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Valaris Reports First Quarter 2022 Results

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Valaris Limited (NYSE: VAL) reported a strong operational performance with 99% revenue efficiency for Q1 2022, showing a revenue increase to $318 million compared to $306 million in Q4 2021. Notably, the drillship VALARIS DS-12 secured a contract offshore West Africa, highlighting improved day rates. However, the company incurred a net loss of $40 million, contrasting with a net income of $28 million in Q4 2021. Reactivation costs rose significantly to $62 million due to preparations for four floaters, potentially impacting future financial results.

Positive
  • Achieved 99% revenue efficiency in Q1 2022.
  • Revenue increased to $318 million from $306 million in Q4 2021.
  • Secured a contract for drillship VALARIS DS-12 offshore West Africa.
  • Sold jackups VALARIS 113 and 114 for a total of $125 million.
Negative
  • Net loss of $40 million in Q1 2022 compared to net income of $28 million in Q4 2021.
  • Significant increase in reactivation costs to $62 million.
  • Adjusted EBITDA decreased to negative $31 million from $3 million.

Continued Strong Operational Performance – 99% Revenue Efficiency in 1Q 2022

Four Floater Reactivation Projects in Progress for Contracts Expected to Commence in 2Q 2022

Drillship VALARIS DS-12 Awarded Contract Offshore West Africa

Jackups VALARIS 113 and 114 Sold for a Total of $125 Million

HAMILTON, Bermuda--(BUSINESS WIRE)-- Valaris Limited (NYSE: VAL) ("Valaris" or the "Company") today reported first quarter 2022 results.

President and Chief Executive Officer Anton Dibowitz said, “The heart of our business, and our primary focus every day, is on delivering safe, reliable and efficient operations to our customers. I would like to thank the Valaris team for continuing to deliver the strong performance that our customers have come to expect from us, achieving 99% revenue efficiency during the first quarter.”

Dibowitz commented, “We are currently in the midst of a transitional period as we incur reactivation costs to put three drillships and one semisubmersible back to work on long-term contracts. I am proud of the progress that the entire Valaris team has made in executing these major projects concurrently, particularly considering the ongoing pandemic, personnel and global supply chain challenges. VALARIS DPS-1 recently returned to work, and we continue to expect that all four floaters will be on contract by the middle of the year with financial results expected to improve meaningfully as these reactivations are completed.”

Dibowitz added, “Very recently, we were awarded a contract with a major operator offshore Angola and the Republic of Congo for drillship VALARIS DS-12. The operating rate for this contract, which is expected to take place during the first quarter 2023, is at a level not seen in the past seven years for drillship work offshore West Africa, providing further evidence of the improvement in floater day rates across geographies.”

Dibowitz concluded, “We continue to take a rational approach to fleet management, including regularly assessing our fleet for retirement and divestiture candidates. In this regard, we recently sold two jackups, VALARIS 113 and 114, to ADES for a total of $125 million, a value which is highly accretive to our shareholders. Each of these rigs had been stacked for more than six years and would have required meaningful capital to reactivate.”

First Quarter Review

Revenues increased to $318 million in the first quarter 2022 from $306 million in the fourth quarter 2021. Excluding reimbursable items, revenues increased to $291 million in the first quarter from $283 million in the fourth quarter primarily due to higher utilization for the jackup fleet and higher average day rates for the other segment, partially offset by lower utilization for the floater fleet.

Contract drilling expense increased to $331 million in the first quarter 2022 from $286 million in the fourth quarter 2021. Excluding reimbursable items, contract drilling expense increased to $305 million in the first quarter from $264 million in the fourth quarter, primarily due to higher rig reactivation costs, which increased to $62 million in the first quarter from $37 million in the fourth quarter, as we prepare four floaters for long-term contracts that are expected to commence in the second quarter. The remaining variance was due to higher personnel costs, higher repair and maintenance costs and higher mobilization costs.

Depreciation expense decreased to $23 million in the first quarter 2022 from $25 million in the fourth quarter 2021. General and administrative expense increased marginally to $19 million in the first quarter 2022 from $18 million in the fourth quarter 2021.

Other income decreased to $9 million in the first quarter 2022 from $21 million in the fourth quarter 2021. First quarter other income included a gain on sale of assets of $2 million related to the sale of jackup VALARIS 67 compared to a $21 million gain on sale of assets related to the sale of jackups VALARIS 22, 37 and 142 in the fourth quarter. The remaining variance is primarily due to lower reorganization-related professional fees in the first quarter as compared to the fourth quarter.

Tax benefit decreased to $1 million in the first quarter 2022 from $31 million in the fourth quarter 2021. The first quarter tax provision included $15 million of discrete tax benefit primarily related to a reduction in liabilities for unrecognized tax benefits associated with tax positions taken in prior years. The fourth quarter tax provision included $30 million of discrete tax benefit primarily related to a reduction in liabilities for unrecognized tax benefits associated with tax positions taken in prior years and deferred tax benefits associated with Swiss tax reform. Adjusted for discrete items, tax expense of $14 million in the first quarter compared to a tax benefit of $1 million in the fourth quarter. The increase in tax expense is primarily due to changes in the relative components of our earnings generated in tax jurisdictions with higher tax rates compared to the prior quarter, and to a reduction in deferred tax valuation allowances in the prior quarter.

Net loss was $40 million in the first quarter 2022 compared to net income of $28 million in the fourth quarter 2021. Adjusted EBITDA decreased to negative $31 million in the first quarter from $3 million in the fourth quarter. Adjusted EBITDAR decreased to $31 million in the first quarter from $40 million in the fourth quarter.

Segment Review

Floaters

Floater revenues decreased marginally to $100 million in the first quarter 2022 from $101 million in the fourth quarter 2021. Excluding reimbursable items, revenues decreased to $87 million in the first quarter from $93 million in the fourth quarter. The sequential quarter decline was primarily due to semisubmersible VALARIS DPS-5 being out of service for most of the first quarter while undergoing a five-year special survey prior to starting the first of several new contracts. This was partially offset by higher utilization and average day rates for the drillship fleet.

Contract drilling expense increased to $148 million in the first quarter 2022 from $114 million in the fourth quarter 2021. Excluding reimbursable items, contract drilling expense increased to $135 million in the first quarter from $106 million in the fourth quarter. The sequential quarter increase was primarily due to higher rig reactivation costs, which increased to $61 million in the first quarter from $34 million in the fourth quarter, as we prepared drillships VALARIS DS-4, DS-9 and DS-16 as well as semisubmersible VALARIS DPS-1 for new long-term contracts. Included within first quarter reactivation costs is approximately $4 million related to minor damage arising from an incident involving VALARIS DS-16, which broke free from its moorings during gale force winds. We also incurred repair and maintenance costs in the first quarter on semisubmersible VALARIS DPS-5 while the rig was in the shipyard undergoing a five-year special survey.

Jackups

Jackup revenues increased to $181 million in the first quarter 2022 from $172 million in the fourth quarter 2021. Excluding reimbursable items, revenues increased to $170 million in the first quarter from $160 million in the fourth quarter. The sequential quarter increase was primarily due to higher utilization on VALARIS 249, 117, 144 and Norway, each of which commenced new contracts either in the first quarter or late in the fourth quarter. This was partially offset by idle time between contracts for VALARIS Viking and 107.

Contract drilling expense increased to $139 million in the first quarter 2022 from $128 million in the fourth quarter 2021. Excluding reimbursable items, contract drilling expense increased to $129 million in the first quarter from $117 million in the fourth quarter. The sequential quarter increase was primarily due to higher costs resulting from more operating days across the jackup fleet in the first quarter and higher mobilization costs primarily related to VALARIS 144.

ARO Drilling

Revenues increased to $111 million in the first quarter 2022 from $105 million in the fourth quarter 2021 primarily due to higher utilization and the addition of VALARIS 140 to the leased rig fleet late in the first quarter. Contract drilling expense decreased to $84 million in the first quarter from $89 million in the fourth quarter. Operating income was $5 million in the first quarter compared to an operating loss of $6 million in the fourth quarter. EBITDA was $22 million in the first quarter compared to $11 million in the fourth quarter.

Other

Revenues increased to $38 million in the first quarter 2022 from $33 million in the fourth quarter 2021 primarily due to higher day rates for managed rigs Mad Dog and Thunder Horse, which were each awarded two-year contract extensions, effective from late January. Contract drilling expense increased marginally to $16 million in the first quarter from $15 million in the fourth quarter. Operating income increased to $22 million in the first quarter from $16 million in the fourth quarter. EBITDA increased to $23 million in the first quarter from $17 million in the fourth quarter.

 

 

First Quarter

 

Floaters

 

Jackups

 

ARO

 

Other

 

Reconciling Items

 

Consolidated Total

(in millions of $, except %)

Q1
2022

Q4
2021

Chg

 

Q1
2022

Q4
2021

Chg

 

Q1
2022

Q4
2021

Chg

 

Q1
2022

Q4
2021

Chg

 

Q1
2022

Q4
2021

 

Q1
2022

Q4
2021

Chg

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

99.7

 

100.5

 

(1

)%

 

180.7

172.3

5

%

 

111.3

105.4

 

6

%

 

38.0

32.7

16

%

 

(111.3

)

(105.4

)

 

318.4

 

305.5

 

4

%

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling

147.6

 

113.8

 

30

%

 

139.2

128.0

9

%

 

84.2

88.9

 

(5

)%

 

15.5

15.4

1

%

 

(55.2

)

(60.6

)

 

331.3

 

285.5

 

16

%

Depreciation

12.2

 

11.7

 

4

%

 

9.1

12.1

(25

)%

 

16.5

17.7

 

(7

)%

 

0.9

1.1

(18

)%

 

(16.2

)

(17.5

)

 

22.5

 

25.1

 

(10

)%

General and admin.

—

 

—

 

—

%

 

—

—

—

%

 

5.2

5.1

 

2

%

 

—

—

—

%

 

13.6

 

13.2

 

 

18.8

 

18.3

 

3

%

Equity in earnings (losses) of ARO

—

 

—

 

—

%

 

—

—

—

%

 

—

—

 

—

%

 

—

—

—

%

 

4.3

 

(1.3

)

 

4.3

 

(1.3

)

nm

 

Operating income (loss)

(60.1

)

(25.0

)

140

%

 

32.4

32.2

1

%

 

5.4

(6.3

)

nm

 

 

21.6

16.2

33

%

 

(49.2

)

(41.8

)

 

(49.9

)

(24.7

)

102

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

(60.0

)

(25.4

)

136

%

 

34.7

52.8

(34

)%

 

1.4

(10.0

)

nm

 

 

21.6

16.2

33

%

 

(37.5

)

(5.9

)

 

(39.8

)

27.7

 

nm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

(48.7

)

(12.9

)

278

%

 

43.0

44.4

(3

)%

 

21.9

11.4

 

92

%

 

22.6

17.3

31

%

 

(69.7

)

(57.5

)

 

(30.9

)

2.7

 

nm

 

Adjusted EBITDAR

12.2

 

20.9

 

(42

)%

 

43.6

47.7

(9

)%

 

21.9

11.4

 

92

%

 

22.6

17.4

30

%

 

(69.7

)

(57.5

)

 

30.6

 

39.9

 

(23

)%

Fresh Start Accounting

Valaris emerged from Chapter 11 bankruptcy protection on April 30, 2021 (the "Effective Date"). Upon emergence, Valaris applied fresh start accounting which resulted in Valaris becoming a new reporting entity for accounting and financial reporting. Accordingly, our financial statements and notes after the Effective Date are not comparable to our financial statements and notes prior to that date. As required by GAAP, results for the second quarter must be presented separately for the predecessor period from April 1, 2021, through April 30, 2021 (the "Predecessor" period) and the successor period from May 1, 2021, through June 30, 2021 (the "Successor" period). However, the Company has combined certain results of the Predecessor and Successor periods ("Combined" results) as non-GAAP measures to compare the combined second quarter with other quarters since we believe it provides the most meaningful basis to analyze our results. The Predecessor and Successor results for the second quarter are more fully discussed in our quarterly report on Form 10-Q for the period ended June 30, 2021 filed with the SEC on August 3, 2021.

As previously announced, Valaris will hold its first quarter 2022 earnings conference call at 9:00 a.m. CT (10:00 a.m. ET) on Tuesday, May 3, 2022. An updated investor presentation will be available on the Valaris website after the call.

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. To learn more, visit the Valaris website at www.valaris.com.

