VAL - Earnings call 3 2023 | Valaris Limited

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Valaris Third Quarter 2023 Results Conference Call. [Operator Instructions] Please note, this event is being recorded.I would now like to turn the conference over to Darin Gibbins, Vice President of Investor Relations and Treasurer. Please go ahead.

Darin Gibbins

Welcome, everyone, to the Valaris Third Quarter 2023 Conference Call. With me today are President and CEO, Anton Dibowitz; Senior Vice President and CFO, Chris Weber; Senior Vice President and CCO, Matt Lyne; and other members of our executive management team. risks release, we available are make and subject press at our forward-looking our are comments valaris.com.Any today to issued which on is website statements We uncertainties. and about expectations cause could differ our results Many factors actual materially to from expectations. release press list website results. and SEC filings factors impact future and other our that to on forward-looking define refer and Please could statements risk our events that and to will note please that GAAP financial Also, refer forward-looking we this call, undertakes duty the statements.During update no to non-GAAP measures. company Please press information on website and our required see release the for reconciliations. additional

As after recent Drilling An ARO a on call.Now call the the updated which Anton reminder, contracts last Status details website and presentation presentation week, I'll President we turn will issued our provides and to fleet. CEO. investor over Fleet be most across available Dibowitz, rig our our Report, on

Anton Dibowitz

afternoon morning and and Darin, to Thanks, everyone. good

commentary closing this forward the to want quarter, Chris our about that we the for fleet markets XXXX. performance then and the call, discuss then including provide more some some preliminary the get today's contracting going our of financial overview the strategy. And up of will guidance into During our highlight overview discuss details I finally, an After high-level outlook comments.Before detail we the XXXX. and floater more in results key will that, with the in business call for to our the an to in I discuss and guidance, to call. quarter I'll over detail and will points wrap call our and providing hand drilling of market by on outlook during Matt I'll start jackup some provide offshore for

sustained with cycle. outlook increasing the demand and setting supply and is up a strong positive constrained up Valaris First, for

meaningful results demonstrated full Second, meaningful significant success and by to XXXX, shareholders it its better for offshore quarter flow, it.Moving Consequently, and accretive to in Equinor Bacalhau going expect legacy this unless our its in reactivation with and to DS-XX returns. leverage XX generating the be when had ongoing have there retained all more to a and contract we great VALARIS operations. value Brazil their And over return improvement improving we with repricing operating commitment and have will We're the both our contracting commenced cash a on year XXXX prior flow quarter past our our we project months sustained or begins pleased forward. is the contribute to finally, to in that to presence increase flagship earnings market. Brazil use we We're intend expect and capital of free excited and business driven reactivations following cash it basin. in meaningful partnering during contracts. and And Equinor third our strategic

have DS-X, is offshore priority. with working acceptance drillships of the We about of contract Brazil following will always soon X Petrobras.Operating customer commence which arrival is ahead X.X-year safely top to our its recent VALARIS

Offshore Safety, for recognized Safety Training with XXXX to So program which its Center we're Award. Valaris honored be proud the the by Basic Leadership

training made Valaris stacked work for an to for to of innovative quarter. women U.S. incident, new culture possible years We a costs prepare dedication utilizes to EBITDA of the safety, daily basis.Now demand I'd the and a adjusted of adding X to employees on onetime million safely and to hires and that the Mexico $XX men are improve, work safe a achievement initiative of new is crews services to for generated number increasing to which million. Gulf subject offshore. congratulate we like EBITDAR, reactivation on industry. XX VALARIS of without the safety-first of our our As performance Remaining adjusted in are rigs for one hiring continues an our fantastic adhering The new Training to to the $XX Basic systems the recordable of basic program, provide turning of financial their celebrating back by recently our a building

Our results downtime as for as were unplanned the quarter in few a XXX. impacted events the floated contract rigs, impact fourth and which will quarter start-ups DS-XX by one of VALARIS the well on also delayed

a its from contract will month, was this fleet-wide strong in floater committed Kingdom to for XX%, of of delivery in revenue highly X later its the the shipyard, attractive had increase and an Kingdom at secured we X expectations, first recently we and important of of delivered syndicate will Kingdom safe growth in Arabian revenue our its newbuild the weeks efficiency first year-to-date earnings. expected commenced was startup ago, delivering ARO and while announced is is XXXX. and lead anticipate banks the of and While X. quarter the our first that X below operations.A couple deliveries a our XXXX to delivered is quarter Kingdom remain we contract it efficiency Saudi The maiden now financing expected be and of commence to from that to substantial and X local Drilling milestone newbuilds finance story the mark to breaks, ARO, efficient X

