VAL - Earnings call transcript Q3 2024

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Operator

Good day, and welcome to the Valaris Third Quarter 2024 Results Conference Call. [Operator Instructions] Please note; this event is being recorded. I would now like to turn the conference over to Nick Georgas, Vice President Treasurer and Investor Relations. Please go ahead.

Nick Georgas

Welcome, everyone, to the Valaris third quarter 2024 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 refer that future cause other could events factors SEC differ our release results Many results. statements to our and factors press website actual our on and impact forward-looking materially that to from could expectations. Please define filings risk and list statements. Also, duty that to please the no forward-looking note undertakes company update

will GAAP to we financial non-GAAP website will presentation release fleet. see recent our Please provides Report, call, on week, and after available additional the be Fleet call. measures. this During this which rig most An details refer on updated and press issued Earlier required our the our on investor reconciliations. Status our we contracts website information for across

Anton the turn over call I'll Now, President to and CEO. Dibowitz,

Anton Dibowitz

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

key I the to will floater call, Chris markets results with contracting the provide today's on and and outlook. recent market. comments. To points. more begin, will our I closing and some highlight over of then an provide discuss overview discuss awards, contract some color the our drilling on Matt, to and few During update After to call additional quarter in jackup guidance a performance offshore detail with before finish that, will financial our during I highlight hand want begin the I our an

during and $XXX of quarter, helped generate which operating period. million excellent third performance flow us cash delivered financial results we the in First, free to the

up long-term the is believe in value well our this positioned maintained we strength we and drive conviction Valaris duration creation. to And Second, cycle. of

of customer demand have future and XXXX seen pipeline we beyond While remains robust. opportunities the deferred, in some

cash contracts securing long-term growth. our to fleet support prudently on earnings focused are We our flow managing and and attractive

future $XXX we the half more a unless Third, is relative improved to million committed the third to as value-accretive free first all And cash free our during year. the for of quarter. shareholders remain repurchased cash or use expected, of it. shares returning flow better We flow profile there to

Turning consecutive Achieving efficiency levels And of XX% revenue in is organization's at efficiency. These performance for performance was another a its capital across operating a customers area those provide their year. high delivered contract such of day from all achieve of who efficiency late reactivation demonstrate DS-X to third our a safe, crews XXX% this of fleet-wide since efforts like outstanding XX%. demonstrates has of ability support We to revenue and helping this the operating on that to projects, us following rig exceptional objective, to great organization revenue sustained like our VALARIS been long-standing with and particularly that, vital congratulate the deliver and complex operational relationships. I'd performance second operations the I'm operations. the for reliable onshore and and offshore, an the performance quarter. achieving in fantastic quarter X. for quarter quarter began emphasis pleased least to company's the during amazing men entire customer the key results accomplishment them third in year. I'd this women for is This thank efficient of focus delivering this building

operations. development restricted lifts. the of analysis that for to tool pressure By second areas, by personnel the and our the row exposure in front, enhancing significantly for with This our innovative hazardous testing the Leadership helping its are to a and Offshore Center for we safe, be for visual On ensure no-go zone this Safety Award to like reduces recognized offshore access activities year zones, handling, safety tool. identifies proud zones planning authorized the restricted Safety only complex pipe safety high-risk of tool

the XXX reached accomplishment year milestones free, we all safety rigs Thunder quarter. VALARIS by celebrate achieved DS-X, these Stavanger DS-X, DS-XX, and In excellent X recordable several recordable Horse each an years had X teams. addition, during of incident without and a

to EBITDA to And million primarily This our quarter. team Chris performance shares strong third from later. Moving was also $XXX during little the second of during cash the financial million quarter, million achieving Adjusted to in our provide up we free results operating performance generation. to and better financial will performance. further the $XXX operating the than contributed $XXX quarter. This a solid the strong guidance in of guidance, increased quarter. our flow third repurchased due details

