![COLUMN | Rig rolled, part two of two: Borr sells stock; ADES rig sinks; Cadeler contract cancelled [Offshore Accounts]](http://media.assettype.com/bairdmaritime%2F2025-07-08%2F16gtrsdl%2FUntitled.jpeg?w=480&auto=format%2Ccompress&fit=max)
COLUMN | Rig rolled, part two of two: Borr sells stock; ADES rig sinks; Cadeler contract cancelled [Offshore Accounts]
On Monday, we looked at a drilling company folding in the face of a weaker market, as Eldorado Drilling sold two deepwater drillships for US$245 million apiece to TPAO, the Turkish state oil and gas company, which has been on a roll of discoveries in the Black Sea.
Luckless Eldorado is not the only driller facing travails, however, as the drilling market this year is weaker than last year, even if it is still well above the miserable 2015 to 2021 period. Also, we are starting to see the slowdown in offshore wind starting to have a real world impact on owners of offshore wind turbine installation vessels (WTIVs).
Borr, never being boring
As Eldorado sold two of its three rigs to obtain cash and pay down its loans, another driller was passing around the hat to its shareholders in its fifth (??) capital raising.
Borr Drilling has been on a veritable roller coaster since it was founded in 2016. As the above graph of the company’s stock price shows. From a low of 76 cents in late October 2020, the stock soared over 1,000 per cent by August 2023 to close to US$9 per share, only to crash another 75 per cent today back down to just above US$2.
Another Norwegian masterplan
The company was created by Tor Olav Trøim (the former CEO of Seadrill, chairman of Golar LNG and John Fredriksen’s ex-business partner), to take advantage of rock-bottom jackup drilling rig prices in the industry downturn which struck in 2014 (the same business plan that Eldorado Drilling hoped to pull off for drillships), and several of the original Borr leadership have found homes at Eldorado.
Backed by well service giant Schlumberger (now SLB), which invested US$220 million in Borr, the company acquired two dozen modern rigs from Transocean and Singaporean shipyards where they had been abandoned by the speculators who ordered them in the boom.
Borr also bought the entire Paragon Drilling fleet in 2018 and scrapped all but two of that company’s units in the single biggest jackup scrapping programme of the downturn.
Catching a falling knife
Unfortunately, Borr’s entry to the jackup market was premature. The company listed on the New York Stock Exchange in 2019, but was hard hit when the Covid-19 pandemic sent the oil price tumbling to US$20 in 2020.
By the end of the year, Borr was hanging on by a thread. Its then CEO Svend Anton Maier (now CEO of Deep Value Driller and Eldorado) and two CFOs departed in quick succession, and only some timely equity raises and some very supportive lenders saw it through a year-end crisis (covered in our Christmas Turkey story here).
The recovery in jackup day rates and utilisation that followed the Russian invasion of Ukraine saved the company. It was gushing cash at last as jackups passed US$150,000 per day to charter.
2024 brings Aramco agony and Pemex pain
In 2024, Borr was hammered by negative developments in two of its major markets. In January last year, Saudi Aramco launched a programme of rig suspensions that saw the kingdom’s state-owned oil producer suspend just under thirty jackups in a phased programme with several waves.
Aramco’s offshore rig fleet had soared from 49 rigs in June 2022 to 89 rigs by March 2024, but the suspensions slammed on the brakes. Whilst only two of Borr’s rigs were suspended by Aramco, there was a flood of rigs suddenly available for charter in Bahrain, which sent jackup utilisation and day rates tumbling.
Middle East jackup rates plunged from around US$150,000 per day in January 2024 to just over US$100,000 per day in January 2025, according to S&P Global data.
Borr’s problems then multiplied when Mexican state oil producer Pemex hit a cash crunch and also announced that not only was it struggling to pay its past invoices, but that it would also suspend around a dozen rigs in January 2025.
With seven rigs working in Mexico, its most important market, Borr was hammered when Pemex suspended, meaning that in the first quarter of this year, only 16 of its rigs were onhire. It did manage to receive a payment settlement for approximately US$125 million from Pemex, however.
The company made a net loss of US$16.9 million in the January to March quarter.