our is rigs buoyed has by Brent spot the relationship Saudi its industry ARO in terms for financing the will a highly local with with that prices the recent in escalation $XX details on at provide business been demonstrating Commodity risk. to geopolitical little of the supportive, remain able strength pleased above these and Chris a Arabia. financing to lenders our barrel, Valaris crude outlook terms, tight attention secure the supply attractive ARO and further are later.Turning positive. both The market. in for We

support X% breakevens offshore be long-cycle provide commodity are More that anticipated importantly, more in compound grow estimated invest most Rystad from $XX to indicates The of increased which undeveloped is customers now to demand a approximately and of are prices at growth with through barrel, profitable. which attractive a of than XXXX, drilling a confidence around reserves upstream projects.Data offshore projects level lead X-year offshore services. is forward offshore price rate CapEx expected XX% for offshore to the to annual to at for

demand active spending outlook next of at that a benign we over is cost against to are While several late strong and and drilling years market, in to desire how utilization in the environment further capital XXXX the generation a the the in weighing drillships their shareholders.Looking see robust, the we seventh return that capital customers provide environment rising up approach they their measured opportunities are sustainable evidence for commencing and mid-XXs, being programs, in longer-term in number floater remains a cycle. sixth and beyond

contract day near range be at lead during specific mid- repositioning high of rates opportunity. upgrades lengthening we to pricing, considering depending the and when on to schedules for times, acquired We rates continue work, XXXX.Looking rigs expect leading-edge term, a gaps customer in However, the in each industry across the XXXs. circumstances and the wide see may of

bidding Valaris, willing contractors of we to are through payments. each continues are a to of day X-year made term maximizing and to total upfront or we balance X- the we and lower the However, the medium our diminish tighten. on will an capacity continues to to some and possible the may opportunities utilized whether meaningful of to be jobs We've in we shorter-term long-term highly contract upward trajectory be rate active bid accept economics see deliberate idle as demand situation, profitability some the Similarly, awarded supply we may a to aggressively expect the are fleet backlog. rigs as payments for to duration on while and programs gapfill rates newbuild as close believe going some a our stacked best rates, rates upfront at likely that see reactivation We on X-year to continue willing securing that certain to lower period.For effort rates may and avoid secure or by in contracts. lower plus the to secure unique keeping leading-edge focused rigs for see more

headline improve return to moving not more value total of lower upfront overall into contract are the profile rate, of the risk, payments subject payment the day may While operational the contract an upfront and a total has DS-XX out included payment contract a upfront $XX million $XXX,XXX. VALARIS of day the $XXX value.For of drive million rate and an of effective over example, total shareholder contract value

had is meaningful when increasing to effective less with $XXX,XXX. generate drillship than tenfold backlog. EBITDA Another out a is payment year only example with is provide we reactivation X of than This of billion. to contract minute, a drillships a million of it's $XXX have approximately in a million.Taking upfront expected XX the back for May then, of our we cost worth Valaris a more minimal annualized on anticipated that to cash relisted step $XX drillships, our has a stacked $X.X to contract XXXX, of day which contracts and contracted DS-X, remembering Since rate payback contract won backlog X for total X

newbuild VALARIS our of X legacy will maintain DS-XX rate XXXX leverage market contracts a in stacked Looking attractive exercise. to uncontracted forward, the key rates recontract XXXX, options that which further one we and to day for that strong forward.We low recontract mid-XXXs we operating we which drillships VALARIS earnings to in DS-XX, drillships market further X currently DS-XX in with anticipate a growth to expected are have going currently drillship, and higher on floater purchase at and the be are to driver remaining intend expected

to firm over and that on rigs expected hand the region the entire our will onshore deliver a and XXXX. like work on day I'll continue take hand additional meaningful initial call more to commitment this to team reactivated leverage jackup generate will efficient by for provide reactivation to to opportunity call they markets contract.Before thank operations over to costs our to focus our our that we how and operational opportunities and safe We detailed disciplined Valaris return only bring for to I and remain customers.Now the Matt to floater contracting commentary the the in exercise be and I'd are offshore over, every the outlook for