Turning drilling market. offshore now broader to the

demand lower hydrocarbons for energy particularly an In secure offshore terms is play production expected attractive energy to of economics, role the production. the needs. Deepwater the global in market to important customers deepwater, deepwater of carbon increase. is production, providing sources other relative affordable intensity world's increasingly emissions to program growing to And and continues fundamentals, of due meet fields, compelling to and to size

more and profitable. the relatively volatility crude X-year Brent offshore barrel, XX% The per spot have is third declined to stable. a While prices of of are have crude late, undeveloped around remained increased Brent $XX prices be longer shown reserves level expected at quarter than during dated forward Brent which price

production investment are in regulatory protracted environment these in As the amount a pricing commodity availability seen project pipeline. commodity drivers customers' continued strong of of of meaningful of and demand decline customer contracting projects. and the capital into long-cycle FPSOs, deepwater discipline. deferred we approvals supportive this a demand and delayed The That being of year-over-year primary equipment, pace offshore deferrals said, XXXX. The year, result, had remained particular in a a have provided drivers prices very for

delayed factors these While deepwater canceled, note demonstrating as of opposed production customers' production portfolios. component a headwinds created is to have that commitment it for next as year, our to being some projects are their key important being to

development, bolstered is as the offshore investment in by and market billion Nigeria. strength major deepwater a Suriname recent $XX Our Exxon's reported GranMorgu of developments, $XX.X conviction FIDs project offshore such billion including in the TotalEnergies

to and fleet next active on attractive operating term perspective, And contracts, also fleet secure in and securing temporary. for the our securing time, $XXX,XXX for it pipeline also offshore to a work of Brazil, have operating fact for as the have priority. is our management priority we day recent solid until rates several to addition, our work. contracts fleet remained solid third year-to-date, meaningful that rig rate of drillships. Average strength day is DPS-X secure to continued West high-specification warm assets. prudent they quarter. The of floater utilization, lower gap are decline and we a its progression day drillships is approximately marketed relative And the are see daily opportunities that, stack despite increase first best this that programs In strong between well for for can management on their floater processes If a in rates programs seen this in customers average softness have modest same projects. From contract. a and willing we assets a At XXXX long-term a to will pay we cost high-spec Africa And costs demonstrates doing for longer currently Southeast DS-XX we a have we continued generation expected as seventh meaningful tender provide further seen to focused averaging particularly also rates, in beyond. We're our Asia. long-term for bridge see

key jackup the we Australia market Moving rates Marketed global water. all remained where firm. In rates jackup with to XX% in and utilization the average utilization we for stable. Trinidad, to rig day presence, operate where shallow counts, are global XXX,XXXs. contracted The the the are the and day currently fleet markets in mid as North Sea, in for and markets relatively day remains niche healthy day strong rates and high such mid-XXX,XXXs a have have rates is

the more and half suspension the we had are scrapped. rigs our alongside we terminate VALARIS now preservation fleet. XX these contract warrant rigs stacked remaining and investment of XXX. We conference rigs is and re-contracted leased attractive UAE the to these earlier this back call jackups expected expect notices X necessary elsewhere to the jackup the competitive broadly into bring that intend until are suspended we in at XXX, see on Saudi Arabia to active that the of with stacked elected XXX opportunities to Together mentioned these rigs, year, contracts Aramco. to last in ARO, than Of ARO, less already rigs them been from Looking internationally. We were VALARIS sufficiently X be received that keep our which have market, making

active and conditions end existing discussions of ARO rigs. In XX X in We have XXXX. due the late profits and U.K., start with region, that remained at we contracted the new are or are Aramco the early all And Danish in rigs Sea, anticipated to in budget. just U.K., see in are market extending the to contracts Despite about including in currently some multiyear or balanced opportunities XXXX. continued in customer North XXXX the X sectors these leased Dutch energy complete long yesterday with to levy their active in region. to were the jackups rigs interest which U.K. XXXX changes confirmed expected in stacked the that We the

year. Sea demand up rigs well our contract We customer coverage availability our have next lines with for good North limited through XXXX and that see

the on and in Now, Matt detail I'll outlook. contract and over discuss more awards, some markets call to additional recent our provide contracting hand floater our highlight to jackup the color

