Valaris Announces Fleet Rationalization and Issues Fleet Status Report
Semisubmersibles VALARIS DPS-3, DPS-5 and DPS-6 to be Retired from Global Drilling Supply
Jackup VALARIS 75 Sold for $24 Million
Multi-Year Contract for Jackup VALARIS Stavanger in the North Sea
Valaris Limited (NYSE:VAL) ("Valaris" or the "Company") today announced several fleet rationalization actions and issued a Fleet Status Report.
Fleet Rationalization Actions
- The Company recently decided to retire three semisubmersibles from its fleet: VALARIS DPS-5, which has been idle since last working in third quarter 2024, as well as VALARIS DPS-3 and VALARIS DPS-6, which have been stacked for several years. The Company expects that these rigs will be removed from the global drilling supply and repurposed for alternative uses or scrapped.
- Jackup VALARIS 75 has been sold for $24 million. VALARIS 75 is a 25-year-old jackup that has been stacked in the U.S. Gulf for five years. As part of the purchase and sale agreement, future operations are restricted to the U.S. Gulf.
President and Chief Executive Officer Anton Dibowitz said, "We are committed to prudently managing our fleet and will retire or divest rigs when the expected future economic benefit for an asset does not justify its costs. Consistent with this approach, we have decided to high-grade our fleet by retiring three semisubmersibles: VALARIS DPS-3, DPS-5 and DPS-6, for which we see limited attractive, long-term contract opportunities, as well as selling jackup VALARIS 75. These actions reduce costs for idle rigs, benefit our cash flow and further focus our fleet on high-specification assets."
Fleet Status Report
The Company has also issued a Fleet Status Report, announcing new contracts and contract extensions, with associated contract backlog of approximately $120 million, awarded subsequent to issuing the Company's previous Fleet Status Report on October 30, 2024:
- 600-day priced contract extension with TotalEnergies in the UK North Sea for jackup VALARIS Stavanger. The priced extension is expected to commence in the third quarter 2025 in direct continuation of the current program. The total contract value for the priced extension is over $75 million.
- 100-day contract for jackup VALARIS 249 with BP offshore Trinidad. The contract is expected to commence in the first quarter 2026 in direct continuation of the rig's previous program with another operator. The total contract value is approximately $16.8 million.
- One-well contract with Jadestone Energy offshore Australia for jackup VALARIS 247. The contract is expected to commence in March 2025 in direct continuation of the rig's current program with another operator.
- Two-well priced option exercised by BP Indonesia for jackup VALARIS 106. The option period has an estimated duration of 80 days and is expected to commence in May 2025 in direct continuation of the existing firm program. The operating day rate is $95,000.
- Short-term bareboat charter agreement extensions through February 28, 2025, for jackups VALARIS 116, VALARIS 146 and VALARIS 250, which are leased to ARO Drilling ("ARO"). Valaris and ARO remain in discussions with Saudi Aramco regarding longer-term contract extensions for these rigs.
About Valaris Limited
Valaris Limited (NYSE:VAL) is the industry leader in offshore drilling services across all water depths and geographies. Operating a high-quality rig fleet of ultra-deepwater drillships, versatile semisubmersibles and modern shallow-water jackups, Valaris has experience operating in nearly every major offshore basin. Valaris maintains an unwavering commitment to safety, operational excellence, and customer satisfaction, with a focus on technology and innovation. Valaris Limited is a Bermuda exempted company (Bermuda No. 56245). To learn more, visit our website at www.valaris.com.
Cautionary Statements
Statements contained in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include words or phrases such as "anticipate," "believe," "estimate," "expect," "intend," "likely," "outlook," "plan," "project," "could," "may," "might," "should," "will" and similar words and specifically include statements regarding expected financial performance; expected utilization, day rates, revenues, operating expenses, cash flows, contract status, terms and duration, contract backlog, capital expenditures, insurance, financing and funding; the offshore drilling market, including supply and demand, customer drilling programs and the attainment of requisite permits for such programs, stacking of rigs, effects of new rigs on the market and effect of the volatility of commodity prices; expected work commitments, awards, contracts and letters of intent; scheduled delivery dates for rigs; performance and expected benefits of our joint ventures, including our joint venture with Saudi Aramco; timing of the delivery of the Saudi Aramco Rowan Offshore Drilling Company ("ARO") newbuild rigs and the timing of additional ARO newbuild orders; the availability, delivery, mobilization, contract commencement, availability, relocation or other movement of rigs and the timing thereof; rig reactivations; suitability of rigs for future contracts; divestitures of assets; general economic, market, business and industry conditions, including inflation and recessions, trends and outlook; general political conditions, including political tensions, conflicts and war; cybersecurity attacks and threats; uncertainty around the use and impacts of artificial intelligence applications; impacts and effects of public health crises, pandemics and epidemics; future operations; ability to renew expiring contracts or obtain new contracts, including for VALARIS DS-13 and VALARIS DS-14; increasing regulatory complexity; targets, progress, plans and goals related to sustainability matters; the outcome of tax disputes; assessments and settlements; and expense management. The forward-looking statements contained in this press release are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from those indicated, including cancellation, suspension, renegotiation or termination of drilling contracts and programs; our ability to obtain financing, service our debt, fund capital expenditures and pursue other business opportunities; adequacy of sources of liquidity for us and our customers; future share repurchases; actions by regulatory authorities, or other third parties; actions by our security holders; internal control risk; commodity price fluctuations and volatility, customer demand, loss of a significant customer or customer contract, downtime and other risks associated with offshore rig operations; adverse weather, including hurricanes; changes in worldwide rig supply, including as a result of reactivations and newbuilds; and demand, competition and technology; supply chain and logistics challenges; consumer preferences for alternative fuels and forecasts or expectations regarding the global energy transition; increased scrutiny of our sustainability targets, initiatives and reporting and our ability to achieve such targets or initiatives; changes in customer strategy; future levels of offshore drilling activity; governmental action, civil unrest and political and economic uncertainties, including recessions, volatility affecting the banking system and financial markets, inflation, tariffs and adverse changes in the level of international trade activity; terrorism, piracy and military action; risks inherent to shipyard rig reactivation, upgrade, repair, maintenance or enhancement; our ability to enter into, and the terms of, future drilling contracts; suitability of rigs for future contracts; the cancellation of letters of intent or letters of award or any failure to execute definitive contracts following announcements of letters of intent, letters of award or other expected work commitments; the outcome of litigation, legal proceedings, investigations or other claims or contract disputes; governmental regulatory, legislative and permitting requirements affecting drilling operations; the use of artificial intelligence by us, third-party service providers or our competitors; our ability to attract and retain skilled personnel on commercially reasonable terms; environmental or other liabilities, risks or losses; compliance with our debt agreements and debt restrictions that may limit our liquidity and flexibility, including in any return of capital plans; cybersecurity risks and threats; and changes in foreign currency exchange rates. In addition to the numerous factors described above, you should also carefully read and consider "Item 1A. Risk Factors" in Part I and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II of our most recent annual report on Form 10-K, which is available on the Securities and Exchange Commission's website at www.sec.gov or on the Investor Relations section of our website at www.valaris.com. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to update or revise any forward-looking statements, except as required by law.
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