Valaris Reports First Quarter 2024 Results

HAMILTON, Bermuda, May 01, 2024--(BUSINESS WIRE)--Valaris Limited (NYSE: VAL) ("Valaris" or the "Company") today reported first quarter 2024 results.

President and Chief Executive Officer Anton Dibowitz said, "I am very pleased with our start to 2024 as we delivered strong safety and operational performance during the first quarter as evidenced by fleetwide revenue efficiency of 97%. Our financial results also benefited from more operating days for our most recent drillship reactivation, VALARIS DS-8. In addition, we were awarded new contracts and extensions with associated contract backlog of more than $520 million, including a multi-year contract offshore Angola for VALARIS 144 at a leading-edge day rate for a benign environment jackup."

Dibowitz added, "We remain laser-focused on securing work for the remaining available days across our fleet in 2024 and preparing VALARIS DS-7 for its expected contract startup in the second quarter. We have an industry-leading track record of executing reactivation projects and look forward to the completion of another successful startup."

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Dibowitz concluded, "We continue executing our growth strategy by securing new contracts at significantly higher day rates and building our contract backlog, which has increased over each of the past six consecutive quarters. We see strong customer demand for work that is expected to commence in 2025 and 2026, highlighting the longevity of this upcycle. We are focused on securing attractive contracts that support our anticipated earnings and cash flow growth over the next few years and intend to return all future free cash flow to shareholders unless there is a better or more value accretive use for it."

Financial and Operational Highlights

  • Net income of $26 million, Adjusted EBITDA of $54 million and Adjusted EBITDAR of $84 million;

  • Revenue efficiency of 97% during the quarter;

  • Strong safety performance, including no Lost Time Incidents (LTI) during the quarter;

  • Awarded new contracts and extensions with associated contract backlog of more than $520 million during the first quarter; and

  • Increased total contract backlog to more than $4.0 billion as of April 30, 2024, representing the sixth consecutive quarter of backlog growth and a 43% increase from twelve months ago.

First Quarter Review

Net income decreased to $26 million from $829 million in the fourth quarter 2023. Net income included tax expense of $13 million compared to a tax benefit of $790 million in the fourth quarter. Adjusted EBITDA decreased to $54 million from $58 million in the fourth quarter primarily due to idle time for several jackups that were undergoing contract preparations and special periodic surveys in the first quarter, partially offset by more operating days for the floater fleet. Adjusted EBITDAR decreased to $84 million from $96 million in the fourth quarter.

Revenues increased to $525 million from $484 million in the fourth quarter 2023. Excluding reimbursable items, revenues increased to $491 million from $453 million in the fourth quarter primarily due to VALARIS DS-8, which commenced a contract in late December following its reactivation, and higher revenue efficiency across the floater fleet in the first quarter compared to the fourth quarter. This was partially offset by fewer operating days for the jackup fleet, with several rigs experiencing idle time for contract preparations and special periodic surveys prior to the start of their next contracts.

Contract drilling expense increased to $445 million from $402 million in the fourth quarter 2023. Excluding reimbursable items, contract drilling expense increased to $414 million from $374 million in the fourth quarter. The increase was primarily due to more operating days for the floater fleet and higher repair and maintenance expense.

Depreciation expense of $27 million was in line with the fourth quarter 2023. General and administrative expense increased to $27 million from $24 million in the fourth quarter 2023 primarily due to higher compensation costs and professional fees.

Other income increased to $9 million from $0 million in the fourth quarter 2023 primarily due to foreign currency exchange gains compared to losses in the prior quarter.

Tax expense of $13 million compared to a tax benefit of $790 million in the fourth quarter 2023 primarily due to an $800 million deferred tax benefit recognized in the fourth quarter 2023 related to a reduction in the valuation allowance on certain deferred tax assets.

Cash and cash equivalents and restricted cash decreased to $509 million as of March 31, 2024, from $636 million as of December 31, 2023. The decrease was primarily due to capital expenditures, partially offset by positive operating cash flow.

Capital expenditures of $151 million declined from $463 million in the fourth quarter 2023 due to the Company exercising options to take delivery of newbuild drillships VALARIS DS-13 and DS-14 for an aggregate purchase price of $337 million during the fourth quarter.

First Quarter Segment Review

Floaters

Floater revenues increased to $324 million from $263 million in the fourth quarter 2023. Excluding reimbursable items, revenues increased to $310 million from $247 million in the fourth quarter. The increase was primarily due to VALARIS DS-8, which commenced a contract in late December following its reactivation, and higher revenue efficiency across the floater fleet in the first quarter compared to the fourth quarter.

Contract drilling expense increased to $253 million from $226 million in the fourth quarter 2023. Excluding reimbursable items, contract drilling expense increased to $240 million from $211 million in the fourth quarter. The increase was primarily due to more operating days and higher costs associated with planned repairs and maintenance.