Matt Lyne

XXX our associated of for million. contract X-year new $XXX and contract will wanted in offshore is X contracts contract jackups at in in Trinidad approximately expected and market, These primarily And building strong earnings day afternoon, on cash to further contracts we team Thanks, day flow with currently Valaris' Anton, projects our rate. second quarter a BP late at that rates contract our XXXX rates. and a focused long-term This beyond day that were extensions VALARIS we strengthens we fleet, of XXXs. solid commencing mid growth. Since in by attractive niche position backlog securing I to and secured good jackup a the a few pipeline for backlog stating XXXX this everyone. at including our call, and have awards solid support by work and with with earnings high morning where opportunities begin see attractive

option we or for Mexico our Australia. DS-X. secured In a discussions rigs. X-month floaters, priced of participating for recently either VALARIS XXX active the ongoing tenders in And extension our customer and in exercised a VALARIS a addition, are to offshore added XXX backlog several the offshore we for Amongst XXX-day

we tenders And earnings providing next forward discussions our can these in and now due between course. these expect and to conference concluded take time, look be that While call. will we updates

see in for work we opportunities XXXX in the primarily the market. remains Moving strong. The to on pipeline commencing

will seen Africa. floater to opportunities approximately recently programs that awarded number result, a some still we And for XX into we with as a other and opportunities offshore have quarters, we long-term expect We programs turn arise. few continue new tracking greatest opportunities contracts. Consistent previous the see of are

before currently expected XXXX. We to several XXXX. for start we dozen early the ongoing tracking a one with to end which Nigeria X requiring awards rigs by tenders at region may end see are in dates demand X IOCs a opportunities include We with roughly the year, of up lead of incremental the expected follow to opportunities, multiyear have the further long-term of that contract programs in that anticipate offshore could additional These in these XXXX. least

Ghana maintaining demand will Mozambique. In lead customer to for we success We into Petrobras a expect in long-term up X also exploration awarded by reports including in development anticipate couple programs awards later supported the keep the significant other decade. contract long-term Petrobras' for plan past Offshore new could process in This greater a has X-year further further to many and on months. Egypt, countries and X% and is see will several see of production. its longevity an programs gas X offshore oil long-term contracts an focus in rigs outlook rigs to coming Honcador Africa, Brazil, the commencing Namibia, for in long-term recently years Brazil. additional X XXXX demand see we and of increase program. Petrobras which that the confirmed in demonstrating occupied the tenders CapEx These positive over XXXX,

combination for focus of on add In areas addition, rounds, programs. reinforcing Petrobras its to market developing a to to through summary, its XXXX we announced X plans National largest recently further for expect continue new potential country's and demand Brazil's Brazil to pre-salt resources. In and environment with Agency bidding incremental be pre-salt benign the the floaters Petroleum exploring prolific IOC

Moving Mexico. to the of Gulf

met region. balanced, market largely existing this expect fairly in We to supply demand the by remain with

While we the be demand, of a positive. Mexico recent activity to has not driver Gulf of meaningful expect been do in incremental basin the contracting

rates major expected floater incremental number starting the the demand months XXXX fixtures, to of through awarded compared programs years supported period last rig of drillship same X FID, of the the require first all for TotalEnergies to With multiyear markets, is and Suriname by in day floaters from XXXX. which we see X year. Outside recent higher

seen an with also in with looking incremental one expected awarded have to at operators region, We in that rigs year-end. program could Southeast long-term several before uptick opportunities be demand Asia, the in require the

in year, for the far remains tracking the balanced. we IOCs or gas opportunities have a or contracted Asia, the in to than of work healthy. regions, decrease seen around August, sign than start a firm the this abandonment health Saudi during excellent East, plug currently X to now Nigeria. DS-XX rigs is for with the our going XXXX of for North campaigns which customer had our early jackup that DS-XX continued in with time. finished its and years And availability, good by for early XXXX the outlook average, expected continuous performance starting are of market after market. I'm XX is as independent The driven Arabia. In all and Southeast its a its VALARIS our August. rig And until for current rigs on conditions Egypt and are global to Mexico this decline the this years for and XXXX. These well expected region. in February about current The review expected operational of more India so primarily in Chevron As well energy opportunities are DS-XX work contracts future early floaters. programs duration the Middle contract its offshore we noted, positive these their that count rigs with to complete Gulf market China oil new Anton projects environment very work expected prospects The are the to late in as mostly or In continue more benign offset with few rig X.X feel the DS-XX XXXX. The Sea, suited major in operators we into and contracted with XXXX that commence is DS-XX in to expected offshore adding by remained program are late XXXX, and BP in both

could the We currently that in and are Eni commence both pursuing idle. XXXX. Also, contract its for XXXX Mexico, in July opportunities of and Gulf completed with rigs in is DPS-X

