Valaris (VAL) investor relations material

Fleet overview and operational performance

• Operates 48 rigs, including 13 high-spec drillships, 2 semisubmersibles, and 33 jackups, with 12 of 13 drillships being seventh-generation assets.

• High-spec drillships command day rates about 25% higher and utilization 10% higher than the market average.

• Achieved 96% revenue efficiency and a strong safety record, supporting customer preference and contract wins.

• Added over $2 billion in contract backlog this year, with $1.3 billion from drillships, raising total backlog to $4.7 billion, the highest in a decade.

• Increased 2023 guidance midpoint by $55 million to $585 million due to strong operational performance.

Market outlook and contracting trends

• White space in rig availability was a timing issue, not a loss of demand, with programs delayed but not canceled.

• Contracting pace picked up in 2024, with operators booking rigs 12+ months ahead for 2026 startups.

• Pipeline of about 30 term program opportunities remains steady, with half in Africa, supporting continued contracting.

• Seventh-generation drillships expected to lead recovery, with utilization projected above 90% by end of 2026.

• Pricing expected to rise as utilization tightens through 2026 and 2027, especially for high-spec assets.

Asset deployment and reactivation

• Three of four near-term available drillships contracted; DS-12 remains, with focus on securing a long-term contract, especially in Africa.

• Short-term opportunities are emerging but long-term contracts remain the priority for earnings visibility.

• Cold-stacked rigs DS-11, DS-13, and DS-14 likely to remain idle until at least 2028, pending market readiness.

• Reactivation costs for drillships estimated at $120–$125 million, with about a one-year timeline.