Borr Drilling buys newbuild jack-up at discount price

Oslo-listed offshore driller Borr Drilling has bought the jack-up rig newbuilding, Hull No. B378 (formerly named Hakuryu-15), for $122 million from BOT Lease Co.

The driller said the purchase price was attractive as the original ordering price of the rig was approximately $240 million.

To remind, BOTL ordered the KFELS Super B Class jack-up rig from Keppel back in 2014. The rig – provisionally named Hakuryu-15, was supposed to be delivered in 2016 and operated by Japan Drilling Co., Ltd (JDC) based on the leased agreement with BOTL.

Commenting on Monday, Borr Drilling said: “The purchase of Hull B378 should be seen as an opportunistic deal, with the target to acquire a high specification rig at what we consider a very attractive price.”

The jack-up rig Hull B378 is a KFELS Super B Bigfoot design and, according to Borr Drilling, will need around six months to be operationally fit from the yard.

“The rig has 2,200,000 lbs hook load capacity, 75 feet cantilever and significant crane capacity which makes the unit ideal for drilling of deep HPHT wells,” the drilling company said.

The rig is of similar design as the five newbuildings Borr bought from Transocean.

Borr has stressed that the acquisition is not a sign of Borr having a strong strategic desire to significantly increase the size of its existing fleet.

“With a largely homogenous fleet of 30 premium jack-up drilling rigs, the company has established a foundation which provides strong cost and operating benefits compared to our competitors. Borr’s focus on premium jack-up drilling rigs has made it possible to achieve the strong growth witnessed from 2018, keeping technical utilization above 99% and keeping an industry-leading safety standard,” Borr said.

“Borr believes that the acquired unit is well positioned for contractual work at attractive rates. Market rates for term works for similar units is currently estimated to generate an EBITDA in excess of USD 20 million per year,” Borr Drilling said.

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