Oslo and New York-listed Borr Drilling, partly owned by Schlumberger Ltd., said on Aug. 29 it expected strong core earnings growth in coming months with demand for its rigs set to rise.

The offshore drilling rig contractor reported a negative adjusted EBITDA of $4.9 million for the second quarter.

However, it said it expected core earnings to be able to cover all operational and financial cash costs in the third quarter.

"Based on current operations and committed contracts, Borr Drilling expects strong growth in Adjusted EBITDA in the coming quarters," the company said in a statement.

Borr owns a fleet of jackup rigs, which drill in shallow waters such as in the Middle East and North Sea, competing with such firms as Valaris, Seadrill, Shelf Drilling and Maersk Drilling.

The company said it had contracted several rigs at day rates at or above $100,000 per day over the last month, double prices seen in 2017, while its competitors have made similar deals.

Jackup day rates for the last 10 years averaged $145,000, indicating upside potential, it added.

The company said there was demand for more than 40 modern jackup rigs in various tenders, including in the Middle East, Mexico, South-East Asia and West Africa.

As a result, it expected the global count of contracted jackup rigs to surpass 400 units in the next 12 months, up from 365 units at the end of June and compared to a peak of 440 units in 2014.

Utilization rates of modern rigs built after the year 2000, which account for a majority of Borr Drilling's fleet, have surpassed levels where owners gain sufficient market power to rise prices.

"Utilization is pushing the 90% mark for modern rigs, while historically, pricing power for owners starts at 85%," the company said.

Borr Drilling, which has 15 rigs in operation or contracted, will activate five newly built rigs in anticipation of rising demand.

"The probability to generate significant cash even at current market day rates should be good," it added.

Founded in 2016 by Norwegian investor Tor Olav Troeim, Borr is 14.2% owned by Schlumberger, the world's largest oil service firm.

Last week, Borr Drilling's board of directors proposed to elect former Schlumberger CEO Paal Kibsgaard as its new chairman.

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Borr Drilling's shares were up 2.2% by 6:02 a.m. CDT (11:02 GMT), but still down some 70% since listing on Oslo's main exchange on Aug. 30, 2017.