Jackups

Jackup revenues decreased to $152 million from $179 million in the fourth quarter 2023. Excluding reimbursable items, revenues decreased to $139 million from $170 million in the fourth quarter primarily due to fewer operating days, with several rigs experiencing idle time for contract preparations and special periodic surveys prior to the start of their next contracts.

Contract drilling expense increased to $134 million from $123 million in the fourth quarter 2023. Excluding reimbursable items, contract drilling expense increased to $122 million from $115 million in the fourth quarter primarily due to higher repair and maintenance expense associated with contract preparations and special periodic surveys.

ARO Drilling

Revenues increased to $138 million from $134 million in the fourth quarter 2023 primarily due to a full quarter of operations for newbuild jackup Kingdom 1, which commenced its maiden contract during the fourth quarter. This was partially offset by fewer operating days for the rest of the fleet due to more out of service days for planned maintenance in the first quarter compared to the fourth quarter. Contract drilling expense increased to $98 million from $88 million in the fourth quarter primarily due to higher bareboat charter expense for leased rigs and higher repair costs associated with planned maintenance in the first quarter.

Other

Revenues increased to $48 million from $41 million in the fourth quarter 2023 primarily due to higher revenues earned from bareboat charter agreements with ARO and higher revenues from two rigs that we manage on behalf of a customer in the U.S. Gulf of Mexico, which both commenced three-year contract extensions during the first quarter. Contract drilling expense increased to $22 million from $18 million in the fourth quarter.

 

Three Months Ended

(Unaudited)

 

Floaters

 

Jackups

 

ARO (1)

 

Other

 

Reconciling Items (1)(2)

 

Consolidated Total

(in millions of $, except %)

Q1
2024

Q4
2023

Chg

 

Q1
2024

Q4
2023

Chg

 

Q1
2024

Q4
2023

Chg

 

Q1
2024

Q4
2023

Chg

 

Q1
2024

Q4
2023

 

Q1
2024

Q4
2023

Chg

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

324.4

$

263.2

23

%

 

$

152.3

$

179.3

(15

)%

 

$

138.3

 

$

133.7

3

%

 

$

48.3

$

41.3

17

%

 

$

(138.3

)

$

(133.7

)

 

$

525.0

$

483.8

9

%

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contract drilling

 

253.4

 

226.0

(12

)%

 

 

133.9

 

123.3

(9

)%

 

 

98.3

 

 

88.0

(12

)%

 

 

22.2

 

18.0

(23

)%

 

 

(63.0

)

 

(53.3

)

 

 

444.8

 

402.0

(11

)%

Depreciation

 

13.2

 

15.0

12

%

 

 

10.4

 

11.2

7

%

 

 

19.0

 

 

19.5

3

%

 

 

1.3

 

1.2

(8

)%

 

 

(17.1

)

 

(19.4

)

 

 

26.8

 

27.5

3

%

General and admin.

 

 

%

 

 

 

%

 

 

5.8

 

 

6.3

8

%

 

 

 

%

 

 

20.7

 

 

18.0

 

 

 

26.5

 

24.3

(9

)%

Equity in earnings of ARO

 

 

%

 

 

 

%

 

 

 

 

%

 

 

 

%

 

 

2.4

 

 

8.3

 

 

 

2.4

 

8.3

(71

)%

Operating income

$

57.8

$

22.2

160

%

 

$

8.0

$

44.8

(82

)%

 

$

15.2

 

$

19.9

(24

)%

 

$

24.8

$

22.1

12

%

 

$

(76.5

)

$

(70.7

)

 

$

29.3

$

38.3

(23

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

64.1

$

24.3

164

%

 

$

8.8

$

46.1

(81

)%

 

$

(1.6

)

$

10.3

 

nm

 

$

24.8

$

22.1

12

%

 

$

(70.6

)

$

725.7

 

 

$

25.5

$

828.5

(97

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

71.0

$

37.2

91

%

 

$

18.4

$

56.0

(67

)%

 

$

34.2

 

$

39.4

(13

)%

 

$

26.1

$

23.2

13

%

 

$

(96.0

)

$

(98.3

)

 

$

53.7

$

57.5

(7

)%

Adjusted EBITDAR

$

101.3

$

75.7

34

%

 

$

18.4

$

56.0

(67

)%

 

$

34.2

 

$

39.4

(13

)%

 

$

26.1

$

23.2

13

%

 

$

(96.0

)

$

(98.3

)

 

$

84.0

$

96.0

(13

)%

 

(1) The full operating results included above for ARO are not included within our consolidated results and thus deducted under "Reconciling Items" and replaced with our equity in earnings of ARO.

(2) Our onshore support costs included within contract drilling expenses are not allocated to our operating segments for purposes of measuring segment operating income (loss) and as such, these costs are included in "Reconciling Items." Further, general and administrative expense and depreciation expense incurred by our corporate office are not allocated to our operating segments for purposes of measuring segment operating income (loss) and are included in "Reconciling Items."

As previously announced, Valaris will hold its first quarter 2024 earnings conference call at 9:00 a.m. CT (10:00 a.m. ET) on Thursday, May 2, 2024. An updated investor presentation will be available on the Valaris website after the call.

