BORR Stock Sinks Post Q1, But The CEO Sees A Silver Lining With The Middle East Conflict

• BORR stock dropped over 8% premarket after wider losses and delayed rig operations pressured first-quarter results. 
• Borr CEO noted that the Middle East conflict has created near-term uncertainty, but certain key tenders in the region have continued to progress.
• The CEO also said he expects the geopolitical disruptions stemming from the Middle East conflict to be “substantial and long-lasting,” potentially supporting offshore drilling demand over time. 

Shares of Borr Drilling (BORR) dipped over 8% premarket on Thursday after the offshore rig operator reported a weak quarter, hurt by delays tied to its Odin jack-up rig, and a credit loss provision of $8.4 million. 

While investors focused on the earnings miss and near-term operational setbacks, Chief Executive Officer (CEO) Bruno Morand said that the rising geopolitical tensions in the Middle East could ultimately strengthen the longer-term outlook for offshore drilling demand and oil prices. 

BORR Q1 Misses Estimates

The company reported first-quarter (Q1) total operating revenues of $247.0 million, missing analysts’ estimates of $252 million. The net loss widened to $0.09 per share, compared with Wall Street expectations of a $0.04 loss, according to Fiscal.AI. 

Odin Rig Delay To Impact Q2 Results 

CEO Morand stated that the operational performance in the Q1 resulted in technical utilization of 99.4% and economic utilization of 97.0%, and added that Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $88.5 million in the quarter was primarily impacted by the late contract start-up of the Odin, and a credit loss provision of $8.4 million.

“In the quarter, the Odin completed its mobilization from Mexico to the U.S. Gulf, where operations were expected to start in February. However, the start-up was delayed by additional contract preparation work and regulatory approvals,” Morand added. 

He further noted that the company expects its second-quarter results to be impacted by this delay and now sees Odin operations to commence late June along with rigs transitioning between contracts.

BORR CEO’s Take On Middle-East Conflict

The company CEO also noted that the Middle-East conflict has created some near-term uncertainty but certain key tenders in the region have continued to advance with some delays. 

“More broadly, in our view, recent events have strengthened the longer-term outlook for the sector providing for a higher oil price and a renewed focus on energy security,” said Morand.

BORR Increasingly Confident About 2027- 2028 Outlook

Morand said shallow-water basins remain attractive because they offer lower-cost, short-cycle oil production, allowing customers to respond more quickly to changing market conditions.

The CEO added that offshore activity and dayrates typically lag oil price moves by 6 to 12 months due to customer budgeting cycles, similar to the pattern seen after Russia’s invasion of Ukraine. As a result, he expressed growing confidence in the company's 2027 and 2028 prospects, expecting the Middle East conflict's disruptions to be both substantial and long-lasting.

What Does Retail Think Of BORR?

On Stocktwits, retail sentiment for the stock has remained ‘bullish’ while message volumes stayed ‘high’ over the past 24 hours.

Shares of Borr Drilling have gained more than 54% so far this year.

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Read Next: IBM, GFS, RGTI, QBTS, INFQ Stocks Soar After Trump Admin’s $2B Quantum Funding Push In Exchange For Equity Stakes: Report