Valaris DPS-5 rig. Source: Lukoil

Valaris finds drilling work for three rigs in Gulf of Mexico and Australia

Offshore drilling contractor Valaris has secured four new drilling deals for its rig fleet in the U.S. Gulf of Mexico and Australia, which provide a further boost to its backlog. 

Valaris DPS-5 rig. Source: Lukoil

Back in May 2023, Valaris revealed a batch of contracts and extensions for its rig fleet within its new fleet status report, secured after its previous one was published in February 2023. These rig deals were awarded in the UK, Brazil, and New Zealand.

With a multi-year upcycle in the offing, the offshore drilling market is booming, thanks to high demand and tight supply, as shown by Valaris and its rivals: TransoceanVantage DrillingShelf DrillingDiamond Offshore, and Noble, which are anticipating even higher rig demand that will bring increased day rates and fleet utilisation.

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In an update on Wednesday, 5 July 2023, Valaris disclosed new deals with an associated contract backlog of approximately $150 million, which were awarded subsequent to issuing the fleet status report in May 2023. This contract backlog excludes lump sum payments such as mobilisation fees and capital reimbursements.

Semi-sub deals

According to the rig owner, the Valaris DPS-5 semi-submersible rig has been hired on a two-well contract with Anadarko Petroleum Corporation, a wholly owned subsidiary of Occidental, for work in the U.S. Gulf of Mexico. With a total value of around $22 million, this contract has a minimum duration of 60 days. It is scheduled to start in July 2023.

In addition, a nine-well contract for a plug and abandonment campaign with Apache has also been secured for this semi-sub rig in the U.S. Gulf of Mexico. The deal is expected to begin in September 2023 and has a minimum duration of 110 days.

Eni hired the Valaris DPS-5 rig on a three-well contract in 2022 for operations in Mexico. The rig started drilling Yatzil-1 well in February 2023, which resulted in an oil discovery estimated to contain around 200 million barrels of oil in place. The 2012-built DPS-5 rig, previously known as ENSCO 8505 from the 8500 Series, can accommodate 150 people.

Jack-up deals

Furthermore, a 180-day (minimum duration) contract was awarded to the Valaris 107 heavy-duty modern jack-up rig by an undisclosed operator offshore Australia. The deal is slated to commence in the first quarter of 2024 and the operating day rate is $150,000.

Additionally, this rig got a one-year contract offshore Australia with another undisclosed operator, which is expected to kick off in October 2024. The rig has multiple jobs lined up this year and the most recent one prior to this is a 70-day contract with Beach Energy for work offshore New Zealand.

The contract with Beach Energy is due to begin in the third quarter of 2023 and last from August until December 2023. The rig was working for Eni in Australia until May 2023 when it was expected to move to its assignment with GB Energy, which is anticipated to last until July 2023.

Afterwards, the rig is scheduled to work for an undisclosed operator in Australia until August 2023. The 2006-built Valaris 107 jack-up rig is of KFELS MOD V – Class B design. It can accommodate 112 people. The rig’s maximum drilling depth is 30,000 ft.

Moreover, the Valaris 247 heavy-duty ultra-harsh environment jack-up rig landed a two-well contract with – what Valaris deems to be – a major Australian operator. This deal will start in early to mid-2024 and has an estimated duration of 100 days. The operating day rate is $180,000. Valaris claims it will get a mobilisation and demobilisation fee that covers operating costs while the rig is in transit.

At the start of the year, in January 2023, a 180-day contract was inked with Perenco in the UK North Sea for this jack-up rig. The contract was scheduled to start in March 2023 and last until September 2023. It also comes with one 60-day option. The Valaris 247 rig can accommodate 140 people and its maximum drilling depth is 35,000 ft.