Forward-Looking 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, rig commitments and availability, cash flows, contract status, terms and duration, contract backlog, capital expenditures, insurance, financing and funding; the effect, impact, potential duration and other implications of the ongoing COVID-19 pandemic; impact of our emergence from bankruptcy; 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 and contracts; letters of intent; scheduled delivery dates for rigs; performance of our joint venture with Saudi Aramco; the timing of delivery, mobilization, contract commencement, availability, relocation or other movement of rigs; future rig reactivations; expected divestitures of assets; general market, business and industry conditions, trends and outlook; general political conditions, including political tensions, conflicts and war (such as the ongoing conflict in Ukraine); future operations; increasing regulatory complexity; 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 the COVID-19 outbreak and global pandemic and the related public health measures implemented by governments worldwide, which may, among other things, impact our ability to staff rigs and rotate crews; cancellation, suspension, renegotiation or termination of drilling contracts and programs, including drilling contracts which grant the customer termination right if FID is not received with respect to projects for which the drilling rig is contracted; potential additional asset impairments; failure to satisfy our debt obligations; 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; the effects of our emergence from bankruptcy on the Company's business, relationships, comparability of our financial results and ability to access financing sources; actions by regulatory authorities, or other third parties; actions by our security holders; commodity price fluctuations and volatility, customer demand, new rig supply, downtime and other risks associated with offshore rig operations; severe weather or hurricanes; changes in worldwide rig supply and demand, competition and technology; consumer preferences for alternative fuels; increased scrutiny of our Environmental, Social and Governance ("ESG") practices and reporting responsibilities; changes in customer strategy; future levels of offshore drilling activity; governmental action, civil unrest and political and economic uncertainties; 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; debt restrictions that may limit our liquidity and flexibility; and cybersecurity risks and threats. 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 SEC’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.

 

VALARIS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per share amounts)

 

 

Three Months Ended

 

Successor

 

Combined
(Non-GAAP) (1)

 

Predecessor

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

OPERATING REVENUES

$

318.4

 

 

$

305.5

 

 

$

326.7

 

 

$

293.1

 

 

$

307.1

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

Contract drilling (exclusive of depreciation)

 

331.3

 

 

 

285.5

 

 

 

274.6

 

 

 

258.8

 

 

 

253.6

 

Loss on impairment

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

756.5

 

Depreciation

 

22.5

 

 

 

25.1

 

 

 

24.4

 

 

 

54.1

 

 

 

122.1

 

General and administrative

 

18.8

 

 

 

18.3

 

 

 

27.2

 

 

 

19.1

 

 

 

24.3

 

Total operating expenses

 

372.6

 

 

 

328.9

 

 

 

326.2

 

 

 

332.0

 

 

 

1,156.5

 

EQUITY IN EARNINGS (LOSSES) OF ARO

 

4.3

 

 

 

(1.3

)

 

 

2.6

 

 

 

6.0

 

 

 

1.9

 

OPERATING INCOME (LOSS)

 

(49.9

)

 

 

(24.7

)

 

 

3.1

 

 

 

(32.9

)

 

 

(847.5

)

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

Interest income

 

10.9

 

 

 

11.0

 

 

 

9.7

 

 

 

8.8

 

 

 

2.6

 

Interest expense, net (Unrecognized contractual interest expense for debt subject to compromise was $32.6 million and $100.3 million for the three months ended June 30, 2021 and March 31, 2021, respectively)

 

(11.5

)

 

 

(11.7

)

 

 

(11.3

)

 

 

(9.1

)

 

 

(1.3

)

Reorganization items, net

 

(1.0

)

 

 

(4.9

)

 

 

(6.5

)

 

 

(3,536.5

)

 

 

(52.2

)

Other, net

 

11.0

 

 

 

27.0

 

 

 

5.5

 

 

 

9.0

 

 

 

22.5

 

 

 

9.4

 

 

 

21.4

 

 

 

(2.6

)

 

 

(3,527.8

)

 

 

(28.4

)

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

(40.5

)

 

 

(3.3

)

 

 

0.5

 

 

 

(3,560.7

)

 

 

(875.9

)

 

 

 

 

 

 

 

 

 

 

PROVISION (BENEFIT) FOR INCOME TAXES

 

(0.7

)

 

 

(31.0

)

 

 

53.3

 

 

 

(0.4

)

 

 

31.7

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

(39.8

)

 

 

27.7

 

 

 

(52.8

)

 

 

(3,560.3

)

 

 

(907.6

)

 

 

 

 

 

 

 

 

 

 

NET (INCOME) LOSS ATTRIBUTABLE TO NONCONTROLLING INTERESTS

 

1.2

 

 

 

—

 

 

 

(1.7

)

 

 

(2.9

)

 

 

(2.4

)

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) ATTRIBUTABLE TO VALARIS

$

(38.6

)

 

$

27.7

 

 

$

(54.5

)

 

$

(3,563.2

)

 

$

(910.0

)

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) PER SHARE - BASIC AND DILUTED

$

(0.51

)

 

$

0.37

 

 

$

(0.73

)

 

 

n/m

 

 

$

(4.56

)

WEIGHTED-AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED

 

75.0

 

 

 

75.0

 

 

 

75.0

 

 

 

n/m

 

 

 

199.6

 

(1)

Represents the combined results of operations for the two-months ended June 30, 2021 (Successor) and the one-month ended April 30, 2021 (Predecessor).

   

VALARIS LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions)

   

 

Successor

 

 

Predecessor

 

March 31,
2022

December 31,
2021

September 30,
2021

June 30,
2021

 

 

March 31,
2021

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

$

578.2

 

$

608.7

 

$

620.8

 

$

608.8

 

 

$

291.7

 

Restricted cash

 

30.0

 

 

35.9

 

 

33.9

 

 

53.1

 

 

 

17.1

 

Accounts receivable, net

 

439.3

 

 

444.2

 

 

455.8

 

 

436.1

 

 

 

449.8

 

Other current assets

 

125.7

 

 

117.8

 

 

117.0

 

 

119.7

 

 

 

366.4

 

Total current assets

$

1,173.2

 

$

1,206.6

 

$

1,227.5

 

$

1,217.7

 

 

$

1,125.0

 

 

 

 

 

 

 

 

 

 

 

 

 

PROPERTY AND EQUIPMENT, NET

 

930.2

 

 

890.9

 

 

892.3

 

 

897.8

 

 

 

10,083.9

 

 

 

 

 

 

 

 

 

 

 

 

 

LONG-TERM NOTES RECEIVABLE FROM ARO

 

256.8

 

 

249.1

 

 

241.3

 

 

234.3

 

 

 

442.7

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTMENT IN ARO

 

90.9

 

 

86.6

 

 

87.9

 

 

85.4

 

 

 

122.8

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER ASSETS

 

186.6

 

 

176.0

 

 

153.5

 

 

166.5

 

 

 

172.5

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

2,637.7

 

$

2,609.2

 

$

2,602.5

 

$

2,601.7

 

 

$

11,946.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

 

 

 

 

 

 

Accounts payable - trade

$

311.2

 

$

225.8

 

$

203.0

 

$

183.9

 

 

$

176.8

 

Accrued liabilities and other

 

212.1

 

 

196.2

 

 

223.8

 

 

212.7

 

 

 

290.6

 

Total current liabilities

$

523.3

 

$

422.0

 

$

426.8

 

$

396.6

 

 

$

467.4

 

 

 

 

 

 

 

 

 

 

 

 

 

LONG-TERM DEBT

 

545.5

 

 

545.3

 

 

545.1

 

 

544.8

 

 

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

OTHER LIABILITIES

 

544.8

 

 

581.1

 

 

591.3

 

 

569.8

 

 

 

704.6

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES NOT SUBJECT TO COMPROMISE

 

1,613.6

 

 

1,548.4

 

 

1,563.2

 

 

1,511.2

 

 

 

1,172.0

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES SUBJECT TO COMPROMISE

 

—

 

 

—

 

 

—

 

 

—

 

 

 

7,313.7

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL EQUITY

 

1,024.1

 

 

1,060.8

 

 

1,039.3

 

 

1,090.5

 

 

 

3,461.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$

2,637.7

 

$

2,609.2

 

$

2,602.5

 

$

2,601.7

 

 

$

11,946.9

 
 

VALARIS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)

 

 

Three Months Ended

 

Successor

 

 

Combined
(Non-GAAP) (1)

 

Predecessor

 

March 31,
2022

December 31,
2021

September 30,
2021

 

 

June 30,
2021

 

March 31,
2021

OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net income (loss)

$

(39.8

)

$

27.7

 

$

(52.8

)

 

 

$

(3,560.3

)

 

$

(907.6

)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

Depreciation expense

 

22.5

 

 

25.1

 

 

24.4

 

 

 

 

54.1

 

 

 

122.1

 

Accretion of discount on shareholder note

 

(7.7

)

 

(7.9

)

 

(6.9

)

 

 

 

(6.0

)

 

 

—

 

Equity in losses (earnings) of ARO

 

(4.3

)

 

1.3

 

 

(2.6

)

 

 

 

(6.0

)

 

 

(1.9

)

Net periodic pension and retiree medical income

 

(4.0

)

 

(2.6

)

 

(3.7

)

 

 

 

(3.8

)

 

 

(4.0

)

Share-based compensation expense

 

3.4

 

 

2.7

 

 

1.6

 

 

 

 

1.0

 

 

 

3.8

 

Gain on asset disposals

 

(2.5

)

 

(21.0

)

 

(0.3

)

 

 

 

(4.5

)

 

 

(1.4

)

Amortization, net

 

1.6

 

 

(0.5

)

 

3.1

 

 

 

 

(0.5

)

 

 

(4.6

)

Deferred income tax expense (benefit)

 

(0.6

)

 

(22.5

)

 

0.1

 

 

 

 

(18.0

)

 

 

0.9

 

Amortization of debt issuance cost

 

0.2

 

 

0.2

 

 

(0.1

)

 

 

 

0.4

 

 

 

—

 

Loss on impairment

 

—

 

 

—

 

 

—

 

 

 

 

—

 

 

 

756.5

 

Non-cash reorganization items, net

 

—

 

 

—

 

 

—

 

 

 

 

3,487.3

 

 

 

—

 

Other

 

—

 

 

0.3

 

 

0.2

 

 

 

 

1.3

 

 

 

5.8

 

Changes in operating assets and liabilities

 

32.5

 

 

(9.0

)

 

45.0

 

 

 

 

21.9

 

 

 

20.9

 

Contributions to pension plans and other post-retirement benefits

 

(0.8

)

 

(1.0

)

 

(1.1

)

 

 

 

(0.9

)

 

 

(22.2

)

Net cash provided by (used in) operating activities

$

0.5

 

$

(7.2

)

$

6.9

 

 

 

$

(34.0

)

 

$

(31.7

)

 

 

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Additions to property and equipment

$

(38.5

)

$

(26.5

)

$

(15.6

)

 

 

$

(10.8

)

 

$

(6.0

)

Net proceeds from disposition of assets

 

1.3

 

 

23.6

 

 

1.3

 

 

 

 

26.6

 

 

 

3.7

 

Net cash provided by (used in) investing activities

$

(37.2

)

$

(2.9

)

$

(14.3

)

 

 

$

15.8

 

 

$

(2.3

)

 

 

 

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Issuance of first lien notes

$

—

 

$

—

 

$

—

 

 

 

$

520.0

 

 

$

—

 

Payments to Predecessor creditors

 

—

 

 

—

 

 

—

 

 

 

 

(129.9

)

 

 

—

 

Other

 

—

 

 

—

 

 

—

 

 

 

 

(1.4

)

 

 

—

 

Net cash provided by financing activities

$

—

 

$

—

 

$

—

 

 

 

$

388.7

 

 

$

—

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

$

0.3

 

$

—

 

$

0.2

 

 

 

$

(0.3

)

 

$

(0.1

)

 

 

 

 

 

 

 

 

 

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

$

(36.4

)

$

(10.1

)

$

(7.2

)

 

 

$

370.2

 

 

$

(34.1

)

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

 

644.6

 

 

654.7

 

 

661.9

 

 

 

 

291.7

 

 

 

325.8

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

$

608.2

 

$

644.6

 

$

654.7

 

 

 

$

661.9

 

 

$

291.7

 

(1)

Represents the combined results of operations for the two-months ended June 30, 2021 (Successor) and the one-month ended April 30, 2021 (Predecessor).

