drilling, valued at approximately $5.58 million, during the fourth quarter of 2025 [2] - This new position accounts for 1.8371% of GeoSphere's reportable assets under management [3] Industry Dynamics - The offshore drilling sector is highly cyclical, with improving contract activity expected to lift earnings sharply [1][7] - Following years of underinvestment, offshore activity is recovering, leading to a significant rise in Borr's stock price [7] - The company's profitability is closely tied to the demand for rigs and contract prices, which can fluctuate based on industry activity [9][10] Investment Considerations - Investors should monitor whether higher day rates and stronger rig demand can be sustained, as these factors will influence Borr's cash flow [10] - High fleet utilization and manageable debt levels are critical for Borr to capitalize on industry improvements [10]

Financial Performance - Total operating revenues for Q4 2025 were $259.4 million, a decrease of $17.7 million or 6% compared to Q3 2025[12] - Net loss for Q4 2025 was $1.0 million, a decrease of $28.8 million compared to net income of $27.8 million in Q3 2025[17] - Adjusted EBITDA for Q4 2025 was $105.2 million, a decrease of $30.4 million or 22% compared to Q3 2025[17] - Total operating revenues for FY 2025 were $1,020.8 million, a slight increase from $1,010.6 million in FY 2024, driven by dayrate revenue of $906.7 million[52] - Adjusted EBITDA for FY 2025 was $470.1 million, down from $505.4 million in FY 2024, indicating a decrease in operational efficiency[50] - Q4 2025 net loss was $1.0 million, compared to a net income of $26.3 million in Q4 2024, reflecting a significant decline in profitability[50] Cash and Liquidity - Cash and cash equivalents increased to $379.7 million in Q4 2025, up 67% from $227.8 million in Q3 2025[18] - Cash and cash equivalents rose significantly to $379.7 million as of December 31, 2025, compared to $61.6 million a year earlier, indicating improved liquidity[54] - Cash and cash equivalents at the end of the period on December 31, 2025, reached $380.7 million, a substantial increase from $62.5 million at the end of December 2024[58] - The total cash and cash equivalents and restricted cash increased to $380.7 million as of December 31, 2025, from $62.5 million a year earlier, indicating improved cash management[58] Debt and Liabilities - As of December 31, 2025, the Company had principal debt outstanding of $2,210.0 million, including various senior secured notes and convertible bonds[23] - Long-term debt stood at $2,021.0 million as of December 31, 2025, compared to $1,992.5 million in 2024, indicating a slight increase in leverage[54] - Total liabilities decreased to $2,403.0 million in 2025 from $2,426.3 million in 2024, suggesting improved financial stability[54] - The company incurred $94.7 million in interest paid for the three months ended December 31, 2025, compared to $89.6 million in the same period of 2024, reflecting increased financing costs[58] Operational Metrics - The technical utilization for working rigs was 98.8% in Q4 2025, with economic utilization at 97.8%[34] - The marketed utilization for jack-up rigs globally was 88.03% as of December 31, 2025, a decrease of 2.4 percentage points from the previous quarter[35] - Rig operating and maintenance expenses increased to $500.6 million in FY 2025 from $456.4 million in FY 2024, highlighting rising operational costs[52] Shareholder Equity and Issuance - The Company issued 21 million new common shares at $4.00 per share, raising gross proceeds of $84 million[27] - The company raised $80.3 million from share issuance during the three months ended December 31, 2025, contributing to its liquidity position[56] - The company’s total equity increased to $1,222.6 million as of December 31, 2025, from $993.3 million at the end of December 2024, indicating a strengthening balance sheet[60] - The company’s cash distributions paid were $4.7 million for the twelve months ended December 31, 2025, compared to $76.3 million in 2024, showing a decrease in shareholder returns[56] Asset Management - Total assets increased to $3,625.6 million as of December 31, 2025, up from $3,419.6 million in 2024, reflecting growth in the company's asset base[54] - The company reported a net cash used in investing activities of $124.5 million for the twelve months ended December 31, 2025, down from $409.4 million in 2024, reflecting a reduction in capital expenditures[56] Forward-Looking Statements - The company has no obligation to update forward-looking statements after the date of the report, which may affect future guidance[46]

