Good day, and thank you for standing by. Welcome to the Dolphin Drilling 2024 Q4 Report Conference Call and Webcast. At this time, all participants will be in listen-only mode. After speakers' presentations, there will be a question-and-answer session. You may submit your questions via the webcast at any time by typing them in the question box and clicking "Submit." Please note that today's conference is being recorded. I will now like to turn the conference over to your speaker, Jon Oliver Bryce, Interim President and CEO. Please go ahead.
Thank you for that introduction, and good afternoon, everybody. My name is Jon Oliver Bryce, and I am the recently appointed Interim CEO of Dolphin Drilling. I'm very pleased to be here today and present to you Dolphin Drilling's fourth quarter and preliminary full year 2024 financial results. To help me do this today, I have with me Dolphin's CFO, Stephen Cox, and I also have Ingolf Gillesdal from our Investor Relations team. On this call, we will present our financial performance, we will share some of our operational highlights, and we will give you some commentary on the market in which we operate. At the end of the presentation, we will hold a Q&A. In summary then, Dolphin Drilling ended the year in a stronger position as compared to the year before.
Through a combination of organic activity and acquisitional growth during 2024, Dolphin now has two units working, both with secured term backlog. The company also has a further unit in layup, which is being marketed worldwide and can be mobilized at relatively short notice. 2025 is Dolphin Drilling's 60th anniversary, and with a tightening rig market, especially in the moored semi-submersible supply side, this is underpinned by strong oil price fundamentals, we have good reason to be optimistic about the future. Going forward, we will look to build on the success of 2024. We will look to secure further backlog for our working units and also new backlog for our unit currently in layup, but being cognizant that the backlog justifies the completion of the rig's reactivation.
We will continue to have the highest focus on safe and efficient operations and adhere to our core values of trust, excellence, accountability, and momentum. Finally, we will also operate with strict financial discipline, whether it be in relation to our existing business or to growth opportunities in order to maximize shareholder value. Okay, let's kick off the presentation in detail, and I'll draw your attention to slide two, which is our disclaimer. Moving on to slide three, which is the agenda, we have four bullets there. The first one is Q4 and 2024 key financials and events. The second one is the rig fleet. The third one is the market, and the fourth one is a summary followed by Q&A. I'm going to hand over now to Dolphin's CFO, Stephen Cox, to walk us through section one. Stephen.
Thank you, Jon. We released our report for Q4 2024 earlier today, and here is a brief overview of the preliminary financial results. As always, I refer you to the detailed report for further information. In Q4, we recorded total revenues of $50 million, an increase from prior quarter as a result of the Blackford contract commencement and the one-off termination fee payment related to the canceled Borgland Dolphin campaign. The Paul B. Loyd Jr. continues to deliver strong performance. EBITDA was $11 million. This includes the full impact of the termination fee received, the cost impact of the final leg of Blackford's journey into India, and the application of LDs by Oil India. Operating costs on the units were slightly higher than anticipated. Blackford went on contract on 11th November, and following startup, achieved 97% uptime for the remainder of the quarter.
Startup was several weeks behind schedule, hence the application of LDs, and we are in continuing discussions with the client on the quantum of these. We are pleased to see continued strong safety statistics with no lost-time incidents for the fourth quarter and a full year of zero LTIs. We are very proud of the hard work and dedication of our teams and the performance they deliver. Just prior to Christmas, we received the result of the arbitration case in Nigeria. We have been awarded our full claim of $105 million, and all claims against Dolphin were dismissed. We continue to take steps to recover against this award. However, at this stage, we cannot provide any guidance around potential recovery. Now we'll move to the next page and a closer look at the results.
Revenues and EBITDA both significantly improved from earlier quarters, but with various one-off and exceptional items influencing the numbers both ways. Those making calculations can note that the Blackford had 51 days on contract. We suffered $3.8 million in liquidated damages, and counteracting that, a $20.7 million early termination fee was received and booked. The company now has two units on contract, and we have solid counterparties to those contracts. We have incurred higher costs than planned in the quarter. The startup of Blackford with multiple shipments of equipment, delays in personnel movements, and other expenses has driven daily OPEX costs higher than planned. This is similar to the experience we had in Mexico and Nigeria, and over time, we expect to reduce OPEX very much in the same vein as we achieved in those locations.
The company concluded the quarter with a total cash balance of $34.6 million, unrestricted cash being at the high end of the guidance provided in last quarter's report. We are carrying a large amount of accounts payable on the balance sheet. However, it should be noted that there are several million dollars offset to this balance recorded as other current assets, being advance payments and deposits, which will net against the AP number in the coming months. Dolphin's total debt comprises the MAP facility and a shareholder loan. These are shown gross of a $6.5 million reserve amount, which is recorded in other current assets. The MAP loan includes monthly debt amortization equal to $1.67 million U.S. dollars, which commenced in January. The shareholder loan includes PIK interest and no debt amortizing. That loan expires in November this year.
