Borr Drilling : The Jackal of the Seas

Borr Drilling exists because Tor Olav Trøim looked at the jackup market during the 2016

downturn and saw yards and distressed owners sitting on modern rigs nobody could afford to keep. He founded the company in December 2016, raised roughly a hundred fifty five million dollars in an initial private placement, and within a year had bought fifteen jackup rigs off Transocean and Paragon Offshore for close to one point three five billion dollars, assembling one of the youngest fleets in the industry without paying for a single day of new construction. Ten years later, in January 2026, Borr did the same trade again, buying five premium jackup rigs from Noble Corporation for three hundred sixty million dollars, roughly seventy two million dollars a rig, against a modern newbuild cost this project has already documented at two hundred fifty to three hundred million dollars each. The company’s entire identity is one trade, repeated on a cycle, buy someone else’s rig for a fraction of what a shipyard would charge to build it fresh.

Understand the asset before the numbers, because a jackup rig is not interchangeable equipment the way a barrel of oil is. A jackup stands on three or four legs that lower to the seabed, jacking the hull clear of wave action, which is why the rig class only works in water shallow enough for the legs to reach bottom, typically up to three hundred fifty or four hundred feet. Age and specification inside that category matter enormously. A premium jackup built in the last decade carries a longer cantilever reach over an existing platform, a deeper variable deck load capacity, and harsh environment certification that an older unit from the 1990s or 2000s simply does not have, which is why premium rigs command day rates that can run two or three times what an older, lower specification unit earns even in the same basin. Buying operating premium rigs directly from Noble Corporation, already crewed, already contracted, already earning revenue, is a fundamentally different trade than the stranded newbuild purchase this project covered in the jackup construction economics issue, where Borr picked up an unfinished hull, Hull B378, for a hundred twenty two million dollars against an original order price near two hundred forty million. A stranded newbuild still needs completion capital and still carries delivery risk. An operating premium rig bought from a competitor starts earning the day it changes hands. Borr’s January 2026 purchase was the safer version of the same underlying arbitrage.

The company did not stop there. It also entered a fifty fifty joint venture to acquire five more premium jackups for two hundred eighty seven million dollars, taking the fleet from twenty nine rigs to thirty four in a single year, and it refinanced its entire high yield debt stack to fund the buying spree, tendering for its ten percent notes due 2028 and ten point three seven five percent notes due 2030, and pricing two point zero three five billion dollars of new senior secured notes, eight point seven five percent due 2032 and nine percent due 2034. Ninety three point eight four percent of noteholders tendered into the exchange, the deal closed June 10, 2026. Borr is still borrowing at close to nine percent. It is simply borrowing at slightly less than the ten percent and ten point three seven five percent coupons it carried before, and using the fresh capital to keep buying rigs at a discount to replacement cost rather than to shrink the balance sheet.

Here is the stress test, and the first quarter of 2026 already shows where the strain lands. Revenue of two hundred forty seven million dollars, down five percent from the fourth quarter. Adjusted EBITDA of eighty eight point five million dollars, down sixteen percent. A net loss of twenty nine million dollars, against a net loss of only one million dollars the prior quarter, driven by a late contract start on the Odin rig, which needed additional maintenance before beginning its Cantium contract, and an eight point four million dollar credit loss provision against a customer who is not paying on time. Technical utilization still ran at ninety nine point four percent and economic utilization at ninety seven percent, meaning the fleet itself is working almost every day it is available to work. The loss is not an operating problem. It is a timing and credit problem sitting on top of a balance sheet that just added roughly two billion dollars of fresh debt to fund a fleet expansion, with full year 2026 contract coverage at only seventy percent and second half coverage weaker than first half, sixty two percent against seventy eight percent, at an average day rate near a hundred thirty four thousand dollars. A company borrowing at nine percent needs day rates and coverage to hold. Sixty two percent second half coverage is not holding, it is exposure.

Trøim built this company once already on the theory that buying cheap during someone else’s distress beats building expensive during your own optimism, survived a 2020 restructuring when the same theory left Borr owing Keppel and PPL Shipyard in Singapore more than it could pay after the COVID oil crash, and is now running the identical playbook a decade later with better assets and a still expensive balance sheet. The rigs are premium. The utilization is real. The debt is still priced like a company the market does not fully trust to hold its coverage through the cycle it just bet on.

Label for this one: Borr Drilling arbitrages. Not oil. Not gas. The gap between what a shipyard charges to build a rig and what a distressed or consolidating owner will sell one for, a gap Trøim has now traded twice, a decade apart, with the same balance sheet risk both times.

Sources: Borr Drilling Limited first quarter 2026 results announcement, Borr Drilling Limited operational and contracting updates April 2026, Borr Drilling Limited notes tender and new senior secured notes offering announcements May and June 2026, Borr Drilling Limited second quarter 2026 earnings call invitation, company history summaries from Borr Drilling’s own investor relations site, Baird Maritime Offshore Accounts coverage of Borr’s 2020 and 2021 restructuring.