2023-11-28 06:21:02 ET
Dolphin Drilling ASA (FOEAF)
Q3 2023 Earnings Conference Call
November 28, 2023, 03:00 AM ET
Company Participants
Bjørnar Iversen – CEO
Stephen Cox - CFO
Ingolf Gillesdal - VP Corporate Finance and Investor Relations
Conference Call Participants
Presentation
Bjørnar Iversen
First of all, welcome to the Dolphin Drilling Third Quarter Presentation 2023. This is our fourth quarterly presentation since we listed the company last year, 28 of October 2022. And please put forward your questions in the chat functions in the web player as we go along during the presentation, and we will answer those questions as good as we can after the presentation. Then as always, we refer to the disclaimer for risk and forward-looking statements. So for those of you who are particularly interested, please have a look at those.
My name is Bjørnar Iversen, I am the CEO of Dolphin Drilling. And with me here today, I have Stephen Cox, our CFO and I have with me also Ingolf Gillesdal, Vice President, Finance and Investor Relations.
Let's then have a quick look at today's agenda. The agenda today, I will take you through the Q3 highlights and the key financials. Then Stephen will take you through the Q3 quarterly results and the key financials, and I will then take you a little bit into the company with strategy and operational slides and quickly through our market outlook. And at the end, I will have a quick summary before we turn into the Q&A session
Okay. So let's then have a look at the Q3 highlights. In general, we can say that this quarter has been dominated by improved operation and a serious accumulation of new order backlog in the U.K. and in India, which bring the backlog, the firm backlog up to 422 million and with USD 941 million, including our options.
This quarter, the company has delivered an EBITDA of USD 4.6 million, which is an improvement of 3 million from the second quarter. This is mainly due to Blackwood Dolphin delivering high operational uptime, both operational and financial uptime for GHL in Nigeria, and we have also reduced the OpEx with approximately $10,000 down to $16,000 per day.
Let's then have a little look at the fleet update. We have signed a 5-year frame agreement for Borgen with EnQuest [ph] in the U.K. This contract includes 137 day for a drilling program, and it includes a contribution for the reactivation of the Borgen Dolphin. EnQuest has further an option here that needs to be confirmed within 90 days from contract signing to extend their additional work, it's significantly as part of a 5-year strategic alliance over, as I said, a 5-year period. Within this 5-year period, Dolphin Drilling will have the full schedule flexibility and of course, that gives us optionality to slot in work for other operators in the North Sea in a way, which is a very high strategic importance for the company.
Then commenting on the letter of award from Oil India, which is commencing Q3 drilling operation commenced in Q3 2024 for up to 21 months of drilling, where we have 14 months of firm order backlog and a 7 months with options, and we are in negotiations with Oil India to mobilize the Blackboard drilling for an early commencement there post over operation in Nigeria.
Then a couple of words about the closing of Paul B. Loyd and the Transocean Leader acquisition that we did before the summer holidays this year. We are expected to take over the operations within the next 60 days. The company gained a U.K. acceptance from the - from the HFC in the U.K. for Paul B. Loyd in November. And now it's about planning and taking over the operation and we will do that as soon as the current well is finished. The rig is currently working for Neo on a well. And when - as soon as that well is finished, we will take over the operation. And today, we are now preparing, what should I say, installing computers on board. We are doing systems on board. We are training people in our systems and so forth. So we are ready to do that within the next 60 days.
Looking at the order portfolio, commenting a little bit to the bubble to the right there. We have a total revenue backlog now of USD 941 million, with 422 million in firm order backlog and with 509 [ph] million in options. And this is excluding the peak petroleum contract that we have decided to take out in our base case assumptions.
So commenting on the Nigeria client and contract status, we are continuing to have some payment delays in Nigeria, and we are in close contact with GHL and the funding partners and Stephen will take us through that in more detail in the finance chapter.
And as I said, peak is out due to a continued breach of the contract conditions by the client there. We have decided to take the order backlog out of both the firm and the optional backlog. So the figures to the right here are excluding those figures.
Finally, at the bottom of this slide, financing, we have signed a term sheet for our USD 65 million loan facility with Maritime Asset Partners. And of course, this is to fund, of course, the mobilization of the Borland [ph] It's yes, to give us, let's say, liquidity buffer to run the company. And yes, I think Stephen will probably comment on that on a separate slide back in - later in the presentation.