Lastly, earlier this month, the HMRC court case was heard at the U.K. Supreme Court. As a reminder, we were successful in the first two rounds of this case and lost at the appeal court early last year. A decision is now expected from the Supreme Court within the next six months. At this time, we can't provide any further guidance. Now, next up on today's agenda is an update on the company, strategic priorities, rig fleet contract status, and our view of the market sentiment within our segment. Back over to you, Jon.
Thanks, Stephen. Slide seven, Dolphin at a glance. As we enter our 60th year, we have three operational units. Two are working, and one is ready for work. Our Aker H-4 unit, the Paul B. Loyd Jr., or the PBLJ as we call it, is working for Harbour Energy in the U.K. Our enhanced Aker H-3, the Blackford Dolphin, is working for Oil India Limited in India. Our enhanced Aker H-3 unit, the Borgland Dolphin, is currently berthed in Las Palmas, and we are marketing this unit. These are the three units that we have. We are additionally looking for growth opportunities and management opportunities. At the moment, we have these three rigs that you can see in front of you on slide seven. Dolphin Drilling is pursuing a strategy of building on its 60 years as an offshore drilling contractor, with the anniversary of that in spring this year.
During this long period, Dolphin has drilled wells in most of the offshore basins around the world, covering shallow water, midwater, and deepwater, and of course, within a harsh environment. As mentioned previously, we currently have three units, two on contract, and this provides the company with strong revenue visibility going forward. Okay, let's move forward, look at slide eight, and talk about 2024 key company milestones. If we look back at 2024, we can see that it was a transformative year for the company with some significant milestones. One of these milestones was onboarding a large number of new personnel, 220 personnel, in the U.K. and in India. We also acquired a new unit, which was the Paul B. Loyd Jr. We acquired it from Transocean. Following a lot of planning, we implemented a seamless transition for this new unit coming into the Dolphin fleet.
Also, we were in an arbitration case in Nigeria, which we won, which saw a ruling towards Dolphin Drilling of $105 million. Also, the Blackford commenced its drilling program in India, so it was a major milestone. That gives us the company with two strong revenue streams. In addition to these achievements, it's also worth noting that we scrapped two older units from our fleet. We recycled the Bideford and Borgsten , which had very high reactivation costs. In the backdrop of an uncertain market at that time, it was a prudent decision. The market is, however, now showing strong signs of improvement, putting Dolphin in a strong position to capitalize on this tightening market. Okay, let's move on to slide nine and look at the Blackford in a bit more detail. I'm pleased to highlight the successful commencement of operations of this unit in India.
This achievement marks a significant milestone for Dolphin Drilling, demonstrating our ability to secure and execute long-term profitable contracts in key growth markets. On the 11th of November, we announced the official commencement of the Blackford Dolphin's exploration drilling contract with Oil India Limited. This contract, which will see our rig drilling exploration wells in the Andaman Sea, positions us strongly in the Indian market. We've reinforced our local presence through a strategic partnership with Dynamic Drilling and established an Indian offshore drilling contractor. This collaboration, combined with our prior experience in India, sets a solid foundation for our operations. Looking ahead, we see a promising future for the Blackford Dolphin in India. For the time being, Blackford Dolphin is the only moored semi-sub rig located in India.
The rig's capabilities, allowing for shallow water and deepwater moored drilling, aligns perfectly with India's ambitious energy goals, supporting the country's efforts to increase their domestic hydrocarbon production and also enhance their energy security. The rig's performance in Q4 was robust at approximately 96% revenue efficiency. Subsequent to that, we have, however, experienced some BOP-related downtime during Q1, but our target here is to ensure the remainder of the current quarter sees the rig on high uptime as we head back toward 90% for the quarter. Okay, moving on to slide 10 now and Paul B. Loyd Jr. or the PBLJ. We are very pleased with the unit's continued strong operational and safety performance. The unit continues to deliver high operational uptime and has had zero lost-time incidents recorded since it joined the Dolphin fleet early last year.
The detailed planning and execution of the unit's change in ownership back in Q1 2024 has been a key factor in its ongoing success, and feedback from both crew and customers has been very positive. The PBLJ is currently undertaking a long-term contract with Harbour Energy, with the potential to extend into the 2030s. As one of the select few semi-subs still active in the U.K., capable of drilling both wells and supporting decommissioning projects, the PBLJ is strategically positioned for sustained long-term operations in the region. With both Blackford Dolphin and the PBLJ now generating revenue under long-term contracts, Dolphin Drilling has established a solid foundation for sustained cash flows and enhanced financial performance. Okay, moving on to slide 11 and the Borgland.