the are other and regions. We in active the of rig regarding discussions Mexico for opportunities in Gulf

the will are solid next are cash We our work suit on so, are of in discussions program quarter. building in its contract rig that is flow. rig if focused for generates half a MS-X. current we to we And active second the a do the from MSX But the like work XXXX commencing that active in EBITDA the for finish second year consider would rig meaningful to Australia, fleet. In and moored due removing unable we

start like Our for Australia, the positioned the rig customer could third depending option. fourth today quarter country other a the in to we DPS-X, in opportunities into floater in that, of on expected or see After whether dynamically next are exercises work its year DPS-X mid-XXXX.

the Indonesia. in and In XXX outside environment fleet, XXX only Middle have the in jack-ups jackup XXXX, regions VALARIS Australia terms operating VALARIS East availability our with in of meaningful X we in benign

of for Middle due we either East, regarding in ongoing Aramco complete through in exercise expected with We existing into of at or work or are X discussions visibility the terms that programs rigs new end extensions lease XXXX. are options. In rigs the have these for good additional their to XXXX the

active across Lastly, strong less XXXX fleet. we our of our coverage X for Sea with contract availability have North in year jackups X-rig than

the to to cash hand Aside fully expected building XXXX. In capitalizing will robust transition Sea that or support flow growth. I fleet in from we out-of-service the of over periods, our opportunities to and you expect sold be through take planned on we as active between now contract backlog our some continue and rigs Chris gaps financials. focus the earnings pipeline will contracts out call on summary, North complete to short-term

Christopher Weber

the $XXX good second was quarter of and which And for the DS-X million, primarily quarter. Starting day primarily with full the contract new operations its contracts Matt, the offset lower $XXX Thanks, higher prepared average quarter an EBITDA rate due DS-XX, in everyone. from started our XXX results. up and costs in quarter. Adjusted through utilization a for the a of to and daily third morning DS-XX, late the prior fleet, leg for and for outlook following start-up In repair afternoon, third third my during our late VALARIS quarter. These in was from contract and $XXX the overview prior revenue by out and which Revenue adjusted quarter third remarks, begin million up higher increased of walk to million, items completed the and due to floater $XXX time with DPS-X in the I'll related repairs. results then in million were fourth second EBITDA partially quarter, the quarter quarter. for service quarter

Our our our than guidance, to EBITDA performance. third quarter better came primarily operating strong in due

revolving available, of from to the liquidity slightly total CapEx quarter. than credit facility and cash as lower $XX guidance of cash ended fully came quarter spend $XXX fourth is timing some million in And equivalents We million. to $XXX at providing the with quarter our shifted the quarter Third our which due million, $XXX remains million. third

from an a working price have million have share of authorization. we flow the at shares by prior million total, of benefited $XXX $XXX repurchased since in quarter, the we remaining free quarter In we $XXX $XX operations, under capital quarter. And shares average started third flow. We in million repurchased This last repurchase build million of unwind still we from program offset expenditures, year. our generated of partial $XXX cash was capacity our million partially per of the share. of which of capital providing the During $XXX cash

our fourth Moving outlook. now to quarter

decrease Revenues We to the expected short with the BP at due and largely million associated to utilization million DS-XX mobilization third of be lower quarter. range quarter. legacy a XXX lower the recognized amortized $XXX down with completing fleet, its in the to $XXX in reverting its to DS-XX $XXX for expect with contract revenue million, and that in total due was the revenues floater expected move DPS-X to expense to Sea day are from and which TotalEnergies lower idle its the VALARIS to primarily rate Australia in fourth quarter, revenue largely North for are contract is and from as third

the quarter. quarter mode. We compared We the drilling of compared $XXX being to of is the the Adjusted with to expense quarter XXX, full no we anticipate as for are expected Petrobras quarter. warm of stack DS-XX our at contract $XXX $XX in Brazil third upgrade expect the million of approximately during remainder down expect of XXX well be million that to lower costs VALARIS projects costs expected EBITDA expected nor quarter long-term in and associated CapEx third quarter, guidance work $XXX $XXX $XX the its CapEx in lower I next million lower range. due is and an approximately DPS-X of its at mobilization shifting third $XXX the the be in our to G&A as expense shipyard expense start as quarter expected fourth their to EBITDA third higher and midpoint the fourth million we to prior the the to fourth end to guidance quarter of is quarter. due to rigs year DS-X as to related XXXX to the year. Total spend Angola, million from is DS-X third is and to prior the the in to $XXX This This DS-XX prior million This the for I decrease with $XXX spend provides million expense than for transition contract mentioned to CapEx longer later for its $XXX respectively, fourth amortized project offshore contracts lower million. to previously million, DPS-X upgrade in $XXX primarily to million the from million as as just mentioned, the the capitalized