About Valaris Limited

Valaris Limited (NYSE: VAL) is the industry leader in offshore drilling services across all water depths and geographies. Operating a high-quality rig fleet of ultra-deepwater drillships, versatile semisubmersibles, and modern shallow-water jackups, Valaris has experience operating in nearly every major offshore basin. Valaris maintains an unwavering commitment to safety, operational excellence, and customer satisfaction, with a focus on technology and innovation. Valaris Limited is a Bermuda exempted company. To learn more, visit the Valaris website at www.valaris.com.

Forward-Looking Statements

Statements contained in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include words or phrases such as "anticipate," "believe," "estimate," "expect," "intend," "likely," "plan," "project," "could," "may," "might," "should," "will" and similar words and specifically include statements regarding expected financial performance; expected utilization, day rates, revenues, operating expenses, cash flows, contract status, terms and duration, contract backlog, capital expenditures, insurance, financing and funding; the offshore drilling market, including supply and demand, customer drilling programs and the attainment of requisite permits for such programs, stacking of rigs, effects of new rigs on the market and effect of the volatility of commodity prices; expected work commitments, awards, contracts and letters of intent; scheduled delivery dates for rigs; performance of our joint ventures, including our joint venture with Saudi Aramco; timing of the delivery of the Saudi Aramco Rowan Offshore Drilling Company ("ARO") newbuild rigs and the timing of additional ARO newbuild orders; the availability, delivery, mobilization, contract commencement, availability, relocation or other movement of rigs and the timing thereof; rig reactivations; suitability of rigs for future contracts; divestitures of assets; general economic, market, business and industry conditions, including inflation and recessions, trends and outlook; general political conditions, including political tensions, conflicts and war; cybersecurity attacks and threats; impacts and effects of public health crises, pandemics and epidemics; future operations; ability to renew expiring contracts or obtain new contracts, including for VALARIS DS-13 and VALARIS DS-14; increasing regulatory complexity; targets, progress, plans and goals related to sustainability matters; the outcome of tax disputes; assessments and settlements; and expense management. The forward-looking statements contained in this press release are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from those indicated, including cancellation, suspension, renegotiation or termination of drilling contracts and programs; our ability to obtain financing, service our debt, fund capital expenditures and pursue other business opportunities; adequacy of sources of liquidity for us and our customers; future share repurchases; actions by regulatory authorities, or other third parties; actions by our security holders; internal control risk; commodity price fluctuations and volatility, customer demand, loss of a significant customer or customer contract, downtime and other risks associated with offshore rig operations; adverse weather, including hurricanes; changes in worldwide rig supply, including as a result of reactivations and newbuilds; and demand, competition and technology; supply chain and logistics challenges; consumer preferences for alternative fuels and forecasts or expectations regarding the global energy transition; increased scrutiny of our sustainability targets, initiatives and reporting and our ability to achieve such targets or initiatives; changes in customer strategy; future levels of offshore drilling activity; governmental action, civil unrest and political and economic uncertainties, including recessions, volatility affecting the banking system and financial markets, inflation and adverse changes in the level of international trade activity; terrorism, piracy and military action; risks inherent to shipyard rig reactivation, upgrade, repair, maintenance or enhancement; our ability to enter into, and the terms of, future drilling contracts; suitability of rigs for future contracts; the cancellation of letters of intent or letters of award or any failure to execute definitive contracts following announcements of letters of intent, letters of award or other expected work commitments; the outcome of litigation, legal proceedings, investigations or other claims or contract disputes; governmental regulatory, legislative and permitting requirements affecting drilling operations; our ability to attract and retain skilled personnel on commercially reasonable terms; environmental or other liabilities, risks or losses; compliance with our debt agreements and debt restrictions that may limit our liquidity and flexibility; cybersecurity risks and threats; and changes in foreign currency exchange rates. In addition to the numerous factors described above, you should also carefully read and consider "Item 1A. Risk Factors" in Part I and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II of our most recent annual report on Form 10-K, which is available on the Securities and Exchange Commission's website at www.sec.gov or on the Investor Relations section of our website at www.valaris.com. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to update or revise any forward-looking statements, except as required by law.

VALARIS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)

(Unaudited)

 

Three Months Ended

 

Mar 31, 2024

 

Dec 31, 2023

 

Sep 30, 2023

 

Jun 30, 2023

 

Mar 31, 2023

OPERATING REVENUES

$

525.0

 

 

$

483.8

 

 

$

455.1

 

 

$

415.2

 

 

$

430.1

 

 

 

 

 

 

 

 

 

 

 

OPERATING EXPENSES

 

 

 

 

 

 

 

 

 

Contract drilling (exclusive of depreciation)

 

444.8

 

 

 

402.0

 

 

 

390.9

 

 

 

373.5

 

 

 

377.2

 

Depreciation

 

26.8

 

 

 

27.5

 

 

 

25.8

 

 

 

24.5

 

 

 