 

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS
(In millions)

 

 

Three Months Ended

 

Successor

 

Combined
(Non-GAAP)

 

Predecessor

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

REVENUES

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

$

85.4

 

$

73.5

 

$

67.5

 

$

42.6

 

$

81.0

Semisubmersibles

 

14.3

 

 

27.0

 

 

36.8

 

 

25.5

 

 

16.3

 

$

99.7

 

$

100.5

 

$

104.3

 

$

68.1

 

$

97.3

Jackups (1)

 

 

 

 

 

 

 

 

 

HD Ultra-Harsh & Harsh Environment

$

92.9

 

$

94.0

 

$

102.8

 

$

104.9

 

$

95.5

HD & SD Modern

 

67.9

 

 

56.2

 

 

59.6

 

 

57.7

 

 

50.5

SD Legacy

 

19.9

 

 

22.1

 

 

23.9

 

 

25.7

 

 

26.6

 

$

180.7

 

$

172.3

 

$

186.3

 

$

188.3

 

$

172.6

 

 

 

 

 

 

 

 

 

 

Total

$

280.4

 

$

272.8

 

$

290.6

 

$

256.4

 

$

269.9

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

$

38.0

 

$

32.7

 

$

36.1

 

$

36.7

 

$

37.2

 

 

 

 

 

 

 

 

 

 

Valaris Total

$

318.4

 

$

305.5

 

$

326.7

 

$

293.1

 

$

307.1

 

 

 

 

 

 

 

 

 

 

ARO

 

 

 

 

 

 

 

 

 

ARO Total

$

111.3

 

$

105.4

 

$

117.7

 

$

124.8

 

$

122.7

Valaris 50% Share (unconsolidated)

 

55.7

 

 

52.7

 

 

58.9

 

 

62.4

 

 

61.4

 

 

 

 

 

 

 

 

 

 

Adjusted Total (2)

$

374.1

 

$

358.2

 

$

385.6

 

$

355.5

 

$

368.5

(1)

HD = Heavy Duty; SD = Standard Duty. Heavy duty jackups are well-suited for operations in tropical revolving storm areas.

 

 

(2)

Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO (unconsolidated).

 

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS
(In millions)

 

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

ADJUSTED EBITDAR (1)

 

 

 

 

 

 

 

 

 

Active Fleet (1) (2)

$

66.5

 

 

$

79.6

 

 

$

93.0

 

 

$

82.1

 

 

$

88.8

 

Leased and Managed Rigs (1)

 

22.6

 

 

 

17.4

 

 

 

22.2

 

 

 

22.9

 

 

 

22.7

 

 

$

89.1

 

 

$

97.0

 

 

$

115.2

 

 

$

105.0

 

 

$

111.5

 

 

 

 

 

 

 

 

 

 

 

Stacked Fleet (1) (3)

 

(10.7

)

 

 

(11.0

)

 

 

(12.5

)

 

 

(17.1

)

 

 

(17.7

)

 

$

78.4

 

 

$

86.0

 

 

$

102.7

 

 

$

87.9

 

 

$

93.8

 

 

 

 

 

 

 

 

 

 

 

Support costs

 

 

 

 

 

 

 

 

 

General and administrative expense

$

18.8

 

 

$

18.3

 

 

$

27.2

 

 

$

19.1

 

 

$

24.3

 

Onshore support costs

 

29.0

 

 

 

28.0

 

 

 

27.1

 

 

 

29.1

 

 

 

32.2

 

 

$

47.8

 

 

$

46.3

 

 

$

54.3

 

 

$

48.2

 

 

$

56.5

 

Add:

 

 

 

 

 

 

 

 

 

Merger transaction and integration cost included in contract drilling expense

 

—

 

 

 

0.2

 

 

 

0.9

 

 

 

0.9

 

 

 

1.9

 

 

 

 

 

 

 

 

 

 

 

Valaris Total

$

30.6

 

 

$

39.9

 

 

$

49.3

 

 

$

40.6

 

 

$

39.2

 

 

 

 

 

 

 

 

 

 

 

ARO

 

 

 

 

 

 

 

 

 

ARO Total

$

21.9

 

 

$

11.4

 

 

$

17.9

 

 

$

27.8

 

 

$

33.4

 

Valaris 50% Share (unconsolidated)

 

11.0

 

 

 

5.7

 

 

 

9.0

 

 

 

13.9

 

 

 

16.7

 

 

 

 

 

 

 

 

 

 

 

Adjusted Total (4)

$

41.6

 

 

$

45.6

 

 

$

58.3

 

 

$

54.5

 

 

$

55.9

 

 

 

 

 

 

 

 

 

 

 

Reactivation costs (5)

$

61.5

 

 

$

37.1

 

 

$

19.4

 

 

$

24.0

 

 

$

11.1

 

 

 

 

 

 

 

 

 

 

 

(1)

Adjusted EBITDAR is earnings before interest, tax, depreciation, amortization and reactivation costs. Adjusted EBITDAR for active fleet, leased and managed rigs and stacked fleet also excludes onshore support costs and general and administrative expense.

 

 

(2)

Active fleet represents rigs that are not preservation stacked, including rigs that are in the process of being reactivated.

 

 

(3)

Stacked fleet represents the combined total of all preservation and stacking costs.

 

 

(4)

Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO (unconsolidated).

 

 

(5)

Reactivation costs, all of which are attributed to the active fleet, are excluded from adjusted EBITDAR.

 

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS
(In millions)

 

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

ADJUSTED EBITDAR (1)

 

 

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

 

 

Drillships (1)

$

27.2

 

 

$

17.7

 

 

$

8.9

 

 

$

(2.5

)

 

$

16.1

 

Semisubmersibles (1)

 

(15.0

)

 

 

3.2

 

 

 

8.3

 

 

 

6.5

 

 

 

(1.0

)

 

$

12.2

 

 

$

20.9

 

 

$

17.2

 

 

$

4.0

 

 

$

15.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Jackups

 

 

 

 

 

 

 

 

 

 

 

HD Ultra-Harsh & Harsh (1)

$

21.0

 

 

$

24.3

 

 

$

38.7

 

 

$

42.3

 

 

$

31.0

 

HD & SD - Modern (1)

 

13.7

 

 

 

11.6

 

 

 

15.6

 

 

 

6.7

 

 

 

12.0

 

SD - Legacy (1)

 

8.9

 

 

 

11.8

 

 

 

9.0

 

 

 

12.0

 

 

 

13.0

 

 

$

43.6

 

 

$

47.7

 

 

$

63.3

 

 

$

61.0

 

 

$

56.0

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

55.8

 

 

$

68.6

 

 

$

80.5

 

 

$

65.0

 

 

$

71.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs (1)

$

22.6

 

 

$

17.4

 

 

$

22.2

 

 

$

22.9

 

 

$

22.7

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

78.4

 

 

$

86.0

 

 

$

102.7

 

 

$

87.9

 

 

$

93.8

 

 

 

 

 

 

 

 

 

 

 

 

 

Support costs

 

 

 

 

 

 

 

 

 

 

 

General and administrative expense

$

18.8

 

 

$

18.3

 

 

$

27.2

 

 

$

19.1

 

 

$

24.3

 

Onshore support costs

 

29.0

 

 

 

28.0

 

 

 

27.1

 

 

 

29.1

 

 

 

32.2

 

 

$

47.8

 

 

$

46.3

 

 

$

54.3

 

 

$

48.2

 

 

$

56.5

 

Add:

 

 

 

 

 

 

 

 

 

 

 

Merger transaction and integration cost included in contract drilling expense

 

—

 

 

 

0.2

 

 

 

0.9

 

 

 

0.9

 

 

 

1.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Valaris Total

$

30.6

 

 

$

39.9

 

 

$

49.3

 

 

$

40.6

 

 

$

39.2

 

 

 

 

 

 

 

 

 

 

 

 

 

ARO

 

 

 

 

 

 

 

 

 

 

 

ARO Total

$

21.9

 

 

$

11.4

 

 

$

17.9

 

 

$

27.8

 

 

$

33.4

 

Valaris 50% Share (unconsolidated)

 

11.0

 

 

 

5.7

 

 

 

9.0

 

 

 

13.9

 

 

 

16.7

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Total (2)

$

41.6

 

 

$

45.6

 

 

$

58.3

 

 

$

54.5

 

 

$

55.9

 

(1)

Adjusted EBITDAR is earnings before interest, tax, depreciation, amortization and reactivation costs. Adjusted EBITDAR for asset category also excludes onshore support costs and general and administrative expense.

 

 

(2)

Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO (unconsolidated).

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS
(In millions)

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

ADJUSTED EBITDA (1)

 

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

 

Drillships (1)

$

(21.4

)

 

$

(6.6

)

 

$

8.6

 

 

$

(2.5

)

 

$

16.1

 

Semisubmersibles (1)

 

(27.3

)

 

 

(6.3

)

 

 

7.2

 

 

 

6.4

 

 

 

(6.7

)

 

$

(48.7

)

 

$

(12.9

)

 

$

15.8

 

 

$

3.9

 

 

$

9.4

 

 

 

 

 

 

 

 

 

 

 

 

Jackups

 

 

 

 

 

 

 

 

 

 

HD Ultra-Harsh & Harsh (1)

$

20.4

 

 

$

21.0

 

 

$

25.1

 

 

$

22.2

 

 

$

29.3

 

HD & SD - Modern (1)

 

13.7

 

 

 

11.6

 

 

 

11.2

 

 

 

2.9

 

 

 

8.3

 

SD - Legacy (1)

 

8.9

 

 

 

11.8

 

 

 

9.0

 

 

 

12.0

 

 

 

13.0

 

 

$

43.0

 

 

$

44.4

 

 

$

45.3

 

 

$

37.1

 

 

$

50.6

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

(5.7

)

 

$

31.5

 

 

$

61.1

 

 

$

41.0

 

 

$

60.0

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs (1)

$

22.6

 

 

$

17.3

 

 

$

22.1

 

 

$

22.9

 

 

$

22.7

 

 

 

 

 

 

 

 

 

 

 

 

Total

$

16.9

 

 

$

48.8

 

 

$

83.2

 

 

$

63.9

 

 

$

82.7

 

 

 

 

 

 

 

 

 

 

 

 

Support costs

 

 

 

 

 

 

 

 

 

 

General and administrative expense

$

18.8

 

 

$

18.3

 

 

$

27.2

 

 

$

19.1

 

 

$

24.3

 

Onshore support costs

 

29.0

 

 

 

28.0

 

 

 

27.1

 

 

 

29.1

 

 

 

32.2

 

 

$

47.8

 

 

$

46.3

 

 

$

54.3

 

 

$

48.2

 

 

$

56.5

 

Add:

 

 

 

 

 

 

 

 

 

 

Merger transaction and integration cost included in contract drilling expense

 

—

 

 

 

0.2

 

 

 

0.9

 

 

 

0.9

 

 

 

1.9

 

 

 

 

 

 

 

 

 

 

 

 

Valaris Total

$

(30.9

)

 

$

2.7

 

 

$

29.8

 

 

$

16.6

 

 

$

28.1

 

 

 

 

 

 

 

 

 

 

 

 

ARO

 

 

 

 

 

 

 

 

 

 

ARO Total

$

21.9

 

 

$

11.4

 

 

$

17.9

 

 

$

27.8

 

 

$

33.4

 

Valaris 50% Share (unconsolidated)

 

11.0

 

 

 

5.7

 

 

 

9.0

 

 

 

13.9

 

 

 

16.7

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Total (2)

$

(19.9

)

 

$

8.4

 

 

$

38.8

 

 

$

30.5

 

 

$

44.8

 

(1)

Adjusted EBITDA is earnings before interest, tax, depreciation and amortization. Adjusted EBITDA for asset category also excludes onshore support costs and general and administrative expense.

 

 

(2)

Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO (unconsolidated).

 

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS
(In millions)

 

 

As of

 

May 2,
2022

 

February 21,
2022

 

October 27,
2021

 

August 2,
2021

 

March 31,
2021

CONTRACT BACKLOG (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships (2)

$

1,290.9

 

$

1,280.4

 

$

1,338.6

 

$

1,102.2

 

$

117.6

Semisubmersibles

 

375.8

 

 

384.9

 

 

277.9

 

 

294.0

 

 

171.4

 

$

1,666.7

 

$

1,665.3

 

$

1,616.5

 

$

1,396.2

 

$

289.0

Jackups

 

 

 

 

 

 

 

 

 

HD Ultra-Harsh & Harsh

 

218.8

 

 

309.7

 

 

307.6

 

 

364.4

 

 

403.8

HD & SD - Modern

 

225.7

 

 

252.1

 

 

274.5

 

 

299.9

 

 

180.6

SD - Legacy

 

70.7

 

 

81.2

 

 

85.5

 

 

102.9

 

 

134.4

 

$

515.2

 

$

643.0

 

$

667.6

 

$

767.2

 

$

718.8

 

 

 

 

 

 

 

 

 

 

Total

$

2,181.9

 

$

2,308.3

 

$

2,284.1

 

$

2,163.4

 

$

1,007.8

 

 

 

 

 

 

 

 

 

 

Other (3)

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

$

271.5

 

$

135.6

 

$

33.9

 

$

60.3

 

$

90.8

 

 

 

 

 

 

 

 

 

 

Valaris Total

$

2,453.4

 

$

2,443.9

 

$

2,318.0

 

$

2,223.7

 

$

1,098.6

 

 

 

 

 

 

 

 

 

 

ARO

 

 

 

 

 

 

 

 

 

Owned Rigs

$

993.6

 

$

1,040.9

 

$

757.4

 

$

818.7

 

$

869.5

Leased Rigs

 

496.9

 

 

460.2

 

 

88.7

 

 

134.5

 

 

192.2

ARO Total

$

1,490.5

 

$

1,501.1

 

$

846.1

 

$

953.2

 

$

1,061.7

 

 

 

 

 

 

 

 

 

 

Valaris 50% Share of ARO Owned Rigs

 

496.8

 

 

520.5

 

 

378.7

 

 

409.4

 

 

434.8

 

 

 

 

 

 

 

 

 

 

Adjusted Total (4)

$

2,950.2

 

$

2,964.4

 

$

2,696.7

 

$

2,633.1

 

$

1,533.4

(1)

Our contract drilling backlog reflects commitments, represented by signed drilling contracts, and is calculated by multiplying the contracted day rate by the contract period. Contract drilling backlog includes drilling contracts subject to FID and drilling contracts which grant the customer termination rights if FID is not received with respect to projects for which the drilling rig is contracted. The contracted day rate excludes certain types of lump sum fees for rig mobilization, demobilization, contract preparation, as well as customer reimbursables and bonus opportunities.

