Q4 2025 Borr Drilling Ltd Earnings Call

February 19, 2026

Operator: Good day, and thank you for standing by. Welcome to the Borr Drilling Limited Q4 2025 Results Presentation Webcast and Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, please press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. For the benefit of all participants on the call, please limit yourself to one question and a follow-up, so that everyone is given opportunity to ask questions. Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker, Mr. Bruno Morand, CEO. Please go ahead.

Speaker #1: Good day and thank you for standing by . Welcome to the Borr Drilling limited Q4 2025 results presentation , webcast and conference call At this time , all participants are in a listen only mode After the speakers presentation , there will be a question and answer session .

Speaker #1: To ask a question during the session , please press star one one on your telephone . You will then hear an automated message advising your hand is raised To withdraw your question , please press star one one again for the benefit of all participants on the call .

Speaker #1: Please limit yourself to one question and a follow up so that everyone is given opportunity to ask questions . Please be advised that today's conference is being recorded .

Speaker #1: I would now like to turn the conference over to your speaker , Mr. Bruno . Please go ahead .

Speaker #2: Good morning and thank you for participating in Borr Drilling fourth quarter earnings call on Bruno Morand . And with me here today in Dubai is Magnus Vaaler , our chief Financial officer First , covering the required disclaimers , I would like to remind all participants that some of the statements will be forward looking .

Bruno Morand: Good morning, and thank you for participating in Borr Drilling's fourth quarter earnings call. I'm Bruno Morand, and with me here today in Dubai is Magnus Vaaler, our Chief Financial Officer. First, covering the required disclaimers, I would like to remind all participants that some of the statements will be forward-looking. These matters involve risks and uncertainties that could cause actual results to differ materially from those projecting these statements. I therefore refer you to our latest public filings. For today's call, I'll start with a review of Q4 and highlight key developments since the quarter end. Magnus will then review our quarterly and full year financial results. I'll follow with a deeper look into the commercial execution, and we'll conclude with some comments on the business outlook. Let's get started. Before going to the results, I would like to take a moment to recognize our teams around the world.

Speaker #2: These matters involve risks and uncertainties that could cause actual results to differ materially from those projected in these statements. I therefore refer you to our latest public filings for today's call.

Speaker #2: I'll start with a review of Q4 and highlight key developments since the quarter end . Magnus will then review our quarterly and full year financial results I'll follow with a deeper look into the commercial execution , and will conclude with some comments on the business outlook .

Speaker #2: Let's get started. Before going to the results, I'd like to take a moment to recognize our teams around the world. During the fourth quarter, several of our rigs achieved noteworthy safety.

Bruno Morand: During the fourth quarter, several of our rigs achieved noteworthy safety milestones. That includes the rigs Ida and Grid, reaching six and three years LTI free, respectively, and the rigs Gunlod and Gerd, reaching one year incident-free. Additionally, we're proud to highlight that our rig, Arabia III, has received an award from Aramco's offshore department for the rig with the best safety score in 2025. These achievements underscore the team's commitment to safety, and I would like to take this opportunity to thank each member of the Borr Drilling family for their efforts. Now on to the results. Our operational performance in the fourth quarter was solid, with technical utilization of 98.8% and an economic utilization of 97.8%. Fourth quarter operational revenues total $259.4 million.

Speaker #2: That includes the rigs idle and grid reaching six and three years , LTI free , respectively , and the Rigs Gunnlöd and Gerd reaching one year incident free Additionally , we're proud to highlight that our Rig Arabia three has received an award from Aramco's Offshore department for the rig with the best safety score in 2025 .

Speaker #2: These achievements underscore the team's commitment to safety , and I would like to take this opportunity to thank each member of Borr Drilling family for their efforts Now into the results Our operational performance in the fourth quarter was solid with technical utilization of 98.8% and an economic utilization of 97.8% .

Speaker #2: Fourth quarter operational revenues totaled 259.4 million . Adjusted EBITDA of 105.4 million came in line with our expectations , bringing full year adjusted EBITDA to 470.1 million at the top end of the guidance range .

Bruno Morand: Adjusted EBITDA of $105.4 million came in line with our expectations, bringing full-year adjusted EBITDA to $470.1 million at the top end of the guidance range. This performance underscored the resilience of our organization, which navigated several headwinds in 2025 while delivering strong operational and financial execution. Our fleet contract visibility continues to improve as we reduce remaining open days. Recent awards and extensions have increased 2026 coverage to 80% in the first half and 48% in the second half, including the recently acquired rigs. Since our last quarterly report, we secured new commitments for seven rigs and expect further coverage gains in the coming months as we progress negotiations on multiple active leads. We believe the jackup market bottom is behind us now, and we see fundamentals recovering gradually as demand increases.

Speaker #2: This performance underscored the resilience of our organization , which navigated several headwinds in 2025 while delivering strong operational and financial execution . Our fleet contract visibility continues to improve as we reduce remaining open days Recent awards and extensions have increased .

Speaker #2: 2026 coverage to 80% in the first half , and 48% in the second half , including the recently acquired rigs Since our last quarterly report , we secured new commitments for seven rigs and expect further coverage gains in the coming months as we progress negotiations on multiple active leads .

Speaker #2: We believe that Jackup market bottom is behind us now , and we see fundamentals recovering gradually as demand increases Most notably in the Middle East Multi-year tenders are in progress for an estimated 13 rigs in Mexico .

Bruno Morand: Most notably in the Middle East, multi-year tenders are in progress for an estimated 13 rigs. In Mexico, we're seeing better visibility of payments and a more positive operating outlook. These improvements are being supported by financial measures introduced by the government, while at the same time, Pemex announced plans for a 34% year-on-year increase in upstream contracts and reaffirmed its mandate to raise production. Overall, mobile jackup market utilization remains steady at approximately 90%. As tenders are awarded and available supplies absorbed, we expect market conditions to firm. Against this backdrop, we're pleased to have expanded our fleet to the accretive acquisition of 5 premium rigs from Noble. These rigs are highly complementary to our existing portfolio and well suit the capacity to pursue near-term opportunities. Integration is in progress and ahead of expectation.

Speaker #2: We're seeing better visibility of payments and a more positive operating outlook . These improvements are being supported by financial measures introduced by the government , while at the same time , Pemex announced plans for a 34% year on year increase in upstream CapEx and reaffirmed its mandate to raise production Overall .

Speaker #2: Modern jackup market utilization remained steady at approximately 90% as tenders are awarded and available supplies absorbed. We expect market conditions to firm against this backdrop.

Speaker #2: We're pleased to have expanded our fleet to the accretive acquisition of five premium rigs from Noble . These rigs are highly complementary to our existing portfolio and well-suited capacity to pursue near-term opportunities .

Speaker #2: Integration is in progress , and ahead of expectations Looking ahead , market dynamics are set are set the stage for improvements in the second half of 2026 and are recovering day rate and earnings visibility into 2027 .

Bruno Morand: Looking ahead, market dynamics are setting the stage for improvements in the second half of 2026, a recovering day rate, and earnings visibility into 2027. But before I hand the call over to the Q&A, I'll hand the call to Magnus to discuss our financial results.

Speaker #2: But before I add color to this , I'll hand the call to Magnus to discuss our financial results .

Speaker #3: Thank you . Bruno . I will now go into some details of the financials of the fourth quarter . Total operating revenues was 259.4 million , a decrease of 17.7 million , or 6.4% , from Q3 This is mainly explained by 16 million decrease in day rate revenue , primarily due to rigs transitioning into contracts with lower day rates .