23.3

 

General and administrative

 

26.5

 

 

 

24.3

 

 

 

24.2

 

 

 

26.4

 

 

 

24.4

 

Total operating expenses

 

498.1

 

 

 

453.8

 

 

 

440.9

 

 

 

424.4

 

 

 

424.9

 

EQUITY IN EARNINGS (LOSSES) OF ARO

 

2.4

 

 

 

8.3

 

 

 

2.4

 

 

 

(0.7

)

 

 

3.3

 

OPERATING INCOME (LOSS)

 

29.3

 

 

 

38.3

 

 

 

16.6

 

 

 

(9.9

)

 

 

8.5

 

 

 

 

 

 

 

 

 

 

 

OTHER INCOME (EXPENSE)

 

 

 

 

 

 

 

 

 

Interest income

 

21.0

 

 

 

27.2

 

 

 

26.6

 

 

 

24.6

 

 

 

23.0

 

Interest expense, net

 

(17.7

)

 

 

(21.7

)

 

 

(19.4

)

 

 

(16.7

)

 

 

(11.1

)

Other, net

 

5.8

 

 

 

(5.5

)

 

 

3.9

 

 

 

(0.8

)

 

 

0.6

 

 

 

9.1

 

 

 

 

 

 

11.1

 

 

 

7.1

 

 

 

12.5

 

 

 

 

 

 

 

 

 

 

 

INCOME (LOSS) BEFORE INCOME TAXES

 

38.4

 

 

 

38.3

 

 

 

27.7

 

 

 

(2.8

)

 

 

21.0

 

 

 

 

 

 

 

 

 

 

 

PROVISION (BENEFIT) FOR INCOME TAXES

 

12.9

 

 

 

(790.2

)

 

 

10.7

 

 

 

24.5

 

 

 

(27.6

)

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS)

 

25.5

 

 

 

828.5

 

 

 

17.0

 

 

 

(27.3

)

 

 

48.6

 

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) ATTRIBUTABLE TO NONCONTROLLING INTERESTS

 

 

 

 

6.7

 

 

 

(4.1

)

 

 

(2.1

)

 

 

(1.9

)

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) ATTRIBUTABLE TO VALARIS

$

25.5

 

 

$

835.2

 

 

$

12.9

 

 

$

(29.4

)

 

$

46.7

 

 

 

 

 

 

 

 

 

 

 

EARNINGS (LOSS) PER SHARE

 

 

 

 

 

 

 

 

 

Basic

$

0.35

 

 

$

11.47

 

 

$

0.18

 

 

$

(0.39

)

 

$

0.62

 

Diluted

$

0.35

 

 

$

11.30

 

 

$

0.17

 

 

$

(0.39

)

 

$

0.61

 

WEIGHTED-AVERAGE SHARES OUTSTANDING

 

 

 

 

 

 

 

 

 

Basic

 

72.4

 

 

 

72.8

 

 

 

73.7

 

 

 

74.8

 

 

 

75.2

 

Diluted

 

73.6

 

 

 

73.9

 

 

 

74.8

 

 

 

74.8

 

 

 

76.4

 

VALARIS LIMITED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions)

(Unaudited)

 

As of

 

Mar 31, 2024

Dec 31, 2023

Sep 30, 2023

Jun 30, 2023

Mar 31, 2023

ASSETS

 

 

 

 

 

 

 

 

 

 

 

CURRENT ASSETS

 

 

 

 

 

Cash and cash equivalents

$

494.1

$

620.5

$

1,041.1

$

787.3

$

822.5

Restricted cash

 

15.0

 

15.2

 

16.2

 

18.0

 

21.5

Accounts receivable, net

 

510.9

 

459.3

 

492.4

 

473.4

 

393.4

Other current assets

 

177.6

 

177.2

 

178.7

 

168.7

 

158.1

Total current assets

$

1,197.6

$

1,272.2

$

1,728.4

$

1,447.4

$

1,395.5

 

 

 

 

 

 

PROPERTY AND EQUIPMENT, NET

 

1,732.3

 

1,633.8

 

1,159.9

 

1,073.7

 

1,015.5

 

 

 

 

 

 

LONG-TERM NOTES RECEIVABLE FROM ARO

 

289.3

 

282.3

 

275.2

 

268.0

 

261.0

 

 

 

 

 

 

INVESTMENT IN ARO

 

126.8

 

124.4

 

116.1

 

113.7

 

114.4

 

 

 

 

 

 

DEFERRED TAX ASSETS

 

854.8

 

855.1

 

53.8

 

48.5

 

50.5

 

 

 

 

 

 

OTHER ASSETS

 

153.6

 

154.4

 

151.5

 

137.1

 

114.3

 

 

 

 

 

 

 

$

4,354.4

$

4,322.2

$

3,484.9

$

3,088.4

$

2,951.2

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

CURRENT LIABILITIES

 

 

 

 

 

Accounts payable - trade

$

394.2

$

400.1

$

376.4

$

364.2

$

324.1

Accrued liabilities and other

 