Core Insights - The company has seen significant improvements in rig commitments and operational performance, indicating a recovery in the jackup market fundamentals, particularly in the Middle East and Mexico [1][5][20] Operational Performance - In Q4 2025, the company achieved a technical utilization rate of 98.8% and an economic utilization rate of 97.8%, with operational revenues totaling $259.4 million [2][6] - The adjusted EBITDA for Q4 was $105.4 million, bringing the full-year adjusted EBITDA to $470.1 million, which was at the top end of the guidance range [2][8] Fleet and Contracting - The company has expanded its fleet by acquiring five premium rigs from Noble, which are expected to enhance operational capabilities and support near-term opportunities [5][20] - As of now, the fleet coverage for 2026 stands at 64%, with the first half coverage at 80% due to new rig acquisitions and contract extensions [15][16] Market Outlook - The company anticipates a gradual recovery in day rates and earnings visibility into 2027, driven by increasing demand and a robust tender pipeline, particularly in the Middle East [6][20] - There are approximately 120 rig-years in the tender and pre-tender phase for opportunities commencing within the next 12 months, with expectations for awards by mid-2026 [16][29] Financial Position - The company reported a net loss of $1 million for Q4, with total operating expenses increasing to $192.1 million, primarily due to higher rig operating and maintenance costs [7][8] - Cash and cash equivalents as of December 31 were $379.7 million, with total liquidity of $613.7 million, providing a solid financial foundation for future operations [10][20] Customer Relationships - The company has secured several new contracts and extensions, including a two-year contract extension for the Njord in Mexico, highlighting strong customer relationships and operational reliability [12][14] - Improved payment terms with Pemex are expected to enhance cash flow stability moving into 2026 [50][51]

Financial Data and Key Metrics Changes - Total operating revenues for Q4 2025 were $259.4 million, a decrease of $17.7 million or 6.4% from Q3 2025, primarily due to a $16 million decrease in day rate revenue [8] - Adjusted EBITDA for Q4 2025 was $105.4 million, bringing full year adjusted EBITDA to $470.1 million, which was at the top end of the guidance range [4][9] - The company recorded a net loss of $1 million for Q4 2025, while full year net income was $45 million, with a 7% decrease in adjusted EBITDA compared to 2024 [9][18] Business Line Data and Key Metrics Changes - Technical utilization for Q4 2025 was 98.8% and economic utilization was 97.8%, indicating strong operational performance [3] - The company secured new commitments for 7 rigs since the last quarterly report, with a focus on filling idle space in the 2026 schedule [13][16] Market Data and Key Metrics Changes - The jackup market utilization remains steady at approximately 90%, with expectations for market conditions to firm as tenders are awarded [6] - In the Middle East, multi-year tenders are in progress for an estimated 13 rigs, and Pemex announced a 34% year-on-year increase in upstream CapEx [5][6] Company Strategy and Development Direction - The company is focused on expanding its fleet and has acquired 5 premium rigs from Noble, which are expected to enhance operational flexibility and scale [6][19] - The strategy includes a mix of short and long-term contracts to optimize fleet utilization while being mindful of market conditions [49] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of market fundamentals and expects improvements in the second half of 2026, with a clear recovery in day rates anticipated in 2027 [19] - The company is actively pursuing contracting opportunities and expects to secure commitments that will bring contract coverage above 70% [16][19] Other Important Information - Cash and cash equivalents as of December 31, 2025, were $379.7 million, with total liquidity of $613.7 million [11] - The company plans to return to the Oslo Stock Exchange with a full uplisting expected in the first half of 2026 [12] Q&A Session Summary Question: Outlook for idle rigs Sif and Freya - Management is confident about securing contracts for Sif in the coming months, while Freya may take longer, potentially by late 2026 or early 2027 [22][23] Question: Achievability of EBITDA consensus of $440 million - Management indicated that while it is early for formal guidance, the outlook for 2026 suggests a pathway to achieve activity levels modestly higher than 2025 [24][26] Question: Market conditions in the Middle East - Management noted that tenders from Aramco and KOC are in progress, with awards expected around mid-year, which could tighten the market [31][32] Question: Potential for further acquisitions - Management stated that while they are open to M&A opportunities, they are selective and focused on complementary assets rather than individual rigs [39] Question: Rate development trajectory - Management anticipates that higher activity levels will start impacting bidding levels in Q3 2026, following the conclusion of current tenders [45][46] Question: Contracting strategy - Management aims for a mix of short and long-term contracts, with flexibility based on market conditions and specific tender requirements [49][50]