Magnus Vaaler: Thank you, Bruno. I will now go into some details of the financials of Q4. Total operating revenues was $259.4 million, a decrease of $17.7 million, or 6.4% from Q3. This is mainly explained by $16 million decrease in day rate revenue, primarily due to rigs transitioning into contracts with lower day rates. The activity level in terms of total number of operating days, stayed even over the two quarters. A decrease in bareboat charter revenue explains a further $3.1 million decrease, primarily due to the Grid's end of contract and its planned transfer to a contract in Angola. These decreases are offset by $1.4 million increase in OEM revenue.

Speaker #3: The activity level in terms of total number of operating days stayed even over the two quarters , a decrease in bareboat charter revenue , explains a further 3.1 million decrease , primarily due to the grids and the contract , and is planned transferred to a contract in Angola These decreases are offset by 1.4 million increase in oil revenue Total operating expenses for the fourth quarter were 192.1 million , an increase of 13.2 million , or 7.4% , compared to the third quarter .

Magnus Vaaler: Total operating expenses for the fourth quarter were $192.1 million, an increase of $13.2 million, or 7.4% compared to the third quarter. The increase in cost was primarily due to $11.6 million increase in rig operating and maintenance expenses, attributable to increase in personnel costs, accelerated amortization of deferred costs for the rig Hild, and reimbursable expenses. Overall, for the quarter, we recorded a net loss of $1 million and adjusted EBITDA of $104.5 million. Looking at full year 2025, net income was $45 million, and full year adjusted EBITDA came in at $470.1 million, a decrease of 7% compared to 2024. Moving into cash.

Speaker #3: The increase in costs was primarily due to an $11.6 million increase in rig operating and maintenance expenses, attributable to an increase in personnel costs, accelerated amortization of deferred costs for the rig Hill, and reimbursable expenses. Overall, for the quarter, we recorded a net loss of $1 million and adjusted EBITDA of $105.2 million.

Speaker #3: Looking at full year 2025 net income was 45 million and full year adjusted EBITDA came in at 470.1 million , a decrease of 7% compared to 2024 .

Speaker #3: Moving into cash . Cash increased by 151.9 million . In comparison to the prior quarter , and is primarily driven by the following 34.8 million cash from operations , which was which is after 94.7 million of interest payments and 8.8 million of cash taxes paid We spent 52.1 million in investing activities consisting of 36 million deposits for the five rig acquisition and 15.9 million additions to Jakob rigs And lastly , cash from financing activities was 169.2 million , consisting of 159.3 million net proceeds from the bond issuance , 80.3 million net proceeds from share issuance , net issuance costs offset by 70.8 million repayment of debt in the quarter The company's cash and cash equivalents as of December 31st were 379.7 million .

Magnus Vaaler: Cash increased by $151.9 million in comparison to the prior quarter and is primarily driven by the following: $34.8 million cash from operations, which is after $94.7 million of interest payments and $8.8 million of cash taxes paid. We spent $52.1 million in investing activities, consisting of a $36 million deposit for the five-rig acquisition and $15.9 million additions to jackup rigs. And lastly, cash from financing activities was $169.2 million, consisting of $159.3 million net proceeds from the bond issuance, $80.3 million net proceeds from share issuance, net of issuance cost, offset by $70.8 million repayment of debt in the quarter. The company's cash and cash equivalents as of December 31 were $379.7 million.

Speaker #3: In addition , we had 234 million of undrawn revolving credit facilities , resulting in total liquidity of 613.7 million . It's worth noting after year end , we completed the five rig acquisition from noble and paid 174 million in cash consideration in January .

Magnus Vaaler: In addition, we have $234 million of undrawn revolving credit facilities, resulting in total liquidity of $613.7 million. It's worth noting, after year-end, we completed the 5-rig acquisition from Noble and paid $174 million in cash consideration in January. The remaining consideration was settled by way of a $160 million set of credits. We are very pleased with the 5-rig acquisition and the accompanying capital markets transactions we concluded in December. We completed an offering of an additional $165 million of bonds during 2030, issued as part. In addition, we completed an equity offering, raising gross proceeds of $84 million for the same purpose. Both transactions saw very high investor interest and were significantly oversubscribed.

Speaker #3: The remaining consideration was settled by way of $150 million in seller credits. We are very pleased with the five rig acquisition and the accompanying capital market transactions.

Speaker #3: We concluded in December . We completed an offering of an additional $165 million of bonds , due in 2030 , issued as part .

Speaker #3: In addition, we completed an equity offering, raising gross proceeds of $84 million for the same purpose. Both transactions saw very high investor interest and were significantly oversubscribed.

Speaker #3: In December, we also made the first steps to return to the Oslo Stock Exchange through listing on the Euronext Growth. The decision was made after seeing high investor interest from the Norwegian and European investor base.

Magnus Vaaler: In December, we also made the first steps to return to the Oslo Stock Exchange through a listing on the Euronext Growth. This decision was made after seeing high investor interest from the Norwegian and European investor base, in addition to strong following by Norwegian sell-side analysts. We are planning on a full uplisting to the main list on Oslo Stock Exchange in the first half of 2026. Then I'll pass the word back to Bruno.

Speaker #3: In addition to a strong following by Norwegian sell-side analysts, we are planning on a full uplifting to the main list on the Oslo Stock Exchange in the first half of 2026.

Speaker #3: Then I'll pass the word back to Bruce.

Speaker #2: Thank you Magnus . We have been busy on a contract in front to start the year . Year to date 2026 . We've secured five new commitments .

Bruno Morand: Thank you, Magnus. We have been busy on the contracting front to start the year. Year to date, 2026, we've secured 5 new commitments, adding approximately $145 million to our backlog. Together with the 2 contracts we secured in December, this marks 7 new commitments since our last quarterly report. I'm pleased to see both short- and long-term commitments in this mix. Filling idle space in our 2026 schedule remains a key focus, while at the same time, we're mindful about positioning our fleet to capitalize on improving market conditions from late 2026 and onwards. I'll now spend time discussing the commitments we've secured since the last quarterly report. In Americas, the Ran received a 1-well extension with Eni in Mexico. The well has an anticipated duration of 75 days, keeping the rig on firm contract through March 2026.

Speaker #2: Adding approximately $145 million to our backlog. Together with the two contracts we secured in December, this marks seven new commitments since our last quarterly report.

Speaker #2: I'm pleased to see both short and long term commitments in these mix . Feeling idle space in our 2026 schedule remains a key focus , while at the same time , we're mindful about positioning our fleet to capitalize on improving market conditions .

Speaker #2: From late 2026 and onwards I'll now spend time discussing the commitments we secured since the last quarterly report in America's The Run received a one .

Speaker #2: Well extension with Eni in Mexico. The well has an anticipated duration of 75 days, keeping the rig on firm contract through March 2026.

Speaker #2: Eni remains a core customer of ours in Mexico and globally. Ongoing engagements leave us reassured that we'll have more positive news soon for the run. Additionally, the Odin secured a contract for two wells plus an optional well with an undisclosed operator in the United States. The campaign is expected to commence in July 2026, with an estimated firm duration of 120 days.

Bruno Morand: Eni remains a core customer of ours in Mexico and globally. Ongoing engagements leaves us reassured that we'll have more positive news soon for the Ran. Additionally, the Odin secured a contract for two wells, plus an optional well with an undisclosed operator in the United States. The campaign is expected to commence in July 2026, with an estimated firm duration of 120 days. As a result, the Odin is now committed into November, with options that could keep the rig utilized in the US through mid-2027. Staying in the Americas, today, we announced a two-year contract extension for the Njord in Mexico, keeping the rig committed into 2028. This extension highlights the strength of our business in Mexico, a market that remains critical to the jack-up industry.

Speaker #2: As a result , the old and is now committed into November with options that could keep the rig utilized in the US through mid 2027 .

