Valaris Adds About $600 Million to Contracted Backlog, Lifting It to $4.8 Billion
Key Facts
Valaris added about $600 million to its contracted backlog through new contracts and extensions since its previous fleet status report, issued on August 5, according to the company’s November 2 report filed with the U.S. Securities and Exchange Commission. Total contracted backlog rose to about $4.8 billion, compared with about $4.6 billion in the previous report. The additions include drilling services contracts and operating extensions in the Gulf of America and Saudi Arabia, as well as work in Suriname, Egypt, Australia and the North Sea. Among the largest new contracts is a three-year services agreement with BP to support drilling on the Mad Dog and Thunder Horse platforms. The contract is scheduled to begin in January 2027 and adds about $290 million to contracted backlog.
In Suriname, the Valaris DS-18 drillship secured a contract with Petronas Suriname Exploration and Production to drill two exploration wells offshore. Work is expected to begin in the fourth quarter of 2026, with a duration of up to seven months. The contract covers a defined two-well program, while its expected duration is tied to the announced execution schedule. In Egypt, an extension for the Valaris DS-12 with BP Exploration Delta adds about $25 million to contracted backlog. The extension is expected to begin in late 2027 or early 2028 and last an estimated 60 days.
The updates also included a contract for the Valaris 107 with Emperor Energy offshore Australia, expected to begin in the second quarter of 2027. The contract has a minimum term of 30 days and a day rate of $165,000. The report also listed a separate contract for the same rig, starting after its current commitments, with an estimated duration of 300 days. Estimated contracted backlog for this contract is about $50 million. The newly announced contracts span exploration work and drilling services, with start dates from the fourth quarter of 2026 through 2027 and beyond.
In Saudi Arabia, ARO extended contracts for five of its owned rigs with Saudi Aramco for three years, with the extensions starting in October 2026. In the southern North Sea, the report includes a multi-well well abandonment contract with an estimated duration of 341 days. Contracted backlog for the contract is estimated at about $41.5 million, with a start window extending through December 2030. The agreement includes an option for an additional well with an estimated duration of 19 days. The report shows total contracted backlog of $4.7501 billion, including $2.9041 billion for drillships, $1.1667 billion for jackups and $679.3 million for the other services category.
The increase in contracted backlog follows Valaris adding about $220 million in contracts and extensions announced on October 7, after the fleet report issued on August 5. In third-quarter results published on November 2, the company reported operating revenue of $594 million and net income of $47 million. Revenue efficiency was 97% during the quarter and 98% year to date. Revenue excluding reimbursable items also rose to $556 million from $502 million in the second quarter. The company attributed the increase to higher operating days and average day rates for its floater fleet.
Chief Executive Anton Dibowitz said all ten of the company’s active drillships are now contracted, and day rates are moving higher amid strong demand for high-specification drillships. At the same time, the company said ongoing conflicts in the Middle East reduced adjusted EBITDA by about $24 million in the third quarter, compared with about $30 million in the second quarter. It added that the adverse impact had begun to ease as war-risk insurance costs declined. On the company’s next step, Dibowitz said the pending merger with Transocean had received the required regulatory approvals. Valaris expects to complete the transaction on or around December 1, 2026, while the company’s shares closed at $94.69 in the November 2 session.