366.5

 

344.2

 

346.6

 

294.7

 

267.7

Total current liabilities

$

760.7

$

744.3

$

723.0

$

658.9

$

591.8

 

 

 

 

 

 

LONG-TERM DEBT

 

1,080.1

 

1,079.3

 

1,079.4

 

681.9

 

542.8

 

 

 

 

 

 

DEFERRED TAX LIABILITIES

 

31.6

 

29.9

 

17.1

 

16.7

 

16.1

 

 

 

 

 

 

OTHER LIABILITIES

 

451.7

 

471.7

 

465.4

 

464.8

 

448.5

 

 

 

 

 

 

TOTAL LIABILITIES

 

2,324.1

 

2,325.2

 

2,284.9

 

1,822.3

 

1,599.2

 

 

 

 

 

 

TOTAL EQUITY

 

2,030.3

 

1,997.0

 

1,200.0

 

1,266.1

 

1,352.0

 

 

 

 

 

 

 

$

4,354.4

$

4,322.2

$

3,484.9

$

3,088.4

$

2,951.2

VALARIS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

 

Three Months Ended

 

Mar 31, 2024

Dec 31, 2023

Sep 30, 2023

Jun 30, 2023

Mar 31, 2023

OPERATING ACTIVITIES

 

 

 

 

 

Net income (loss)

$

25.5

 

$

828.5

 

$

17.0

 

$

(27.3

)

$

48.6

 

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

Depreciation expense

 

26.8

 

 

27.5

 

 

25.8

 

 

24.5

 

 

23.3

 

Share-based compensation expense

 

8.0

 

 

7.8

 

 

6.8

 

 

7.0

 

 

5.7

 

Accretion of discount on notes receivable from ARO

 

(7.0

)

 

(7.1

)

 

(7.2

)

 

(7.0

)

 

(7.0

)

Equity in losses (earnings) of ARO

 

(2.4

)

 

(8.3

)

 

(2.4

)

 

0.7

 

 

(3.3

)

Deferred income tax expense (benefit)

 

2.0

 

 

(788.7

)

 

(4.8

)

 

2.5

 

 

4.6

 

Loss (gain) on asset disposals

 

0.1

 

 

(0.7

)

 

 

 

(27.8

)

 

(0.1

)

Loss on extinguishment of debt

 

 

 

 

 

 

 

29.2

 

 

 

Changes in contract liabilities

 

(7.0

)

 

8.8

 

 

3.6

 

 

13.3

 

 

(20.8

)

Changes in deferred costs

 

2.2

 

 

3.2

 

 

(22.4

)

 

(7.4

)

 

0.5

 

Other

 

1.8

 

 

0.6

 

 

2.7

 

 

2.1

 

 

0.4

 

Changes in other operating assets and liabilities

 

(21.3

)

 

27.3

 

 

31.0

 

 

(37.3

)

 

100.8

 

Contributions to pension plans and other post-retirement benefits

 

(2.4

)

 

(2.2

)

 

(1.9

)

 

(1.6

)

 

(1.0

)

Net cash provided by (used in) operating activities

$

26.3

 

$

96.7

 

$

48.2

 

$

(29.1

)

$

151.7

 

 

 

 

 

 

 

INVESTING ACTIVITIES

 

 

 

 

 

Additions to property and equipment

$

(151.3

)

$

(463.0

)

$

(105.8

)

$

(71.0

)

$

(56.3

)

Net proceeds from disposition of assets

 

 

 

1.1

 

 

0.1

 

 

29.0

 

 

0.1

 

Net cash used in investing activities

$

(151.3

)

$

(461.9

)

$

(105.7

)

$

(42.0

)

$

(56.2

)

 

 

 

 

 

 

FINANCING ACTIVITIES

 

 

 

 

 

Payments for share repurchases

$

(1.4

)

$

(51.2

)

$

(83.0

)

$

(64.4

)

$

 

Debt issuance costs

 

 

 

(1.9

)

 

(5.7

)

 

(31.0

)

 

 

Payments for tax withholdings for share-based awards

 

 

 

(0.2

)

 

(4.8

)

 

(0.4

)

 

 

Issuance of Second Lien Notes

 

 

 

 

 

403.0

 

 

700.0

 

 

 

Redemption of First Lien Notes

 

 

 

 

 

 

 

(571.8

)

 

 

Other

 

(0.2

)

 

(3.1

)

 

 

 

 

 

 

Net cash provided by (used in) financing activities

$

(1.6

)

$

(56.4

)

$

309.5

 

$

32.4

 

$

 

 

 

 

 

 

 

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

$

(126.6

)

$

(421.6

)

$

252.0

 

$

(38.7

)

$

95.5

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD

 

635.7

 

 

1,057.3

 

 

805.3

 

 

844.0

 

 

748.5

 

CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD

$

509.1

 

$

635.7

 

$

1,057.3

 

$

805.3

 

$

844.0

 

