Key Takeaways
- Borr Drilling shares fell 8% after its Prospector 5 jackup rig sank off Gabon on Oct. 24. In Borr’s latest update, five of the 115 people on board were still missing.
- Borr has lost a working rig that was booked with BW Energy into mid-2027, so analysts’ 2027 revenue estimates look likely to come down.
- Borr’s net debt was 3.6x EBITDA in fiscal 2025, so what its insurance pays for the rig matters a lot.
- Watch for what Borr says about insurance and what Gabon’s technical investigation finds.
Borr Drilling (BORR) stock is down 8% today after the company said its Prospector 5 jackup rig sank off Gabon on Saturday night.
In a release on Sunday morning, Borr said the rig “experienced a punch through event during preload activities, resulting in loss of stability and the subsequent sinking of the rig.” Of the 115 people on board, 110 are safe. Borr said before Monday’s open that the search for the other five is still going on. Reuters reported that one of the five had been found dead, citing a union official, but Gabon’s government hadn’t confirmed it.
Borr loses a rig with work booked
A jackup stands on legs lowered to the seabed. Before it drills, the crew pumps seawater into its tanks to press the legs down and test the footing. In a punch through, a leg breaks through a firm layer of seabed into softer ground below, and the rig lurches and tilts. Every jackup driller lives with this risk, and Gabon’s oil minister has reportedly ordered a technical investigation.
Prospector 5 wasn’t sitting idle. In April, Borr announced a firm four-well award from BW Energy lasting at least 320 days, with options for 220 more. Its August fleet report had the rig working in Gabon from early July into July 2027. (BW Energy and its partner Panoro Energy fell in Oslo too.)
Wall Street expects Borr’s revenue to grow from about $1 billion this year to $1.35 billion in 2028…
One rig is a small slice of that, but I’d expect analysts to trim 2027, the year Prospector 5 was booked for.
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The insurance answer matters
Borr hasn’t said yet what its insurance covers, and its balance sheet makes that answer important. Net debt has come down from 10.2x EBITDA in fiscal 2022 to 3.6x in fiscal 2025, which is still a heavy load…
Meanwhile, the stock was already cheap. At Friday’s close, Borr traded at 1.2x forward sales, below its five-year average of 1.4x…
After today’s drop, it’s closer to 1.1x.
My take: Borr can work through losing this contract, and the stock was priced low going in. But with this much debt, I’d wait to hear what insurance pays for the rig before buying the drop. Borr’s third-quarter report should start to answer that.
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