Speaker #2: Staying in Americas today , we announced a two year contract extension for the New Mexico keeping the rig committed into 2028 . This extension highlights the strength of our business in Mexico , a market that remains critical to the Jackup industry Moving to West Africa , the not secured work with Eni keeping the rig busy through the end of this month .

Bruno Morand: Moving to West Africa, the Nap secured work with Eni, keeping the rig busy through the end of this month. The rig is scheduled to move to Nigeria in early Q2 to commence its eleven-month contract with Shell. In Asia, Brunei Shell extended the Saga contract by an additional 5 months. The Saga is now committed into April 2027, with an additional one-year option remaining available under the contract. In Thailand, the Ida secured a 75-day extension with PTTEP, extending its commitment into Q2 of this year. And finally, in Vietnam, we have entered into a contract with Tan Long for the Gunlod for a one-well campaign anticipated to commence in May. The well has an estimated duration of 70 days and should place the rig well to find follow-on work in the region.

Speaker #2: The rigs are scheduled to move to Nigeria in early Q2 to commence its 1111 month contract with shell in Asia . Brunei shell extended the saga contract by an additional five months .

Speaker #2: The saga is now committed into April 2027 , with an additional one year option remaining available under the contract . In Thailand , the Ida secured a 75 day extension with Pttep extending its commitment into the second quarter of this year .

Speaker #2: And finally , in Vietnam , we have entered into a contract with Tang Long for the gun lot for a one . Well campaign anticipated to commence in May The well has an estimated duration of 70 days and should place the rig well to find follow on work in the region .

Speaker #2: I remain proud of the continued contracting success, which is a testament to our strong customer relationships and ability to deliver reliable and exceptional operational performance day in and day out. Now, looking ahead, as of today, our 2026 fleet coverage stands at 64% with the inclusion of five newly acquired rigs.

Bruno Morand: I remain proud of the continued contracting success, which is a testament to our strong customer relationship and ability to deliver reliable and exceptional operational performance day in and day out. Now, looking ahead, as of today, our 2026 fleet coverage stands at 64%. With the inclusion of 5 newly acquired rigs, our coverage for the first half of the year currently sits at 80%. As a comparison, before factoring these new rigs, this coverage figure would have been approximately 85%. Based on current customer engagements, we're confident that in the coming months, our fleet will continue to secure commitments and bring our contract coverage above 70%. On a full year basis, we see a pathway that allows contracting days in 2026 to modestly exceed the numbers of days achieved in 2025.

Speaker #2: Our coverage for the first half of the year currently sits at 80% . As a comparison , before factoring in these new rigs , this coverage figure would have been approximately 85% based on current customer engagements .

Speaker #2: We're confident that in the coming months , our fleet will continue to . Secure commitments and bring our contract coverage above 70% on a full year basis .

Speaker #2: We see a pathway that allows contracting days in 2026 to modestly exceed the numbers of days achieved in 2025 . In parallel . And as I noted by various industry analysts , tender activity is entering levels not seen since January 2023 , according to information from Petro data , there are approximately 120 rig years on the tender and pre-tender phase for opportunities commencing within the next 12 months and based on operator schedules , we anticipate that meaningful amount of these will be awarded by mid 2026 .

Bruno Morand: In parallel, and as I noted by various industry analysts, tender activity is entering levels not seen since January 2023. According to information from Petrodata, there are approximately 120 rig years on the tender and pre-tender phase for opportunities commencing within the next 12 months. Based on operator schedules, we anticipate that meaningful amount of these will be awarded by mid-2026. Should this materialize, we believe that several of the awarded rigs will need to undertake lengthy contract preparations, leading to a boost in utilization from this year. Noting the strength of the tendering pipeline, coupled with current utilization levels, I remain optimistic that the foundation is set for a positive momentum as we progress to 2026.

Speaker #2: Should these materialize , we believe that several of the awarded rigs will need undertake lengthy contract preparations , leading to a boost in utilization from this year Noting the strength of the tendering pipeline , coupled with current utilization levels , I remain optimistic that the foundation is set for a positive momentum as we progress through 2020 2026 .

Speaker #2: To close , I would like to reiterate key points around our 2025 execution and leave you with some thoughts on the business outlook at the beginning of last year , we indicated that we were comfortable with consensus for full year adjusted EBITDA that stood at 460 million during the year .

Bruno Morand: To close, I would like to reiterate key points around our 2025 execution and leave you with some thoughts on the business outlook. At the beginning of last year, we indicated that we were comfortable with consensus for full-year Adjusted EBITDA that stood at $460 million. During the year, however, we faced unforeseen headwinds, including temporary contract suspensions and sanction-related contract terminations. We responded by leaning into the Borr Drilling platform, which continues to be our competitive advantage. We fill the white space through close customer relationships, deep market knowledge, and our track record of safe and reliable execution. As a result, we delivered full-year Adjusted EBITDA of $470 million, which was at the top of our final guidance range.

Speaker #2: However , we faced unforeseen headwinds , including temporary contract suspensions and sanction related contract terminations . We responded by leaning into the Borr Drilling platform , which continues to be our competitive advantage .

Speaker #2: We feel the whitespace through close customer relationships , deep market knowledge and our track record of safe and reliable execution . As a result , we delivered full year adjusted EBITDA of 470 million , which was at the top of our final guidance range Further , in 2025 , we took decisive action and completed successful equity and debt transactions that strengthen our liquidity and position .

Bruno Morand: Further, in 2025, we took decisive action and completed successful equity and debt transactions that strengthened our liquidity and positioned the company to pursue consolidation opportunities. Then in December, we announced the accretive acquisition of five premium jackups. We act opportunistically and bought these assets at an attractive price at a point in the cycle when demand is improving. We expect the transaction to be immediately accretive to Adjusted EBITDA and to reduce our debt per rig. Looking ahead, we expect market conditions to continue improving through the second half of 2026, with ongoing dynamics supporting a clear recovery in day rates in 2027 and beyond. Our expanded fleet will provide a good scale and operational flexibility, providing Borr Drilling to deliver long-term value to our shareholders. With that, I'll now turn the call over to Q&A.

Speaker #2: The company to pursue consolidation opportunities . Then , in December , we announced the accretive acquisition of five premium Jacobs . We act opportunistically and bought these assets and attractive price at a point in the cycle when demand is improving We expect the transaction to be immediately accretive to adjusted EBITDA and to reduce our debt per rig Looking ahead , we expect market conditions to continue improving to the second half of 2026 with ongoing dynamics supporting a clear recovery in day rates in 2027 and beyond .

Speaker #2: Our expanded fleet will provide us with scale and operational flexibility, allowing Borr Drilling to deliver long-term value to our shareholders. With that, I'll now turn the call over to Q&A.

Speaker #1: Thank you . As a reminder to ask a question , please press star one one on your telephone and wait for your name to be announced .

Operator: Thank you. As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Once again, please press star one one for any question and wait for your name to be announced. To withdraw your question, please press star one one again. For the benefit of all participants on the call, please limit yourself to one question and a follow-up so that everyone is given an opportunity to ask their questions. Please stand by while we compile the Q&A roster. This will take a few moments. Thank you. We are now going to proceed with our first question. The question comes from the line of Scott Kuba from Citigroup. Please ask your question.

Speaker #1: To withdraw your question, please press star one one again. Once again, please press star one one for any questions and wait for your name to be announced.

Speaker #1: To withdraw your question, please press star one one again for the benefit of all participants on the call. Please limit yourself to one question and a follow-up so that everyone is given an opportunity to ask their questions.

Speaker #1: Please stand by while we compile the Q&A roster . This will take a few moments . Thank you We are now going to proceed with our first question And the questions come from the line of Scott Gruber from Citigroup .