Matt Lyne

have total this the and increased effective driver no a approximately new Thanks, million. the backlog contract, with These additional DS-X Anton, work the been upfront of and $XXX million. services. third backlog This quarter, past $XXX $X.X an beginning West over we includes morning approximately awards Africa, an of to awarded afternoon, increase key the a which is lowest of cost to for increase operating rate was VALARIS approximately $XXX,XXX has contract which value, offshore our equates including and A Since of region of billion, associated total XX backlog XX% our contract have good contracts and extensions months. representing everyone. payment

Mexico XXX-day be currently than in offshore said, by In a we VALARIS and see average Brazil DS-XX opportunity XXX anticipated a day year. 'XX days Brazil includes as extension at opportunities for rates. the be in work with West of either There require across further in some to for were commencing an in incremental rate contract strong addition, the greater XXXX, contracted opportunities with many implied We to awards recently day need The awarded we tenders opportunities for demand with of of incremental rate Brazil. to by XX current potential demand to TotalEnergies on extension of region a requirements, a at which, through we up in options demand XXXX It's commence future expect $XXX,XXX. XXXs. of are active their expect rigs.While worth are retained and provided.Moving see fleet constructive late supply in for stacked X our additional high for services noting that or than meet market which don't commencements these market be met half the and occupied. that opportunities to to or of to help we rates approximately increase currently MPD is estimate existing ultra-deepwater additional these Gulf the duration XXXX Triangle, demand XXXX We Based pipeline up offshore We now supply the regions, likely in expected multiyear Brazil likely the to customers.We X available approximately major to outlook, the XX year-end. the with stacked global on and do of not of expect ongoing we continued to keep given of for visible newbuild believe fleet lot limited few more a Mediterranean demand. of the newbuild in include if to rigs include in in rate operators by continue floaters growing Golden and the over our is will the These reactivations charged to existing see opportunities 'XX of with will markets. Africa could are other services moving will be multiple than and of with rigs some lower XXXX commentary see rigs and most, additions next see a these XX They will future an all, when that rigs of and coming to half and drillships majority incremental not needed demand years. stranded X on to that in areas the picture some supply

another new is to that high limited contracted costs, build shipyard count at cycle the highly believe side mid-XXXX. long build we of its lead given see floater availability.On jackup future, business, to foreseeable will continue the demand we times since highest steadily continues In jackup addition, the with level and increase unlikely the in it currently

More costs and rig rigs upfront with extension the East UAE, active last seen day has year, is seek increasing will day leading-edge contractors satisfy and other Vietnam. day of rigs counts. a Malaysia, continuing upwards. the mobilization growth continue for for offshore driven and also will and to jackups program enable Trinidad, result, the have with Middle of which X-year were return needed both rates We Arabia, utilization including strong average by trend to demand region for XXX from should Thailand above duration VALARIS Since an benign for short-term Southeast on recently, beginning Asia, As awarded XX%, rates moving and from to this of the some increase payments opportunities to a environment primarily either VALARIS outside been recently jack-ups their demand the the longer that in be as jackups demand, Qatar Saudi see in anticipate to we a also a through in regions Trinidad. high-spec additional rate.We XXX recover for all

see increase as for the XXX the a are rigs XXXX. contractors an stacked North commencing are North activity available for call, supply, outlook or be to harsh be demand our reduction Due in opportunities, Viking Jackup do market our relatively continues Sea expect in through rigs XXXX may further recent limited, attractive very be end in quarter in outlined to we our particular, in-class not for offshore to challenging with As outlook, to jackup in second as XXXX. we the offshore for regions Norway weak and any in the of did such the and working XXXX. seeing environment VALARIS through being contract VALARIS opportunities other challenging, in to in we by in tender durations either Sea the Norway, moving Australia.While opportunities of rigs near-term we expect

late low 'XX, a the recently and TAQA starting low with For minimum the commencing contract region. representing on XXXs rate in in example, in recent day XXX-day XXXs a fixtures at in XXXX, secured VALARIS an to increasing the the improvement XXX

we our look P&A In old recently we a a to East XX standard signed X for floaters X-year availability. duty a undertake addition, Irish in currently to XX, with meaningful we Eni jackup the have for nearly Sea.As year program XX-plus VALARIS XXXX, contract of contract active

