Borr Drilling Limited (BORR): A Bull Case Theory

We came across a bullish thesis on Borr Drilling Limited on The Pale Blue Dot’s Substack by Saad Khan. In this article, we will summarize the bulls’ thesis on BORR. Borr Drilling Limited's share was trading at $4.6600 as of January 29th. BORR’s trailing and forward P/E were 16.11 and 28.17 respectively according to Yahoo Finance.

Borr Drilling Limited operates as an offshore shallow-water drilling contractor to the oil and gas industry in the United States and internationally. BORR has endured a brutal cycle over the past year, with the stock ultimately suffering an 80%+ drawdown from its 2023 peak after additional weakness followed a prior 50% decline. The selloff stemmed from a deteriorating jackup market marked by falling utilization and dayrates, contract cuts from key customers Pemex and Aramco, macro-driven outflows from cyclical names amid tariff anxiety, and high leverage that pushed investors to price in bankruptcy risk.

Yet these pressures were progressively resolved: the jackup slowdown was always likely to be temporary given the essential, economically compelling nature of shallow-water drilling; economic resilience eased macro fears; and management addressed leverage concerns through an equity issuance and credit facility refinancing. With these overhangs reduced, attention shifted back to the fundamental recovery needed for the stock to re-rate.

That recovery is now materializing. In October, ADES received multiple contract resumption notices in Saudi Arabia, and BORR’s Q3 results confirmed tangible progress, including three contract extensions in Mexico, renewed Pemex payments, and new awards in the Gulf of America and Angola. More meaningfully, Aramco has reinstated seven suspended rigs, extended contracts, and launched a tender for seven additional units beginning in 2026—clear evidence that the jackup market is tightening even against a weak oil tape.

Given that 70–80% of jackup demand is structural and the global fleet is aging, BORR’s modern assets are well positioned. With H2 2026 dayrates already 11% higher than H1 and limited forward coverage offering upside to rising rates, BORR could generate roughly $650 million in unlevered cash flow and $200 million to equity on a ~$1 billion market cap. As utilization trends toward 96% and dayrates inflect, the improving fundamentals present a compelling opportunity, prompting a renewed long position.

Previously we covered a bullish thesis on Transocean Ltd. (RIG) by Unemployed Value Degen in February 2025, which highlighted the company’s resilient offshore drilling operations, rising revenues and EBITDA, robust backlog, and undervaluation. The company's stock price has appreciated approximately by 46.08% since our coverage. The thesis still stands, while Saad Khan takes a similar approach but focuses on Borr Drilling’s jackup market recovery and rising dayrates.

Borr Drilling Limited is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 16 hedge fund portfolios held BORR at the end of the third quarter which was 17 in the previous quarter. While we acknowledge the potential of BORR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.