Borr Drilling's Q1 2025: Contradictions in Rig Utilization, Contract Renewals, and Dividend Strategy

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Revenue and Financial Performance:
- Borr Drilling's total operating revenue declined by $46.5 million quarter-over-quarter, resulting in adjusted EBITDA of $96.1 million for Q1 2025.
- The decline was attributed to temporary rig suspensions and preparatory work for upcoming contracts.

Rig Activity and Utilization:
- The company averaged 16 active rigs out of its 24 rig fleet during Q1 2025.
- Technical utilization reached 99.2% and economic utilization was at 97.9%, reflecting strong operational efficiency.

Mexico Operations and Production:
- The reactivation of three suspended rigs in Mexico raised the operating rig count from 16 to 22 in Q2.
- This increase is linked to the Mexican government's efforts to restore production to 1.85 million barrels per day.

Backlog and Contract Coverage Expansion:
- The company secured 9 new contract commitments in Q1 2025, adding $221 million to its backlog.
- This expansion is part of active efforts to increase 2025 backlog coverage to 80% to 85% and 2026 coverage to 35%.

Market Conditions and Strategy:
- The decision to suspend the dividend was based on uncertain market conditions, including potential oil price declines and customer caution.
- The company's continued focus on securing long-term contracts, particularly in Mexico, aims to enhance long-term value creation.