Speaker #1: Please ask your question

Speaker #4: Yes . Good morning . Appreciate all the detail this morning . And the tendering pipeline boost is certainly encouraging I'm curious on the outlook for the two acquired rigs that are idle .

Scott Gruber: Yes, good morning. Appreciate all the detail this morning, and the tendering pipeline boost is certainly encouraging. I'm curious on the outlook, the two acquired rigs that are idle, the Sif and the Freya. Do you have any line of sight to securing contracts on those two?

Speaker #4: The Sith and the Freyja. Do you have any line of sight to securing contracts on those two?

Speaker #2: Hey , Scott , great to have you on and thanks for the question . Indeed . Great question . We we are looking at a pipeline of opportunities for for both rigs .

Bruno Morand: Hey, Scott, great to have you online, and thanks for the question. Indeed, great question. We are looking at a pipeline of opportunities for both rigs. What is interesting is, as I said in the remarks, I think the capability of these rigs is very well suited for the pipeline of tenders that we referred to. At the moment, we feel quite confident that the Sif will have a contract for it in the coming months, that will put the rig back into the operating fleet in relatively short term. In the case of Freya, I do think that it may take a bit longer, but as I said, the pipeline in the second half of the year continues to strengthen.

Speaker #2: What is interesting is, as I said in the remarks, I think the capability of these rigs is very well suited for the pipeline of tenders that we refer to at the moment.

Speaker #2: We feel quite confident that the Sif will have a contract for it in in the coming months . That will put the rig back into the operating fleet in relatively short term .

Speaker #2: In the case of Freyja , I do think that it may take a bit longer , but as I said , the pipeline in the second half of the year continues to strength .

Speaker #2: So I would think about that rig probably going to work sometime in the back end of 2026 or potentially early 2027 , depending on on the scope is assigned to

Bruno Morand: So I would think about that rig probably going to work sometime in the back end of 2026 or potentially early 2027, depending on the scope it's assigned to.

Speaker #4: Great , and I apologize . I jumped on a bit late , so apologies if I missed this , but just thoughts on on how you know , EBITDA shapes up during the year .

Scott Gruber: ... Great. And apologies, I jumped on a minute late, so apologies if I missed this. But just thoughts on you know how you know EBITDA shapes up during the year. Consensus, you know, is close to $440 million. You know, just some initial thoughts on the achievability of that level of EBITDA.

Speaker #4: Consensus as close to 440 million . You know , just some initial thoughts on the achievability of that level of UTA . Yeah .

Bruno Morand: Yeah, for sure, Scott. I think at this stage, it's still probably a bit too early for us to provide kind of a formal guidance. What I can share, as I said, is that the outlook continues to improve, and the team is working really hard to make sure that we de-risk and cover the days in 2026. What I'll share, which is not far from what I mentioned during the last call, the outlook for 2026 right now seems to indicate that we should be able to achieve, or we have a pathway to achieve, an activity level in contracting days that is modestly higher than 2025. And when I say that, I'm referring to a 24 rig to 24 rig, with the Noble acquired rigs or the recently acquired rigs being an upside to that.

Speaker #2: For sure . I think at this stage , we're still probably a bit too early for us to provide kind of a formal , formal guidance .

Speaker #2: What I can share , as I said , is that the outlook continues to improve and the team is working really hard to make sure that we de-risk and cover the days in 2026 .

Speaker #2: What I'll share , which is not far from what I mentioned during the last call , the outlook for 2026 right now seems to indicate that we should be able to achieve , or we have a pathway to achieve a activity level in contracting days .

Speaker #2: That is modestly higher than 2025 . And when I say that , I'm referring to a 24 rig to 2024 rig with a noble acquired rig or the recently acquired rigs being an upside to that .

Speaker #2: So I think that's the simple way to think . I think activity level will track slightly higher than it did in 2024 . Now let's see how the rates mature in 2026 , particularly in the second half .

Bruno Morand: So I think that's the simple way to think. I think activity level will track slightly higher than it did in 2024. Now let's see how the rates mature in 2026, particularly in the second half, and that should leave us in a position to provide better guidance in the coming quarters.

Speaker #2: And that should leave us in a position to provide better guidance in the coming quarters .

Speaker #4: Okay , I appreciate the color . Thank you . I'll turn it back

Scott Gruber: Okay. I appreciate the color. Thank you. I'll turn it back.

Speaker #2: Thank you . Scott .

Bruno Morand: Thank you, Scott.

Speaker #1: We are now going to proceed with our next question, and the question comes from the line of Craig Lewis from BTIG. Please ask your question.

Operator: We are now going to proceed with our next question. The question comes from the line of Greg Lewis from BTIG. Please ask your question.

Speaker #5: Yeah . Hey , thank you and good , good afternoon . Or good morning . And thanks for taking my questions . You know , Bruno , I did have kind of like a question , you know , around what you're seeing in the Middle East .

Greg Lewis: Yeah. Hey, thank you, and good afternoon or good morning, and thanks for taking my questions. You know, Bruno, I did have kind of a, like, a question, you know, around what you're seeing in the Middle East. I mean, clearly, you know, part of what drove the last or the more recent softness in the market was, you know, the laying down of rigs and just kind of a slowdown in overall Middle East activity. It kind of like, I guess there's been some rumblings about tenders coming to market for, it seems like some time now.

Speaker #5: I mean , clearly , you know , part of what drove the last or the more recent softness in the market was , you know , the laying down of rigs and just kind of a slowdown in overall Middle East activity .

Speaker #5: It kind of like , I guess there's been some rumblings about tenders coming to market for it seems like some time now . Any sense for when we could actually see some of these , you know , talked about tenders in the Middle East , actually not necessarily have the rigs start working .

Greg Lewis: Any sense for when we could actually see some of these, you know, talked about tenders in the Middle East, actually, you know, not necessarily have the rigs start working, but when we could start seeing maybe some rigs be contracted around some of that?

Speaker #5: But when we could start seeing maybe some rigs be contracted around some of that .

Speaker #2: Yeah . No . And thanks . Thanks for joining Greg . Very fair question . When we were talking about some of these standards in in the fourth quarter in our November call , we were looking at that , anticipating them to be out at the moment , the larger ones that we were expecting , including Aramco and KGO , are in progress .

Bruno Morand: Yeah. No, and thanks, thanks for joining, Greg. Very fair question. When we were talking about some of these tenders in Q4, in our November call, we were looking at that, anticipating them to be out. At the moment, the larger ones that we were expecting, including Aramco and KOC, are in progress. And in fact, KOC is in full tender evaluation from what we understand, and Aramco is still in tender submission phase. So this is very actual, this is very real, very tangible. There are a few more prospects in the region that we've been expecting to come to the tender pipeline, including KOC, which is not yet fully developed, but that should come in the next couple of months, we would think.

Speaker #2: And in fact , KGO is in full tender evaluation from what we understand . And they are still tender submission phase . So this is very actual .

Speaker #2: This is very real , very tangible . There are a few more prospects in the region that we've been expecting to come to the tender pipeline , including KGO , which is not yet fully developed , but that should come in the next couple of months .

Speaker #2: We would think , as I mentioned earlier in the call and the outlook at the moment , based on the conversations that we have had with the customers , is that they should be planning to award sometime around mid-year , maybe some a bit earlier , some slightly later .

Bruno Morand: As I mentioned earlier in the call, the outlook at the moment, based on the conversations that we have had with the customers, is that they should be planning to award sometime around midyear. Maybe some a bit earlier, some slightly later, but by midyear, I think that visibility will have formed quite nicely. So that's, that's why - what one of the reasons why we feel excited. That's a large volume of work coming from those tenders, and it's probably worth to highlight that not all of it, but a portion of these requirements, not only are large volume, but they require very specific technical capabilities, right? And we feel the fleet that we have, particularly with the recent acquisitions placed as well, to evaluate, and we'll see. They are long-term vendors.

