Valaris Announces Contract Awards and Fleet Status Updates

Rhea-AI Summary

Valaris Limited announces new contracts and contract extensions, with associated contract backlog of approximately $150 million. Contracts include a two-well contract with Anadarko Petroleum Corporation in the U.S. Gulf of Mexico, a nine-well contract for a plug and abandonment campaign with Apache in the U.S. Gulf of Mexico, a 180-day contract with an undisclosed operator offshore Australia, a one-year contract with an undisclosed operator offshore Australia, and a two-well contract with a major Australian operator. Operating day rates range from $150,000 to $180,000.

Positive

• Valaris Limited announces new contracts and contract extensions with a contract backlog of approximately $150 million. These contracts will contribute to the company's revenue and financial stability. The contracts include a two-well contract with Anadarko Petroleum Corporation in the U.S. Gulf of Mexico, a nine-well contract for a plug and abandonment campaign with Apache in the U.S. Gulf of Mexico, a 180-day contract with an undisclosed operator offshore Australia, a one-year contract with an undisclosed operator offshore Australia, and a two-well contract with a major Australian operator. These contracts provide a steady stream of income for Valaris Limited and enhance its market position. The operating day rates range from $150,000 to $180,000, which indicates the profitability of the contracts.

Negative

• None.

HAMILTON, Bermuda--(BUSINESS WIRE)-- Valaris Limited (NYSE: VAL) (“Valaris” or the “Company”) announced today new contracts and contract extensions, with associated contract backlog of approximately $150 million, awarded subsequent to issuing the Company’s most recent fleet status report on May 1, 2023. Contract backlog excludes lump sum payments such as mobilization fees and capital reimbursements.

• Two-well contract with Anadarko Petroleum Corporation (a wholly owned subsidiary of Occidental) in the U.S. Gulf of Mexico for semisubmersible VALARIS DPS-5. The contract is expected to commence in July 2023 and has a minimum duration of 60 days. The total contract value is approximately $22 million.
• Nine-well contract for a plug and abandonment campaign with Apache in the U.S. Gulf of Mexico for semisubmersible VALARIS DPS-5. The contract is expected to commence in September 2023 and has a minimum duration of 110 days.
• 180-day (minimum duration) contract with an undisclosed operator offshore Australia for heavy duty modern jackup VALARIS 107. The contract is expected to commence in first quarter 2024. The operating day rate is $150,000.
• One-year contract with an undisclosed operator offshore Australia for heavy duty modern jackup VALARIS 107. The contract is expected to commence in October 2024.
• Two-well contract with a major Australian operator for heavy duty ultra-harsh environment jackup VALARIS 247. The contract is expected to commence in early to mid-2024 and has an estimated duration of 100 days. The operating day rate is $180,000 and Valaris will receive a mobilization and demobilization fee that covers operating costs while the rig is in transit.

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," "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, 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 of our joint ventures, including our joint venture with Saudi Aramco; 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 (such as the ongoing conflict in Ukraine); cybersecurity attacks and threats; impacts and effects of public health crises, pandemics and epidemics, such as the COVID-19 pandemic; future operations; increasing regulatory complexity; targets, progress, plans and goals related to environmental, social and governance (“ESG”) 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 ESG targets, including our Scope 1 emissions intensity reduction target, 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 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; 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; 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230705314567/en/

Investor & Media Contacts:

Darin Gibbins

Vice President - Investor Relations and Treasurer

+1-713-979-4623

Tim Richardson

Director - Investor Relations

+1-713-979-4619

Source: Valaris Limited

FAQ

What contracts did Valaris Limited announce?

Valaris Limited announced new contracts and contract extensions, including a two-well contract with Anadarko Petroleum Corporation in the U.S. Gulf of Mexico, a nine-well contract for a plug and abandonment campaign with Apache in the U.S. Gulf of Mexico, a 180-day contract with an undisclosed operator offshore Australia, a one-year contract with an undisclosed operator offshore Australia, and a two-well contract with a major Australian operator.

What is the contract backlog for Valaris Limited?

The contract backlog for Valaris Limited is approximately $150 million.

What are the operating day rates for the contracts?

The operating day rates for the contracts range from $150,000 to $180,000.