10 Oversold Energy Stocks To Buy Now

8. Borr Drilling Limited (NYSE:BORR)  

Number of Hedge Fund Investors: 11  

Forward P/E Ratio as of November 5: 6.16  

YTD Performance as of November 5: -43.14%  

Borr Drilling Limited (NYSE:BORR) is a Norwegian offshore drilling contractor, operating a fleet of jack-up rigs. The company serves oil and gas exploration firms worldwide, especially in shallow-water drilling.

Borr Drilling Limited’s (NYSE:BORR) growth prospects are driven by several factors, including a strong order backlog, increasing day rates, and a tight supply-demand scenario for modern jack-up rigs. The company’s order backlog of $1.76 billion provides clear revenue and cash flow visibility, with 92% contract coverage for 2024 and 73% coverage for 2025.

The average day rate for new contracts is expected to trend higher, with a recent order intake at an average day rate of $184,000. Additionally, the company’s modern fleet and tight supply-demand scenario for jack-up rigs position it for EBITDA margin expansion and cash flow growth.

Borr Drilling Limited (NYSE:BORR) is focusing on offshore shallow-water drilling in the Middle East, which has an attractive breakeven point even at lower oil prices. The company’s CEO, Bruno Morand, expects incremental demand to continue outpacing potential supply growth, leading to higher day rates and increased revenue. The company is also targeting to reduce leverage to 2x in the medium term and achieve a long-term steady-state leverage of 1.5x.

Borr Drilling Limited (NYSE:BORR) presents a compelling investment opportunity with a strong order backlog, increasing day rates, and a tight supply-demand scenario for modern jack-up rigs.