HAMILTON, Bermuda — Valaris Ltd. recently announced new contracts and contract extensions, with an associated contract backlog of $466 million.
The contract backlog excludes lump sum payments such as mobilization fees and capital reimbursements.
President and CEO Anton Dibowitz said, “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.”
Valaris received a 540-day contract with Equinor offshore Brazil for drillship VALARIS DS-17. The rig will be reactivated for this contract, which is expected to commence in mid-2023. The total contract value is about $327 million, including an upfront payment totaling approximately $86 million for mobilization costs, a contribution toward reactivation costs and capital upgrades. The remaining contract value relates to the operating day rate and additional services, including managed pressure drilling (MPD), an ROV, casing running, slop treatment and cuttings handling.
Dibowitz added, “We are particularly pleased to have been awarded another contract for one of our preservation stacked drillships, VALARIS DS-17, and look forward to partnering with Equinor on their flagship Bacalhau project in Brazil. 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.”
Valaris also received a contract extension with TotalEnergies EP Brasil offshore Brazil for drillship VALARIS DS-15. The option is in direct continuation of the current firm program.
Valaris secured a two-well contract extension with Woodside offshore Australia for semisubmersible VALARIS DPS-1. The two-well extension has an estimated duration of 38 days and will be in direct continuation of the existing firm program for Woodside’s Enfield plug and abandonment campaign (18 wells in total).
In addition, the company was awarded a one-well contract extension with Woodside offshore Australia for semisubmersible VALARIS DPS-1. The one-well extension has an estimated duration of 60 days and will be executed within Woodside’s Scarborough development campaign sequence.
The company also snagged a one-well contract with GB Energy offshore Australia for heavy-duty modern jackup VALARIS 107. The contract is expected to begin either late in fourth-quarter 2022 or early in first-quarter 2023 with an estimated duration of 20 days. The operating rate is $118,000 per day.
Valaris also received a four-year contract with Brunei Shell Petroleum Sdn. Bhd. offshore Brunei for heavy-duty modern jackup VALARIS 115. The contract is expected to start in April 2023 and has a total contract value of approximately $159 million.
Valaris has secured a one-well contract extension with Shell in the UK North Sea for heavy-duty harsh environment jackup VALARIS 122. The one-well contract extension has an estimated duration of 150 days and will be in direct continuation of the existing firm program.
Gulf of Mexico
The company secured a four-well contract with an undisclosed operator in the U.S. Gulf of Mexico for standard duty modern jackup VALARIS 144. The contracted work is expected to take place during third-quarter 2022 with an estimated duration of 60 days and an estimated contract value of approximately $5 million.
Additionally, Valaris has received a 90-day contract with Cantium in the U.S. Gulf of Mexico for standard duty modern jackup VALARIS 144. The contract is expected to commence in fourth-quarter 2022. The operating rate is $80,000 per day.
“We have demonstrated our ability to successfully contract and reactivate stacked rigs," Dibowitz concluded. "We have now won contracts for five stacked floaters since the middle of last year, with three already on rate and the fourth expected to commence work soon, and we retain additional operating leverage to the improving market with eleven high-quality stacked rigs, including three uncontracted drillships, and options on two additional newbuild drillships.”