Speaker #2: But by mid-year , I think that visibility will have formed quite nicely . So that's that's why what one of the reasons why feel excited .

Speaker #2: That's a large volume of work coming from those standards , and it's probably worth to highlight that . Not all of it , but a portion of these requirements , not only are large volume , but they require very specific technical capabilities .

Speaker #2: Right . And and we feel the fleet that we have , particularly with the recent acquisitions well to , to evaluate . And we'll see their long term tenders for us is a very interesting body of work , but it has to make sense from , from , from a pure commercial standpoint as well .

Bruno Morand: For us, it's a very interesting body of work, but it has to make sense from a pure commercial standpoint as well. In any case, once that volume gets absorbed in the market, whether directly awards to us, let's see, or just to the peer group, it will put a lot of tightness in the market, which I think is what everyone is looking forward to.

Speaker #2: In any case , once that volume gets absorbed , the market , whether directly awards to us but see or just to the peer group , it would put a lot of tightness in the market , which I think is what everyone is looking forward to .

Speaker #5: Okay , super helpful . Thanks for that , Bruno . And hey , congrats on the on the noble on those rig acquisitions .

Greg Lewis: Okay. Super helpful. Thanks for that, Bruno. Hey, congrats on the Noble acquisition of those rig acquisitions. Clearly, you know, not transformational for the fleet, but definitely gives you a nice boost. You know, it does look like we are at an inflection point or the cycle is turning, and I guess what I'm kind of curious about is, you know, how you think about and is there room where the fleet is today to potentially acquire more rigs? And really, you know, I don't know how deep you want to get into that conversation, but I am kind of curious around, I mean, it's not capital anymore, it's, I guess, they call it Seadrill.

Speaker #5: Clearly, you know, not transformational for the fleet, but definitely gives you a nice boost. You know, it does look like we are at an inflection point, or the cycle is turning.

Speaker #5: And I guess I'm kind of curious about is how you think about and is there room where the fleet is today to potentially acquire more rigs and really , you know , I don't know how deep you want to get into that conversation , but I am kind of curious .

Speaker #5: Around I mean , its not capital anymore . It's I guess they call it semi sea trim . You know , they still have some rigs that , you know , I guess they're operating some jack ups from , from previous orders from other customers .

Greg Lewis: You know, they still have some rigs that, you know, I guess they're operating some jackups from previous orders from other customers. They have these rigs. Is there any kind of when could we see these rigs or, I mean, are they being... Do you have any sense for if these rigs are being actively marketed for sale? And yeah, I mean, I guess that's kind of it and kind of, you know, the pricing and where we kind of think pricing is now for a premium rig in Q2?

Speaker #5: They have these rigs. Is there any kind of— is there any kind of— when could we see these rigs, or, I mean, are they being— do you have any sense for if these rigs are being actively marketed for sale, and—

Speaker #5: Yeah, I mean, I guess that's kind of it, and kind of, you know, the end where we kind of think pricing is now for a premium rig in the second.

Speaker #5: Yeah . No .

Bruno Morand: Yeah. No, very good, Greg. Let me tackle maybe the question on the Seadrill rigs first. You said rigs, but I understand that there's one of them that had been operating with Aramco before and was returned to the yard. I think the rest of them are either committed through BBCs or have been sold. I think it's probably fair to assume that a rig gets offered in the Middle Eastern tenders. It was a rig that was with Aramco before, and it has specifications and complies with the requirements. So I would expect that rig to eventually be offered in that tender. From experience, we know that the Singaporeans are not really in the business of selling rigs cheap, and they probably see the market responding, and they will have expectations.

Speaker #2: Very good . Greg , let me tackle maybe the question on the sea rigs first . And you said rigs . But I understand that there's one of them that had been operating with around before and was returned to the yard .

Speaker #2: I think the rest of them are either committed through BBC or have been sold. I think it's probably fair to assume that that rig gets offered in the Middle East or tenders.

Speaker #2: It was a rig that was around for and it has specifications and complies with the requirements . So I would expect that rig to eventually be be offered in a tender .

Speaker #2: From experience , we we've we know that the Singaporeans are not really in the business of selling rigs cheap . And they probably see the market responding and they'll have expectations .

Speaker #2: So I'm not sure if they get sold , but I do expect that there will be people looking at those rigs and trying to to to place them .

Bruno Morand: So I'm not sure if they get sold, but I do expect that there will be people looking at those rigs and trying to place them. Now, on the broader M&A picture, the answer that I have for you is probably not very different than what we said in a call in the last quarter. I think we have a operating platform that is very well-recognized around the globe, including very well-recognized by our customers, and that gives us a chance to look into M&A opportunities and see how we strengthen that platform further. For us, we've continued to think about consolidation, very selectively. It's not consolidation and growth for the sake of growth. We would have to look complementary to our fleet. And I think less likely to be looking at individual asset things.

Speaker #2: Now on the broader M&A picture . And the answer I have for you is probably not very different than what we said in a call in the last quarter .

Speaker #2: I think we have an operating platform that is very well recognized around the globe Including very well recognized by our customers , and that gives us a chance to look into M&A opportunities and see how we strengthen the platform further .

Speaker #2: For us , we continue to think about consolidation very selectively , if not consolidation and growth for the sake of growth . We would have to look complementary to our fleet , and I think less likely to be looking at individual asset things .

Speaker #2: We want to see things that could potentially help us continue to transform and consolidate the sector . Now , we said it before with 24 rigs , and I had to emphasize again now with 29 , we think we have a very interesting fleet size .

Bruno Morand: We wanna see things that could potentially help us continue to transform and consolidate the sector. Now, we said it before with 24 rigs, and I have to emphasize again, now with 29, we think we have a very interesting fleet size. We have scale in pretty much every key market around the globe. So growth is something that we'll look opportunistically, but I don't think it necessarily composes a core to our strategy. I think we have a good operational platform to do so, if the opportunity comes, but we'll look at that very opportunistically.

Speaker #2: We have scale in pretty much every key market around the globe . So growth is something that we look opportunistically . But I don't think it necessarily composes a core to our strategy .

Speaker #2: I think we have a good operational platform to do so . If opportunity comes . But we'll look at that very opportunistically

Speaker #5: Super helpful. Thank you very much.

Scott Gruber: Super helpful. Thank you very much.

Greg Lewis: Super helpful. Thank you very much.

Speaker #1: We are now going to proceed with our next question . And the questions come from the line of Fredrik Stein from Clarkstown Securities .

Operator: We are now going to proceed with our next question. The question's come from the line of Frederick Steen from Clarksons Securities. Please ask your question.

Speaker #1: Please ask your question .

Speaker #6: Hey , Bruno Magnus , hope you are well . And as always , thank you for for your good prepared remarks . I wanted to dig a bit deeper into , you know , what's going on with the market at the moment .

Fredrik Stene: Hey, Bruno, Linus. Hope you are well, and as always, thank you for, you know, good prepared remarks. I wanted to dig a bit deeper into, you know, what's going on with the market at the moment, and I think, you know, we have a shared view that it's exciting times. Tenders are up, and utilization will likely point upwards as well. And on the back of that, I was hoping you could give a bit more color on how you kind of specifically see, you know, rate development trajectory going forward. Because typically there will be, I guess, first you'll see the tenders, then you'll see the awards, and then you'll see the day rates.

Speaker #6: And I think , you know , we share you have a shared view that that it's it's exciting times . Tenders are up and utilization will likely point upwards as well .