rigs the remarks. for we plan to XXXX, call visibility to year. I'll call better provide outlook guidance quarter XXXX completing ahead to contracts have expect earnings full next our Looking the for some on to we now on year are closing when back fourth hand that Anton

Anton Dibowitz

Thanks, covered Chris. some key want points the to of today. I we reiterate

the cash thanks entire the First, to free results, team. We delivered Valaris financial outstanding strong operating including of solid execution with quarter and flow performance generation. another good

in XXXX Second, while future pipeline some opportunities we of deferred; customer robust. remains demand beyond have and the seen

contracts We long-term prudently fleet focused earnings cash our our on to and securing managing growth. flow attractive are support and

to long-term of during as is positioned remarks. Operator, to We've more expected, cash the relative there our structural believe flow for free deliver to open our year. We prepared repurchased is from Third, quarter. summary, the for our strength line questions. please reached and of cycle the Valaris employees, flow of benefit to investors of we half to third support. value up returning that free and profile for now shares thank shareholders. the a remain customers end use well the committed and We the duration their all or the million it. In value-accretive better $XXX first future unless cash we shareholders And improved our

Operator

question Our Eddie from Barclays. [Operator Kim Instructions] comes from first

Edward Kim

into But the year, some to some I to demand, day light type year the your range of trajectory to some of Just next pressure rate ask next wanted in again expectations rates deferred next mid-XXXs the over months. in just for kind progression on day XXXs you're for lower of 'XX? just curious maybe leading-edge high in XX expect up about before now. we ramping about Yes, day whitespace rates. drift how thinking the time the We've for should mean, of XX and for the been

Anton Dibowitz

that's question. I good think a

Look, then start think maybe Matt can me that add to Let through rates it's color of see I day the wants. have to off gratifying some and he increase if quarter-over-quarter year. kind continued

can talking see forward we the contracted, the and in the with rates the next some in assets think is year, ranges rates we you're for go seen about, we've high we've customers some are I mid as market. see variety day example, that in as whitespace. What into day XXXs, we XXXs especially to as to and willing to for pay in right recently 'XX high-specification solid

I to work quality dependent shorter-term But bit work. day that's bridge of But -- think we chase of going is as contracted, the be may for after the term we on programs markets asset little being it's people or the to contracted rates some a into. think to bridge solid. the kind variety, being So especially longer see outlook

Edward Kim

a FPSOs of expected, color FPSOs, than deferred. And shipyards bottlenecks well, around customer longer it's comment? extend for that that lift? I if concern these production availability these we're then guess seeing you that last the and on just possible additional the delays. just maybe Any the whitespace provide in shallow follow-up that next this expected both Or and commentary color to was some could deepwater so be any is beyond as the as why highlighted year more some would can separately, great. is bottlenecks is water you the on when deepwater reasons delayed my seeing you're demand And the work? on on Is equipment of of

Matt Lyne

even it's yard the are to there drilled taking equipment are being time being I'd FPSOs these of are And deepwater managing developments. a when developed. equipment customers FPSOs been in a of for lot to business some more ready and their extended longer times, with out and that. But production the and prudently more think production wells phenomenon, of more equipments produce be example, The have become to and yards the delays. if and about when realistic our chain, of long-term time are to the come large are prepared it's stop for I the as they -- line really supply the delivery sustained, aligning say with busy. kind really, are things

issue our So kind FPSO of we busy. a to ongoing saw the stabilized build because will transitory taking chain as we or an more with they're are expecting it that an supply a and issue, than Ultimately, because longer as take yards longer delivery oilfield that see business them gets year X in of equipment.

