Valaris reports $466M in associated contract backlog, updates fleet status

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• Valaris (NYSE:VAL) announced new contracts and contract extensions, with associated contract backlog of $466M which excludes lump sum payments such as mobilization fees and capital reimbursements.
• It has a 540-day contract with Equinor offshore Brazil for drillship VALARIS DS-17; rig will be reactivated for this contract (~$327M), which is expected to commence in mid-2023.
• It also announced contract extension with TotalEnergies EP Brasil offshore Brazil for drillship VALARIS DS-15.
• It has two-well contract extension with Woodside offshore Australia for semisubmersible VALARIS DPS-1 and also one-well contract extension with the same.
• It has a 4-year contract with Brunei Shell Petroleum Sdn. Bhd. offshore Brunei for heavy duty modern jackup VALARIS 115; contract (~$159M) is expected to commence in April 2023.
• One-well contract extension with Shell in the U.K. North Sea for heavy duty harsh environment jackup VALARIS 122.
• "We continue to see a constructive outlook for the offshore drilling industry as evidenced by these recent contract awards for both floaters and jackups across several geographies. We expect Brazil to be a significant growth market for high-specification floaters over the next several years and we are well-positioned to benefit by now adding a third rig to this strategic basin," president & CEO Anton Dibowitz commented.

Comments

[LLCapital]

Definitely a huge negative ! Oil down, sell VAL even though they just put on a stacked rig at well over 400k a day

[Anthony Ruben]

@LLCapital I fail to understand how a one-day drop in oil prices is correlated to the need to replenish reserves, especially at $90+ prices.

[LLCapital]

@Anthony Ruben not sure what you mean? I agree reserves need to be replenished , cap ex going up , anywhere above 90 is very positive , people are freaking out in these names and oil is still above the beginning of the year, rates are moving higher, utilization is going up , and stocks are back to where oil was 85, not 100

[freakmaster]

@LLCapital tough to get the clean dayrate but if my math is right including MPD and other services the rate comes in at ~446K. That’s a big deal but maybe even bigger is the fact Equinor is picking up a good chunk of the reactivation cost. Just shows how tight supply is right now.

I can remember not too long ago the conventional wisdom said stacked rigs would never go back to work and if they did operators would not be picking up the cost.