Financial Data and Key Metrics Changes - Total operating revenues for Q4 2025 were $259.4 million, a decrease of $17.7 million or 6.4% from Q3 2025, primarily due to a $16 million decrease in day rate revenue [8][9] - Adjusted EBITDA for Q4 2025 was $105.4 million, bringing full year adjusted EBITDA to $470.1 million, which was at the top end of the guidance range [4][9] - The company recorded a net loss of $1 million for Q4 2025, while full year net income was $45 million, representing a 7% decrease compared to 2024 [9][10] Business Line Data and Key Metrics Changes - Technical utilization for Q4 2025 was 98.8% and economic utilization was 97.8%, indicating strong operational performance [3] - The company secured new commitments for seven rigs since the last quarterly report, enhancing fleet contract visibility [4][13] Market Data and Key Metrics Changes - In the Middle East, multi-year tenders are in progress for an estimated 13 rigs, with Pemex announcing a 34% year-on-year increase in upstream CapEx [5][6] - Overall jackup market utilization remains steady at approximately 90%, with expectations for market conditions to firm as tenders are awarded [6] Company Strategy and Development Direction - The company believes the jackup market has bottomed out and anticipates gradual recovery in fundamentals as demand increases [4] - The company plans to return to the Oslo Stock Exchange through a listing on Euronext Growth, with a full uplisting to the main list expected in the first half of 2026 [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about improving market dynamics in the second half of 2026, with expectations for a recovery in day rates and earnings visibility into 2027 [7][19] - The company highlighted the importance of filling idle space in the 2026 schedule while positioning the fleet to capitalize on improving market conditions [13][16] Other Important Information - The company completed a five-rig acquisition from Noble, which is expected to be immediately accretive to adjusted EBITDA and reduce debt per rig [19] - Cash and cash equivalents as of December 31, 2025, were $379.7 million, with total liquidity of $613.7 million [11] Q&A Session Summary Question: Outlook for idle rigs Sif and Freyja - Management is confident about securing contracts for Sif in the coming months, while Freyja may take longer to find work [22][23] Question: Achievability of EBITDA consensus of $440 million - Management indicated that while it is early for formal guidance, the outlook for 2026 suggests a pathway to achieve activity levels modestly higher than 2025 [24][25][26] Question: Middle East tender timeline - Management expects major tenders from Aramco and KOC to be awarded around mid-year, which could tighten the market [31][32] Question: Strategy for contract lengths - Management aims for a mix of short and long-term contracts, focusing on securing a baseline of backlog while being flexible with contract durations based on market conditions [47][49] Question: Payment normalization from Pemex - Management reported improved payment terms with Pemex, with expectations for continued normalization into 2026 [56][57] Question: Market dynamics and day rates - Management noted that day rates have been stable, with expectations for improvement following the awarding of tenders in the Middle East [42][45]

Financial Data and Key Metrics Changes - Total operating revenues for Q4 2025 were $259.4 million, a decrease of $17.7 million or 6.4% from Q3 2025, primarily due to a $16 million decrease in day rate revenue [8][9] - Adjusted EBITDA for Q4 2025 was $105.4 million, bringing full-year adjusted EBITDA to $470.1 million, which was at the top end of the guidance range [4][9] - The company recorded a net loss of $1 million for Q4 2025, while full-year net income was $45 million, with adjusted EBITDA decreasing by 7% compared to 2024 [9][10] Business Line Data and Key Metrics Changes - Technical utilization for the fleet was 98.8% and economic utilization was 97.8% in Q4 2025 [3] - The company secured new commitments for 7 rigs since the last quarterly report, with expectations for further coverage gains in the coming months [4][13] Market Data and Key Metrics Changes - In the Middle East, multi-year tenders are in progress for an estimated 13 rigs, and Pemex announced a 34% year-on-year increase in upstream CapEx [5] - Overall jackup market utilization remains steady at approximately 90%, with expectations for market conditions to firm as tenders are awarded [5] Company Strategy and Development Direction - The company believes the jackup market has bottomed out and sees gradual recovery in fundamentals as demand increases [4] - The company plans to return to the Oslo Stock Exchange through a listing on Euronext Growth, with a full uplisting to the main list expected in the first half of 2026 [12][20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the tendering pipeline, indicating that significant awards are expected by mid-2026, which could lead to improved market conditions [18][34] - The company anticipates that market conditions will continue to improve through the second half of 2026, with a clear recovery in day rates expected in 2027 and beyond [20] Other Important Information - Cash and cash equivalents as of December 31, 2025, were $379.7 million, with total liquidity of $613.7 million [11] - The company completed an equity offering raising gross proceeds of $84 million and an additional bond offering of $165 million [11][12] Q&A Session Summary Question: Outlook for idle rigs Sif and Freya - Management is confident that Sif will secure a contract in the coming months, while Freya may take longer, potentially going to work in late 2026 or early 2027 [22][24] Question: Thoughts on EBITDA for 2026 - Management indicated that while it is early for formal guidance, the outlook for 2026 suggests a modest increase in contracting days compared to 2025 [25][27] Question: Status of tenders in the Middle East - Management confirmed that major tenders from Aramco and KOC are in progress, with awards expected around mid-year [32][34] Question: Potential for further rig acquisitions - Management stated that while they are open to M&A opportunities, they are focused on complementary acquisitions rather than growth for its own sake [39][40] Question: Rate development trajectory - Management expects that higher activity levels will start impacting bidding levels in Q3 2026, following the awarding of tenders [46][47] Question: Contracting strategy for the fleet - Management emphasized the importance of a mix of short and long-term contracts, with flexibility based on market conditions [50][51] Question: Current status of rigs without contracts - Management indicated that rigs like Var and Freya may take longer to secure contracts, with a focus on developments in the Middle East as a potential catalyst [66]