Odfjell Drilling reported strong financial and operational results for the fourth quarter and full year 2025, marked by significant growth and strategic expansion. The company's net profit for Q4 reached $45 million, doubling the figure from the same period the previous year. Full-year net profits more than doubled to $173 million, up from $65 million in 2024.

Strategic Expansion and Refinancing

A pivotal development was the completion of a $480 million acquisition of the harsh environment semi-submersible rig Deepsea Bollsta on December 15. The company secured this high-specification rig at a cost significantly below its implied value and newbuild price. The rig, to be renamed Deepsea Bergen, seamlessly transitioned to Odfjell's fleet. This acquisition was executed alongside a major refinancing described as a "turning point for the business," which lowered debt costs and extended final maturities until 2031.

Contract Backlog and Key Agreements

The acquisition contributed to nearly $1 billion in firm order backlog secured during the year. Key contracts signed in the quarter include:

• Deepsea Bollsta contracted to Equinor until 2028.
• A contract extension with Aker BP for the Deepsea Nordkapp until the end of 2027.
• An extension for the Deepsea Aberdeen, under contract with Equinor until 2029.

Consequently, the company's total firm contract backlog now stands at $2.2 billion, with an additional $300 million in priced options.

Market Outlook and Opportunities

The demand outlook is positive, with a noticeable increase in interest for Tier 1, 6th generation harsh environment rigs in Norway as operators aim to offset production declines. The Norwegian Continental Shelf is viewed as mature but still holding significant resources, and client ambitions in exploration have been raised. Additional contract opportunities are identified in regions including Canada, West of Shetland in the UK North Sea, South Africa, and Namibia. However, drilling activity in the UK is at an "all-time low," with policy shifts needed to improve the scenario. On the supply side, the market is tightening, as most rigs in the sector are either fully contracted, operating overseas, or require significant investment to operate on the Norwegian Continental Shelf.

Financial Performance

Fourth-quarter revenues were $245 million, a 20% increase from $204 million in the same period last year, driven by increased dayrates. Full-year 2025 revenues reached $901 million, compared to $775 million in 2024. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) for Q4 was $124 million, up 33% from $93 million in the last three months of 2024. Reflecting this strong performance, the company increased its quarterly dividend to 23 cents per share from 20 cents, with total Q4 dividends amounting to $55 million.