So let's move to the next page, which says something about our headline financial data points, and let me repeat a little bit. For backlog, as mentioned, 422, which is up 45 million, excluding peak. That gives us an estimated EBITDA backlog for the firm backlog of 220 million and more than double, of course, for the - including the optional backlog. And it also - the Q3 EBITDA backlog was up 3 million to 4.6 million, and we are pretty happy and feel that we are delivering on operations. So safe, solid operations, high uptime, low operational costs, and taking in a significant amount of order backlog in the company, bringing the total backlog, including options close to USD 1 billion. So we feel that we have really delivered in this quarter and really lifting the company.
Let's then go to the Q3 results in more details, and I give the word to you, Stephen, please.
Stephen Cox
Okay. Thanks, Bjørnar, and hello, everybody. So I'm going to run through the financials for Q3, and I'm going to dive a little bit into the balance sheet and in particular, into the receivables position with GHL- as Jon alluded to there and some of the work that we've done around that balance.
So first of all, our P&L statement for Q3. So we achieved $20.8 million of charter revenues for the quarter. As referenced, that's close to the maximum that is possible under the contract with GHL. So we're very pleased with that result. As we look down the page, we incurred OpEx of $12.5 million. That reflects reduced daily operating expenses on the Blackford. And again, we're very pleased with that as the operation stabilized in Nigeria.
We did have a onetime cost adjustment between our G&A line and our OpEx line at $0.4 million for those that are adjusting. So the G&A on the numbers side of it on the front of it looks like it's up a little bit here. The bulk of that is really the adjustment between OpEx and G&A.
Underlying G&A is $0.2 million more than previous quarter, and that's all attributable to the work that we've done onshore to support the transition process training, et cetera, around the Paul B. Loyd group.
Our stacking costs for [indiscernible] are very stable. The bulk of that spend is on the Borland [ph] as we've discussed in the past. That remained very consistent with the previous quarter. And as I said, G&A underlying is very consistent with previous quarters. So all in very stable cost base, slightly down OpEx running on the Blackford. And with that increase in revenue, that almost all falls through to the EBITDA number. So we have a $4.6 million EBITDA. That's in line with our projections from last quarter as we saw a very sort of stable result into June, and that carried through into Q3, running down below the line then down to the net, unfortunately, net loss number, the bulk of that really being depreciation, amortization and taxes. And just as the statement says on the bottom there, we're not actually cash paying taxes at this point. There's no requirement for us to do that as yet. These are accounting adjustments.
So moving into the balance sheet. As everybody is very much aware of, $65 million net proceeds raised following the placement and the subsequent repair offering in July and September. That is now reflected within the total cash balance of just shy of $60 million. On the page, the accounts receivable number, and I'm going to dive into this a little bit in the next couple of pages has shown just shy of $41 million there. That is what I will refer to as a gross number. It does not reflect some of the deposits on account and some of the cash receipts that we've had through the quarter, and I'll explain that in a little bit.
Our net PP&E number now includes the deposits we paid to Transocean in line with the acquisition agreement of the Paul B. Loyd and the leader. So there's been 2 sets of deposits paid there, just over $6 million. That's included in that balance.
Other current liabilities is the other number I'll call out and draw attention to, that's $42.4 million. That number includes the deposits we've received from GHL, that includes deferred mobilization revenues, including the peak $6 million. And again, I'll touch on that in a little bit. It includes amount were due to our factor and those amounts will be repaid as we look to refinance using the new facility. And it also includes various tax provisions, the bulk of which are not cash payable for many years into the future, if at all. We do then have the $50 million debt balance, that is the shareholder loan, which was in existence at the end of last quarter.
Just moving on to the cash flow. So we show here the year-to-date position on cash. Unfortunately, as we've alluded to, the receipts have been very slow from GHL. We've seen what I refer to as direct feeding of cash payments through Q3. We do have the investment mainly again in Q3, that was CapEx related to the Transocean acquisitions. We had very little CapEx underlying the Blackford up and running, and we do not have any investment yet flowing to Borland, although that will happen with the reactivation in the future. And as I said, the full proceeds are invested. So really, our big focus here is working capital and the amount of cash we're having to deploy there to keep the Nigeria operation running.