 

 

(2)

Approximately $428 million of backlog as of May 2, 2022, is attributable to a contract awarded to drillship VALARIS DS-11 that is expected to commence in mid-2024. In February 2022, the customer decided not to sanction and therefore withdrew from the project. In March 2022, the contract was novated to another customer, which was a partner on the project. No material changes to the contract resulted from the novation, including with respect to the termination provisions in the event the project does not receive FID.

 

 

(3)

Leased rigs and managed rigs included in Other reporting segment.

 

 

(4)

Adjusted total is Valaris consolidated total plus Valaris 50% share of ARO owned rigs.

 

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS

 

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

AVERAGE DAY RATES (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

$

203,000

 

$

196,000

 

$

189,000

 

$

212,000

 

$

208,000

Semisubmersibles

 

156,000

 

 

171,000

 

 

191,000

 

 

178,000

 

 

164,000

 

$

197,000

 

$

189,000

 

$

190,000

 

$

197,000

 

$

198,000

Jackups

 

 

 

 

 

 

 

 

 

HD Ultra-Harsh & Harsh

$

104,000

 

$

110,000

 

$

124,000

 

$

141,000

 

$

140,000

HD & SD Modern

 

80,000

 

 

76,000

 

 

77,000

 

 

73,000

 

 

70,000

SD Legacy

 

71,000

 

 

73,000

 

 

74,000

 

 

72,000

 

 

70,000

 

$

89,000

 

$

90,000

 

$

96,000

 

$

99,000

 

$

95,000

 

 

 

 

 

 

 

 

 

 

Total

$

108,000

 

$

111,000

 

$

115,000

 

$

114,000

 

$

116,000

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

$

39,000

 

$

33,000

 

$

31,000

 

$

31,000

 

$

32,000

 

 

 

 

 

 

 

 

 

 

Valaris Total

$

90,000

 

$

89,000

 

$

90,000

 

$

87,000

 

$

89,000

 

 

 

 

 

 

 

 

 

 

ARO

 

 

 

 

 

 

 

 

 

Owned Rigs

$

99,000

 

$

101,000

 

$

99,000

 

$

99,000

 

$

98,000

Leased Rigs (2)

 

93,000

 

 

94,000

 

 

92,000

 

 

93,000

 

 

89,000

ARO Total

$

96,000

 

$

97,000

 

$

95,000

 

$

96,000

 

$

93,000

(1)

Average day rates are derived by dividing contract drilling revenues, adjusted to exclude certain types of non-recurring reimbursable revenues, lump-sum revenues, revenues earned during suspension periods and revenues attributable to amortization of drilling contract intangibles, by the aggregate number of contract days, adjusted to exclude contract days associated with certain suspension periods, mobilizations, and demobilizations. 

 

 

(2)

All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs average day rates.

 

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS

 

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

UTILIZATION - TOTAL FLEET (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

30

%

 

27

%

 

24

%

 

18

%

 

33

%

Semisubmersibles

11

%

 

30

%

 

39

%

 

30

%

 

20

%

 

25

%

 

28

%

 

28

%

 

22

%

 

29

%

Jackups

 

 

 

 

 

 

 

 

 

HD Ultra-Harsh & Harsh

78

%

 

73

%

 

72

%

 

58

%

 

50

%

HD & SD Modern

51

%

 

42

%

 

43

%

 

43

%

 

40

%

SD Legacy

75

%

 

66

%

 

74

%

 

93

%

 

100

%

 

63

%

 

55

%

 

57

%

 

54

%

 

50

%

 

 

 

 

 

 

 

 

 

 

Total

49

%

 

46

%

 

47

%

 

44

%

 

44

%

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

100

%

 

100

%

 

100

%

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

Valaris Total

57

%

 

54

%

 

56

%

 

54

%

 

54

%

 

 

 

 

 

 

 

 

 

 

Pro Forma Jackups (2)

68

%

 

62

%

 

62

%

 

63

%

 

60

%

 

 

 

 

 

 

 

 

 

 

ARO

 

 

 

 

 

 

 

 

 

Owned Rigs

91

%

 

80

%

 

85

%

 

96

%

 

97

%

Leased Rigs (3)

91

%

 

89

%

 

86

%

 

83

%

 

85

%

ARO Total

91

%

 

84

%

 

86

%

 

89

%

 

90

%

(1)

Rig utilization is derived by dividing the number of operating days by the number of available days in the period for the total fleet.

 

 

(2)

Includes all Valaris jackups including those leased to ARO Drilling.

 

 

(3)

All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs utilization.

 

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS

 

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

UTILIZATION - ACTIVE FLEET (1) (2)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

56

%

 

57

%

 

79

%

 

51

%

 

91

%

Semisubmersibles

19

%

 

51

%

 

64

%

 

50

%

 

33

%

 

45

%

 

55

%

 

73

%

 

51

%

 

66

%

Jackups

 

 

 

 

 

 

 

 

 

HD Ultra-Harsh & Harsh

85

%

 

80

%

 

84

%

 

82

%

 

92

%

HD & SD Modern

83

%

 

76

%

 

75

%

 

74

%

 

84

%

SD Legacy

100

%

 

84

%

 

87

%

 

93

%

 

100

%

 

86

%

 

79

%

 

80

%

 

80

%

 

90

%

 

 

 

 

 

 

 

 

 

 

Total

74

%

 

72

%

 

79

%

 

74

%

 

84

%

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

100

%

 

100

%

 

100

%

 

100

%

 

100

%

 

 

 

 

 

 

 

 

 

 

Valaris Total

80

%

 

78

%

 

84

%

 

81

%

 

89

%

 

 

 

 

 

 

 

 

 

 

Pro Forma Jackups (3)

87

%

 

81

%

 

82

%

 

86

%

 

93

%

 

 

 

 

 

 

 

 

 

 

ARO

 

 

 

 

 

 

 

 

 

Owned Rigs

91

%

 

80

%

 

85

%

 

96

%

 

97

%

Leased Rigs (4)

91

%

 

89

%

 

86

%

 

83

%

 

85

%

ARO Total

91

%

 

84

%

 

86

%

 

89

%

 

90

%

(1)

Rig utilization is derived by dividing the number of operating days by the number of available days in the period for the active fleet.

 

 

(2)

Active fleet represents rigs that are not preservation stacked, including rigs that are in the process of being reactivated.

 

 

(3)

Includes all Valaris jackups including those leased to ARO Drilling.

 

 

(4)

All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs utilization.

 

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS

 

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

REVENUE EFFICIENCY (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

98.3

%

 

91.5

%

 

97.6

%

 

100.0

%

 

95.7

%

Semisubmersibles

100.0

%

 

97.7

%

 

96.7

%

 

100.0

%

 

100.0

%

 

98.5

%

 

93.0

%

 

97.3

%

 

100.0

%

 

98.2

%

Jackups

 

 

 

 

 

 

 

 

 

HD Ultra-Harsh & Harsh

98.9

%

 

99.1

%

 

99.5

%

 

100.0

%

 

95.1

%

HD & SD Modern

99.8

%

 

97.9

%

 

100.0

%

 

99.8

%

 

99.7

%

SD Legacy

100.0

%

 

100.0

%

 

99.0

%

 

96.9

%

 

100.0

%

 

99.4

%

 

98.8

%

 

99.6

%

 

99.0

%

 

99.3

%

 

 

 

 

 

 

 

 

 

 

Valaris Total

99.1

%

 

96.6

%

 

98.8

%

 

99.3

%

 

98.9

%

 

 

 

 

 

 

 

 

 

 

ARO

 

 

 

 

 

 

 

 

 

Owned Rigs

96.8

%

 

96.3

%

 

98.1

%

 

94.0

%

 

99.7

%

Leased Rigs

95.5

%

 

91.3

%

 

96.9

%

 

92.6

%

 

96.0

%

ARO Total

96.2

%

 

93.7

%

 

97.4

%

 

93.3

%

 

97.9

%

(1)

Revenue efficiency is day rate revenue earned as a percentage of maximum potential day rate revenue.

 

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS

 

 

As of

NUMBER OF RIGS

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

Active Fleet (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

7

 

7

 

4

 

4

 

4

Semisubmersibles

3

 

3

 

3

 

3

 

3

 

10

 

10

 

7

 

7

 

7

Jackups

 

 

 

 

 

 

 

 

 

HD Ultra-Harsh & Harsh

10

 

10

 

10

 

10

 

9

HD & SD Modern

10

 

11

 

11

 

11

 

11

SD Legacy

3

 

3

 

3

 

4

 

4

 

23

 

24

 

24

 

25

 

24

 

 

 

 

 

 

 

 

 

 

Total Active Fleet

33

 

34

 

31

 

32

 

31

 

 

 

 

 

 

 

 

 

 

Stacked Fleet

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships (2)

4

 

4

 

7

 

7

 

7

Semisubmersibles

2

 

2

 

2

 

2

 

2

 

6

 

6

 

9

 

9

 

9

Jackups

 

 

 

 

 

 

 

 

 

HD Ultra-Harsh & Harsh

1

 

1

 

1

 

2

 

4

HD & SD Modern

7

 

7

 

7

 

8

 

8

SD Legacy

—

 

1

 

1

 

—

 

—

 

8

 

9

 

9

 

10

 

12

 

 

 

 

 

 

 

 

 

 

Total Stacked Fleet

14

 

15

 

18

 

19

 

21

 

 

 

 

 

 

 

 

 

 

Leased Rigs (3)

 

 

 

 

 

 

 

 

 

Jackups

 

 

 

 

 

 

 

 

 

HD Ultra-Harsh & Harsh

1

 

1

 

1

 

1

 

1

HD & SD Modern

6

 

5

 

5

 

5

 

5

SD Legacy

1

 

1

 

2

 

3

 

3

Total Leased Rigs

8

 

7

 

8

 

9

 

9

 

 

 

 

 

 

 

 

 

 

Valaris Total

55

 

56

 

57

 

60

 

61

 

 

 

 

 

 

 

 

 

 

Managed Rigs (3)

2

 

2

 

2

 

2

 

2

 

 

 

 

 

 

 

 

 

 

ARO (4)

 

 

 

 

 

 

 

 

 

Owned Rigs

7

 

7

 

7

 

7

 

7

Leased Rigs

8

 

7

 

8

 

9

 

9

ARO Total

15

 

14

 

15

 

16

 

16

(1)

Active fleet represents rigs that are not preservation stacked, including rigs that are in the process of being reactivated.

 

 

(2)

Excludes VALARIS DS-13 and VALARIS DS-14, which Valaris has the option to purchase through year-end 2023. Prior periods have been revised to conform with the current treatment.

 

 

(3)

Leased rigs and managed rigs included in Other reporting segment.

 

 

(4)

Valaris has a 50% ownership interest in ARO. Rig count for ARO owned rigs excludes two newbuild rigs. The first two rigs are expected to be delivered in the first half 2023. All ARO leased rigs are leased from Valaris and also included in Valaris leased rig count.

 

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS

 

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

AVAILABLE DAYS - TOTAL FLEET (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

1,170

 

1,196

 

1,196

 

1,001

 

990

Semisubmersibles

450

 

460

 

460

 

455

 

450

 

1,620

 

1,656

 

1,656

 

1,456

 

1,440

Jackups

 

 

 

 

 

 

 

 

 

HD Ultra-Harsh & Harsh

990

 

1,012

 

1,074

 

1,153

 

1,170

HD & SD Modern

1,599

 

1,668

 

1,748

 

1,729

 

1,710

SD Legacy

360

 

420

 

398

 

364

 

360

 

2,949

 

3,100

 

3,220

 

3,246

 

3,240

 

 

 

 

 

 

 

 

 

 

Total

4,569

 

4,756

 

4,876

 

4,702

 

4,680

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

831

 

828

 

982

 

1,001

 

990

 

 

 

 

 

 

 

 

 

 

Valaris Total

5,400

 

5,584

 

5,858

 

5,703

 

5,670

 

 

 

 

 

 

 

 

 

 

ARO

 

 

 

 

 

 

 

 

 

Owned Rigs

630

 

644

 

644

 

637

 

630

Leased Rigs (2)

646

 

644

 

798

 

819

 

810

ARO Total

1,276

 

1,288

 

1,442

 

1,456

 

1,440

(1)

Represents the maximum number of days available in the period for the total fleet, calculated by multiplying the number of rigs in each asset category by the number of days in the period, irrespective of asset status.