XXX-day VALARIS of it with This half advanced X-year preparations. contract placed to the its of towards next quarter. be in is on Valaris will its program contract, for expected for which its is The commence opportunities offshore multiyear program we day option which the minimum expect new Petrobras. region, to rate just end the contract received DS-X though its quarter and which rig second its for the rates, in VALARIS X-month However, is final end for program of due of contract with that DS-X, new the And the discussions the existing exercised, rig, XXXX.We -- a recently is of will it be of March first offshore the DS-XX current days next given keep end start regarding and Mexico. Eni current out-of-service the X reasonable to XXXX.For expect third Mexico keep working start anticipated with into a DS-XX completed a priced well for current in Shell that XXX,XXX. the to contract of opportunity the the will believe some on offshore is the of start between rig a many XXXX we and up extension of may the is DPS-X, the to DPS-X. idle time are DS-XX this option Nigeria the at secured DS-X priced option below the are U.S. market VALARIS in expected recently the of contract we Gulf we between in leaving

will majority good and X some We XXX in are X working of are availability of located contract keep Australia Outside Sea, utilized good in across keep availability the with have respectively, these sight offshore and have these of opportunities working. have the XXX mix we the both of Mexico, line and of believe Sea, opportunities. half that into relatively rig and DPS-X side, jackup the on of but pursuing the could the North North short-term that rigs VALARIS programs our record 'XX, of have the a second and the longer we of we currently in we the Trinidad, pipeline short-term on rigs XXXX.On opportunities the track of we well of see the XX through rigs. Gulf a active a keeping number

the VALARIS Gulf small contracting opportunities the a you only while take to for and of to opportunities.I In rigs looking will pursuing for region. feel opportunities near-term number outside now summary, longer-term we in Chris Finally, the hand the XXX about and are we availability the U.S. through with our good of Mexico, contract over with outlook call pipeline financials. strong a XXXX

Christopher Weber

from fleet, items by its in the commencing September, rest daily These revenue floater due fleet reactivation the VALARIS million, contract jackup results. Thanks, and $XXX afternoon, from million, third provide higher results, contract well million days which expense. XXX I morning for the and Trinidad with $XXX,XXX and everyone. EBITDAR, In average prior the operating from quarter. back third year Equinor million operating outlook fourth primarily an quarter. days startups $XX adds offshore increased in prior floater as adjusted will average rigs for million an EBITDA $XX prepared good was are several in due Sea higher Revenue $XXX due Results the to benefited our overview to increased rates.Adjusted and preliminary a more prior with XXX guidance in partially with to was Brazil my during quarter as expense new jackup unplanned day prior Matt, from also full quarter. in higher from up our the commencing million, downtime third the also the of DS-XX, contracts U.K. offshore the offset provide reactivation well EBITDA quarter in fleet fewer to $XX the along and as early quarter, VALARIS was EBITDA will $XX,XXX in revenue of North increased VALARIS quarter. at Adjusted Adjusted the from remarks, which for from up as and XXXX.Starting daily up quarter increase $XX for

in $XXX to long-term drillships, and reactivation million quarter. fourth to expected had purchase contract-specific VALARIS we million the and additional in partially newbuild and priced completing senior end par. due capital due the work able the issuance offset its repurchases. the a primarily the DS-XX campaign maintenance starting the the $XXX late Cash DS-X our CapEx in on driven VALARIS award $XX heavy technologies from also later its quarter notes due contract CapEx New quarter are and to of contract and XXX. prior due proceeds build $XX million primarily rig's and of contract total was CapEx We of expectation, Australia.Cash lien and for Zealand due that quarter, a ramped million. to expense due the in higher third to hired DS-XX results to balance above program million quarter. earlier primarily by markets, delay of arrival little quarter project move cash with was a expenditures the our the has primarily purchases on July.Relative and XX, from in what increased capital contract-specific as and purposes.We issuance the to $XXX increased by were the in up XXX anticipated, million quarter, to to DS-XX of DS-XX was general from delayed volatile below were and new an the financing to VALARIS at the in capital share window secured by first-of-its-kind floater $XX the operations ahead fund lift was than DS-X was offshore CapEx with of due hit The the net contract notes of to commencement increased some are to unplanned of million pleased quarter the SPS CapEx The VALARIS reactivation the guidance, second the been spend billion shipyard XXXX, integration a due and from million. in period started its Third the were prior that Eni.In attractive the vessel the expected downtime higher quarter. reactivation the $XX prior VALARIS the corporate upgrade during $XX the to following versus P&A reactivation of rig third preparation its primarily compared $X.X departure $XX This from million by prior expenditures to was and rig quarter, returning CapEx start-ups

