Valaris' Drilling Rig Contracts Backlog Grows to $4 Billion

VALARIS DS-9 (Credit: Valaris)
VALARIS DS-9 (Credit: Valaris)

Offshore drilling company Valaris has secured new contracts and extensions for its drilling rigs, increasing its contract backlog to approximately $4 billion.

Since its latest fleet status report, issued on February 15, 2024, Valaris has secured approximately $480 million new contracts and contract extensions, increasing its backlog from $3.9 million.

Drillships and Jack-Ups Deals

During the period, Valaris has seen a six-month priced option exercised by ExxonMobil for drillship VALARIS DS-9. The six-month option will start in January 2025 in direct continuation of the existing firm program.

Also, a 60-day priced option has been exercised by Equinor offshore Brazil for drillship VALARIS DS-17.

The 60-day option is expected to begin in May 2025 in direct continuation of the existing firm contract.

The operating day rate for the priced option period is approximately $497,000 including MPD and additional services.

As for the jack-ups, Valaris has secured a 13-well contract offshore Angola for its jack-up VALARIS 144.

The contract is expected to commence in the second quarter 2025 and has an estimated duration of between 730 days and 770 days. The total contract value is estimated to be between $149 million and $156 million, including a mobilization fee from the U.S. Gulf of Mexico.

Also, a one-well priced option was exercised by TotalEnergies in the UK North Sea for heavy duty harsh environment jack-up VALARIS Stavanger.

The well has an estimated duration of 30 days and will be added to the existing firm program, increasing the total contract value by approximately $4 million. Other Contract Awards

In addition, Valaris was awarded a three-year contract extension with BP in the U.S. Gulf of Mexico for managed rigs Mad Dog and Thunder Horse.

The contract extensions were effective on January 27, 2024. The three-year extension periods have a combined estimated total contract value of approximately $259 million.

Contract Suspensions 

As for other fleet updates, the contract between ARO and Saudi Aramco for jack-up VALARIS 143 will be suspended with an expected effective date in May 2024.

ARO has provided notice to Saudi Aramco to terminate the contract effective seven days after the contract suspension date. Upon termination of the contract, the bareboat charter agreement between Valaris and ARO will also be terminated, and the rig will return to Valaris.

Furthermore, Valaris received a contract suspension notice for VALARIS 92 that is estimated to take effect from February 26, 2025, at the end of the operator's planned work scope. The contract was previously scheduled to end in February 2026. The contract suspension results in a reduction to contract backlog of approximately $35 million, Valaris said.

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