Borr’s debt is its Achilles heel
Borr’s problem is that it has total liabilities of around US$2.4 billion and it needs to pay around US$67 million in interest payments every quarter, regardless of the state of the market.
In order to stabilise its balance sheet, Borr announced last week that it would be raising new capital and taking on new debt. The company says it has received commitments from certain commercial banks to rejig its debt so that an additional US$65 million is available under existing facilities and to take on a new US$35 million senior secured facility.
However, this new debt was subject to a US$100 million equity raise. So, the company once again went cap in hand to its shareholders and raised US$105 million by selling 50 million new shares at US$2.05 a share. This increases the share count by 20 per cent, but many existing shareholders contributed cash.
Another CEO change
Borr also announced that its CEO of five years, Patrick Schorn, would be moving onwards and upwards to become Executive Chairman of the company effective September 1, 2025 and that he would be replaced by Bruno Morand as CEO.
The Borr board thus has a surfeit of talent with former CEO Mr Schorn sitting as Director alongside Tor Olav Trøim (former CEO of Seadrill) and Dan Rabun (former CEO of at Ensco, who will become Lead Independent Director). Ironically, Borr’s former CEO from 2018, Simon Johnson, is now CEO at… Seadrill.
Conclusion – Borr is safe for now
Companies never go bust by raising new equity from shareholders. and whilst this move caps two years of misery for investors at Borr, it stabilises the situation nicely.
Once again, Borr has performed another Houdini-like escape from the clutches of its creditors, and once again, it lives to fight another day.
However, until Borr has meaningfully reduced its debt to half the current levels, the company remains vulnerable to shocks. After the agonies inflicted by Aramco on the jackup market in 2024, it would be good if Borr and the jackup market as a whole could revert simply to being boring.
ADES rig sinks, seven dead
Sometimes reading our column is very boring, we admit. There’s corruption (there is always corruption) and there are needless accidents where lives are tragically and unnecessarily lost.
One of the most recurrent themes we have banged on about is jackup rig and liftboat safety. These vessels have poor stability under tow and unacceptable loss rates.
This is an area where the offshore industry’s safety record is frankly alarming. We have covered the capsize and sinking of the Ezion-owned liftboat Teras Lyza in 2018 extensively, a loss where neither the flag state (Singapore) nor the littoral state (the Philippines) provided any report or recommendations, instead leaving the facts to a civil case between the insurers and the rig’s mortgage holder.
The liftboat turned over “unexpectedly” whilst under tow by an Ezion-owned tug, Teras Eden, between Vung Tau, Vietnam where the liftboat had been laid-up, and Taichung, Taiwan. Fortunately, no one was on board the jackup when the accident occurred, so nobody was killed or injured.
The crew of the liftboat Seacor Power were not so lucky when that vessel capsized in a squall three hours after departing Port Fourchon, Louisiana, on April 13, 2021, with the loss of thirteen lives, as we covered.
Now we can add a third sad case to this litany of failure. On July 1, 2025, the ADES-owned jackup Admarine 12 capsized while being towed to a new location in the Gulf of Suez, near the Zeit Bay area offshore Egypt. Admarine 12 was under contract to Egyptian oil and gas producer Offshore Shukheir Oil (OSOCO).
1966-built antique rig should have been scrapped years ago
There were 30 people on board when the rig turned over: 23 were rescued, seven are dead. Egyptian newspaper Al-Masry Al-Youm published pictures of the rig in its resting place here and videos of the sinking captured by Mahmoud Elsaman were widely circulated on social media here and here.
The rig was amongst the oldest in the world, built in 1966, a legacy of ADES’s original heritage when we characterised the company as “the Egyptian Antiques Roadshow” in 2021.
We noted that ADES' offshore drilling fleet began with the purchase of the 1982-built jackup barge Admarine II in 2004 and that from 2012 onwards, ADES acquired nine legacy jackups constructed between 1974 and 1981 from Transocean, Paragon Offshore, Diamond Offshore, Hercules Offshore, KCA Deutag and TODCO.
We were surprised that Saudi Arabia’s sovereign wealth fund, PIF, would use a company with such an aged asset base working mainly in the low-quality market of Egypt as a springboard for a multi-billion dollar rig investment programme.