VALARIS LIMITED AND SUBSIDIARIES

OPERATING STATISTICS

(In millions)

(Unaudited)

 

Three Months Ended

 

Mar 31, 2024

 

Dec 31, 2023

 

Sep 30, 2023

 

Jun 30, 2023

 

Mar 31, 2023

REVENUES

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

$

249.6

 

$

190.7

 

$

168.2

 

$

147.2

 

$

138.9

Semisubmersibles

 

60.2

 

 

56.3

 

 

64.1

 

 

68.5

 

 

67.1

 

$

309.8

 

$

247.0

 

$

232.3

 

$

215.7

 

$

206.0

Reimbursable and Other Revenues (1)

 

14.6

 

 

16.2

 

 

11.0

 

 

11.7

 

 

8.8

Total Floaters

$

324.4

 

$

263.2

 

$

243.3

 

$

227.4

 

$

214.8

 

 

 

 

 

 

 

 

 

 

Jackups (2)

 

 

 

 

 

 

 

 

 

HD Harsh Environment

$

67.5

 

$

76.6

 

$

75.5

 

$

54.1

 

$

70.9

HD & SD Modern

 

56.9

 

 

79.0

 

 

68.8

 

 

67.9

 

 

70.4

SD Legacy

 

14.8

 

 

14.2

 

 

10.5

 

 

12.5

 

 

20.4

 

$

139.2

 

$

169.8

 

$

154.8

 

$

134.5

 

$

161.7

Reimbursable and Other Revenues (1)

 

13.1

 

 

9.5

 

 

11.1

 

 

10.1

 

 

8.1

Total Jackups

$

152.3

 

$

179.3

 

$

165.9

 

$

144.6

 

$

169.8

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

$

42.1

 

$

36.0

 

$

40.1

 

$

37.4

 

$

39.1

Reimbursable and Other Revenues (1)

 

6.2

 

 

5.3

 

 

5.8

 

 

5.8

 

 

6.4

Total Other

$

48.3

 

$

41.3

 

$

45.9

 

$

43.2

 

$

45.5

 

 

 

 

 

 

 

 

 

 

Total Operating Revenues

$

525.0

 

$

483.8

 

$

455.1

 

$

415.2

 

$

430.1

 

 

 

 

 

 

 

 

 

 

Total Reimbursable and Other Revenues (1)

$

33.9

 

$

31.0

 

$

27.9

 

$

27.6

 

$

23.3

 

 

 

 

 

 

 

 

 

 

Revenues Excluding Reimbursable and Other Revenues

$

491.1

 

$

452.8

 

$

427.2

 

$

387.6

 

$

406.8

(1)

Reimbursable and other revenues includes certain types of non-recurring reimbursable revenues, revenues earned during suspension periods and revenues attributable to amortization of contract intangibles.

(2)

HD = Heavy Duty; SD = Standard Duty. Heavy duty jackups are well-suited for operations in tropical revolving storm areas.

VALARIS LIMITED AND SUBSIDIARIES

OPERATING STATISTICS

(In millions)

(Unaudited)

 

Three Months Ended

 

Mar 31, 2024

 

Dec 31, 2023

 

Sep 30, 2023

 

Jun 30, 2023

 

Mar 31, 2023

ADJUSTED EBITDA (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

$

55.6

 

$

16.7

 

$

2.8

 

$

0.3

 

$

12.2

Semisubmersibles

 

15.4

 

 

20.5

 

 

25.4

 

 

30.8

 

 

28.0

 

$

71.0

 

$

37.2

 

$

28.2

 

$

31.1

 

$

40.2

 

 

 

 

 

 

 

 

 

 

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

$

5.4

 

$

21.1

 

$

20.9

 

$

6.1

 

$

3.0

HD & SD Modern

 

8.6

 

 

30.1

 

 

20.4

 

 

11.6

 

 

9.4

SD Legacy

 

4.4

 

 

4.8

 

 

2.9

 

 

3.4

 

 

8.4

 

$

18.4

 

$

56.0

 

$

44.2

 

$

21.1

 

$

20.8

 

 

 

 

 

 

 

 

 

 

Total

$

89.4

 

$

93.2

 

$

72.4

 

$

52.2

 

$

61.0

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

$

26.1

 

$

23.2

 

$

27.2

 

$

24.9

 

$

25.4

 

 

 

 

 

 

 

 

 

 

Total

$

115.5

 

$

116.4

 

$

99.6

 

$

77.1

 

$

86.4

 

 

 

 

 

 

 

 

 

 

Support costs

 

 

 

 

 

 

 

 

 

General and administrative expense

$

26.5

 

$

24.3

 

$

24.2

 

$

26.4

 

$

24.4

Onshore support costs

 

35.3

 

 

34.6

 

 

35.4

 

 

35.4

 

 

33.5

 

$

61.8

 

$

58.9

 

$

59.6

 

$

61.8

 

$

57.9

 

 

 

 

 

 

 

 

 

 

Total

$

53.7

 

$

57.5

 

$

40.0

 

$

15.3

 

$

28.5

(1)

Adjusted EBITDA is earnings before interest, tax, depreciation and amortization. Adjusted EBITDA for asset category also excludes onshore support costs and general and administrative expense.