 

 

(2)

All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs available days.

 

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS

 

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

AVAILABLE DAYS - ACTIVE FLEET (1) (2)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

630

 

567

 

368

 

364

 

360

Semisubmersibles

270

 

276

 

276

 

273

 

270

 

900

 

843

 

644

 

637

 

630

Jackups

 

 

 

 

 

 

 

 

 

HD Ultra-Harsh & Harsh

900

 

920

 

920

 

819

 

630

HD & SD Modern

969

 

932

 

1,012

 

1,001

 

810

SD Legacy

270

 

328

 

337

 

364

 

360

 

2,139

 

2,180

 

2,269

 

2,184

 

1,800

 

 

 

 

 

 

 

 

 

 

Total

3,039

 

3,023

 

2,913

 

2,821

 

2,430

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

831

 

828

 

982

 

1,001

 

990

 

 

 

 

 

 

 

 

 

 

Valaris Total

3,870

 

3,851

 

3,895

 

3,822

 

3,420

 

 

 

 

 

 

 

 

 

 

ARO

 

 

 

 

 

 

 

 

 

Owned Rigs

630

 

644

 

644

 

637

 

630

Leased Rigs (2)

646

 

644

 

798

 

819

 

810

ARO Total

1,276

 

1,288

 

1,442

 

1,456

 

1,440

(1)

Represents the maximum number of days available in the period for the active fleet, calculated by multiplying the number of rigs in each asset category by the number of days in the period, for active rigs only. Active rigs are defined as rigs that are not preservation stacked.

 

 

(2)

Active fleet represents rigs that are not preservation stacked, including rigs that are in the process of being reactivated.

 

 

(3)

All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs available days.

 

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS

 

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

OPERATING DAYS (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

353

 

322

 

290

 

185

 

329

Semisubmersibles

52

 

140

 

177

 

137

 

90

 

405

 

462

 

467

 

322

 

419

Jackups

 

 

 

 

 

 

 

 

 

HD Ultra-Harsh & Harsh

769

 

734

 

770

 

674

 

582

HD & SD Modern

809

 

706

 

759

 

742

 

683

SD Legacy

270

 

276

 

294

 

339

 

360

 

1,848

 

1,716

 

1,823

 

1,755

 

1,625

 

 

 

 

 

 

 

 

 

 

Total

2,253

 

2,178

 

2,290

 

2,077

 

2,044

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

831

 

828

 

982

 

1,001

 

990

 

 

 

 

 

 

 

 

 

 

Valaris Total

3,084

 

3,006

 

3,272

 

3,078

 

3,034

 

 

 

 

 

 

 

 

 

 

ARO

 

 

 

 

 

 

 

 

 

Owned Rigs

572

 

513

 

549

 

609

 

609

Leased Rigs (2)

588

 

570

 

687

 

684

 

687

ARO Total

1,160

 

1,083

 

1,236

 

1,293

 

1,296

(1)

Represents the total number of days under contract in the period. Days under contract equals the total number of days that rigs have earned and recognized day rate revenue, including days associated with early contract terminations, compensated downtime and mobilizations. When revenue is deferred and amortized over a future period, for example when we receive fees while mobilizing to commence a new contract or while being upgraded in a shipyard, the related days are excluded from days under contract.

 

 

(2)

All ARO leased rigs are leased from Valaris and also included in Valaris leased and managed rigs operating days.

 

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS
($ in millions, except average day rate)

 

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

DRILLSHIPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted revenues (1)

$

73.1

 

 

$

63.3

 

 

$

55.7

 

 

$

39.6

 

 

$

71.3

 

Adjusted operating expense (2)

 

94.0

 

 

 

69.2

 

 

 

46.8

 

 

 

41.6

 

 

 

52.8

 

 

 

 

 

 

 

 

 

 

 

Rig operating margin

 

(20.9

)

 

 

(5.9

)

 

 

8.9

 

 

 

(2.0

)

 

 

18.5

 

Rig operating margin %

 

(29

)%

 

 

(9

)%

 

 

16

%

 

 

(5

)%

 

 

26

%

 

 

 

 

 

 

 

 

 

 

Other operating expenses

 

 

 

 

 

 

 

 

 

Depreciation

 

11.3

 

 

 

10.8

 

 

 

10.5

 

 

 

21.4

 

 

 

43.0

 

Loss on impairment

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

11.3

 

 

$

10.8

 

 

$

10.5

 

 

$

21.4

 

 

$

43.0

 

 

 

 

 

 

 

 

 

 

 

Other operating income (expense) (3)

 

(11.6

)

 

 

(11.4

)

 

 

(9.3

)

 

 

(9.9

)

 

 

(8.6

)

 

 

 

 

 

 

 

 

 

 

Operating loss

$

(43.8

)

 

$

(28.1

)

 

$

(10.9

)

 

$

(33.3

)

 

$

(33.1

)

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (4)

$

(21.4

)

 

$

(6.6

)

 

$

8.6

 

 

$

(2.5

)

 

$

16.1

 

Reactivation costs (5)

 

48.6

 

 

 

24.3

 

 

 

0.3

 

 

 

—

 

 

 

—

 

Adjusted EBITDAR

$

27.2

 

 

$

17.7

 

 

$

8.9

 

 

$

(2.5

)

 

$

16.1

 

 

 

 

 

 

 

 

 

 

 

Preservation and stacking costs (5)

$

7.5

 

 

$

7.6

 

 

$

8.3

 

 

$

8.9

 

 

$

11.3

 

 

 

 

 

 

 

 

 

 

 

Number of Rigs (at quarter end)

 

 

 

 

 

 

 

 

 

Total Fleet

 

11

 

 

 

11

 

 

 

11

 

 

 

11

 

 

 

11

 

Active Fleet

 

7

 

 

 

7

 

 

 

4

 

 

 

4

 

 

 

4

 

 

 

 

 

 

 

 

 

 

 

Operating Days

 

353

 

 

 

322

 

 

 

290

 

 

 

185

 

 

 

329

 

Utilization - Active Fleet

 

56

%

 

 

57

%

 

 

79

%

 

 

51

%

 

 

91

%

Average Day Rate

$

203,000

 

 

$

196,000

 

 

$

189,000

 

 

$

212,000

 

 

$

208,000

 

(1)

Revenues exclusive of amortization and reimbursable items. In the three months ended March 31, 2022, we adjusted reimbursable revenues to exclude recurring reimbursable revenues. Prior periods were adjusted to conform with the current period presentation.

 

 

(2)

Operating expense exclusive of depreciation, amortization, reimbursable items, bad debt expense and onshore support costs.

 

 

(3)

Other operating income (expense) includes reimbursable revenue and expense, amortized revenue and expense, bad debt expense and other miscellaneous items.

 

 

(4)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

 

 

(5)

Included in rig operating expense.

 

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS
($ in millions, except average day rate

 

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

SEMISUBMERSIBLES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted revenues (1)

$

8.1

 

 

$

24.0

 

 

$

33.8

 

 

$

24.5

 

 

$

14.9

 

Adjusted operating expense (2)

 

34.5

 

 

 

28.2

 

 

 

25.9

 

 

 

17.4

 

 

 

20.9

 

 

 

 

 

 

 

 

 

 

 

Rig operating margin

 

(26.4

)

 

 

(4.2

)

 

 

7.9

 

 

 

7.1

 

 

 

(6.0

)

Rig operating margin %

 

(326

)%

 

 

(18

)%

 

 

23

%

 

 

29

%

 

 

(40

)%

 

 

 

 

 

 

 

 

 

 

Other operating expenses

 

 

 

 

 

 

 

 

 

Depreciation

 

0.8

 

 

 

0.8

 

 

 

0.8

 

 

 

2.2

 

 

 

12.9

 

Loss on impairment

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

756.5

 

 

$

0.8

 

 

$

0.8

 

 

$

0.8

 

 

$

2.2

 

 

$

769.4

 

 

 

 

 

 

 

 

 

 

 

Other operating income (expense) (3)

 

(4.8

)

 

 

(5.8

)

 

 

(6.7

)

 

 

(6.6

)

 

 

(6.1

)

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

$

(32.0

)

 

$

(10.8

)

 

$

0.4

 

 

$

(1.7

)

 

$

(781.5

)

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (4)

$

(27.3

)

 

$

(6.3

)

 

$

7.2

 

 

$

6.4

 

 

$

(6.7

)

Reactivation costs (5)

 

12.3

 

 

 

9.5

 

 

 

1.1

 

 

 

0.1

 

 

 

5.7

 

Adjusted EBITDAR

$

(15.0

)

 

$

3.2

 

 

$

8.3

 

 

$

6.5

 

 

$

(1.0

)

 

 

 

 

 

 

 

 

 

 

Preservation and stacking costs (5)

$

1.2

 

 

$

1.0

 

 

$

1.4

 

 

$

1.4

 

 

$

1.6

 

 

 

 

 

 

 

 

 

 

 

Number of Rigs (at quarter end)

 

 

 

 

 

 

 

 

 

Total Fleet

 

5

 

 

 

5

 

 

 

5

 

 

 

5

 

 

 

5

 

Active Fleet

 

3

 

 

 

3

 

 

 

3

 

 

 

3

 

 

 

3

 

 

 

 

 

 

 

 

 

 

 

Operating Days

 

52

 

 

 

140

 

 

 

177

 

 

 

137

 

 

 

90

 

Utilization - Active Fleet

 

19

%

 

 

51

%

 

 

64

%

 

 

50

%

 

 

33

%

Average Day Rate

$

156,000

 

 

$

171,000

 

 

$

191,000

 

 

$

178,000

 

 

$

164,000

 

(1)

Revenues exclusive of amortization and reimbursable items. In the three months ended March 31, 2022, we adjusted reimbursable revenues to exclude recurring reimbursable revenues. Prior periods were adjusted to conform with the current period presentation.

 

 

(2)

Operating expense exclusive of depreciation, amortization, reimbursable items, bad debt expense and onshore support costs.

 

 

(3)

Other operating income (expense) includes reimbursable revenue and expense, amortized revenue and expense, bad debt expense and other miscellaneous items. 

 

 

(4)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

 

 

(5)

Included in rig operating expense.

 

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS
($ in millions, except average day rate)

 

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

HD ULTRA-HARSH &
HARSH JACKUPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted revenues (1)

$

81.1

 

 

$

83.7

 

 

$

95.8

 

 

$

95.0

 

 

$

86.4

 

Adjusted operating expense (2)

 

58.1

 

 

 

61.4

 

 

 

68.8

 

 

 

71.3

 

 

 

55.2

 

 

 

 

 

 

 

 

 

 

 

Rig operating margin

 

23.0

 

 

 

22.3

 

 

 

27.0

 

 

 

23.7

 

 

 

31.2

 

Rig operating margin %

 

28

%

 

 

27

%

 

 

28

%

 

 

25

%

 

 

36

%

 

 

 

 

 

 

 

 

 

 

Other operating expenses

 

 

 

 

 

 

 

 

 

Depreciation

 

5.5

 

 

 

7.9

 

 

 

8.0

 

 

 

13.7

 

 

 

26.9

 

Loss on impairment

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

5.5

 

 

$

7.9

 

 

$

8.0

 

 

$

13.7

 

 

$

26.9

 

 

 

 

 

 

 

 

 

 

 

Other operating income (expense) (3)

 

(4.4

)

 

 

(5.4

)

 

 

(7.1

)

 

 

(6.1

)

 

 

(6.0

)

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

$

13.1

 

 

$

9.0

 

 

$

11.9

 

 

$

3.9

 

 

$

(1.7

)

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (4)

$

20.4

 

 

$

21.0

 

 

$

25.1

 

 

$

22.2

 

 

$

29.3

 

Reactivation costs (5)

 

0.6

 

 

 

3.3

 

 

 

13.6

 

 

 

20.1

 

 

 

1.7

 

Adjusted EBITDAR

$

21.0

 

 

$

24.3

 

 

$

38.7

 

 

$

42.3

 

 

$

31.0

 

 

 

 

 

 

 

 

 

 

 

Preservation and stacking costs (5)

$

0.1

 

 

$

0.1

 

 

$

0.1

 

 

$

1.3

 

 

$

2.8

 

 

 

 

 

 

 

 

 

 

 

Number of Rigs (at quarter end)

 

 

 

 

 

 

 

 

 

Total Fleet

 

11

 

 

 

11

 

 

 

11

 

 

 

12

 

 

 

13

 

Active Fleet

 

10

 

 

 

10

 

 

 

10

 

 

 

10

 

 

 

9

 

 

 

 

 

 

 

 

 

 

 

Operating Days

 

769

 

 

 

734

 

 

 

770

 

 

 

674

 

 

 

582

 

Utilization - Active Fleet

 

85

%

 

 

80

%

 

 

84

%

 

 

82

%

 

 

92

%

Average Day Rate

$

104,000

 

 

$

110,000

 

 

$

124,000

 

 

$

141,000

 

 

$

140,000

 

(1)

Revenues exclusive of amortization and reimbursable items. In the three months ended March 31, 2022, we adjusted reimbursable revenues to exclude recurring reimbursable revenues. Prior periods were adjusted to conform with the current period presentation.