However, PIF acquired ADES and then listed it on the Riyadh stock exchange in 2023, embarking on a programme that saw it grow to become one of the largest jackup owners in the world. We wondered whether PIF, “wishes to start a maritime museum of antique drilling units refurbished by ADES' enthusiastic CEO Dr Mohamed Farouk.”
Will lessons be learnt?
Now the rig is lost, seven men are dead, others are hospitalised, and the safety standards of ADES are called into question. Once again, we find ourselves lamenting low offshore standards, poor safety procedures, and a completely avoidable accident.
ADES has helpfully removed the rig specifications from its website, assured investors that the rig was fully insured in its press release and stated that, “at this stage, the company does not expect any material impact on its financial position or published guidance for the fiscal year 2025.”
Without any sense of irony (given all I hear from rig movers in Saudi Arabia), ADES concluded by saying that, “the company remains firmly committed to maintaining the highest safety standards across all its operations.”
Of course, ADES also extended its, “deepest condolences and sincere support to the families and colleagues of those affected by this tragic incident.”
That’s okay, then! What we would like to see is a transparent and public investigation report into the loss of the rig and the deaths of seven crew. Will the Egyptian authorities actually publish a credible report into what happened and why? And will ADES commit to improving its standards and procedures across all its remaining 50 offshore rigs, so that such an accident never happens again?
The company made US$52 million in profit in the first quarter, so it has the resources to raise the quality bar. Retaining the aged Admarine vessels in its fleet does nobody any favours.
I would love never to write about another jackup rolling over and sinking, but I sadly fear that Admarine 12 will not be the last.
Cadeler contract cancelled
We’ll leave one last red flag out there. Sentiment has turned against offshore wind for now and a segment that was booming in 2021 to 2024 now looks to be facing some uncertainty.
That doesn’t mean the industry is going to disappear. It just means that the pace of windfarm development will slow down, projects will be delayed and some cost adjustments will likely occur (rates for services and equipment will fall as demand softens).
Companies with large quantities of debt will be vulnerable. They always are (see Borr’s problems managing its US$2.4 billion of liabilities above). Debt has to be paid whether rigs are onhire or offhire, whether rates are high or low. Lenders don’t care; they just want their interest paid regardless of the state of the market.
The situation is worse if a firm has a lot of spot market exposure too. One player with such a problem is WTIV leader Cadeler of Copenhagen.
Please read the following announcement Cadeler made to the stock market last week, which strikes me as somewhat delusional optimistic:
“Cadeler today announces that it has received a notice of termination from Ørsted in relation to the long-term agreement for a windfarm installation vessel initially disclosed on April 8, 2024. The agreement had secured vessel capacity from Q1 2027 through the end of 2030.
"The termination of the long-term agreement is principally a result of Ørsted’s decision to discontinue work towards the Hornsea Four offshore wind farm.
"Cadeler is entitled to agreed compensation as a consequence of the termination of the long-term agreement. In addition, Cadeler is now free to deploy the vessel on alternative projects currently under discussion with third parties.
"Cadeler does not believe that the termination of the long-term agreement will adversely affect Cadeler’s long-term financial performance. Receipt of the termination compensation noted above will positively impact financial guidance for the 2025 calendar year."
Lipstick on a pig, I fear. Drilling companies had a great 2015 financially when their oil industry clients cancelled and sent them millions in cancellation fees, but by 2016, they were all struggling and most went into financial restructuring in the long drilling downturn.
Offshore wind activity is slowing and Cadeler has a bloated overhead, far in excess of other rig owners, and a US$3 billion newbuilding and acquisition programme to expand its fleet to 12 WTIVs. The fleet growth is expected to bring its debt to a Borr-like US$2.5 billion.
I fully anticipate Cadeler to require a rights issue and additional shareholder funds in the next two years to stabilise its debt-heavy balance sheet. It’s not just Hornsea Four that is on the backburner; the sector as a whole is recalibrating and slowing down.
Cadeler is the industry leader and has grown very quickly. The next four years will be harder, I fear.
As Rick Astley put it, “You know the rules and so do I.”