VALARIS LIMITED AND SUBSIDIARIES

OPERATING STATISTICS

(In millions)

(Unaudited)

 

Three Months Ended

 

Mar 31, 2024

 

Dec 31, 2023

 

Sep 30, 2023

 

Jun 30, 2023

 

Mar 31, 2023

ADJUSTED EBITDAR (1)

 

 

 

 

 

 

 

 

 

Active Fleet (2)

$ 126.3

 

$ 137.5

 

$ 129.3

 

$ 104.5

 

$ 100.4

Leased and Managed Rigs

26.1

 

23.2

 

27.2

 

24.9

 

25.4

 

$ 152.4

 

$ 160.7

 

$ 156.5

 

$ 129.4

 

$ 125.8

 

 

 

 

 

 

 

 

 

 

Stacked Fleet (3)

(6.6)

 

(5.8)

 

(6.0)

 

(8.2)

 

(13.1)

 

$ 145.8

 

$ 154.9

 

$ 150.5

 

$ 121.2

 

$ 112.7

 

 

 

 

 

 

 

 

 

 

Support costs

 

 

 

 

 

 

 

 

 

General and administrative expense

$ 26.5

 

$ 24.3

 

$ 24.2

 

$ 26.4

 

$ 24.4

Onshore support costs

35.3

 

34.6

 

35.4

 

35.4

 

33.5

 

$ 61.8

 

$ 58.9

 

$ 59.6

 

$ 61.8

 

$ 57.9

 

 

 

 

 

 

 

 

 

 

Total

$ 84.0

 

$ 96.0

 

$ 90.9

 

$ 59.4

 

$ 54.8

 

 

 

 

 

 

 

 

 

 

Reactivation costs (4)

$ 30.3

 

$ 38.5

 

$ 50.9

 

$ 44.1

 

$ 26.3

(1)

Adjusted EBITDAR is earnings before interest, tax, depreciation, amortization and reactivation costs. Adjusted EBITDAR for active fleet, leased and managed rigs and stacked fleet also excludes onshore support costs and general and administrative expense.

(2)

Active fleet represents rigs that are not preservation stacked and includes rigs that are in the process of being reactivated.

(3)

Stacked fleet represents the combined total of all preservation and stacking costs.

(4)

Reactivation costs, all of which are attributed to Valaris' active fleet, are excluded from adjusted EBITDAR.

VALARIS LIMITED AND SUBSIDIARIES

OPERATING STATISTICS

(In millions)

(Unaudited)

 

Three Months Ended

 

Mar 31, 2024

 

Dec 31, 2023

 

Sep 30, 2023

 

Jun 30, 2023

 

Mar 31, 2023

ADJUSTED EBITDAR (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

$

85.9

 

$

55.2

 

$

53.7

 

$

44.4

 

$

38.2

Semisubmersibles

 

15.4

 

 

20.5

 

 

25.4

 

 

30.9

 

 

28.2

 

$

101.3

 

$

75.7

 

$

79.1

 

$

75.3

 

$

66.4

 

 

 

 

 

 

 

 

 

 

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

$

5.4

 

$

21.1

 

$

20.9

 

$

6.1

 

$

3.1

HD & SD Modern

 

8.6

 

 

30.1

 

 

20.4

 

 

11.5

 

 

9.4

SD Legacy

 

4.4

 

 

4.8

 

 

2.9

 

 

3.4

 

 

8.4

 

$

18.4

 

$

56.0

 

$

44.2

 

$

21.0

 

$

20.9

 

 

 

 

 

 

 

 

 

 

Total

$

119.7

 

$

131.7

 

$

123.3

 

$

96.3

 

$

87.3

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

$

26.1

 

$

23.2

 

$

27.2

 

$

24.9

 

$

25.4

 

 

 

 

 

 

 

 

 

 

Total

$

145.8

 

$

154.9

 

$

150.5

 

$

121.2

 

$

112.7

 

 

 

 

 

 

 

 

 

 

Support costs

 

 

 

 

 

 

 

 

 

General and administrative expense

$

26.5

 

$

24.3

 

$

24.2

 

$

26.4

 

$

24.4

Onshore support costs

 

35.3

 

 

34.6

 

 

35.4

 

 

35.4

 

 

33.5

 

$

61.8

 

$

58.9

 

$

59.6

 

$

61.8

 

$

57.9

 

 

 

 

 

 

 

 

 

 

Total

$

84.0

 

$

96.0

 

$

90.9

 

$

59.4

 

$

54.8

(1)

Adjusted EBITDAR is earnings before interest, tax, depreciation, amortization and reactivation costs. Adjusted EBITDAR for asset category also excludes onshore support costs and general and administrative expense.