The net cash balance at the end of Q3 was just shy of $60 million. Included in that is $9 million of restricted cash, and that restricted cash is related to bid bonds. It's related to guarantees. It's related to the import bonds that we had to post to get the Blackford into Nigeria, and it also includes just over $3.2 million worth of receipts that we had from entities related to GHL, but not GHL themselves, and I'll explain that on the next page.
So this - Page 11 is a specific update around the Blackford in Nigeria. So as Bjørnar mentioned, a strong operational performance of the work we've been able to do. The rig has successfully drilled a well a prospect there for the client. We have seen a lot of disruption to the operation, and that's through delayed delivery of client-supplied equipment and services. We are on location, and we're on our first location still. The rig is there in standby mode at 95% day rate as per the contract.
The client has given us indication of what they want to do next with the rig, which includes a sidetrack on existing location and a rig move. Unfortunately, we have been in a lot of dialogue and a very frequent dialogue with the customer and the principal and the customer directly, discussing the situation of payment and the overall financial condition of the client.
We are - we have a lot of insight into that process. We are in direct contact with the client's main financier, which is First Bank of Nigeria. And we have visibility line of sight to how financing is going to work there. We also have line of sight to how the revenues and the current production offtake is happening in that client. And that is how our main payment source is looking for the future state. We will obviously inform the market as payments come in from this point forward. But our net position, as I described at the bottom of the page there is, as at the end of Q3, GHL were give [ph] $17 million.
So the breakdown of that and the waterfall to the right-hand side that we're displaying, first of all, we explained how we moved from the Q2 receivables position, which was $9 million. We cut $23 million worth of invoices in the quarter. We received just over $4 million worth of payments. However, $3 million of those payments has not been applied to the receivables balance. Instead, we're holding those in the other current liability side of the balance sheet. And that is because they came from sources other than GHL as a company. And until we run our checks on those balances, we will not recognize those as offsets to the receivables.
If we do, however, clear that process and I move down to the breakdown of the balance, the $41 million of receivables can be viewed in the manner of $6 million is linked to peak, Bonar mentioned, and we're continuing to assess the options there. There's an invoice in the system for $6 million. The offset of that invoice is recorded in our books as deferred mobilization fee. So that makes up part of the other current liabilities balance. So there's a netting there in the balance sheet. We have received just over $11 million in total from GHL and other parties connected with GHL. So that $11 million, $8 million of that is the $8 million advance we received before we came to Nigeria and the other 3 represents receipts we had during Q3. So that 11% kind of DB applied to the outstanding balance. And then within the receivables, there's $6 million of VAT in tax, and that's money that we'll obviously go through to the Nigerian government ultimately.
So we have a corresponding liability recorded for that in the books as well. So net position in our balance sheet at the end of Q3 is the'17, and that's the math. That's how that balance is derived.. We obviously maintain contact with DHL frequently. And as I mentioned before, we will update we are anticipating some payments in the coming weeks.
So moving on to financing. We have for some time now been in discussion on financing with regards to specifically the Borland, but obviously, the situation with working capital as such that we are looking to put some more money into the company over the period in the next few weeks. We have discussed this being connected specifically to the Paul B. Loyd and that's how this indeed will be structured. So the most efficient way for us to do this financing is to pull this in at the subsidiary level. The financing is going to be connected to the Paul B. Loyd, and that's how this has been derived. All the other assets within Dolphin, the rest of the fleet will remain unencumbered. The financing will include PCG from the listed vehicle, Dolphin Drilling AS. It is lined up and connected to the fixed tenure of the Paul B. Loyd with Harbor. So that gives it roughly 3.75 here through September 2027. And -- and then you can see the headline rate there is just below 10%. So we're very pleased with this facility and the process we have gone through with MAP to get this done. As it stands, the facility is in a signed term sheet with a very advanced negotiation on long-form documentation.
We expect this to be ready within the coming weeks, and we plan to close this contemporaneously with the acquisition of the Paul B. Loyd. As I previously talked about, the factoring facility with GII, while that's worked very well for us over the past few years. It did restrict our flexibility. So we will repay and close that facility down. And this new facility will very much give us an efficient way of funding the group.
As I said before, it's at the subsidiary level. It's at Dolphin Drilling Limited, the U.K. opco level. but it will allow us to manage across the entire group very flexibly the working capital needs of the business as well as moving cash around and getting ourselves to the stage when we can hopefully get distributions done as quickly and efficiently as possible.
