Offshore driller Valaris has announced a string of new contracts and extensions worth around $275 million, including four notable North Sea awards.
The New York-listed rig operator (NYSE: VAL) confirmed six awards for its drillships and jack-ups spanning the North Sea, Egypt and Gulf of Mexico, as well as two bare boat extensions in Saudi Arabia.
The awards add $275m in fleet backlog on top of contracts already confirmed in the group’s most recent fleet status report of October 31, 2022.
Amongst the awards is a 210-day contract with Shell in the UK North Sea for the heavy duty jackup VALARIS 121.
The contract is expected to commence early in Q4 2023 and has an expected value of over $25m (£20.5m), with four further priced options.
It follows a separate $60 million (£51.8m) contract extension agreed in September, which will see Shell continue to use the Valaris 122 to drill a further four wells in the UK The extension is due to run for around 500 days.
In addition, Valaris this week confirmed a 180-day contract with Perenco in the UK North Sea for the VALARIS 247 jackup. Work is expected to commence in Q1 2023, and includes one 60-day option.
Further south, Valaris has also secured a 90-day contract with Kistos in the Dutch North Sea for the VALARIS 123 jackup. This is already underway, having commenced in November 2022.
The same unit will then move onto a 195-day contract with ONE-Dyas in the Dutch sector, expected to begin in Q1 2023 in direct continuation its current work.
One 90-day option has been exercised by Cantium in the US Gulf of Mexico for the VALARIS 144 jackup. The option period is expected to commence in March 2023 in direct continuation of the existing contract. The operating day rate for the option period is $85,000.
Finally, and as announced in November, Valaris also secured a four-well contract with BP offshore Egypt for its VALARIS DS-12 drillship.
The contract is expected to commence late in third quarter or early in fourth quarter 2023 and has an estimated duration of 320 days. The estimated total contract value, including mobilisation fees, is $136 million.
Gulf contracts
Alongside direct contracts, Valaris recorded a series of contract extensions offshore Saudi Arabia with ARO Drilling, its joint venture with Aramco.
This includes a three year extension for the VALARIS 147, beginning in December and in direct continuation of its existing contract. Valaris will bareboat charter VALARIS 147 to ARO, with revenue included in the headline $275m backlog.
Furthermore, another three-year extension for the VALARIS 148 is expected to commence in February 2023, also in direct continuation of its existing contract and under a bareboat charter with ARO.
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