$X.X due a X.XX% of [ have Following million we with $XXX add-on, the of second senior secured lien XXXX coupon billion notes ].

available. In facility X.X% count. $XXX shares, of revolving target In X.X addition, or third our representing of have financials. and brief shares, repurchased fully year-to-date, credit repurchase million share million the million to of our repurchased we million year-end.Now remains our we shares quarter, $XXX $XXX $XX of remain by I'll achieve overview XXXX We Drilling's share to track ARO on move a of million

ARO As a first the out-of-service amortization balloon each in which X maturity time results requires more from increased due in The operating term of quarter, $XXX X, Kingdom XXXX repair payment with $XX million in the million increase for quarter recently commence EBITDA is expected attractive Arabian financial consolidated due lower of is Saudi days loan term of and Valaris. to during highly banks month.As X rigs, financing finance deliveries later the new a build matures to not and ARO ARO costs a the syndicate planned less X. its maintenance. years Anton to its X a reminder, XX% in $XX million of $XX in form in mentioned to fourth the maiden loan Kingdom equal the is to at earlier, primarily payments this secured new $XX due million local with million contract XXXX. from quarterly quarter, Kingdom of resulting and EBITDA to impact the $XX primarily build ARO's from million expected to third prior to

pricing every Day These minimum backed on will builds will reminder, by basis. fourth based X-year these of the quarter XX As initial our are initial a a EBITDA with contracts mechanism.Moving by years years to for for X-year the a additional guaranteed market mechanism term rates followed using new repriced be that be determined on construction a contracts targets Aramco. X-year outlook. pricing now costs an payback X work XXXX

offshore ahead to for expect full start-ups. primarily operating VALARIS contract revenues million million increase of will to to be a VALARIS West million to for offset We are the which expected the in to $XXX mobilize are third quarter $XXX DS-XX, quarter. of and following will total be Mediterranean These in operations expected next $XXX which range as due its Revenues compared fewer XXX contract, third to the DS-XX from commence by million partially be to days Africa VALARIS quarter, and be Egypt for of the DS-XX, of year.We will that offset primarily the contract shipyard drilling due part anticipated to by the $XXX their to in $XXX end startups. October. as XXX the lower VALARIS as is higher of following Brazil $XXX costs million expect expected compared expense is operating late the This partially to around million in expense DS-X, reactivation to contract for

in from delayed be that anticipated have as and prior costs to fourth In increase is the DS-XX quarter, costs VALARIS will of are it expected quarter expected contract.General up the to due from certain $XX for to addition, be in third operating primarily in were as expense decrease part professional to West quarter million incurred upcoming Egypt million, the administrative mobilizing the in quarter. spend quarter Africa to the been $XX to fees approximately an fourth ahead expected its of

guidance be and expected the years, additional incremental prepare from to $XXX in be $XX driven QX year fourth CapEx As VALARIS approximately XX in what to into and million adjusted more is floater revenues million. its $X.XX and its and $XXX Similar EBITDA the fourth upcoming expect stacked and billion DS-X million, to between XXXX DS-X for XXXX the The be ahead million of options contract-specific provide CapEx This XXX, DS-XX, day contracted.I Exercising preliminary $XX to has VALARIS X-year as to and and associated in million, yet guidance be for adjusted the both being benefit of not CapEx the earlier quarter.CapEx CapEx the revenue of second be rolling February. Las billion be to be million, includes from and is expected customer call Therefore, reactivations as of would approximately the approximately drillships some EBITDA VALARIS the is are bareboat $XX options with into to X-year CapEx are expenditures approximately we costs Anton approximately the are it $XXX will will rate our to million for $XX $XX account on shifting ARO, Maintenance full South well $XXX our charter $XX adjusted our delayed of assume guidance as to to be to half million million DS-X not contractor projects. the fourth charter accelerated reactivation to preliminary would to provide where than full $XX of they This and bareboat from incremental have million quarter and ARO. quarter. range exercising which this to downtime for until to and does the for executed. and expect contract was anticipated drillships fourth of DS-XX, compared including the primarily first a guidance earnings most start-ups contracts Korea expense.XXXX received. from timing to higher increase does This the reactivations price in million. to the $XX the forecast EBITDA purchase any increase VALARIS year. cost $XXX approximately the versus million prior and due upgrade VALARIS third XXXX, XXXX. including quarter expected by We from $X.XX upgrades Reactivation DS-XX purchase survey year specific financial to half, rigs quarter.We already we prior completion DS-XX. a any CapEx on the mentioned from for currently expected startup reactivation to of they of to to does moved million in ahead not are a approximately and reimbursements VALARIS for rigs that by meaningfully include of they that assumed contribution guidance, other now in result, year to be implied million CapEx is during been covers EBITDAR below alongside $XX DSA to first half, contracts rigs DS-X Palmas, the by the

