LONDON, March 26, 2020 /PRNewswire/ -- Valaris plc (NYSE:
VAL) ("Valaris" or the "Company") announced today that the Company
continues actively working to recover or replace the blowout
preventer (BOP) stack on VALARIS DS-8 following a non-drilling
incident earlier this month. On March 19,
2020, the Company received a termination notice for the
drilling contract for VALARIS DS-8. The Company is in discussions
with the customer regarding the notice. The drilling contract
represents approximately $150 million
of the Company's contracted revenue backlog of $2.5 billion as of December 31, 2019. The operating day rate for
VALARIS DS-8 is approximately $620,000 per day. The Company has loss of hire
insurance for $602,500 per day after
the expiration of a 45-day deductible waiting period through the
end of the contract in November 2020.
If the contract is terminated, the Company will seek to recover
losses incurred in accordance with the terms of this insurance
policy, which would largely offset the lost backlog noted above.
There can be no assurance as to the timing or amount of insurance
proceeds paid to the Company.
The Company has received a notice of contract termination from a
customer for VALARIS JU-109, which was scheduled to operate
offshore Angola until July 2021. As a result of this termination, the
rig's contract is now expected to end in mid-April 2020 and contracted revenue backlog
will be reduced by approximately $50
million. The Company expects to receive additional notices
of contract terminations and requests to renegotiate contract day
rates and terms in light of increased market uncertainty.
Since the beginning of March, VALARIS JU-87 was awarded a
one-well contract with Cox in the U.S. Gulf of Mexico that commenced in mid-March,
with an estimated duration of 30 days that added approximately
$1 million of contracted revenue
backlog. Additionally, a previously announced contract for VALARIS
DS-4 with Amni offshore Ghana has
been transferred to VALARIS DS-7 and is expected to commence in
April 2020, and the previously
announced contract for VALARIS JU-144 (EXL II) with ENI offshore
Mexico has been transferred to
VALARIS JU-102 and is expected to commence in September 2020.
For the period between the Company's fleet status report that
was filed on February 13, 2020 and
the beginning of March, the Company executed the following new
contracts and contract extensions with associated revenue backlog
of approximately $100 million:
- VALARIS MS-1 awarded a three-well contract with Santos offshore
Australia that is expected to
commence in first quarter 2021, with an estimated duration of 155
days.
- VALARIS 8505 awarded a one-well contract with Lukoil Upstream
Mexico that is expected to commence in mid-November, with an
estimated duration of 80 days.
- VALARIS JU-118 (Joe Douglas)
awarded a three-well contract with Fieldwood offshore Mexico that commenced in mid-March, with an
estimated duration of 425 days.
- VALARIS JU-144 (EXL II) awarded a two-well contract with
Fieldwood offshore Mexico that is
expected to commence in April, with an estimated duration of 200
days.
In addition, the Company is withdrawing its first quarter and
full year 2020 financial guidance that was provided on its
February 21, 2020 conference
call.
About Valaris plc
Valaris plc (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. With an unwavering commitment to safety and operational
excellence, and a focus on technology and innovation, Valaris was
rated first in total customer satisfaction in the latest
independent survey by EnergyPoint Research - the ninth consecutive
year that the Company has earned this distinction. Valaris plc is
an English limited company (England No. 7023598) with its corporate
headquarters located at 110 Cannon Street, London EC4N 6EU. To learn more, visit our
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," "plan,"
"project," "could," "may," "might," "should," "will" and similar
words and specifically include statements involving expected
financial performance; backlog; rig commitments and contracts;
contract duration, status, terms and other contract commitments;
contract cancellations; and general market, business and industry
conditions, trends and outlook. 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 actions by regulatory
authorities, rating agencies or other third parties; actions by our
security holders; costs and difficulties related to the integration
of Ensco and Rowan and the related impact on our financial results
and performance; our ability to repay debt and the timing thereof;
availability and terms of any financing; commodity price
fluctuations, customer demand, new rig supply, downtime and other
risks associated with offshore rig operations, relocations, severe
weather or hurricanes; changes in worldwide rig supply and demand,
competition and technology; future levels of offshore drilling
activity; governmental action, civil unrest and political and
economic uncertainties; terrorism, piracy and military action;
risks inherent to shipyard rig construction, repair, maintenance or
enhancement; possible cancellation, suspension or termination of
drilling contracts as a result of mechanical difficulties,
performance, customer finances, the decline or the perceived risk
of a further decline in oil and/or natural gas prices, or other
reasons, including terminations for convenience (without cause);
our ability to enter into, and the terms of, future drilling
contracts; 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; debt restrictions that may
limit our liquidity and flexibility; and cybersecurity risks and
threats. 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, as updated in our
subsequent quarterly reports on Form 10-Q, which are available on
the SEC'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 publicly
update or revise any forward-looking statements, except as required
by law.
Investor & Media Contacts
Nick Georgas
Vice President – Investor Relations and Corporate
Communications
+1-713-430-4607
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SOURCE Valaris plc