Speaker #6: And on the back of that I was hoping you could give give a bit more color on how you kind of specifically see , you know , rate development trajectory going forward because typically there would be I guess first you'll see the tenders and you'll see the awards , and then you'll see the day rates .

Speaker #6: So any color on on when you think we'll see this higher activity level starting to , you know , really make an impact on on bidding levels across the globe .

Fredrik Stene: So, any color on when you think we'll see this higher activity level starting to, you know, really make an impact on bidding levels across the globe? Thanks.

Speaker #6: Thanks

Speaker #2: Yeah . Fair question . Frederic . And and what we have seen over the last and we've been very open about it in the last few months .

Bruno Morand: Yeah. Fair question, Frederick. And what we have seen over the last, and we've been very open about it in the last few months, is that rates have been walking in most regions a bit sideways. I think in some regions like Asia, maybe a bit downwards a little bit, but it has been fairly contained. For us, the way we think about 2026 at the moment is, utilization is obviously in the forefront, particularly for opportunities that we have that are short term in nature, that helps us fill the gap, help us de-risk the execution during. Now, what is the date for the market to change? You're absolutely right. I think fixtures comes first, then rates come second.

Speaker #2: Is that rates have been walking in most regions a bit sideways . I think in some regions , like Asia , maybe a bit downwards , a little bit , but it has been fairly contained that us , the way we think about 2026 at the moment is utilization is obviously in the forefront , particularly for opportunities that we have that are short term in nature .

Speaker #2: That helps us fill the gap, helps us de-risk the execution during the year. Now, what does it take for the market to change?

Speaker #2: You're absolutely right . I think fixtures comes first , then rates come second . As we said , a large volume of the work that is in the pipeline at the moment is driven by the Middle East .

Bruno Morand: As we said, a large volume of the work that is in the tender pipeline at the moment is driven by the Middle East. We currently anticipate that these awards will start coming out during the second quarter, mid-year, thereabout. What is interesting, as I mentioned in the prepared remarks, is that Middle East tenders generally require a fairly lengthy preparation process for the rig. So basically means that once we see awards coming through, those rigs are effectively out of the market for a given month and until they actually can be deployed. So I expect that the pricing dynamic starts to progress once those tenders conclude, or shortly after those tenders conclude, which would imply that we're looking at, you know, Q3, is when we'll probably have better visibility of build dynamics playing out. That's my best guess.

Speaker #2: We currently anticipate that these awards will start coming out during the second quarter , mid-year , thereabouts . And what is interesting , as I mentioned in the prepared remarks , is that Middle East standards generally require a fairly lengthy preparation process for the rig .

Speaker #2: So basically means that once we see awards coming through , those rigs are effectively out of the market for a given months . And until they actually can be deployed .

Speaker #2: So I expect that the pricing dynamics starts to progress . Once those standards conclude or shortly after those tenders conclude , which would imply that we're looking at , you know , Q3 is when we're probably have better visibility of those dynamics playing out .

Speaker #2: That's my best guess . As I said earlier , for for 2026 , the name of the game for us is really the outlook .

Bruno Morand: As I said earlier, for 2026, name of the game for us is really de-risk the outlook, make sure that the fleet is occupied. I think 2027 is when we turn our focus again, very sharply into economics and rates.

Speaker #2: Make sure that the fleet is occupied . I think 2027 is when we turn our focus again , very sharply into economics and rates

Speaker #6: That's very clear . And just to follow up on that , and I guess you kind of partially answered it , but in terms of recontracting your fleet now , while , you know , definitely appreciate that , you know , 2026 is a utilization game for you , do you have any kind of strategy around what type of contract length you would kind of go for at the current time ?

Fredrik Stene: No, that's very clear. And just to follow up on that, and I guess you kind of partially answered it, but in terms of recontracting your fleet now, while I, you know, definitely appreciate that, you know, 2026 is a utilization game for you, do you have any kind of strategy around what type of contract length you would kind of go for at the current time? You know, are you on short contracts to reprice that when the market starts accelerating again, or you still want to have, like, a base load of longer term contracts, if and when they are available?

Speaker #6: You know , are you are you on short contracts to reprice that when , when , when the market starts accelerating again ? Or do you still want to have like a base load of , of longer term contracts if and when they are available ?

Speaker #6: And like as a side question to that , since the current Middle East tenders are long in nature and , you know , I would assume that you would be interested in these in some of them .

Fredrik Stene: Like as a side question to that, since the current Middle East tenders are long in nature, and, you know, I would assume that you would be interested in at least in some of them, are there any changes to Saudi Aramco contracting terms, you think? You know, obviously, we're referencing suspension ability for the kingdom as we saw two years ago. Thanks.

Speaker #6: Are there any changes to Saudi Aramco contracting terms ? You think ? You know , obviously referencing suspension ability for for the kingdom as we we saw two years ago .

Speaker #6: Thanks .

Speaker #2: Yeah . So let me break it down here Frederick . To to your first part of the question . Yeah . With a 29 rig fleet , we obviously have to have a mix of short and long term contracts is obviously important that we have a baseline of of backlog .

Bruno Morand: Yeah. So let me break it down here, Frederick. To your first part of the question, yeah, with a 29 rig fleet, we obviously have to have a mix of short and long-term contracts. It's obviously important that we have a baseline of backlog. Clearly, as we have regions where day rates are pushing closer to kind of cash cost, cash operating cost. We don't wanna be securing this contract in long term, and we're looking for opportunities to close gaps as best as we can. Some other regions that the margins are still a bit more stretched and more interesting, we're obviously more flexible in extending the duration of the contract a bit longer, and that depends a lot on the opportunities.

Speaker #2: Clearly , as we have regions where day rates push closer to kind of cash cost or cash operating costs , we don't want to be securing these contracts in long term .

Speaker #2: And we're looking for opportunities to close gaps as best as we can . Some other regions that that margins are still a bit more stretched and more interesting .

Speaker #2: We're obviously more flexible in extending the duration of the contracts a bit longer , and that depends a lot on the opportunities . There are regions that could be a bit more competitive at times , but certain tenders within that region that have particular requirements that are well suited for the fleet , and we're looking to how we optimize these things .

Bruno Morand: There are regions that could be a bit more competitive at times, but certain tenders within that region that have particular requirements that are well suited for the fleet, and we look into how we optimize these things. So there's obviously a quite strong combination of fleet factors playing out at the moment. Now, in terms of the second question on Aramco, yes, the tender is still ongoing, so let's see where we land. It does seem that in the tender documentation, Aramco has made some of the terms a bit more flexible, particularly some of the provisions around termination that were of a concern since the last round of suspension and terminations.

Speaker #2: So there's obviously a quite strong combination of factors playing out at the moment . Now , in terms of the second question on Aramco , yes , the tender is still ongoing .

Speaker #2: So let's see where we land . It does seem that in the tender documentation , Aramco has made some of the terms a bit more flexible , particularly some of the provisions around termination that were of a concern since the last round of suspensions and terminations .

Speaker #2: And they indicated some flexibility to discuss a few terms . I think mainly on the technical side , maybe not so much on a on a commercial side , but they do indicated some flexibility to discuss .

Bruno Morand: They indicated some flexibility to discuss a few terms, I think mainly on the technical side, maybe not so much on a commercial side, but they do indicate some flexibility to discuss. So let's see how the tender progresses, and where we land in that discussion.

Speaker #2: So let's see how the tender progresses and where we land in that discussion.

Speaker #6: All right . Thank you very much . Have a good day .

Magnus Vaaler: All right. Thank you very much. Have a good day.

Fredrik Stene: All right. Thank you very much. Have a good day.

