Valaris Ltd VAL won a 1,064-day contract for drillship VALARIS DS-4 from Petroleo Brasileiro S.A.- Petrobras PBR offshore Brazil for around $519 million, including mobilization fees and additional services.
The company won the contract following a competitive bidding process.
Valaris expects the contract to start late in Q4 2024, following the completion of the rig’s current contract with Petrobras, which is projected to finish in September 2024.
Post completion of its current contract, the rig is expected to be out of service for about 90 days to complete customer-required capital upgrades before the commencement of the new agreement.
Anton Dibowitz, President and Chief Executive Officer, said, “We have previously stated that we expect Valaris’ earnings and cash flow to increase meaningfully as rigs are recontracted at market rates. This contract award for VALARIS DS-4 is a great example of how we are executing on the operating leverage inherent in our business, with the rig repricing from a day rate in the low $200,000s to an effective day rate in the high $400,000s.”
Last month, VAL exercised its options and took delivery of newbuild drillships VALARIS DS-13 and DS-14 for about $337 million.
As of September 30, 2023, VAL’s cash and equivalents stood at $1.1 billion.
Price Action: VAL shares are trading higher by 1.41% at $69.54 on the last check Tuesday.