Valaris to Reactivate DS-8 Drillship for Petrobras Contract in Brazil

Offshore drilling contractor Valaris will reactivate its ultra-deepwater drillship DS-8 for a three-year contract with Brazilian state-owned energy company Petrobras valued at approximately $500 million.

The contract includes a $30 million mobilization fee.

Valaris is also announcing two additional contracts: a 100-day contract with a TotalEnergies affiliate for the drillship VALARIS DS-12, which is expected to commence in the second quarter of 2023, and a 70-day contract with Beach Energy offshore New Zealand for the heavy-duty modern jackup VALARIS 107, which is expected to commence in the third quarter of 2023. The total contract value for the VALARIS 107 is approximately $26 million.

The VALARIS DS-8 has been stacked since its previous contract with Total in Angola was terminated after the drillship dropped its blowout preventer (BOP) stack in a non-drilling incident in March 2020. Under that contract, which scheduled to run until November 2020, the operating day rate for the drillship was approximately $620,000 per day.

“We are particularly pleased to have secured the award for preservation stacked drillship VALARIS DS-8, for a contract that is expected to generate a meaningful return over the firm contract term, and we remain focused on exercising our operational leverage in a disciplined manner,” said Valaris President and CEO Anton Dibowitz. “This most recent award represents the sixth contract awarded to one of our high-quality stacked floaters since mid-2021, and speaks volumes about our demonstrated track record of project execution when reactivating rigs.

“Following the reactivation of VALARIS DS-17 and DS-8, we will have ten floaters working across the golden triangle, including four drillships in Brazil, a market where we expect to see continued growth over the next several years,” he added.

As a result of the contract awarded to VALARIS DS-8 the company is updating its first quarter and full-year 2023 guidance provided on February 21, 2023.

Valaris emerged from Chapter 11 bankruptcy in 2021 after completing a financial restructuring to eliminate over $7 billion in pre-petitioned debt. The company was formed in 2019 as “Ensco Rowan” through the merger of Ensco plc and Rowan Companies plc, creating the world’s largest offshore drilling company. It later changed its named to Valaris plc as of August 1, 2019.

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