VALARIS LIMITED AND SUBSIDIARIES

OPERATING STATISTICS

(In millions)

(Unaudited)

 

As of

 

Apr 30, 2024

 

Feb 15, 2024

 

Nov 1, 2023

 

Aug 1, 2023

 

May 1, 2023

CONTRACT BACKLOG (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

$

2,223.9

 

$

2,307.6

 

$

1,726.5

 

$

1,684.9

 

$

1,499.0

Semisubmersibles

 

180.7

 

 

224.1

 

 

259.5

 

 

272.4

 

 

270.2

 

$

2,404.6

 

$

2,531.7

 

$

1,986.0

 

$

1,957.3

 

$

1,769.2

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

$

607.0

 

$

646.8

 

$

327.9

 

$

307.4

 

$

277.7

HD & SD Modern

 

449.1

 

 

347.1

 

 

406.8

 

 

366.8

 

 

317.7

SD Legacy

 

128.8

 

 

173.5

 

 

186.9

 

 

118.4

 

 

119.7

 

$

1,184.9

 

$

1,167.4

 

$

921.6

 

$

792.6

 

$

715.1

 

 

 

 

 

 

 

 

 

 

Total

$

3,589.5

 

$

3,699.1

 

$

2,907.6

 

$

2,749.9

 

$

2,484.3

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

$

427.7

 

$

222.3

 

$

250.5

 

$

291.4

 

$

318.9

 

 

 

 

 

 

 

 

 

 

Total

$

4,017.2

 

$

3,921.4

 

$

3,158.1

 

$

3,041.3

 

$

2,803.2

 

 

 

 

 

 

 

 

 

 

(1)

Our contract drilling backlog reflects commitments, represented by signed drilling contracts, and is calculated by multiplying the contracted day rate by the contract period. Contract drilling backlog includes drilling contracts subject to FID and drilling contracts which grant the customer termination rights if FID is not received with respect to projects for which the drilling rig is contracted. The contracted day rate excludes certain types of lump sum fees for rig mobilization, demobilization, contract preparation, as well as customer reimbursables and bonus opportunities.

VALARIS LIMITED AND SUBSIDIARIES

OPERATING STATISTICS

(Unaudited)

 

Three Months Ended

 

Mar 31, 2024

 

Dec 31, 2023

 

Sep 30, 2023

 

Jun 30, 2023

 

Mar 31, 2023

AVERAGE DAILY REVENUE (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

$

328,000

 

$

307,000

 

$

288,000

 

$

253,000

 

$

239,000

Semisubmersibles

 

261,000

 

 

229,000

 

 

257,000

 

 

252,000

 

 

259,000

 

$

312,000

 

$

285,000

 

$

279,000

 

$

252,000

 

$

245,000

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

$

123,000

 

$

111,000

 

$

116,000

 

$

100,000

 

$

126,000

HD & SD Modern

 

103,000

 

 

119,000

 

 

105,000

 

 

102,000

 

 

98,000

SD Legacy

 

81,000

 

 

79,000

 

 

83,000

 

 

81,000

 

 

76,000

 

$

108,000

 

$

111,000

 

$

108,000

 

$

99,000

 

$

104,000

 

 

 

 

 

 

 

 

 

 

Total

$

197,000

 

$

174,000

 

$

171,000

 

$

158,000

 

$

154,000

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

$

45,000

 

$

39,000

 

$

44,000

 

$

41,000

 

$

44,000

 

 

 

 

 

 

 

 

 

 

Total

$

153,000

 

$

136,000

 

$

134,000

 

$

124,000

 

$

124,000

(1)

Average daily revenue is derived by dividing contract drilling revenues, adjusted to exclude certain types of non-recurring reimbursable revenues, revenues earned during suspension periods and revenues attributable to amortization of drilling contract intangibles, by the aggregate number of operating days.

VALARIS LIMITED AND SUBSIDIARIES

OPERATING STATISTICS

(Unaudited)

 

Three Months Ended

 

Mar 31, 2024

 

Dec 31, 2023

 

Sep 30, 2023

 

Jun 30, 2023

 

Mar 31, 2023

UTILIZATION - TOTAL FLEET (1)

 

 

 

 

 

 

 

 

 

Floaters

 

 

 

 

 

 

 

 

 

Drillships

64

%

 

60

%

 

58

%

 

58

%

 

59

%

Semisubmersibles

51

%

 

53

%

 

54

%

 

60

%

 

57

%

 

61

%

 

58

%

 

57

%

 

59

%

 

58

%

Jackups

 

 

 

 

 

 

 

 

 

HD Harsh Environment

55

%

 

68

%

 

64

%

 

55

%

 

57

%

HD & SD Modern

44

%

 

52

%

 

51

%

 

52

%

 

57

%

SD Legacy

100

%

 

97

%

 

69

%

 

78

%

 

99

%

 

53

%

 

62

%

 

58

%

 

55

%

 

62

%

 

 

 

 

 

 

 

 

 

 

Total

56

%

 

60

%

 

57

%

 

56

%

 

60

%

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

Leased and Managed Rigs

100

%

 

100

%