12 Best Oil and Gas Penny Stocks to Invest in Now

7. Borr Drilling Limited (NYSE:BORR)

Number of Hedge Fund Holders: 16

Share Price as of April 16: $1.86

Borr Drilling Limited (NYSE:BORR) works as a top offshore shallow-water drilling contractor, using jack-up rigs across the Middle East, Southeast Asia, West Africa, and Latin America. It provides drilling services and crew operations to exploration and production companies, with one of the industry’s youngest jack-up fleets. Borr stands to gain from global rig shortages, as no new orders have been placed industry-wide in over a decade, and roughly 30% of global rigs are more than 35 years old.

In Q4 ending December 31, 2024, Borr Drilling Limited (NYSE:BORR) posted adjusted EBITDA of $136.7 million, an increase of 18% from the previous quarter. Net income reached $26.3 million ($0.11 per share) as its quarterly revenue grew by $21.5 million, thanks to better day rates. The company finished the year within its $500-550 million adjusted EBITDA guidance. Moreover, it also announced a $0.02 per share cash payout, ending the quarter with $61.6 million in cash plus access to an unused $150 million credit line.

Furthermore, the company accomplished impressive 98.9% technical and 97.1% economic utilization rates in Q4. Borr Drilling Limited (NYSE:BORR) completed its new build program as its final rig was delivered in November. During 2024, the company secured $795 million in new contracts at an average day rate of $177,000, while 77% of its 2025 rig days are already booked at $149,000 daily. Importantly, Borr settled a long-running $125 million payment dispute with PEMEX, collecting $105 million so far.

Going forward, Borr Drilling Limited (NYSE:BORR) expects to receive $44 million in mobilization payments in the first half of 2025. Its CapEx should stay under $50 million now that its fleet growth cycle is complete. Despite some short-term uncertainty, the company expects higher demand later in 2025 and into 2026, with new business opportunities appearing in the Middle East and Southeast Asia. Moreover, three rigs currently suspended in Mexico should gradually return to service starting in Q2 2025, which will boost Borr’s contracted activity and position it as one of the best penny stocks.