 

 

(2)

Operating expense exclusive of depreciation, amortization, reimbursable items, bad debt expense and onshore support costs.

 

 

(3)

Other operating income (expense) includes reimbursable revenue and expense, amortized revenue and expense, bad debt expense and other miscellaneous items. 

 

 

(4)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

 

 

(5)

Included in rig operating expense.

 

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS
($ in millions, except average day rate)

 

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

HD & SD MODERN JACKUPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted revenues (1)

$

65.5

 

 

$

54.2

 

 

$

58.1

 

 

$

54.2

 

 

$

48.4

 

Adjusted operating expense (2)

 

47.6

 

 

 

40.6

 

 

 

44.9

 

 

 

49.2

 

 

 

38.8

 

 

 

 

 

 

 

 

 

 

 

Rig operating margin

 

17.9

 

 

 

13.6

 

 

 

13.2

 

 

 

5.0

 

 

 

9.6

 

Rig operating margin %

 

27

%

 

 

25

%

 

 

23

%

 

 

9

%

 

 

20

%

 

 

 

 

 

 

 

 

 

 

Other operating expenses

 

 

 

 

 

 

 

 

 

Depreciation

 

2.5

 

 

 

3.2

 

 

 

3.0

 

 

 

9.6

 

 

 

22.4

 

Loss on impairment

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

2.5

 

 

$

3.2

 

 

$

3.0

 

 

$

9.6

 

 

$

22.4

 

 

 

 

 

 

 

 

 

 

 

Other operating income (expense) (3)

 

(13.7

)

 

 

(8.3

)

 

 

(8.5

)

 

 

(6.9

)

 

 

(8.9

)

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

$

1.7

 

 

$

2.1

 

 

$

1.7

 

 

$

(11.5

)

 

$

(21.7

)

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (4)

$

13.7

 

 

$

11.6

 

 

$

11.2

 

 

$

2.9

 

 

$

8.3

 

Reactivation costs (5)

 

—

 

 

 

—

 

 

 

4.4

 

 

 

3.8

 

 

 

3.7

 

Adjusted EBITDAR

$

13.7

 

 

$

11.6

 

 

$

15.6

 

 

$

6.7

 

 

$

12.0

 

 

 

 

 

 

 

 

 

 

 

Preservation and stacking costs (5)

$

1.8

 

 

$

2.0

 

 

$

0.5

 

 

$

5.5

 

 

$

2.0

 

 

 

 

 

 

 

 

 

 

 

Number of Rigs (at quarter end)

 

 

 

 

 

 

 

 

 

Total Fleet

 

17

 

 

 

18

 

 

 

18

 

 

 

19

 

 

 

19

 

Active Fleet

 

10

 

 

 

11

 

 

 

11

 

 

 

11

 

 

 

11

 

 

 

 

 

 

 

 

 

 

 

Operating Days

 

809

 

 

 

706

 

 

 

759

 

 

 

742

 

 

 

683

 

Utilization - Active Fleet

 

83

%

 

 

76

%

 

 

75

%

 

 

74

%

 

 

84

%

Average Day Rate

$

80,000

 

 

$

76,000

 

 

$

77,000

 

 

$

73,000

 

 

$

70,000

 

(1)

Revenues exclusive of amortization and reimbursable items. In the three months ended March 31, 2022, we adjusted reimbursable revenues to exclude recurring reimbursable revenues. Prior periods were adjusted to conform with the current period presentation.

 

 

(2)

Operating expense exclusive of depreciation, amortization, reimbursable items, bad debt expense and onshore support costs.

 

 

(3)

Other operating income (expense) includes reimbursable revenue and expense, amortized revenue and expense, bad debt expense and other miscellaneous items. 

 

 

(4)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

 

 

(5)

Included in rig operating expense.

 

VALARIS LIMITED AND SUBSIDIARIES
OPERATING STATISTICS
($ in millions, except average day rate)

 

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

SD LEGACY JACKUPS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted revenues (1)

$

19.2

 

 

$

20.3

 

 

$

23.4

 

 

$

24.4

 

 

$

25.5

 

Adjusted operating expense (2)

 

9.9

 

 

 

8.4

 

 

 

14.2

 

 

 

11.8

 

 

 

12.1

 

 

 

 

 

 

 

 

 

 

 

Rig operating margin

 

9.3

 

 

 

11.9

 

 

 

9.2

 

 

 

12.6

 

 

 

13.4

 

Rig operating margin %

 

48

%

 

 

59

%

 

 

39

%

 

 

52

%

 

 

53

%

 

 

 

 

 

 

 

 

 

 

Other operating expenses

 

 

 

 

 

 

 

 

 

Depreciation

 

1.0

 

 

 

1.0

 

 

 

0.9

 

 

 

1.6

 

 

 

2.8

 

Loss on impairment

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

$

1.0

 

 

$

1.0

 

 

$

0.9

 

 

$

1.6

 

 

$

2.8

 

 

 

 

 

 

 

 

 

 

 

Other operating income (expense) (3)

 

(1.8

)

 

 

(1.7

)

 

 

(2.2

)

 

 

(3.0

)

 

 

(2.8

)

 

 

 

 

 

 

 

 

 

 

Operating income

$

6.5

 

 

$

9.2

 

 

$

6.1

 

 

$

8.0

 

 

$

7.8

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA (4)

$

8.9

 

 

$

11.8

 

 

$

9.0

 

 

$

12.0

 

 

$

13.0

 

Reactivation costs (5)

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Adjusted EBITDAR

$

8.9

 

 

$

11.8

 

 

$

9.0

 

 

$

12.0

 

 

$

13.0

 

 

 

 

 

 

 

 

 

 

 

Preservation and stacking costs (5)

$

—

 

 

$

0.3

 

 

$

2.3

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

Number of Rigs (at quarter end)

 

 

 

 

 

 

 

 

 

Total Fleet

 

3

 

 

 

4

 

 

 

4

 

 

 

4

 

 

 

4

 

Active Fleet

 

3

 

 

 

3

 

 

 

3

 

 

 

4

 

 

 

4

 

 

 

 

 

 

 

 

 

 

 

Operating Days

 

270

 

 

 

276

 

 

 

294

 

 

 

339

 

 

 

360

 

Utilization - Active Fleet

 

100

%

 

 

84

%

 

 

87

%

 

 

93

%

 

 

100

%

Average Day Rate

$

71,000

 

 

$

73,000

 

 

$

74,000

 

 

$

72,000

 

 

$

70,000

 

(1)

Revenues exclusive of amortization and reimbursable items. In the three months ended March 31, 2022, we adjusted reimbursable revenues to exclude recurring reimbursable revenues. Prior periods were adjusted to conform with the current period presentation.

 

 

(2)

Operating expense exclusive of depreciation, amortization, reimbursable items, bad debt expense and onshore support costs.

 

 

(3)

Other operating income (expense) includes reimbursable revenue and expense, amortized revenue and expense, bad debt expense and other miscellaneous items. 

 

 

(4)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

 

 

(5)

Included in rig operating expense.

   

ARO DRILLING
CONDENSED BALANCE SHEET INFORMATION
(In millions)

   

 

As of

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

Cash

$

240.2

 

 

$

270.8

 

 

$

309.0

 

 

$

318.2

 

 

$

275.4

 

Other current assets

 

179.5

 

 

 

135.0

 

 

 

98.0

 

 

 

81.7

 

 

 

89.2

 

Non-current assets

 

775.8

 

 

 

775.8

 

 

 

776.1

 

 

 

782.8

 

 

 

789.0

 

Total assets

$

1,195.5

 

 

$

1,181.6

 

 

$

1,183.1

 

 

$

1,182.7

 

 

$

1,153.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities

$

92.9

 

 

$

79.9

 

 

$

77.1

 

 

$

74.9

 

 

$

52.3

 

Non-current liabilities

 

957.9

 

 

 

956.7

 

 

 

951.0

 

 

 

950.3

 

 

 

952.1

 

Total liabilities

$

1,050.8

 

 

$

1,036.6

 

 

$

1,028.1

 

 

$

1,025.2

 

 

$

1,004.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

$

144.7

 

 

$

145.0

 

 

$

155.0

 

 

$

157.5

 

 

$

149.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

$

1,195.5

 

 

$

1,181.6

 

 

$

1,183.1

 

 

$

1,182.7

 

 

$

1,153.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

ARO DRILLING
CONDENSED INCOME STATEMENT INFORMATION
(In millions)

 

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

Revenues

$

111.3

 

 

$

105.4

 

 

$

117.7

 

 

$

124.8

 

 

$

122.7

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling (exclusive of depreciation)

 

84.2

 

 

 

88.9

 

 

 

94.4

 

 

 

92.7

 

 

 

86.3

 

Depreciation

 

16.5

 

 

 

17.7

 

 

 

16.8

 

 

 

14.6

 

 

 

16.1

 

General and administrative

 

5.2

 

 

 

5.1

 

 

 

5.4

 

 

 

4.3

 

 

 

3.0

 

Operating income (loss)

$

5.4

 

 

$

(6.3

)

 

$

1.1

 

 

$

13.2

 

 

$

17.3

 

Other expense, net

 

3.3

 

 

 

2.4

 

 

 

3.4

 

 

 

3.1

 

 

 

4.5

 

Provision for income taxes

 

0.7

 

 

 

1.3

 

 

 

0.2

 

 

 

1.9

 

 

 

4.5

 

Net income (loss)

$

1.4

 

 

$

(10.0

)

 

$

(2.5

)

 

$

8.2

 

 

$

8.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA

$

21.9

 

 

$

11.4

 

 

$

17.9

 

 

$

27.8

 

 

$

33.4

 

ARO Drilling condensed balance sheet and income statement information presented above represents 100% of ARO. Valaris has a 50% ownership interest in ARO.

Non-GAAP Financial Measures

To supplement Valaris’ condensed consolidated financial statements presented on a GAAP basis, this press release provides investors with Adjusted EBITDA and Adjusted EBITDAR, which are non-GAAP measures.

Valaris defines "Adjusted EBITDA" as net loss from continuing operations before income tax expense, interest expense, reorganization items, net, other (income) expense, depreciation expense, amortization, net, loss on impairment, equity in earnings of ARO, merger transaction and integration costs and lease modification adjustment. Adjusted EBITDA is a non-GAAP measure that our management uses to facilitate period-to-period comparisons of our core operating performance and to evaluate our long-term financial performance against that of our peers. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance and makes it easier to compare our results with those of other companies within our industry. Adjusted EBITDA should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an indication of cash flows from operating activities, or (c) as a measure of liquidity. Adjusted EBITDA may not be comparable to other similarly titled measures reported by other companies.

Valaris defines "Adjusted EBITDAR" as Adjusted EBITDA before reactivation costs. Adjusted EBITDAR is a non-GAAP measure that our management uses to assess the performance of our fleet excluding one-time rig reactivation costs. We believe that this measure is useful to investors and analysts in allowing for greater transparency of our core operating performance. Adjusted EBITDAR should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an indication of cash flows from operating activities, or (c) as a measure of liquidity. Adjusted EBITDAR may not be comparable to other similarly titled measures reported by other companies.

Valaris defines ARO "EBITDA" as net income before income tax expense, other expense, net and depreciation expense. EBITDA is a non-GAAP measure that our management uses to facilitate period-to-period comparisons of ARO's core operating performance and to evaluate ARO's long-term financial performance against that of ARO's peers. We believe that this measure is useful to investors and analysts in allowing for greater transparency of ARO's core operating performance and makes it easier to compare ARO's results with those of other companies within ARO's industry. EBITDA should not be considered (a) in isolation of, or as a substitute for, net income (loss), (b) as an indication of cash flows from operating activities, or (c) as a measure of liquidity. EBITDA may not be comparable to other similarly titled measures reported by other companies.

The Company is not able to provide a reconciliation of the Company's forward-looking Adjusted EBITDA, as discussed on its first quarter 2022 earnings conference call, to the most directly comparable GAAP measure without unreasonable effort because of the inherent difficulty in forecasting and quantifying certain amounts necessary for such a reconciliation, including forward-looking tax expense and other income (expense).

