Valaris pensions off semi-sub trio, offloads jack-up, and picks up new drilling work for multiple rigs

Bermuda-headquartered offshore drilling contractor Valaris has taken steps to optimize its rig fleet by deciding to put three semi-submersible units out of drilling work for good and divest a stacked jack-up rig. The rig owner has also won a new batch of drilling assignments spanning geographies.

While diving into its fleet rationalization actions, Valaris disclosed its decision to retire three semi-submersibles from its fleet, including the 2012-built Valaris DPS-5, which has been idle since the third quarter of 2024, as well as the 2010-built Valaris DPS-3 and the 2012-built Valaris DPS-6 that have been stacked for several years.

These rigs are expected to be removed from the global drilling supply and repurposed for alternative uses or scrapped. The firm has also sold its 1999-built Valaris 75 jack-up rig for $24 million. This 25-year-old jack-up has been stacked in the U.S. Gulf for five years and future operations are restricted to the same area under the purchase and sale agreement.

Anton Dibowitz, President and Chief Executive Officer of Valaris, highlighted: “We are committed to prudently managing our fleet and will retire or divest rigs when the expected future economic benefit for an asset does not justify its costs.

“Consistent with this approach, we have decided to high-grade our fleet by retiring three semisubmersibles: Valaris DPS-3, DPS-5 and DPS-6, for which we see limited attractive, long-term contract opportunities, as well as selling jackup Valaris 75. These actions reduce costs for idle rigs, benefit our cash flow and further focus our fleet on high-specification assets.”

Within its latest fleet status report, Valaris shed more light on new contracts and extensions, with an associated backlog of approximately $120 million, awarded after the firm issued its previous fleet status report on October 30, 2024. The firm’s contract backlog decreased to around $3.6 billion from $4.1 billion as of October 30, 2024.

The offshore drilling contractor has won a 600-day priced contract extension with TotalEnergies in the UK North Sea for the Valaris Stavanger jack-up rig, which is expected to begin this work in the third quarter of 2025 in direct continuation of the current program. The total contract value for the priced extension is over $75 million.

The firm has landed a 100-day contract for the Valaris 249 jack-up rig with BP offshore Trinidad. The deal is slated to start in the first quarter of 2026 in direct continuation of the rig’s previous program with another operator. The total contract value is approximately $16.8 million.

Valaris also got its hands on a one-well contract with Jadestone Energy offshore Australia for the Valaris 247 jack-up unit. This assignment is expected to commence in March 2025 in direct continuation of the rig’s current program with another operator.

The rig market player also secured a two-well-priced option, exercised by BP in Indonesia, for the Valaris 106 jack-up rig. With an estimated duration of 80 days, the option period is expected to kick off in May 2025 in direct continuation of the existing firm program. The operating day rate is $95,000.

In addition, Valaris got hold of short-term bareboat charter agreement extensions through February 28, 2025, for the Valaris 116, Valaris 146, and Valaris 250 rigs, which are leased to ARO Drilling, the firm’s 50/50 joint venture with Aramco.

Following these extensions and the contract termination for the Valaris 143 rig in the second quarter and suspensions, which later turned to terminations, for the Valaris 147 and 148 rigs during the third quarter, the rig owner and ARO remain in discussions with Saudi Aramco regarding longer-term contract extensions for the Valaris 116, Valaris 146, and Valaris 250 rigs.

The offshore drilling contractor is also working on curbing the greenhouse gas (GHG) emission footprint from its rig activities. Valaris’ decarbonization recipe is based on electrification and biofuel blends.