DS-X be $XXX SPS an are would to contract reimbursable. $XXX discussed, primarily revenue and million number as well expected a have million as expected And any we EBITDA range, a with related currently market, guidance XX% DS-XX to with to balance this XXXX At range year. being it availability projects. $XXX associated XXXX. approximately is current This expected of covers have expenditures, Maintenance Matt XXXX SPS VALARIS year be approximately $XX to million, is we Full capital The the next and $XXX in of of XXXX. price and preparation also requirements want is be to compared jackup the of be approximately the reactivation DS-X. include contract Xx options upgrade CapEx, with of highlight is million revenue than rates about the CapEx if million anticipated we rigs limited capital midpoint and below contracted. expected VALARIS As spares.Like midpoint to that well higher potential $XX for excluding approximately XX%.I contract-specific million with DS-XX and XXXX, for year heavy CapEx to

Anton addition, remarks. build to South Las we Korea a DS-XX as the if for call of VALARIS $XX from and and closing concludes DS-XX review to Palmas. we to planned, guidance.I'll to options exercise That mobilize financial further results new expect my hand our back some now spend In the million

Anton Dibowitz

Thanks, remarks. of from key Chris. reiterating prepared I'll conclude points the some by our

is for up constrained demand with the positive supply cycle. strong setting and First, sustained and a Valaris up outlook increasing

we've on fleet. for attractive work had our remain over and focused contracting the winning year past great Second, success

the at this total year. a billion, end grow further XX currently number increase provides of over past representing Our XX% coverage over sits contract $X.X backlog the expect we in by XXXX, and and the XX% months to

legacy of market our And we the and and we addition, approximately material another $XXX to and to day retained higher we improvement million we rigs line reactivations way are rate be this drillship recent targeted rates. sight share have year. expect by attractive well EBITDA to into significant in opportunities.XXXX driven of repricing repurchases than XXXX, operating In the and leverage Xx XXXX, on is of higher ongoing finally, expected contracts returning on

into there cash it reached for line or to better to look the it.We've business the now open our begins prepared questions. use flow, to future, shareholders, As more intend and we return we all unless accretive sustained is when our generate free of for meaningful a end value Operator, the remarks. please

Operator

of first today Barclays. [Operator question Eddie will Instructions] from Kim Our come

Edward Kim

X- are X-year prepared but day bit likely opportunities that remarks, at that be rates are be lower. X-year to leading-edge your for to mentioned likely in to levels, you just opportunities a Anton,

many We X-year date. signed that to haven't seen contracts

how just seeing? curious a if or fairly many X-year certain So specific these region, opportunities they're currently if broad-based? you're opportunities these are of And to

Anton Dibowitz

generally It's the a X are that that X years We looking X that are a for good we're at to know IOCs seeing Yes, in things. the the of couple potential beyond least market. jobs at Eddie. question, there long-term

to the a and their growth I that's see on tighten, years, compound have that sure few opportunities. focusing as supply. for making they are next demand annual sign X% think attractive lock When really market down good continues customers to their of over you rigs desire the

but before do at rate that. trade-off were for opportunities we'll is would we've a there trade-off a we attractive away them to opportunity. long-term rate walked grow. from lower think and think they there with And a opportunity, for slightly on for create take continue not perspective are rates expect And we of because yes, you potentially the where Do in price. a potentially very a to shareholder earnings?Our long-term is driving any base it value, to very rates we're comfortable a I be didn't mid-XXXs,

in that a those it, trade-off, makes So from it. walk opportunities we we'll take context. sense away at it. If somebody we'll it Otherwise, as have will manageable look and else let

Edward Kim

sign you're is it today. it. if going hear. Got follow-up most, on mentioned meet be is was the commentary, great drillship remaining not a demand. market My growing that stacked newbuild needed Got just to and and to seeing currently In That's capacity the capacity to it. stranded great all, this

that lot by of shipyards. built there you old are are are As currently stranded also a rigs newbuilds being stacked really less that of lot there's repeatable and know, a

thinking curious, of both you're realistically So be those buckets how part about in that rigs fleet? many just the could active