Non-GAAP financial measures should be considered as a supplement to, and not as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

Reconciliation of Net Income (Loss) to Adjusted EBITDA

A reconciliation of net income (loss) as reported to Adjusted EBITDA is included in the tables below (in millions):

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

 

 

 

VALARIS

 

 

 

Net income (loss)

$

(39.8

)

 

$

27.7

 

Add (subtract):

 

 

 

Income tax benefit

 

(0.7

)

 

 

(31.0

)

Interest expense

 

11.5

 

 

 

11.7

 

Reorganization items

 

1.0

 

 

 

4.9

 

Other income

 

(21.9

)

 

 

(38.0

)

Operating loss

 

(49.9

)

 

 

(24.7

)

Add (subtract):

 

 

 

Depreciation expense

 

22.5

 

 

 

25.1

 

Amortization, net (1)

 

1.6

 

 

 

(0.5

)

Merger transaction and integration costs

 

(0.8

)

 

 

1.3

 

Equity in (earnings) losses of ARO

 

(4.3

)

 

 

1.3

 

Adjusted EBITDA

$

(30.9

)

 

$

2.5

 

(1)

Amortization, net, includes amortization during the indicated period for deferred mobilization revenues and costs, deferred capital upgrade revenues, deferred certification costs, intangible amortization and other amortization.

 

Three Months Ended

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

June 30,
2021

 

March 31,
2021

 

 

 

 

 

 

 

 

 

 

 

 

 

ARO

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

$

1.4

 

 

$

(10.0

)

 

$

(2.5

)

 

$

8.2

 

 

$

8.3

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

0.7

 

 

 

1.3

 

 

 

0.2

 

 

 

1.9

 

 

 

4.5

 

Other expense, net

 

3.3

 

 

 

2.4

 

 

 

3.4

 

 

 

3.1

 

 

 

4.5

 

Operating (loss) income

$

5.4

 

 

$

(6.3

)

 

$

1.1

 

 

$

13.2

 

 

$

17.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Add:

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation expense

 

16.5

 

 

 

17.7

 

 

 

16.8

 

 

 

14.6

 

 

 

16.1

 

EBITDA

$

21.9

 

 

$

11.4

 

 

$

17.9

 

 

$

27.8

 

 

$

33.4

 
 

Reconciliation of Net Income (Loss) to Adjusted EBITDA and Adjusted EBITDAR

 

(In millions)

 

 

 

 

Three Months Ended
March 31, 2022

 

Three Months Ended
December 31, 2021

FLOATERS

 

 

 

Net loss

$

(60.0

)

 

$

(25.4

)

Add (subtract):

 

 

 

Other (income) expense

 

(0.1

)

 

 

0.4

 

Operating loss

$

(60.1

)

 

$

(25.0

)

Add (subtract):

 

 

 

Depreciation and amortization, net

 

11.4

 

 

 

11.2

 

Other costs

 

—

 

 

 

0.9

 

Adjusted EBITDA

$

(48.7

)

 

$

(12.9

)

Add (subtract):

 

 

 

Reactivation costs

 

60.9

 

 

 

33.8

 

Adjusted EBITDAR

$

12.2

 

 

$

20.9

 

 

 

 

 

JACKUPS

 

 

 

Net income

$

34.7

 

 

$

52.8

 

Add (subtract):

 

 

 

Other income

 

(2.3

)

 

 

(20.6

)

Operating income

$

32.4

 

 

$

32.2

 

Add (subtract):

 

 

 

Depreciation and amortization, net

 

10.6

 

 

 

11.9

 

Other costs

 

—

 

 

 

0.3

 

Adjusted EBITDA

$

43.0

 

 

$

44.4

 

Add (subtract):

 

 

 

Reactivation costs

 

0.6

 

 

 

3.3

 

Adjusted EBITDAR

$

43.6

 

 

$

47.7

 

 

 

 

 

OTHER

 

 

 

Net income

$

21.6

 

 

$

16.2

 

Add (subtract):

 

 

 

Operating income

$

21.6

 

 

$

16.2

 

Add (subtract):

 

 

 

Depreciation and amortization, net

 

1.0

 

 

 

1.1

 

Adjusted EBITDA

$

22.6

 

 

$

17.3

 

Add (subtract):

 

 

 

Reactivation costs

 

—

 

 

 

0.1

 

Adjusted EBITDAR

$

22.6

 

 

$

17.4

 

 

Reconciliation of Operating Income (Loss) to Adjusted EBITDAR

 

(In millions)

Successor

 

 

Predecessor

Combined
(Non-GAAP)

Predecessor

 

Three Months Ended
March 31, 2022

 

Three Months Ended
December 31, 2021

 

Three Months Ended
September 30, 2021

Two Months Ended
June 30, 2021

 

 

One Month Ended
April 30, 2021

Three Months Ended
June 30, 2021

Three Months Ended
March 31, 2021

ACTIVE FLEET (1)

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

$

(40.0

)

 

$

(3.1

)

 

$

27.2

 

$

20.2

 

 

 

$

(20.7

)

$

(0.5

)

$

(434.1

)

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Reactivation costs

 

61.5

 

 

 

37.1

 

 

 

19.4

 

 

17.3

 

 

 

 

6.7

 

 

24.0

 

 

11.1

 

Depreciation and amortization, net

 

18.9

 

 

 

19.0

 

 

 

20.7

 

 

11.9

 

 

 

 

19.0

 

 

30.9

 

 

62.0

 

Loss on impairment

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

 

419.2

 

Support and other costs

 

26.1

 

 

 

26.6

 

 

 

25.7

 

 

17.9

 

 

 

 

9.8

 

 

27.7

 

 

30.6

 

Adjusted EBITDAR (2)

$

66.5

 

 

$

79.6

 

 

$

93.0

 

$

67.3

 

 

 

$

14.8

 

$

82.1

 

$

88.8

 

 

 

 

 

 

 

 

 

 

 

 

 

LEASED AND MANAGED RIGS

 

 

 

 

 

 

 

 

 

 

 

Operating income

$

19.4

 

 

$

13.9

 

 

$

18.5

 

$

13.0

 

 

 

$

2.6

 

$

15.6

 

$

7.6

 

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization, net

 

1.2

 

 

 

1.2

 

 

 

1.2

 

 

0.9

 

 

 

 

3.9

 

 

4.8

 

 

12.3

 

Support and other costs

 

2.0

 

 

 

2.3

 

 

 

2.5

 

 

1.7

 

 

 

 

0.8

 

 

2.5

 

 

2.8

 

Adjusted EBITDAR (2)

$

22.6

 

 

$

17.4

 

 

$

22.2

 

$

15.6

 

 

 

$

7.3

 

$

22.9

 

$

22.7

 

 

 

 

 

 

 

 

 

 

 

 

 

STACKED FLEET

 

 

 

 

 

 

 

 

 

 

 

Operating loss

$

(14.6

)

 

$

(15.2

)

 

$

(17.6

)

$

(15.3

)

 

 

$

(18.8

)

$

(34.1

)

$

(396.1

)

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization, net

 

3.4

 

 

 

3.9

 

 

 

5.1

 

 

3.3

 

 

 

 

13.7

 

 

17.0

 

 

41.1

 

Loss on impairment

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

 

337.3

 

Support and other costs

 

0.5

 

 

 

0.4

 

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

 

—

 

Adjusted EBITDAR (2)

$

(10.7

)

 

$

(10.9

)

 

$

(12.5

)

$

(12.0

)

 

 

$

(5.1

)

$

(17.1

)

$

(17.7

)

 

 

 

 

 

 

 

 

 

 

 

 

VALARIS TOTAL

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

$

(35.2

)

 

$

(4.4

)

 

$

28.1

 

$

17.9

 

 

 

$

(36.9

)

$

(19.0

)

$

(822.6

)

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Reactivation costs

 

61.5

 

 

 

37.1

 

 

 

19.4

 

 

17.3

 

 

 

 

6.7

 

 

24.0

 

 

11.1

 

Depreciation and amortization, net

 

23.5

 

 

 

24.0

 

 

 

27.0

 

 

16.1

 

 

 

 

36.6

 

 

52.7

 

 

115.4

 

Loss on impairment

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

 

756.5

 

Support and other costs

 

28.6

 

 

 

29.3

 

 

 

28.2

 

 

19.6

 

 

 

 

10.6

 

 

30.2

 

 

33.4

 

Adjusted EBITDAR (2)

$

78.4

 

 

$

86.0

 

 

$

102.7

 

$

70.9

 

 

 

$

17.0

 

$

87.9

 

$

93.8

 

(1)

Active fleet represents rigs that are not preservation stacked, including rigs that are in the process of being reactivated.

 

 

(2)

Adjusted EBITDAR for active fleet, leased and managed rigs and stacked fleet excludes onshore support costs and general and administrative expense.

 

Reconciliation of Operating Revenues to Adjusted Revenues, Operating Expenses to Adjusted Operating Expenses and Operating Income (Loss) to Adjusted EBITDA

 

(In millions)

Successor

 

 

Predecessor

Combined
(Non-GAAP)

Predecessor

 

Three Months Ended
March 31, 2022

 

Three Months Ended
December 31, 2021

 

Three Months Ended
September 30, 2021

Two Months Ended
June 30, 2021

 

 

One Month Ended
April 30, 2021

Three Months Ended
June 30, 2021

Three Months Ended
March 31, 2021

DRILLSHIPS

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

$

85.4

 

 

$

73.5

 

 

$

67.5

 

$

28.9

 

 

 

$

13.7

 

$

42.6

 

$

81.0

 

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Reimbursable revenues (1)

 

(6.9

)

 

 

(5.2

)

 

 

(6.0

)

 

(1.9

)

 

 

 

(0.6

)

 

(2.5

)

 

(2.5

)

Amortized revenues

 

(5.4

)

 

 

(5.0

)

 

 

(5.8

)

 

—

 

 

 

 

(0.5

)

 

(0.5

)

 

(7.2

)

Adjusted revenues

$

73.1

 

 

$

63.3

 

 

$

55.7

 

$

27.0

 

 

 

$

12.6

 

$

39.6

 

$

71.3

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

$

129.3

 

 

$

101.6

 

 

$

78.4

 

$

39.9

 

 

 

$

36.0

 

$

75.9

 

$

114.1

 

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

(15.8

)

 

 

(15.7

)

 

 

(17.0

)

 

(7.2

)

 

 

 

(15.3

)

 

(22.5

)

 

(46.6

)

Reimbursable expenses

 

(7.7

)

 

 

(5.8

)

 

 

(6.5

)

 

(2.2

)

 

 

 

(1.0

)

 

(3.2

)

 

(5.0

)

Support and other costs

 

(11.8

)

 

 

(10.9

)

 

 

(8.1

)

 

(5.5

)

 

 

 

(3.1

)

 

(8.6

)

 

(9.7

)

Adjusted operating expenses

$

94.0

 

 

$

69.2

 

 

$

46.8

 

$

25.0

 

 

 

$

16.6

 

$

41.6

 

$

52.8

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss

$

(43.8

)

 

$

(28.1

)

 

$

(10.9

)

$

(11.0

)

 

 

$

(22.7

)

$

(33.3

)

$

(33.1

)

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization, net

 

10.4

 

 

 

10.7

 

 

 

11.2

 

 

7.2

 

 

 

 

14.8

 

 

22.0

 

 

39.4

 

Support and other costs

 

12.0

 

 

 

10.8

 

 

 

8.3

 

 

5.7

 

 

 

 

3.1

 

 

8.8

 

 

9.8

 

Adjusted EBITDA (2)

$

(21.4

)

 

$

(6.6

)

 

$

8.6

 

$

1.9

 

 

 

$

(4.8

)

$

(2.5

)

$

16.1

 

(1)

In the three months ended March 31, 2022, we adjusted reimbursable revenues to exclude recurring reimbursable revenues. Prior periods were adjusted to conform with the current period presentation.

