Valaris’ drillships awarded long-term contracts

Offshore driller Valaris has secured a Long-term charter contract from Petrobras for its drillship Valaris DS-4 to work on the upcoming Buzios program offshore Brazil.

The New York-listed firm has fixed the 2010-built floater for 1,064 days in a deal worth around $519m, including mobilisation fees and additional services.

The contract should start late in the fourth quarter of 2024, after the rig wraps up its current campaign with Petrobras in September 2024 and goes out of service for approximately 90 days to complete “customer-required capital upgrades”.

Commenting on the deal, Anton Dibowitz president and chief executive of Valaris said: “We have previously stated that we expect Valaris’ earnings and cash flow to increase meaningfully as rigs are recontracted at market rates. This contract award for Valaris DS-4 is a great example of how we are executing on the operating leverage inherent in our business, with the rig repricing from a day rate in the low $200,000s to an effective day rate in the high $400,000s.”

The “Valaris DS-4”, built by South Korean shipyard Samsung Heavy Industries, is a 96k design with a maximum drilling depth of 40,000 feet, can operate in 12,000 feet of water, and has a capacity of 200 people. The new contract is expected to commence at the end of the fourth quarter of 2024 and the existing contract with Petrobras is expected to end in September 2024. At that point, the Valaris DS-4 will be shut down for approximately 90 days to complete the capital upgrades requested by the customer, followed by new performance.

The development of the Buzios deepwater field project is understood to include 11 platforms. Six platforms are already under construction, including the FPSO Almirante Tamandaré, P-78, P-79, P-80, P-82 and P-83.Petrobras is the operator of the field, with an 88.99% stake, and its partners include China National Offshore Oil Corporation (CNOOC) (7.34%) and China Oil & Gas Ltd. (7.34%) and China National Petroleum Corporation (3.67%).

The contract comes just days after Valaris confirmed the purchase and delivery of two ultra-deepwater floating drillships built by Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering, the “Valaris DS-13” and “Valaris DS-14”. Both drillships are of DSME 12000 design and have a total cost of US$1.2 billion. “The estimated final payments for the construction of the Valaris DS-13 and Valaris DS-14 are approximately $119 million and $218 million, respectively.

At that time Anton Dibowitz stated: “It is a pleasure to add these two drillships to our fleet, which are the highest specification drillships in existence at Korean shipyards. These two new vessels increase our drilling fleet to 13 vessels and reinforce our position as one of the most technically capable drilling fleets in the industry.”

Yangzijiang Shipbuilding

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