Valaris Retires Three Semi-Subs, Sells One Jack-Up Drilling Rig
February 19, 2025
Offshore drilling company Valaris has decided to retire three semi-submersible drilling rigs from its fleet as part of its fleet rationalization efforts, which also included the sale of one jack-up rig for $24 million.
The semi-submersible rigs to be retired from Valaris fleet are VALARIS DPS-5, which has been idle since last working in third quarter 2024, as well as VALARIS DPS-3 and VALARIS DPS-6, which have been stacked for several years.
The company expects that these rigs will be removed from the global drilling supply and repurposed for alternative uses or scrapped.
In addition, VALARIS 75 jack-up rig has been sold for $24 million to an undisclosed buyer. VALARIS 75 is a 25-year-old jack-up that has been stacked in the U.S. Gulf for five years. As part of the purchase and sale agreement, future operations are restricted to the U.S. Gulf, the company noted.
“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 jack-up VALARIS 75.
“These actions reduce costs for idle rigs, benefit our cash flow and further focus our fleet on high-specification assets,” said Anton Dibowitz, President and Chief Executive Officer of Valaris.
Valaris' Backlog Grows to $120M Since Last Fleet Status Report
The company has also issued its fleet status report announcing new contracts and contract extensions, with associated contract backlog of approximately $120 million, awarded subsequent to issuing the the previous fleet status report on October 30, 2024:
Since, Valaris has secured a 600-day priced contract extension with TotalEnergies in the UK North Sea for jack-up VALARIS Stavanger. The priced extension is expected to commence in the third quarter 2025 in direct continuation of the current program. The total contract value for the priced extension is over $75 million.
Also, a 100-day contract for jack-up VALARIS 249 was signed with BP offshore Trinidad. The contract is expected to commence in the first quarter 2026 in direct continuation of the rig’s previous program with another operator. The total contract value is approximately $16.8 million.
One-well contract with Jadestone Energy will see the company’s VALARS 247 mobilized offshore Australia. The contract is expected to commence in March 2025 in direct continuation of the rig’s current program with another operator.
In addition, Valaris benefitted from two-well priced option exercised by BP Indonesia for jack-up VALARIS 106. The option period has an estimated duration of 80 days and is expected to commence in May 2025 in direct continuation of the existing firm program. The operating day rate is $95,000.
Finally, Valaris secured short-term bareboat charter agreement extensions through February 28, 2025, for jack-ups VALARIS 116, VALARIS 146 and VALARIS 250, which are leased to ARO Drilling.
Valaris and ARO remain in discussions with Saudi Aramco regarding longer-term contract extensions for these rigs.
