Offshore drilling company Valaris has secured approximately $715 million in new contracts and extensions since its last fleet status report issued three months ago.
Contract backlog of $715 million excludes lump sum payments such as mobilization fees and capital reimbursements, according to Valaris, which marked contract backlog increase to approximately $4.3 billion from approximately $4.0 billion as of April 30, 2024.
Floater Contract Awards
Valaris secured multi-year contract with Equinor offshore Brazil for drillship VALARIS DS-17. The contract has an estimated total duration of 852 days and is expected to commence in the third quarter 2025, in direct continuation of the rig's current program.
The contract includes a 672-day drilling program that is expected to commence in the first half of 2026. The rig will be on standby for an estimated duration of 180 days between the end of the rig's current program and the beginning of the operating period.
During the standby period, the rig may be available for work both inside and outside Brazil, which could lead to incremental revenue. The estimated total contract value is approximately $498 million, inclusive of MPD, additional services and fees for mobilization and minor rig upgrades.
Jackup Contract Awards
The offshore drilling contractor was awarded 26-well plug and abandonment contract in the UK North Sea for jack-up VALARIS 92. The contract has an estimated duration of two years and is expected to start in the first quarter 2025, in direct continuation of the rig’s current program with another operator. The estimated total contract value is approximately $75 million.
Valaris secured an eight-well contract with Shell offshore Trinidad for jack-up VALARIS 249. The contract has an estimated duration of 365 days and is expected to commence in the first half 2026. The estimated total contract value is approximately $66 million.
ENI Energy E&P UK awarded the company a two-well contract in the UK North Sea for jack-up VALARIS Norway. The contract has an estimated duration of 292 days and is expected to commence in the first quarter 2025. The estimated total contract value is approximately $39 million.
One-year priced option was exercised by North Oil Company offshore Qatar for jack-up VALARIS 110. The one-year option will begin in October 2024 in direct continuation of the rig’s current program. The total contract value for the one-year priced option is approximately $26 million.
Also, Valaris won a one-well contract with Anasuria Hibiscus UK in the UK North Sea for jack-up VALARIS 248. The contract has an estimated duration of 93 days and is expected to commence in the second quarter 2025, following completion of the rig's current program with another operator and a shipyard visit for planned maintenance. The estimated total contract value is $14.2 million.
The company reeled in a one-well contract offshore Angola for jack-up VALARIS 144. The contract has an estimated duration of 45 days and is expected to commence in the first quarter 2025, in advance of a previously disclosed 13-well contract for the rig with the same operator. The estimated total contract value is approximately $8.5 million.
In addition, one-well option was exercised by TAQA on behalf of the Porthos CCS project in the Netherlands for jack-up VALARIS 123. The extension period has a minimum duration of 15 days and is expected to commence in the third quarter 2025, in direct continuation of the rig’s current program. The operating day rate for work performed in 2025 is $152,500.
Other Fleet Status Updates
In late July, ARO received suspension notices for the drilling contracts for VALARIS 147 and VALARIS 148, which are two of Valaris' jack-ups leased to ARO. Discussions are ongoing with Saudi Aramco regarding whether other Valaris leased rigs or ARO-owned rigs could be subject to the suspensions instead of VALARIS 147 and VALARIS 148 as well as when the suspensions will be effective.
As of July 29, 2024, these two rigs accounted for $35 million of Valaris' contract backlog.