Offshore drilling contractor Valaris (NYSE: VAL) will active its VALARIS DS-7 drillship after receiving a 12-well contract offshore West Africa.
The contract is expected to commence in second quarter 2024 and has an estimated duration of 850 days.
The company disclosed the total contract value as $364 million.
The VALARIS DS-7 is a Samsung 96K design drillship built in 2013. Valaris said the drillship will require “minimal” customer-specific upgrades.
The award comes as the offshore drilling industry is experiencing a resurgence following a prolonged downturn.
“This most recent award represents the seventh contract awarded to one of our high-quality floaters requiring reactivation since mid-2021 and speaks volumes about our demonstrated track record of project execution when reactivating rigs and delivering operational excellence for our customers,” said President and Chief Executive Officer Anton Dibowitz. “We continue to take a disciplined approach to rig reactivations, and we expect this contract to generate a meaningful return over the initial firm term.”
Valaris has also announced that it is increasing its 2023 share repurchase target from $150 million to $200 million.
“In May, we announced an increase in our share repurchase authorization to $300 million and our intent to repurchase $150 million of shares by year-end 2023. To date, we have repurchased $91 million of shares. As a result of this attractive contract award and our continued commitment to returning capital to shareholders, we are increasing our 2023 share repurchase target from $150 million to $200 million,” Dibowitz said.
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