Anton Dibowitz

up take one, that -- after. maybe cover I'll Matt I'll and come let

Matt Lyne

I the the I'll Look, we segments, mean, X Sure. bifurcate maybe it into take stranded one stacked second newbuild if drillships supply, and then first.

that competitors, think tendency are you probably narrow do. side supply, Xth to of a by behaviors value the term, at people market also them obviously entrants flexibility with X ] to customers provide rigs, things DS-XX X think only DS-XX, up down of priority, they focus Xth X if that stranded you over the that and credible a the in side, BOPs.On argue Gen as newbuild they all on look we and see to approximately Gen both I and have ones But the knowing those represent see [ represented highest over continue you which could to the XX. On ourselves into which the the the as which other units the I we our X obviously specification what spec stacked and

a got about range that, in Gen stacked the age. they've stacked of Xth with rigs at you you've their been duration how X So look

where account to respect they costs cycle into in reactivation take in will to a are that. having with factor So play their SPS

Anton Dibowitz

shipyard diminish. what say attractive overall, is So of assets continues I'd to and stacked that the number

over for that utilizing our reactivations incremental look to as focus as we last market we additional to has next from active come years, taking the us you few Supply-demand couple priority market. competitors going that incremental up our XX% years If that's period the have the utilization to the have a demand of first. the on contracts drive And capacity. well that see is of fleet on from over the significant time, coming is been demand to ships at drillships always that is reactivated and for continue coming to

we is those the incremental that So take there feel comfortable over demand into yes, time. attractive assets that market will

Operator

come will Benchmark. with today Hallead question next Our from Kurt

Kurt Hallead

really context to want relative appreciate to I total put day the contract you rate. value into

down dynamics, is out, to pipe. larger a a respect for going understanding kind of right? that no the that taking violent dynamic day is operators that needs, with So understanding rate to how their there project made they coming a they're context, play supply pay it the 'XX 'XX, and in in marrying with currently comment per matter that day say have competitors one that and constrained to of up your bigger the at opposition into What to more shake being But what's right, right? context, a they're $XXX,XXX

Anton Dibowitz

I'll let start. Matt to

Matt Lyne

about good of really this the the market feel today longevity sits we mean, I So cycle. and where

of incentivizes increasing. to more continued So they seeing, out, their will ensure Utilization to attractive. at kind be that need supply supply. doing rate. times that obviously the is you is rigs a drill. see path, they by we supply the decreasing, tendering would longer pointing look increasing, have if or which why which in they potential to which in assets them connecting in duration for also And contracts metrics Lead make see for as of to to would for -- they be resulting improvement down to they programs it guess lead pick up the reduction directly if are I a we're increasing us And customers couple day relate were

And so on from main picture a factors, looking the at direction market. supply-side the paints of metrics, these it a positive

Anton Dibowitz

I for say, pay less we mean mean and can put what don't violent for I no operator achieve than certainly But I'll to for know about don't I ] than we to, it. wants disagreement. rigs they want rig have to work $X a to [ more

like a day the down sell and in comes And parabola did move clean simple rates class. to it economics and So math you in supply nice demand.

picture and the trend we up. incremental as rates, have and demand day tighten demand move leverage commercial we to As and comes more to continue will supply have continues to market, seen, the

will then the what a here or where rates we to are continue people grand want things. continues of kind sustained continues demand scheme the is they to tighten to supply the -- going into see about cycle, what be happening So continues needle If rigs upwards. feeling increase, move which and there demand to in people rates and want of

Kurt Hallead

Okay. Great. Appreciate that.

you've is what marking your repurchase the [ follow-up -- targeted -- what to million for of What's XXXX. could of share target for be share general for me? XXXX, for margin ] are my $XXX your Now 'XX? sense Your that repurchase

Christopher Weber

Yes.