So with that, I will move on to how we are looking at the 3 assets, the Paul B. Loyd and the Blackford, in particular, and a little bit of high-level discussion around how we see direct and OpEx for those rigs once we are on contract with all 3. So as previously disclosed, the Paul B. Loyd rates with Harbor are known and in the market. And we are seeing the rig and the results that we have visibility to from Transocean very much in line with the data on the page here. The Borland and the Blackford, as Bjørnar has mentioned, we now have a site on the contracts and where those assets will go. And we're providing some very high-level guidance on what that could look like in the future. The Biddeford and leader remain stacked for us.
Those are included in the waterfall here. And along with the startup in India and the exit from Nigeria, we would expect G&A to remain roughly stable with the position we have today. The CapEx and the maintenance CapEx for these assets will be somewhere in the $3 million to $5 million per range. That's consistent with how we have seen Blackford and Borland in particular, as they run through operating periods over the last 4 years. So all in all, when we get to this position, we should see free cash flows for the company somewhere between $80 million and $100 million per year, and we reaffirm that guidance from the perspective of the future play of Dolphin drilling. And I think with that, I'll hand back to Bona.
Bjørnar Iversen
Thank you very much, Stephen. Thank you for taking us through the financial details. Let's then have a quick look at the company and the operational update and have a little bit look at our strategy and where we are positioned in the market. As many of you know, we are the only drilling contractor that are specifically focusing and have the more semisubmersible market as our core focus. And as you see from the slide here, that's in the middle of the market with water debt from around 65,000 to 1,800 meters more -- this market, and just to mention briefly, the market has been through the most extensive capacity reduction in history where the market has been adjusted from 140 units, around 140 units in 2013 and down to total around 36 today, of which there's a majority or 12 to 14 being landlocked in the Caspian Sea and in China, and that brings down the total market to around 20 rigs, 20 available rigs. So that means that this market has now limited supply in a market that is growing. So that's the underlying scene for the company, and that's why we see this also backlog growth.
Okay. Let's have a quick dive into the polloi and the Transocean Leader acquisition, just to take you a little bit through what we've done lately since we signed the agreement with Transocean in June. As we said, it was signed the 26th of June, the project 2023. We have spent around 13,000 man-hours on execution to bring the operation over to Dolphin drilling. The project is on track, and we are ready to take over the operation as soon as Neo has finished the well - we have Masood [ph] authority approval. The safety case was granted from the U.K. authorities, the 7th of November 2023, which was approximately 1 month ahead of schedule, and the feedback from the U.K. authorities were excellent to the company. And we were very happy about that. We had a very strong team that was really executing better than we anticipated.
The remaining scope now is to transfer the contract scope over to us formally. And as mentioned, as soon as Neil has done there well, that will happen. So then we will transfer the ownership and the flag to us. On the people side, the polyloid will come over with the crew intact and we will strengthen it on certain onshore position from both in drilling. We see consistency in safety and operational performance and income through the whole period. So we are very happy with the way that Transocean has done the handover the way they're operating the rig, and we are now facing in our organization and systems day by day.
The integration team, it's ongoing. We have a lot of onboarding activities now every week. And in fact, I'm going over this week again to meet with parts of the crew, and we have now 3, 4 rounds with the crew to do the familiar realization of the personnel and to build a strong and integrated team, both with incumbent to people on the rig but also with the harbor organization. We expect to see this happen over the next 60 days
So -- but as of today, I would say something early January, early mid-January is to be expected based on the well progress as reported this morning. Let's then look a little bit at the company. As we said, we were heading for growth, and we did the acquisition in June. We are very happy with that. And if we look at number on there, we -- and let's take them one by one. Number one is in the right upper right, the left corner, we have the Blackford Dolphin currently operating in Nigeria from DHL, and we had the details from Stephen there. We plan after our operations in Nigeria to move the rig to India and work for Oil India after the GHL/peak campaign, but the DHL campaign.
The poll meloid on number 2 there will be taken over as mentioned, and will operate under a 10-year frame agreement, 10-year frame agreement with Harbor, which is the largest oil company, oil operator in the U.K. It was signed a 4.3-year contract plus a 5-year with option at the end, which basically take the rig to close to 10 years.