In May last year, we mobilized the rig from Norway to Las Palmas to commence its special periodic survey as she had secured a drilling contract in the U.K. from early 2025. The unit completed the majority of its required class renewal, but in late 2024, the client chose to terminate the contract rather than push the start date for their U.K. drilling campaign. Dolphin Drilling and EnQuest subsequently agreed an early termination fee in relation to this cancellation of circa $20 million. Rigorous testing and periodic operations of equipment and services have been conducted, and we are pleased to confirm that the whole structure is in excellent condition. We have implemented preservation measures for the rig and key equipment. A small drag on our balance sheet is expected, with layup costs going forward in the magnitude of approximately $25,000 a day.
This approach allows us to maintain operational flexibility while prudently managing our resources. Borgland Dolphin has bid into multiple contract opportunities, and we hope that some of these rig tenders will make a rig decision in the not-too-distant future. Moving on now to slide 12, looking at the company's fleet status, we can see that we have two solid revenue streams with the PBLJ in the U.K. and the Blackford in India. Specifically, looking at the PBLJ, we are contracted out to 2028 to one of the U.K.'s largest independent oil and gas producing company, Harbour Energy. This contract has options to extend into the future. One point of interest is the SPS, which is planned for this year, 2025. At the moment, we're showing late July for this, but there is some flexibility in this date, and the unit will be going to Norway to undertake this work.
In terms of the Blackford, it's now close to completing its first exploration well for Oil India. Thereafter, there are two firm wells planned or a part of the contract for this unit, and there is also an option for a final fourth well. In the backdrop of India and its ambition for high production targets, we think this is a very positive contract and a very positive basin. Finally, the Borgland Dolphin is marketed into multiple offshore basins, and we're actively pursuing several opportunities for the rig. Okay, on to section three, or slide 13. We'll now talk a bit about the drilling market and the supply-demand side. Let's move on to slide 14. This is the area or the sector that Dolphin Drilling operates in. This is the sector which is the dotted line around it. We are very firmly the moored semi-submersible space.
We're not jack-ups. We're not DP. We're in this moored space in the middle. In terms of our peer rigs, you can see on the right-hand side, globally, there's a very small number of units, and quite a few of these are on term contracts. If you look through them, there's some in the U.K., and there's some dotted around the world, but the sum total of units that are available in the world for a hire of moored semis numbers 11. It's a very, very tight supply picture. Moving on to slide 15, let's quickly look at the demand side. What you can see here is demand for moored semi-submersible rigs, the sector that we operate in. You can see them still operating, or demand is still global, with a large number in Norway, but also some activity in the U.K.
What you can see here, this is a Rystad slide showing that U.K. opportunities set to increase from 2026 onwards, and Norwegian opportunities set to increase from 2026 onwards. This sector looks like increasing demand. If you look back at the slide before, a very small amount of supply in terms of what can accommodate this demand. A tightening market, a good market to be in, and it's the market that Dolphin Drilling is operating in. That was the supply-demand picture. Let's go on to slide 16, and we've got a summary here. In summary then, Dolphin Drilling has navigated a year of significant challenges and uncertainties. As we move forward, many of these uncertainties have been resolved, but we acknowledge some still remain. We have a clear plan going forward. We currently have two rigs under contract, providing predictable cash flows.
The pipeline of work for these rigs remains robust, underscoring the strength of our market position. Returning the Borgland Dolphin to active service represents a clear opportunity for revenue growth. However, we remain committed to pursuing only the projects that offer economic viability and attractive returns to the company. As we approach our 60th anniversary in 2025, Dolphin Drilling's legacy, brand recognition, and operational expertise position us favorably to secure work across various offshore basins. Our in-house systems enable us to participate competitively in rig tenders for our own fleets and to market rigs for other companies. As of our latest reporting date, our firm backlog stands at $340 million. With this overview of our current position and our future outlook, we are now ready to address any questions.
Thank you.
As a reminder to ask questions via the webcast, please type them in the question box and click submit. Once again, to ask questions via the webcast, please type them in the question box and click submit. Thank you.
Okay, thanks, operator. There's a couple of questions come in, predominantly on financing and dividends, and I'll take that just now and try and wrap the answer into kind of a single one you might expect, which is that right now the company's at a place with the two units on good counterparties there, cash flowing for those. Everybody's aware, and you saw in the presentation, the upcoming Paul B. Loyd Jr., SPS, middle of this year at some point. Right now, our assessment against the fundamental balance sheet is the right capital structure will really be driven by Borgland and the timing around what happens next with Borgland.
