\\Position disclosure: 50,000 shares ar $4.27. Not financial advice. Every number below is from Borr's SEC filings (6-K, 11 Aug 2026) or its own press releases - links at the bottom so you can check me.\\
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\## TL;DR
Borr Drilling owns 29 modern jack-up rigs (34 including a JV) in a segment where the global fleet is shrinking and almost nothing new is being ordered. Q2 2026 looked catastrophic - a $241m net loss - but \\73% of that was a refinancing charge, not operations\\. Utilization was 98.4%.
The bull case is not "cheap on book value." It isn't cheap on book value. The bull case is that \\$2.3bn of fixed net debt sits under a fleet that re-rates with dayrates\\, so a modest improvement in rig economics is amplified several times into the equity. That's also precisely why it can go to zero.
This is a leveraged call option on the shallow-water cycle. Size it like one.
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\## 1. What actually happened in Q2 2026
https://preview.redd.it/q0g6pvh02kph1.png?width=1980&format=png&auto=webp&s=af458fdd5654f7723c9a35c8dd0f471b32aaebe9
Revenue has fallen five quarters straight, $277m → $232m. Adjusted EBITDA fell from $136m to $44m. Margin went from 49% to 19%. That is not nothing, and any DD that skips past it is selling you something.
But look at \why\ Q2 specifically collapsed:
https://preview.redd.it/u115yvh02kph1.png?width=1980&format=png&auto=webp&s=d5b9b54b5d5a894bd03c46c4d33e25491a1185f3
Management names four drivers, all disclosed:
\- \\Odin\\: $22.5m of opex in the quarter with \\zero revenue\\ - a US Gulf newbuild entry that hit regulatory delays until mid-July. That's an $11.1m QoQ swing.
\- \\Six rigs transitioning between contracts\\ simultaneously — Idun, Gunnlod, Skald, Sif, Natt, Prospector 5. All now operational.
\- \\$10.8m credit loss\\ on a former West African customer. Receivable is now fully provided for — zero net balance remaining.
\- \\$7.3m\\ higher fuel and insurance from Middle East disruption.
Technical utilization: \\98.4%\\. Economic utilization: \\96.4%\\. The rigs worked. This was a cost-and-timing quarter, not a demand quarter.
Management guides \~23 active rigs in Q3 and Adjusted EBITDA to "improve significantly." That's the near-term thing to verify in November.
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\## 2. The $241m loss, honestly
https://preview.redd.it/fuz9zvh02kph1.png?width=1980&format=png&auto=webp&s=0ce2890ebc5bb439fe71829a28d8f8c2b9ae593a
I've seen this written up as "a non-cash accounting charge."
The $176.3m breaks down as:
\- \\$123.7m in cash redemption premiums\\ — real money paid to retire the 2028/2030 notes early
\- \\$52.6m non-cash\\ write-off of unamortised fees and discounts
So Borr paid $124m cash for the privilege of refinancing. What it bought:
\- Maturities pushed from 2028/2030 → \\2032/2034\\
\- RCF upsized to $250m, margin cut
\- Total liquidity $473.6m
That's a genuinely good trade for a levered company — it removes refinancing-cliff risk, which is what kills companies like this. But call it what it is: an expensive, mostly-cash deleveraging of \timing risk\, not a free accounting artifact.
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\## 3. The asset argument — and where it breaks
This is the part most BORR write-ups get wrong, so here's the full picture:
https://preview.redd.it/w3hqgvh02kph1.png?width=1980&format=png&auto=webp&s=6bdacc3694ded6f6ff1a3d1fa41604dcc1ef4b64
\\On the bull side:\\ a new premium jack-up costs roughly $300m and takes years. Borr's entire 29-rig fleet was built after 2008. At today's EV of \~$3.7bn you're paying \~$128m per rig — well under half replacement cost. Dayrates would need to roughly double for a newbuild to pencil, which is exactly why nobody is ordering them.
\\On the bear side, and you need to sit with this:\\ Borr carries those rigs at \\$3,036.5m, or \~$105m each\\. Recent actual transactions cleared \below\ that — Noble's five rigs at $72m each, Fontis's five at $57m each (older designs, but