And also to mention on that, originally, it was a sign for a very long P&A campaign on the Belmar field, which this has now changed in many ways to do production drilling for harbor -- so we see a change in the U.K. market where a lot of the P&A activities as other companies are twisting their well programs to production drilling, and we see that as a general trend.’’
We also - let's move to the number 3, which is the bar gland, as sent out earlier today and also reported here, we have signed a 5-year frame agreement with EnQuest [ph] with a lot of flexibility. We plan to keep her in the North Sea to filler up the next 5 years with drilling activities, primarily in the U.K. and she is perfectly positioned to that. So the contract with EnQuest including the options there and the options there. This is - we said this is a significant amount of options that will be executed within the next 90 days according to plans. So the Borgen will be operating in parallel out of our Abidin office on the U.K. shelf.
Then we have number 4 there, the Dolphin Leader for the Transocean Leader, which will be named Dolphin leader. We are the cause of the progress of renaming and taking over Flagstate and all the formalities. We are now in the process of getting a full understanding of the rig. And we also have people on the rig this week, and we are positively surprised so far. We are working to get mobilization and SBS budget in place, and we can say that we have had several clients that have shown the interest in the asset.
So what we say here, looking also at a bit different to the right there, considered sold. It's for us today, it seems that the Dolphin Leader is prioritized as the next rig out, and we are considering the Biddeford for sale. They have completely different characteristics. You can say that the leader was -- feared was once the largest semi in the world, and the Biddeford is a smaller P&A exploration, field development development machine, while the leader is a big rig with very high capacities -- so of course, we will -- when it comes to the bid, we will consider alternative use of that asset, and we are -- it's a candidate for sale for us.
Let's then have a quick peek at my favorite slide in this quarterly presentation, the next slide, which is the buildup of revenue backlog. And as we see, if we go to the Q4 2022, it says USD 85 million. And that is back a year from now when we listed the company. So in many ways, when we listed the company, it was a company with a lot of rigs and today, it's the other way around. We have a lot of backlog and the rigs are, in many ways, the 3 first rigs are in manual where it's sold out for the next years. And now it's about converting backlog to cash flow and dividend.
So the company has undergone a complete transformation with, as I said, with no backlog to close to $1 billion, including options. And this is in a market with good demand where we have had quality operations over the last quarters and with very limited supply. So in many ways, this quarter and over the last quarters, we have feel that we have delivered on our promises. And based on the market as we see it, there is more to come.
So let's have a quick look at the market. Here, we see the Lloyd and the Black Ford. So let's jump to the market outlook. Just commenting on the market. Here, we see some bubbles here. On mobile says 10 tenders and request. That is the, I would say, the European market, including the Med, that we see, let's say, South Africa and sorry, South America and West Africa, 5 to 10 tenders in the moment, and we see India, Asia with 5 tenders and request moving.
Even if the ultra-deepwater market has flattened out a little bit as we've seen from the market trends lately, we, as a moored market, we have been, I would say, 6 to 12 months behind that market. So that means we still have a lot of demand momentum in the market as we see from these tenders and also for the latest awards with Oil India and incest [ph] But there's more than 20 opportunities out there that we are actively working with, where we see momentum and opportunities to sign up more work on our assets.
So time wise, as I said, we are behind. There was a big momentum in the quarter. The last year up until now, we still have a lot of momentum in our part of the market. And as mentioned, we have a lot of opportunities in the pipeline.
Having a little bit closer look at the U.K. CMI market, we see a trend where the contracts awarded goes from - it was a short-term market. But if we look at the latest awards with the Ocean Petrie, the Paul B. Loyd and the Borgen, we see an average contract award length between 3 and 5 years. So we see that the whole market in the U.K. goes from short to long and with our acquisition and our assets, we are in the dead center of that in a market with very few assets as shown in this foil.
Okay. Let's then jump to the summary slide. And looking at the summary slide, if we go to one, the company has delivered 4.6 million in EBITDA during this quarter. This is up 3 million from last quarter with a high financial and operational uptime and low OpEx. And two, we have signed a contract, a 5-year frame agreement with EnQuest. And we have - which will - with a lot of options that will be called on within the next 90 days for the Borland with full flexibility for us to slot in work in the U.K. or wherever, over that 5-year period, which gives us a strategic position, which we intend to use to bring in more work.