We'll make a decision on that at some point in the next three to six months, I would anticipate. As Jon alluded to, there's a number of tenders there. We need to run through that process. We are doing as best we can to minimize cost, and we hope to go even lower than the numbers quoted there to keep that option in play. I think people are very much aware that we are not going to sit on a unit forever and wait for operators to make a decision. Those things are really all factors as to the next step for the company and financing, and ultimately to get to the point where we can return cash to shareholders down the line. Hopefully that addresses the questions we have to date. Please go ahead and submit any other questions as well.
There is another question here around, and Jon, you may be able to take this one. How many tenders is the company bidding at the present time?
Yeah, I can take that one, Stephen. Where we are just now, there's a fairly high level of activity, more than half a dozen opportunities, I'll describe them as. These opportunities range from direct conversations to RFIs to tenders, and they're for a range of programs, some short ones, some long ones. I would say the majority is probably P&A, but there is some drilling in there. Also the majority is in the U.K., but there are some overseas ones. If you kind of look at it helicopter view, where we are 2025, the market is quiet-ish, but 2026 looks to be very busy in comparison.
We're heading to a much tighter market, and we're involved in a number of opportunity inquiries at the moment. A positive picture.
Great. Thanks. Another question here. I'll pick this one up. Has the company identified any material things to pursue enforcement against in Nigeria? Great question. Obviously, we were pleased and somewhat justified in the result the arbitration gave us just before Christmas. Obviously, $105 million is a hell of a lot of money for anybody, in particular where we are as a company. We are going as hard as we can there. We are aware of the infrastructure, let's call it that way, of GHL. We are aware of other creditors in that process. We are pursuing through the courts the full enforcement action in Nigeria.
As we kind of noted in the presentation, I think it's very hard to put any kind of recovery number against that in any model. Needless to say, we're doing everything we can to try and monetize some or all of that award. The one thing we do know is there is hydrocarbon production in wells down there. The flow of cash that's attached to that is something that we are pursuing aggressively. I've got another one here around the expectations regarding the amount of cash that needs to be paid this year, SPS for Paul B. Loyd Jr. and the amortization of loans. Again, it goes a little bit back to what we touched on in capital structure. You'll note in the presentation we referred to a number of $30 million for Paul B. Loyd Jr.
That is the SPS and the yard state and the mobilization and what we would call normal operating CapEx plans for the years on that unit. When we look at overall cash flows in the year, we will need to do something to deal with a loan that's due back to shareholders towards the end of this year. Again, the Borgland is key to that in terms of what we do with that unit and when does the decision be made around that in terms of the operator side, the tenders that we're pursuing, or ultimately the negative side of it, which would be to put her to scrap. Those things are all still on the table. We have another one here, Jon, maybe for you about what does the company gain from having the office in Brazil?
Hi, Stephen.
The office in Brazil, it's a very modest office. I think we just have one employee left, but it's a strategic base, which allows us to engage in tenders in Brazil. There are some moored tenders, but for any opportunity, we have the track record and I guess you call it the license in Brazil. A very useful strategic hub to have and potentially build from.
Great. Another one here. Have we received the mobilization fee from Oil India for Blackford? Yes, we have. Oil India have paid all invoicing within contract terms to date. I'm very pleased to report another client who pays their bills on time. The monthly we received was reduced by the LDs. Again, you can see this in the presentation and in the report.
We did suffer an amount of LDs due to the delays, not only leaving Nigeria, but also there were delays in getting into India. Government systems were very slow and actually went down, and we experienced a number of unfortunate things. We are having a discussion with Oil India around that because we believe the amount withheld was a little bit higher than it should have been. That's a little bit of watch this space right now. Maybe another one for you, Jon here. Are your rigs still relevant compared to the 7G rigs?
They operate in very different markets, and they have very different price points. If you take an example of where we are here today, we're joining the call from Aberdeen on the UKCS. All work here is carried out by third and fourth generation rigs with very occasional exceptions.
They're fit-for-purpose rigs in the basins that we operate in. They don't compete at all.
Great. Okay. Any further questions? There's nothing more popped through in the chat right now. Jon, I'll just hand over to you for closing remarks.
Yeah. Thank you very much. We're very pleased with the last quarter, setting us the company up with strong revenue streams. A good position going forward. We'll look to build on that and say thank you for your participation on this call today. Thank you.
This concludes today's conference call. Thank you all for participating. You may now disconnect your lines. Thank you.