Valaris announces $65m in new offshore drilling contracts and extensions

Valaris Limited (NYSE: VAL), a leading provider of offshore drilling services, has revealed new contracts and contract extensions with an associated contract backlog valued at approximately $65 million. This announcement comes after the company’s most recent fleet status report issued on August 1, 2023. Notably, this contract backlog figure excludes any lump sum payments like mobilization fees and capital reimbursements.

$33 Million One-Well Contract with BP Offshore Brazil

Valaris Limited has secured a one-well contract with BP for its drillship VALARIS DS-15, located offshore Brazil. This lucrative contract is slated to begin in either late Q1 or early Q2 of 2024 and is expected to continue directly from the rig’s current program with TotalEnergies. With an estimated duration of 80 days, the contract value stands at approximately $33 million, excluding any additional payments for mobilization and other services.

TotalEnergies Exercises Option Offshore Brazil for VALARIS DS-15

Following the aforementioned BP contract, Valaris Limited also announced an exercised priced option with TotalEnergies, also offshore Brazil. This option period for the drillship VALARIS DS-15 is expected to commence in late Q2 or early Q3 2024 and has an estimated duration of 100 days. The operating day rate during this option period will be approximately $254,000.

BP Indonesia Extends Five-Well Option for VALARIS 106

Furthermore, BP Indonesia has exercised a five-well priced option for the heavy-duty modern jackup VALARIS 106. The option is expected to start in January 2024 and will last for an estimated 365 days. The operating day rate will start at $85,000 effective from January 6, 2024, and increase to $95,000 from January 6, 2025. Valaris Limited has disclosed that the rig is expected to be out of service for about 90 days for planned maintenance during Q2 and Q3 2024.

Valaris Limited Strengthens Offshore Drilling Portfolio

With these newly announced contracts and extensions, Valaris Limited continues to expand its offshore drilling portfolio and secure its position as a market leader. The new contracts, with high-profile clients like BP and TotalEnergies, fortify Valaris Limited’s strong presence in offshore drilling markets such as Brazil and Indonesia. These lucrative deals also enhance the company’s contract backlog, providing increased financial stability and visibility into future earnings.