 

 

(2)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

 

Reconciliation of Operating Revenues to Adjusted Revenues, Operating Expenses to Adjusted Operating Expenses and Operating Income (Loss) to Adjusted EBITDA

 

(In millions)

Successor

 

 

Predecessor

Combined
(Non-GAAP)

Predecessor

 

Three Months Ended
March 31, 2022

 

Three Months Ended
December 31, 2021

 

Three Months Ended
September 30, 2021

Two Months Ended
June 30, 2021

 

 

One Month Ended
April 30, 2021

Three Months Ended
June 30, 2021

Three Months Ended
March 31, 2021

SEMISUBMERSIBLES 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

$

14.3

 

 

$

27.0

 

 

$

36.8

 

$

20.9

 

 

 

$

4.7

 

$

25.6

 

$

16.3

 

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Reimbursable revenues (1)

 

(6.2

)

 

 

(2.3

)

 

 

(2.0

)

 

(1.1

)

 

 

 

—

 

 

(1.1

)

 

(1.4

)

Amortized revenues

 

—

 

 

 

(0.7

)

 

 

(1.0

)

 

—

 

 

 

 

—

 

 

—

 

 

—

 

Adjusted revenues

$

8.1

 

 

$

24.0

 

 

$

33.8

 

$

19.8

 

 

 

$

4.7

 

$

24.5

 

$

14.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

$

46.3

 

 

$

37.9

 

 

$

36.5

 

$

21.5

 

 

 

$

5.8

 

$

27.3

 

$

797.8

 

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

(1.0

)

 

 

(1.2

)

 

 

(3.4

)

 

(1.9

)

 

 

 

(1.6

)

 

(3.5

)

 

(13.0

)

Loss on impairment

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

 

(756.5

)

Reimbursable expenses

 

(7.3

)

 

 

(4.9

)

 

 

(2.8

)

 

(1.5

)

 

 

 

(0.2

)

 

(1.7

)

 

(2.1

)

Support and other costs

 

(3.5

)

 

 

(3.6

)

 

 

(4.4

)

 

(3.0

)

 

 

 

(1.7

)

 

(4.7

)

 

(5.3

)

Adjusted operating expenses

$

34.5

 

 

$

28.2

 

 

$

25.9

 

$

15.1

 

 

 

$

2.3

 

$

17.4

 

$

20.9

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

$

(32.0

)

 

$

(10.8

)

 

$

0.4

 

$

(0.6

)

 

 

$

(1.1

)

$

(1.7

)

$

(781.5

)

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization, net

 

1.0

 

 

 

0.5

 

 

 

2.4

 

 

1.9

 

 

 

 

1.6

 

 

3.5

 

 

13.0

 

Loss on impairment

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

 

 

—

 

 

—

 

 

756.5

 

Support and other costs

 

3.7

 

 

 

4.0

 

 

 

4.4

 

 

2.9

 

 

 

 

1.7

 

 

4.6

 

 

5.3

 

Adjusted EBITDA (2)

$

(27.3

)

 

$

(6.3

)

 

$

7.2

 

$

4.2

 

 

 

$

2.2

 

$

6.4

 

$

(6.7

)

(1)

In the three months ended March 31, 2022, we adjusted reimbursable revenues to exclude recurring reimbursable revenues. Prior periods were adjusted to conform with the current period presentation.

 

 

(2)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

 

Reconciliation of Operating Revenues to Adjusted Revenues, Operating Expenses to Adjusted Operating Expenses and Operating Income (Loss) to Adjusted EBITDA

 

(In millions)

Successor

 

 

Predecessor

Combined
(Non-GAAP)

Predecessor

 

Three Months Ended
March 31, 2022

 

Three Months Ended
December 31, 2021

 

Three Months Ended
September 30, 2021

Two Months Ended
June 30, 2021

 

 

One Month Ended
April 30, 2021

Three Months Ended
June 30, 2021

Three Months Ended
March 31, 2021

HD ULTRA-HARSH & HARSH JACKUPS

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

$

92.9

 

 

$

94.0

 

 

$

102.8

 

$

70.9

 

 

 

$

34.0

 

$

104.9

 

$

95.5

 

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Reimbursable revenues (1)

 

(6.6

)

 

 

(8.6

)

 

 

(6.6

)

 

(5.9

)

 

 

 

(2.7

)

 

(8.6

)

 

(5.7

)

Amortized revenues

 

(5.2

)

 

 

(1.7

)

 

 

(0.4

)

 

(0.2

)

 

 

 

(1.1

)

 

(1.3

)

 

(3.4

)

Adjusted revenues

$

81.1

 

 

$

83.7

 

 

$

95.8

 

$

64.8

 

 

 

$

30.2

 

$

95.0

 

$

86.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

$

79.9

 

 

$

85.0

 

 

$

90.9

 

$

59.1

 

 

 

$

41.9

 

$

101.0

 

$

97.2

 

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

(8.1

)

 

 

(8.9

)

 

 

(8.2

)

 

(5.0

)

 

 

 

(9.0

)

 

(14.0

)

 

(28.8

)

Reimbursable expenses

 

(9.2

)

 

 

(10.1

)

 

 

(8.8

)

 

(6.8

)

 

 

 

(3.2

)

 

(10.0

)

 

(7.6

)

Support and other costs

 

(4.5

)

 

 

(4.6

)

 

 

(5.1

)

 

(3.7

)

 

 

 

(2.0

)

 

(5.7

)

 

(5.6

)

Adjusted operating expenses

$

58.1

 

 

$

61.4

 

 

$

68.8

 

$

43.6

 

 

 

$

27.7

 

$

71.3

 

$

55.2

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

$

13.1

 

 

$

9.0

 

 

$

11.9

 

$

11.8

 

 

 

$

(7.9

)

$

3.9

 

$

(1.7

)

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization, net

 

2.8

 

 

 

7.2

 

 

 

7.8

 

 

4.8

 

 

 

 

7.9

 

 

12.7

 

 

25.4

 

Support and other costs

 

4.5

 

 

 

4.8

 

 

 

5.4

 

 

3.6

 

 

 

 

2.0

 

 

5.6

 

 

5.6

 

Adjusted EBITDA (2)

$

20.4

 

 

$

21.0

 

 

$

25.1

 

$

20.2

 

 

 

$

2.0

 

$

22.2

 

$

29.3

 

(1)

In the three months ended March 31, 2022, we adjusted reimbursable revenues to exclude recurring reimbursable revenues. Prior periods were adjusted to conform with the current period presentation.

 

 

(2)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

 

Reconciliation of Operating Revenues to Adjusted Revenues, Operating Expenses to Adjusted Operating Expenses and Operating Income (Loss) to Adjusted EBITDA

 

(In millions)

Successor

 

 

Predecessor

Combined
(Non-GAAP)

Predecessor

 

Three Months Ended
March 31, 2022

 

Three Months Ended
December 31, 2021

 

Three Months Ended
September 30, 2021

Two Months Ended
June 30, 2021

 

 

One Month Ended
April 30, 2021

Three Months Ended
June 30, 2021

Three Months Ended
March 31, 2021

HD & SD MODERN JACKUPS

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

$

67.8

 

 

$

56.2

 

 

$

59.6

 

$

40.7

 

 

 

$

17.0

 

$

57.7

 

$

50.5

 

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Reimbursable revenues (1)

 

(3.1

)

 

 

(1.4

)

 

 

(1.1

)

 

(0.9

)

 

 

 

(0.5

)

 

(1.4

)

 

(0.5

)

Amortized revenues

 

0.8

 

 

 

(0.6

)

 

 

(0.4

)

 

(1.6

)

 

 

 

(0.5

)

 

(2.1

)

 

(1.6

)

Adjusted revenues

$

65.5

 

 

$

54.2

 

 

$

58.1

 

$

38.2

 

 

 

$

16.0

 

$

54.2

 

$

48.4

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

$

66.2

 

 

$

54.1

 

 

$

57.9

 

$

41.3

 

 

 

$

27.9

 

$

69.2

 

$

72.2

 

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

(6.0

)

 

 

(4.3

)

 

 

(3.6

)

 

(2.2

)

 

 

 

(8.1

)

 

(10.3

)

 

(24.5

)

Reimbursable expenses

 

(7.5

)

 

 

(3.2

)

 

 

(3.2

)

 

(2.2

)

 

 

 

(1.2

)

 

(3.4

)

 

(1.8

)

Support and other costs

 

(5.1

)

 

 

(6.0

)

 

 

(6.2

)

 

(4.1

)

 

 

 

(2.2

)

 

(6.3

)

 

(7.1

)

Adjusted operating expenses

$

47.6

 

 

$

40.6

 

 

$

44.9

 

$

32.8

 

 

 

$

16.4

 

$

49.2

 

$

38.8

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

$

1.7

 

 

$

2.1

 

 

$

1.7

 

$

(0.6

)

 

 

$

(10.9

)

$

(11.5

)

$

(21.7

)

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization, net

 

6.8

 

 

 

3.7

 

 

 

3.2

 

 

0.6

 

 

 

 

7.6

 

 

8.2

 

 

22.9

 

Support and other costs

 

5.2

 

 

 

5.8

 

 

 

6.3

 

 

4.0

 

 

 

 

2.2

 

 

6.2

 

 

7.1

 

Adjusted EBITDA (2)

$

13.7

 

 

$

11.6

 

 

$

11.2

 

$

4.0

 

 

 

$

(1.1

)

$

2.9

 

$

8.3

 

(1)

In the three months ended March 31, 2022, we adjusted reimbursable revenues to exclude recurring reimbursable revenues. Prior periods were adjusted to conform with the current period presentation.

 

 

(2)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

 

Reconciliation of Operating Revenues to Adjusted Revenues, Operating Expenses to Adjusted Operating Expenses and Operating Income (Loss) to Adjusted EBITDA

 

(In millions)

Successor

 

 

Predecessor

Combined
(Non-GAAP)

Predecessor

 

Three Months Ended
March 31, 2022

 

Three Months Ended
December 31, 2021

 

Three Months Ended
September 30, 2021

Two Months Ended
June 30, 2021

 

 

One Month Ended
April 30, 2021

Three Months Ended
June 30, 2021

Three Months Ended
March 31, 2021

SD LEGACY JACKUPS

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

$

19.9

 

 

$

22.1

 

 

$

23.9

 

$

16.8

 

 

 

$

8.8

 

$

25.6

 

$

26.6

 

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Reimbursable revenues (1)

 

(0.7

)

 

 

(1.8

)

 

 

(0.5

)

 

(0.8

)

 

 

 

(0.2

)

 

(1.0

)

 

(0.6

)

Amortized revenues

 

—

 

 

 

—

 

 

 

—

 

 

—

 

 

 

 

(0.2

)

 

(0.2

)

 

(0.5

)

Adjusted revenues

$

19.2

 

 

$

20.3

 

 

$

23.4

 

$

16.0

 

 

 

$

8.4

 

$

24.4

 

$

25.5

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

$

13.5

 

 

$

12.9

 

 

$

17.9

 

$

11.5

 

 

 

$

6.1

 

$

17.6

 

$

18.8

 

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

(1.0

)

 

 

(1.0

)

 

 

(0.9

)

 

(0.7

)

 

 

 

(1.0

)

 

(1.7

)

 

(2.9

)

Reimbursable expenses

 

(1.1

)

 

 

(2.1

)

 

 

(0.9

)

 

(1.2

)

 

 

 

(0.4

)

 

(1.6

)

 

(1.0

)

Support and other costs

 

(1.5

)

 

 

(1.4

)

 

 

(1.9

)

 

(1.7

)

 

 

 

(0.8

)

 

(2.5

)

 

(2.8

)

Adjusted operating expenses

$

9.9

 

 

$

8.4

 

 

$

14.2

 

$

7.9

 

 

 

$

3.9

 

$

11.8

 

$

12.1

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

$

6.5

 

 

$

9.2

 

 

$

6.1

 

$

5.3

 

 

 

$

2.7

 

$

8.0

 

$

7.8

 

Add (subtract):

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization, net

 

1.0

 

 

 

1.0

 

 

 

0.9

 

 

0.7

 

 

 

 

0.8

 

 

1.5

 

 

2.4

 

Support and other costs

 

1.4

 

 

 

1.6

 

 

 

2.0

 

 

1.7

 

 

 

 

0.8

 

 

2.5

 

 

2.8

 

Adjusted EBITDA (2)

$

8.9

 

 

$

11.8

 

 

$

9.0

 

$

7.7

 

 

 

$

4.3

 

$

12.0

 

$

13.0

 

(1)

In the three months ended March 31, 2022, we adjusted reimbursable revenues to exclude recurring reimbursable revenues. Prior periods were adjusted to conform with the current period presentation.

 

 

(2)

Adjusted EBITDA for asset category excludes onshore support costs and general and administrative expense.

 

Investor & Media Contact:

Tim Richardson

Director - Investor Relations

+1-713-979-4619

Source: Valaris Limited

FAQ

What were Valaris' Q1 2022 revenue figures?

Valaris reported revenues of $318 million in Q1 2022, up from $306 million in Q4 2021.

What is the financial impact of Valaris' contract for drillship VALARIS DS-12?

The contract for VALARIS DS-12 in West Africa is expected to improve day rates not seen in the past seven years, positively affecting future financial performance.

What was Valaris' net loss in Q1 2022?

Valaris reported a net loss of $40 million in Q1 2022, compared to a net income of $28 million in the previous quarter.

How did Valaris manage its operational efficiency in Q1 2022?

Valaris achieved a revenue efficiency of 99%, indicating effective operations during the first quarter.

What were the major expenses impacting Valaris in Q1 2022?

Contract drilling expenses increased to $331 million in Q1 2022, attributed to higher rig reactivation costs.

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Valaris Limited

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