We have let award during the quarter received from Oil India, which, according to the contract, should commence Q3 2024, where we are doing negotiations or we have negotiations with Oil India to mobilize the Blackford for an early commencement in India.
The total revenue backlog has grown to 941 million. adjusted for the peak, which we have taken out, of which 422 million is firm and 591 million with quality options. We have also signed, as mentioned earlier and in detail by Stephen, a term sheet with Maritime Asset Partners Limited for a 65 million loan facility to increase our liquidity robustness.
So that sums up the quarter. I will also on the next page, comment a little bit on the company and the company structure. We have 53% of the company and the shares floating on Euronext growth. We have more than 1,000 shareholders, primarily consisting of Norwegian, U.K. and U.S. investors. We have strategic value partners, SVP as our largest owner with 28%. And we have standard and firmly the Ford cliff were with tens petal in there with SM 199% owner in the company, and we are very happy with, as I said, with the current - with our current quarter and the way the company has transformed.
And I have also on the next page, I'm summing up the whole presentation with our vision, mission and values. And why do I do that? I have promised myself to use this in all our presentations going forward. We are onboarding 2 rigs and 2 rig crews that is close to 300 new personnel, and we're using, of course, our vision, mission and values to onboard them. But as we say, the company is deeply committed to deliver pioneer drilling services for the future being the oldest Norwegian driller with 65 years experience.
We have a vision to be the trusted team we are delivering unmatched customer service, innovation and performance. And our mission is to work very close to our customers to achieve this. And in that let's say, illustration to the right, we see trust excellence, accountability and momentum, which can be summed up as team and of course, built on trust, built on excellence built on accountability and built on momentum and team is our values.
With that, I think I would like to open up for our Q&A session. So I think I'll give the word back to you again, Stephen, have we got some questions in there?
Stephen Cox
Yes, we do. We do. So I will attempt to do these in some kind of logical order. So we've got quite a few to go through here, and I'm going to try and start with the market kind of based questions first, June. So here's a good one. So in management's view, what is the biggest misconception when comparing the current cycle for oil rigs compared to 2000 to 2014 that we observe in the market.
Bjørnar Iversen
I think this time, there's more a supply issue than a demand issue. We see all the, what should I say, traditional oil drilling basins coming back to life. And as I said, there were 140 assets before, no there's 20 available - so what I see, it's the supply, it's lack of supply of people or rigs, first of all, our assets, and we see that particularly now with, for instance, Petrobras who is trying to grow, and they don't get hold of assets and services and also what should I say, people and services. So drilling rigs, people and services. This lack this time of it. Looking at the last circle, there was a new build cycle in there, and there were a lot of yards building. Now there is 0 in that -- on that side of the equation...
Stephen Cox
And a very related question, which you may have already answered, how do you consider the potential work in the Brazilian market.
Bjørnar Iversen
I think there's an awful lot of work that will be done in the Brazilian market. And we are in dialogue with Petrobras, which I would say, continuously. And we have continuous meeting with the Brazilian. So we look at Brazilian as one of the core markets. And what should I say, it's the biggest offshore market in the world, and I think that sells everything.
Bjørnar Iversen
And maybe add a little bit on it. We're obviously looking at that market are very conscious of economics. Definitely, there's many things to consider to work effectively over there. Okay. So then maybe in a couple of more of the detailed questions. There's a question regarding how the frame agreement works regarding the Borland, -- what would be understand by with inquest for them or work for them all the time. I know you have mentioned there...
Stephen Cox
No, we can say that what we have there, we have to sum up the mechanics of that contract, it works in the following way. For today, there's a firm work scope. There's an optional work scope that will be firmed up within the next 90 days subject partner approval. And we expect, of course, that to happen. That flexibility in that frame agreement is we can do the work when we want to do the work. So that means we can do it, let's say, continuously from - after doing the SPS on mobilization of the rig or we can put it at the back of that 5-year cycle or in the middle of that 5-year cycle. So if another, let's say, player in the U.K. market, -- and we can mention there's a lot moving out there.
You have the Repsol, you have the IT cars, you have the [indiscernible] you have -- what more do we have there? -- we have the NEO, and we have probably peak - so not peak harbor. So we see at least between 5 and 10 cost clients in the U.K. that need drilling assets. And what we have now, we can slot it in wherever we want...