Speaker #2: Thank you Frederik .

Bruno Morand: Thank you, Frederick.

Speaker #1: We are now going to proceed with our next question. And the question is from the line of Truls Olsen from Fearnley Securities.

Operator: We are now going to proceed with our next question. The question is from the line of Truls Olsen from Fearnley Securities. Please ask your question.

Speaker #1: Please ask your question

Truls Olsen: Thank you. Good afternoon, Bruno and Magnus. A couple of questions from me, starting off in Mexico. You collected a bit, call it extra, from Pemex or OpEx, if you will. Now, you are obviously confident about more quality, regular payments coming from Pemex or Mexico this year. How should we think about this, and what's the current level of outstanding on your balance sheet?

Speaker #7: Thank you . Good afternoon . Bruno and Magnus . A couple of questions from me starting off in Mexico , you collected a bit .

Speaker #7: Call it extra from Pemex or OpEx , if you will . Now you are obviously confident about more . Call it regular payments coming from Pemex or Mexico this year .

Speaker #7: How should we think about this? And what's the current level of outstanding on your balance sheet?

Speaker #2: Hey drew , thanks for the question . I thought we would go the whole call without a question from Magnus , so I'll let him take tackle .

Bruno Morand: Hey, hey, Truls, thanks for the question. I thought we'd go through the whole call without a question from Magnus, so I'll let him take a tack on this one.

Speaker #2: This one .

Speaker #3: Yeah , thanks . Thanks , Bruno . And so , yeah , as you said , we have . Come back to payments from from Pemex has picked up over the past quarter .

Magnus Vaaler: Yeah, thanks. Thanks, Bruno and Truls. So yeah, as you said, we have come back to payments from Pemex has picked up over the past quarter, and we actually received around $46 million in total in Q4. So we estimate we had around $90 to 100 million outstanding at the end of the quarter. Also, in the beginning of January, we received a further $23 million, so that is bringing the outstanding balance further down. So I think this is very positive to see. We see also peers, other companies, reporting the normalization of collections. And the indications we have from Mexico is that it will continue into 2026, and that they're preparing for a new payment plan with the government to tackle 2026 invoices.

Speaker #3: And we actually received around 46 million USD in total in the fourth quarter . So estimate we had around 90 to 100 million outstanding at the end of the quarter .

Speaker #3: Also , in the beginning of January , we received a further 23 million . So that is bringing the outstanding balance further down .

Speaker #3: So I think this is very positive to see . We see also peers , all the companies reporting the normalization of collections and and the indications we have from Mexico is that it will continue into 2026 and that they're preparing for for a new payment plan with the government to to tackle 26 invoices .

Speaker #3: So I think we're we're positive about the development . I think also , as we noted in I think our previous contracting update is that the contract extensions for the gallery include improved payment terms with our counterparty .

Magnus Vaaler: So I think we're positive about the development. I think also, as we noted in I think our previous contracting update, is that the contract extensions for the Galar and Garsemi include improved payment terms with our counterparty. So we are guaranteed to have payments of operating costs within 45 days and no more than 180 days of outstanding variable rate. So we are also improving on the terms towards our counterparty.

Speaker #3: So we are guaranteed to have payment of operating costs within 45 days . And no more than 180 days . Outstanding bareboat so , so we are also improving on the terms towards our our counterparty

Speaker #7: Thanks. That's great to hear. And I would expect those terms to be included on the rig and the letter of intent as well.

Truls Olsen: Thanks. That's great to hear, and I would expect those terms to be included on the, the rig and the letter of intent as well.

Speaker #2: No , no through I think the rig that got extended right now continues on the story called contract structure , which is on a pay pay , pay and pay basis .

Bruno Morand: No, no, Truls. I think the rig that got extended right now continues on the historical contract structure-

Truls Olsen: Okay.

Bruno Morand: - which is on a pay, pay, pay and pay basis. However, as Magnus pointed out, we do have encouraging signs that payments will reach a better normalization going forward.

Speaker #2: However, as Magnus pointed out, we do have encouraging signs that payments will reach a better normalization going forward.

Speaker #7: Okay , okay . Thank you . Good to hear what on another topic , and obviously it's boring to talk about rates , but it ultimately remains important if you will .

Truls Olsen: Okay. Okay, thank you. Good to hear. What... on another topic, and obviously, it's boring to talk about day rates, but it ultimately remains important, if you will. I mean, the spread seems to be very high at the moment, obviously, Asia and Middle East being more competitive than West Africa. Are other moving parts to think about? I mean, you talked briefly about terms, you're discussing or are being discussed with Aramco, if you will, in terms of that tender batch there, how do you see that sort of progressing or moving elsewhere, the TNIs, if you will?

Speaker #7: I mean the spread seems to be very high at the moment . Obviously Asia and Middle East being more competitive than than West Africa .

Speaker #7: Are there other moving parts to think about ? I mean , you talked briefly about terms you're discussing or are being discussed with Aramco .

Speaker #7: If you will, in terms of that tender patch there, how do you see that sort of progressing or moving elsewhere?

Speaker #7: The nice, if you will.

Speaker #2: Yeah, yeah. And I think the dynamics in our contracting are always very fluid. We're always kind of pushing and pulling on terms and conditions to the contracts with the customers.

Bruno Morand: Yeah. Yeah, and I think the dynamics in our contracting is always very fluid. We're always kind of pushing and pulling on terms and conditions of the contract with the customers. So it's normal to the cycle, Truls. I would say that today, there's not a huge focus from our customers in trying to renegotiate terms. I think that the terms are being fairly solid in the cycle so far. The discussion's obviously been a lot about rates, and as you pointed out, in some regions, there's a bit more competitive pressure, some other less pressures. Like if I look at regions like the North Sea, for example, they have very well-established frameworks for contracting. I don't think that we've been spending a huge amount of time revisiting provisions with the customers.

Speaker #2: So it's it's normal to the cycle . Truce . I would say that today there's not a huge focus from our customers in trying to renegotiate terms .

Speaker #2: I think that the terms are being fairly solid in a cycle . So far , the discussions obviously been a lot about rates , and as you pointed out , some in some regions there's a bit more competitive pressure , some other less pressures , like if I look at regions like the North Sea , for example , they have very well established frameworks for contracting .

Speaker #2: I don't think that we've been spending a huge amount of time revisiting provisions with the customers. Keep in mind that we very frequently are talking about customers that are repeat customers for Borr, and we do have a well-established framework in these contracts.

Bruno Morand: Keep in mind that we very frequently are talking about customers that are repeat customers for Borr, and we do have a well-established framework in this contract. So that takes a little bit of the pressure in negotiating terms, both on our side and the customer side. But inevitably, there's always a commercial push and pull, all the negotiations that occur to the cycles.

Speaker #2: So that takes a little bit of the pressure in negotiating terms , both on our side and the customer side . But inevitably there's always a commercial push and pull all the negotiations that mature to the cycles

Truls Olsen: ...Understood. Thank you. And the final one for me, as we think about those rigs as you currently have not secured any work for, I mean, the one which perhaps stands out a bit more than the other ones is the Var. Should we think about that as probably the last one to find work, given that it's been sort of inactive previously or coming from yard, if you will?

Speaker #7: Understood . Thank you . And the final one from me As we think about those rigs that you currently have not secured any work for , I mean , the one which perhaps stands out a bit more than the other ones is the VAR .

Speaker #7: Should we think about that as probably the last one to , to to find work given , given that it's been sort of inactive previously or coming from yard , if you will .

Speaker #2: Yeah . I think it's a fair statement . I think when I look at the pipeline and the things that we're pursuing at the moment in near term , I would think or hope that we will have commitments for the yield and the CIF .