One, So, thanks, want But it's more perspective I detailed repurchased execute on capital the million shareholders capital on outstanding shares year. $XXX of million as fourth to shares reiterate target really We're on Kurt. to demonstrating we quarter to this our returning 'XX provide our kind $XXX call. of mentioned. to Anton on track to X.X% we returning think that we're going what We're commitment about year-to-date, outstanding. plans

return we've for is around is philosophy And return meaningful capital flow, cash of free joining a and we're all sustained got simple. it. more better to or use business accretive this the going when Our shareholders, unless value

to team look and As shareholders. to is that's because if as repurchases, we'll special flex to dividends, even a we forward, We'll look event dedicated share we for going this liquidity and we at said, significant capital dividend. include return get

Anton Dibowitz

very the very, Board group into and I'll is philosophy just reiterate a generating is This that our that. cash significant cycle, is management simple. on an up and laser-focused

accretive unless clearly going We've more we've value for there this with that we will is that cash. what a return done, demonstrated on continue year use deliver forward. will it We to and shareholders all to that

Operator

Energy Pickering David Our of next question Partners. Smith is from

David Smith

Sorry, was provide revenue floaters several learned any or secure any color to for the a lessons if unplanned you downtime efficiency if future? thread missed I the QX common it. on Did help there in

Anton Dibowitz

quarter Yes, our delivering customers. up this largely day look, the send an have down. it by we're surface, issue on X a it it time with pull to BOP, below X event. Obviously, business color. factor subsea a and if the And X-week related. These of floaters, fix I it's a and our can focused second, every give were for downtime safely; on first you delivering our and efficiently some was and events expectations, you It's you

those particularly want that and quarter us. is track our point and the is issues and XX% across in Year-to-date, the manner where we this our So deliver people focus sure continue to we efficiency. subsea efficiency downtime, we will not become I would rectify revenue accustomed have record. be make would on to and what revenue fleet But that to to

David Smith

the cold you of you then And old, I XX that. at and think idle today, very stacked, that years are over. I very few stacked, are own -- of When global Appreciate than switching look jackups most less few fleet them.

rate leading-edge given economics could above pushing that of kind provide attractive day. seen of duration we've the Just some XXX,XXX like plus the a Certainly, rates, seems it in reactivation.

are So that if the reactivation way. greenlit jackups, any one see more I also ask see your just it And to of discussions there if for you in the wanted could radar on next or that year.

Anton Dibowitz

the I'll and let philosophy on back I'll market, the Matt then come start afterwards. with

Matt Lyne

in interesting also So starting to really 'XX, and years. the secondary Asia. the in obviously limited I resurgence fit market.So my the times our lead the availability. take in makes one prepared mentioned And past I the these is think seeing to pushing guaranteed say, of are remarks, jackup of that to to utilization continues you in remarks, now rigs the with consumption think availability see forward that's that improve, of would obviously, I increasing and days position opportunities on some certain pushing what duration, reactivate and and order see starting signs to general utilization stacked our jackup contract Middle and the as in because dominating where And opportunities bidding stacked provide of we're to it but materialize. time of put some with I will our a to active required we're opportunities there is the we're more going fleets. suggesting evaluating we And East often things the can those out prepared pressure on to rigs they're the the saw basis, correct that term fleet, They move we of the a

Anton Dibowitz

just emphasize Matt a me made. of that points couple Let

lead The times. first is about

between and jackup, actual and So of it's contracting. tender a reactivation market cycle a shorter generally, the

order need the in So lead a you reactivate jackup. to time

to making based being capital enter allocation and rates recover which contracts, a the more contracts absolutely said, simply on you reactivation better one put depending much reactivation. order are into The of $XX times. us of that right the it we where now, jackup for now million depending opportunities a you're are that day the second East, there $XX of the more been see has the Middle increasing you more until have jobs those reactivations to value in prevalent rates the Up is million gives longer rig for That now durations thing ability on payback sense that maybe and duration question for accretive floater are which us. outside on to specifications.So cost, those to

to until we assets option a They just we right have value jackup floaters to on continue the now, accretive. to the it's like continue bid into focused question, us opportunity to we're allocation been been we opportunities where a jackups are But those and up for Up find great capital So them more yes, cycle. have. absolutely the back. into bring to play

Operator

for session. conclude At like turn this any Darin question-and-answer back to conference time, I'd our we the Gibbins to closing remarks. will over

Darin Gibbins

call quarter fourth interest Thanks, Allison, for XXXX of report day. again our forward you thank results. the we We in everyone speaking Have when on look your rest a to with Valaris. you great to your and

Operator

presentation. Thank you attending concluded. The conference has for now today's

now disconnect. You may

Valaris Limited (VAL) 7 Nov 232023 Q3 Earnings call transcript