Bjørnar Iversen
Yes. So there's a couple of more here. I'm just going to run out. There's a few obviously related to Nigeria, and we'll maybe try and wrap those into one discussion. So there's a question around her Blackford itself experienced any technical difficulties related to the rig? Or is it more about suffering from lack of equipment and services.
Stephen Cox
The answer is the rig is operating perfectly. So has the cruise. And I would say it's 10 out of 10. What we see is logistic issues and all these normal issues that we have seen earlier in, let's say, African operations. It's about logistics, it's about approvals. And of course, we are providing services.
Bjørnar Iversen
And then there's a couple of questions that are related here about expected payments. And as I said before, we will update as and when those happen. I think the key thing maybe to say is Burn and I are in constant dialogue with GHL with the principles in GHL and with the financial years, we do anticipate cash is coming relatively soon. However, we're not going to give any specific guidance on that. We'll update instead when that does happen.
And then a couple of related questions to that, obviously, but we have talked before about when we can get to the point of distributions, and we've talked about mid- to late 2024. Is that still the case after the problems in Nigeria. And I think I would say the answer to that is that is still very much our plan to get to that point. We obviously are watching the situation carefully in Nigeria and planning the cash flows of the company carefully around about that situation. But again, we don't want to - we wouldn't guide too much around that. And then there's a couple of questions around Oil India and taking Blackford across are we negotiating timing and start date? And is there a possibility that, that can start early.
Stephen Cox
The answer is yes to that. Oil India, they have a wish to take that earlier than anticipated. And as we said, that was what we have communicated before is third quarter - sorry, third quarter next year, and they would like to move it into the second quarter. I can be as specific as that.
Bjørnar Iversen
And then one topic. We obviously haven't mentioned too much, but there is a question about the Keppel rigs.
Stephen Cox
What we see on the Keppel side, we see that the Norwegian market seems a little bit quiet. And of course, those 2 rigs are built for the Norwegian market. We have been in close dialogue with the biggest player in Norway, who's been the Equinor WoitEnergy and Aker BP. And as of today, we don't see any long-term active prospects in Norway, but that might change, but that's what we see now.
Bjørnar Iversen
And then there's a couple of questions here, just around the illustrative EBITDA and cash flow from Page 13 is it representative of what we're seeing. The answer to that is yes. It is representative of the contracts that we are now seeing. And regarding the Biddeford, can you elaborate on whether or not you're in any discussions already.
Stephen Cox
What we can say on the bid for, we have had the bid for in Leo for a long time. We have -- as you see, you take out one rig after rig after 1 rig, that's the way the world works. And now we have taken out from -- we had 5 rigs in a of these rigs more or less. And now we have 2 left. And of those 2, we have the leader as the biggest one and the one probably with the biggest potential. And then we have the Biddeford as, I would say, as or rig number 5 with completely different characteristic. To answer specific to the question, there's been dialogue with 2 different clients for the Biddeford on P&A activities, and that's what we see there. But still, we see that the leader has a bigger operational framework than footprint than the bid effort. So I think I cannot say so much more than that.
Bjørnar Iversen
And then just one more just popped up relating to EnQuest. Can you just - can you make a bit clear of what this contract would mean for Borland if you got no other work from the incremental availability. So I think that where that question is going and what we're talking about there is the firm scope that we have booked and the mobilization contribution that we have booked that more and covers our reactivation cost and OpEx through that period. So we very much reaffirmed the commitment we made previously, which is we will not take rigs out and take risk on investment to hope for more days. economics in that cover us...
Stephen Cox
Definitely.
Bjørnar Iversen
And that is all the questions we have for today.
Stephen Cox
Thank you so to - to sum up, I would like to thank all of you for calling in and listening to us. To sum up, we are happy with the quarter. We feel that the company is completely transformed within the last year. And I think with the latest contract with EnQuest and the work that we're doing with Olivia, it seems that we now have the 3 rigs committed and with close to $1 billion with order backlog, including options in there with quality options in there. We - I think we feel that we have delivered the last quarter. So on that note, we would like to thank you all, and I hope that you can call in on us also on the next quarterly presentation. Thank you.
Question-and-Answer Session
End of Q&A
For further details see:
Dolphin Drilling ASA (FOEAF) Q3 2023 Earnings Call Transcript