Bruno Morand: Yeah, I think it's a fair statement, Drew. The thing that when I look at the pipeline and the things that we're pursuing at the moment, in near term, I would think or hope that we will have commitments for the Hild and the Sif. They've been operating until recently. We have a pipeline of opportunity for them, so that's the most obvious movement in the near future. I do think that the Var and the Freya are rigs that will probably come a bit later, probably kind of back end of this year, early next year, with some focus on some of the developments in the Middle East that will likely create the catalyst to deploy those rigs. But that's probably a fair way to think about it.

Speaker #2: They've been operating until recently. We have a pipeline of opportunity for them, so that's the most obvious movement in the near future.

Speaker #2: I do think that the VAR and the Freya are really they'll probably come a bit later , probably kind of back end of this year or early next year with some focus on some of the developments in the Middle East that will likely create a catalyst to deploy those rigs .

Speaker #2: But that's probably a fair way to think about it.

Speaker #7: Understood . Good stuff . Thank you guys . Keep up the good work

Truls Olsen: Understood. Good stuff. Thank you, guys. Keep up the good work.

Speaker #2: Thank you .

Bruno Morand: Thank you, Drew. Thank you.

Speaker #1: We are now going to take our next question . And the questions come from the line of Joshua Jain from Daniel Energy Partners .

Operator: We are now going to take our next question. The question comes from the line of Joshua Jane from Daniel Energy Partners. Please ask your question.

Speaker #1: Please ask your question .

Speaker #8: Thanks for taking my questions . First one , I just wanted to follow up on Scott's question a little bit . As you talked about an asset that is stacked , potentially coming back to work , how are you thinking about requirements from a return perspective in an initial contract to get a rig up and running today , after it's been stacked , maybe you could just elaborate on that a little bit .

Joshua Jahn: Thanks for taking my questions. First one, I just wanted to follow up on Scott's question a little bit. As you talked about an asset that is stacked, potentially coming back to work, how are you thinking about requirements from a return perspective in an initial contract to get a rig up and running today after it's been stacked? Maybe you could just elaborate on that a little bit.

Joshua Jayne: Thanks for taking my questions. First one, I just wanted to follow up on Scott's question a little bit. As you talked about an asset that is stacked, potentially coming back to work, how are you thinking about requirements from a return perspective in an initial contract to get a rig up and running today after it's been stacked? Maybe you could just elaborate on that a little bit.

Speaker #2: Yeah . Thanks , Joshua . And the answer to your question may vary a little bit from from rig to rig . I think in our case , except for the VAR , all of the rigs either being working until recently or our rigs that would be rolling off contract at this stage .

Bruno Morand: Yeah. Thanks, Joshua. And the answer to the question may vary a little bit from rig to rig. I think in our case, except for the Var, all of the rigs either been working until recently or are rigs that will be rolling off contract. At this stage, we don't expect any meaningful CapEx in putting those rigs to work. The Var would probably require a bit more, probably somewhere close to $5 to 6 million, somewhere in that ballpark. So for the rigs that require little CapEx, the calculation becomes a bit easier, and it's probably less a question of just off-the-gate economics and more balance of the opportunity pipeline. We certainly don't want to have a rig going back to work to just work for a very short amount of time and then come idle again.

Speaker #2: We don't expect any meaningful CapEx , in putting those rigs to work . The volume would probably require a bit more , probably somewhere close to 5 or $6 million , somewhere in that ballpark .

Speaker #2: So for the rigs that require a little CapEx , the calculation becomes a bit probably less a question of just off the gate economics and more a balance of the opportunity .

Speaker #2: Pipeline . We certainly don't want to have a rig going back to work , to just work for a very short amount of time and then come idle again .

Speaker #2: It kind of defeats the purpose, and it hardly ever generates sufficient economics. So, balancing between the feasibility of a pipeline and rate is obviously significant.

Bruno Morand: It kind of defeats the purpose, and it, it hardly ever generates sufficient economics. So balancing between feasibility of a pipeline and rate is obviously significant. But for the fleet that we have at the moment, the CapEx component or reactivation component is not a big factor because as I said, these rigs either been operating until recently or are rigs that are normally rolling off contract as we go along.

Speaker #2: But for the fleet that we have at the moment, the CapEx component, reactivation component is not a big factor because, as I said, these rigs have either been operated until recently or are rigs that are normally rolling off contract as we go along.

Joshua Jahn: Thanks for that. And then I'm gonna ask the, the Venezuela question, I guess, a little bit differently. Any thoughts on what you're seeing and hearing there in the region? And if things are calmer there or quieter, just given geographic proximity, does that further open up Trinidad, Colombia, and Guyana a bit more for the shallow water market? Maybe you could speak to that a little bit.

Speaker #8: Thanks for that . And then I'm going to ask the the Venezuela question , I guess , a little bit differently . Any thoughts on what you're seeing and hearing there in the region ?

Joshua Jayne: Thanks for that. And then I'm gonna ask the, the Venezuela question, I guess, a little bit differently. Any thoughts on what you're seeing and hearing there in the region? And if things are calmer there or quieter, just given geographic proximity, does that further open up Trinidad, Colombia, and Guyana a bit more for the shallow water market? Maybe you could speak to that a little bit.

Speaker #8: And if things are calmer there, or quieter, just given geographic proximity, does that further open up Trinidad, Colombia, and Guyana a bit more for the shallow water market?

Speaker #8: Maybe you could speak to that a little bit.

Speaker #2: Yeah . And Trinidad has been a fairly busy jackup market over the years . There's there's still some opportunities around that . Surinam there has been a few opportunities in discussion .

Bruno Morand: Yeah. Trinidad has been a fairly busy jack-up market over the years. There's still some opportunities around there. Suriname, there has been a few opportunities in discussion. It's mostly exploration work, and some of it is a bit further far in the future. Colombia has had some work in the past and has been quiet. I do think that as things calm down in the region, some of the operators may be a bit more compelled to go. Do I see a near-term, large volume of rig requirements in the region?

Speaker #2: It's mostly exploration work and some of it is a bit further in the far in the future . Colombia has had some work in the past and has been quiet .

Speaker #2: I do think that as things calm down in the region , some of the operators may be a bit more compelled to go .

Speaker #2: Do I see a near-term large volume of of rig region as probably not the way I would ? I would put it , but I think the moment you start getting a couple of jobs in places like Suriname and Colombia , then it starts to become interesting to see how you can put a scope together that supports a rig .

Bruno Morand: That's probably not the way I would, I would put it, but, I think the moment you start getting a couple of jobs in, in places like Suriname and Colombia, then it starts to become interesting to see how you can, put a scope together that supports a rig. Generally, it's a region that requires rigs with, larger capabilities, which is obviously very interesting for our fleet, but I wouldn't think that is a large play.

Speaker #2: Generally, it is a region that requires rigs with larger capabilities, which is obviously very interesting for our fleet. But I wouldn't think of that as a large play.

Speaker #8: Understood. Thanks for taking my questions.

Joshua Jahn: Understood. Thanks for taking my questions.

Joshua Jayne: Understood. Thanks for taking my questions.

Speaker #2: Thanks , Joshua

Bruno Morand: Thanks, Joshua.

Speaker #1: Thank you . That concludes the question and answer session . I will now head back to Mr. Bruno Morand for closing remarks

Operator: Thank you. That concludes the question and answer session. I want to hand back to Mr. Bruno Morand for closing remarks.

Speaker #2: Thank you. That concludes our call. I appreciate the interest in the company, and I look forward to speaking to you again next quarter.

Bruno Morand: Thank you. That concludes our call. Appreciate the interest in the company, and I look forward to speaking to you again next quarter.

Operator: This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.

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