Nine Valaris rigs snap up multi-million drilling gigs with oil & gas giants, pushing total backlog to $3.2 billion
Offshore drilling contractor Valaris has secured a plethora of new contracts and extensions for four floaters and five jack-ups in its rig fleet with TotalEnergies, Petrobras, ExxonMobil, Eni, BP, TAQA, and Perenco. These deals will enable the rig owner to carry out operations in Brazil, Angola, Mexico, Trinidad, Indonesia, the Netherlands, and the UK.
Within its latest fleet status report on Wednesday, November 1, 2023, Valaris disclosed a batch of new contract awards and extensions for its rig fleet, which were obtained after its previous fleet status report from August 2023, when the firm revealed contracts and extensions with an associated contract backlog of approximately $180 million, which increased the offshore drilling player’s total contract backlog to $3 billion.
Thanks to the new series of rig deals with an associated contract backlog of about $480 million, excluding lump sum payments such as mobilization fees and capital reimbursements, the company’s total contract backlog rose to $3.2 billion at the end of October 2023.
Oil majors book Valaris’ floaters for more drilling work
The offshore drilling player won a 250-day contract extension with TotalEnergies offshore Brazil for the Valaris DS-15 drillship, which is expected to start in the fourth quarter of 2024 in direct continuation of the rig’s current program. The total contract value for the firm period, excluding the provision of MPD and additional services, is $100 million. However, an additional rate will be charged for MPD and any other additional services when provided.
The contract includes two 160-day priced options and one 120-day priced option, with increased operating day rates for each option period. The total contract value for the option periods, if exercised, excluding the provision of MPD and additional services, is approximately $210 million. An additional rate will be charged for MPD and any other additional services when provided.
The Valaris DS-15 drillship also got a one-well contract with BP offshore Brazil, which is scheduled to begin in the late first quarter or early second quarter of 2024 in direct continuation of the rig’s current program with TotalEnergies. The deal with BP has an estimated duration of 80 days with an estimated contract value of about $33 million, excluding payments for mobilization and any additional services.
Valaris explains that the priced option TotalEnergies exercised for this drillship offshore Brazil is now anticipated to be undertaken in direct continuation of the contract with BP. The option period is expected to commence in the late second quarter or early third quarter of 2024 and has an estimated duration of 100 days. The operating day rate for the option period is approximately $254,000.
The contract backlog for this deal is not included in the $480 million additional backlog. The 2014-built Valaris DS-15 drillship is of GustoMSC P10000 design. It was constructed at Hyundai Heavy Industries. The rig is capable of operating in water depths of 12,000 ft and can accommodate 210 people. The drillship’s maximum drilling depth is 40,000 ft.
Petrobras exercised a six-month priced option offshore Brazil for the drilling contractor’s Valaris DS-4 drillship. This is slated to start in January 2024 in direct continuation of the existing firm program and comes with an estimated total contract value of approximately $41 million. The 2010-built Valaris DS-4 drillship is of Samsung 96k design. It was constructed at Samsung Heavy Industries, Geoje, South Korea. With a maximum drilling depth of 40,000 ft, the rig is capable of operating in water depths of 12,000 ft and can accommodate 200 people.
Valaris was also awarded a six-month priced contract extension by ExxonMobil offshore Angola for the Valaris DS-9 drillship. The six-month extension will commence in July 2024 in direct continuation of the existing firm program. The 2015-built Valaris DS-9 drillship is of Samsung 78k design.
In addition, the Valaris DPS-5 semi-submersible rig got a two-well contract with Eni offshore Mexico. This contract is expected to begin in March 2024 and has a minimum duration of 110 days. The operating day rate is $345,000, plus a $3 million mobilization fee. The 2012-built Valaris DPS-5 rig, previously known as ENSCO 8505 from the 8500 Series, can accommodate 150 people.
Jack-ups win new jobs
According to Valaris, a 55-well plug and abandonment (P&A) contract was secured with Eni in the East Irish Sea (UK) for the Valaris 72 standard duty legacy jack-up. The contract is expected to commence in December 2023 and has an estimated duration of nearly four years or 1,346 days. The operating day rate is subject to a market-indexed annual adjustment.
The drilling giant explains that the Valaris Norway rig will act as the substitute for the Valaris 72 jack-up until the rig completes its current contract with Eni in the UK North Sea, which is expected to finish in December 2024. The 1981-built Valaris 72 jack-up rig has a maximum drilling depth capacity of 25,000 ft and can accommodate 90 people.
Moreover, a six-well contract extension has been agreed with BP Trinidad for the Valaris 118 heavy-duty modern jack-up rig. The extension period, which is expected to kick off in March 2024 in direct continuation of the existing firm program, has an estimated duration of one year and an estimated total contract value of approximately $51 million. With a maximum drilling depth of 35,000 ft, the 2012-built Valaris 118 LeTourneau Technologies 240-C Class jack-up rig can accommodate 108 people.
Valaris also landed a six-well contract with TAQA on the Porthos carbon capture and storage (CCS) program in the Dutch North Sea for the Valaris 123 heavy-duty harsh environment jack-up rig. The contract is scheduled to start in the fourth quarter of 2024 and has a minimum duration of 170 days. The deal includes options for up to ten wells with an estimated total duration of 300 days.
The operating day rate is $142,500, increasing to $152,500 effective January 1, 2025, and $162,500 effective January 1, 2026. The 2019-built Valaris 123 Keppel FELS, Ultra-Enhanced Super ‘A’ Class jack-up rig comes with a maximum drilling depth of 40,000 ft and can accommodate 145 people.
Valaris further confirmed that the Valaris 249 heavy-duty ultra-harsh environment jack-up rig was contracted by Perenco T&T Limited to drill one open-water appraisal well in the TSP block, offshore the southeast coast of Trinidad. The assignment will begin in the second half of 2024, in direct continuation of the rig’s current program with another operator. The 2001-built Valaris 249 LeTourneau Technologies Super Gorilla Class jack-up rig can accommodate 120 people and its maximum drilling depth is 35,000 ft.
Additionally, a five-well priced option was exercised by BP Indonesia for the Valaris 106 heavy-duty modern jack-up rig. The option period is anticipated to kick off in January 2024, in direct continuation of the existing firm program. The estimated duration is 365 days and the operating day rate is $85,000 effective from January 6, 2024, increasing to $95,000 from January 6, 2025.
The rig is expected to be out of service for approximately 90 days for planned maintenance across the second quarter and third quarter of 2024. With a maximum drilling depth of 30,000 ft, the 2005-built Valaris 106 KFELS MOD V jack-up rig can accommodate 120 people.