Borr Drilling's FCF surge contrasts ProPetro's slim margins

Borr Drilling and ProPetro Holding reported sharply contrasting fiscal 2025 results, underscoring the different risk and reward profiles of offshore drilling versus land-based hydraulic fracturing. Borr Drilling generated nearly $127.4 million in free cash flow, a marked recovery from prior negative figures. ProPetro, by contrast, eked out a net income of just $824,000, yielding a razor-thin net margin of 0.1%.

Offshore leverage yields cash

Borr Drilling's international offshore focus drove a 30% revenue increase to approximately $1.0 billion. However, its net income fell to $45 million from $82 million in the prior year, suggesting rising operational or capital costs. The company carries significant leverage to fund its fleet, posting a debt-to-equity ratio of 1.8x as of December 2025. A current ratio of 1.9x indicates the contractor maintains adequate short-term liquidity to meet its obligations.

The contractor operates 29 premium jack-up rigs capable of working in water depths up to 400 feet. While Borr does not disclose its major customers in recent financial filings, its operations have been heavily concentrated in high-demand international markets like Saudi Arabia and Mexico.

Permian concentration limits pricing

ProPetro’s regional focus leaves it heavily exposed to the spending decisions of a handful of major operators. ExxonMobil accounts for 24.9% of its business, followed by Occidental Petroleum at 13.7%, EOG Resources at 12.1%, and Permian Resources at 11.2%. This extreme customer concentration limits the company's negotiating leverage when activity slows.

Consequently, a 12% drop in annual revenue to $1.3 billion left the completion services provider fighting for margins, though it did manage a return to profitability after heavy losses in fiscal 2024. The 0.1% net margin reflects the highly competitive and capital-intensive reality of the modern Permian Basin.

Investor implications

For market participants, the fiscal 2025 divergence illustrates the structural differences separating global offshore contractors from domestic frac fleets. Borr Drilling's ability to convert higher revenue into free cash flow offers a viable path to deleveraging its balance sheet despite lower absolute profits. ProPetro's near-zero margins serve as a warning that regional dominance in American shale does not guarantee pricing power when a few exploration and production giants control the capital expenditure taps.