Operator

The question Partners. comes Pickering from David Smith Energy from next

David Smith

how costs reduce you that think secures that Regarding rig cost rigs on have to about work? ability once magnitude the any color could idle of the should of been warm and some stacked, we catch-up share your that period, kind the and timing

Anton Dibowitz

I I Look, it absolutely. -- think this Sure, can I way. think about

if you manning we and some reduce to what rig costs. going reducing the you to a So warm would down minimum manning, class rig? so are we be possible, be can so quayside And rig. bring projects. stack to do the So There'd one maintenance run would when fuel required

possible, that where Now that's but is not possible. always

then So I rig a terms and back ramp-up. these contract think similar to can a to in kind What costs rig maybe the bringing to of days of you a next very deepwater of work down don't think of of about few and you XX means that range $XX,XXX programs, over week. go work, period for the getting time,

dependent spend stack that reasonable million how largely the the about a your be to back, cost up warm warm put think certainly $X maintenance on and long opportunity have minimize of would period. then for warm on the stacked. that's your rig of to number those period. also But time that's way that would some just be that you crews the rigs any enough So up on works the about I based as up the $XX of And the for you available. million terms ramping ramp contracting catching during stack to in kind cycle What one

Matt Lyne

$XX,XXX ship, to for takes Yes. to would stack day ramp And add, Anton about that. mode. X we're for months in a down about OpEx looking at said, it warm I a Like

example, for on rate So be expected hitting of of kind day is level at that rate again year. the to DS-XX, level. be run $XX,XXX expect DPS-X run we year and end exiting the by to that a about the the

David Smith

your Appreciate a that criteria not touched you does? preservation process a it to think by you for might relevant and class please follow-up about how evaluating or rig that if DPS-X. stack with And commentary I on the talk could But vary color. is it asset for whether

Anton Dibowitz

broadly, Okay. when equipment Very the if -- and cost to Yes, it stacking, then mid good period out longer think about of there about cold we in a you -- more stacking preservation a preserve you and to preservation stack. versus single-digit think millions protracted cold out is when stack bring question. of

of So XXXX. I to pipeline robust something as we opportunity, you you a that's see we to head do want as do pipeline not if opportunities, into strong. necessarily which about especially that see talked a future

opportunities you around have kind preservation of need not the to line stacking the to on sight mark. X-year breakeven of So an asset,

management intermittent do cost cost, keep full at these we what stack work is long-term we opportunities that full short-term think rig capital don't we will can market, in these chasing rigs can in the with cash management So to warm to want sense see and in a we which you be it have. What rigs, accretive given the between. see prudent operating makes until see to operating

where term. by the which versus DPS-X have rig the contracts, a that operates slightly ships, market nature, are the in shorter term longer generally contracts generally On

program EBITDA together So positive that. for is line an can we that our cash-generating XXXX have it of to sight view and put in on

it keep short-term kind absolutely work. the costs over stacked chasing possible, But and don't is But of nature, by that operating opportunities candidate be seek talking will I going the we believe warm of about was for few months. between. that to that on stacking. a to that's If sight with preservation We just line next before, might high in work depend

Operator

comes question from Fredrik Stene Securities. next The from Clarksons

Fredrik Stene

between merger weeks. around some some there's peers of your -- press to wanted last potential I over certain So the been couple a of

Valaris' if able So to it, were on, the currently. world I M&A wondering was in call comment place just you

If mixed consolidation and are opportunities, you that anything you way still to can anything, be to want you if being the a how happy of you forward? player, see see part point

Anton Dibowitz

that believe for market room the consolidation there this in space in offshore still additional we drilling Look, is in general.

the water. And on we've fleet. gen, the M&A grade business that chase are scale be has have fortunate assets capacity of a XX a to additional XX our that we're are in to of fleet largest need the seventh gain we in contractors preferred ships fleet position. or Some in competitive of the sort thus high looking high-spec seen customers. very been scaled We to drilling this far order with already by their that

look to That fleet shareholders, you either M&A said, M&A. gain be market. compelled for we good that are in to position, feel certainly very we fleet to our being pursue we're not it's in or need If a high-grade this player value our our to about need we'll accretive the we engage at scale position. in we So for a it. to, absolutely will where opportunities creative and But

Fredrik Stene

Since emerged guess That's of part me second I helpful. to the of very now. you some brings years XX back And from it. Chapter that kind

still us that fact how in the XX. line give will are the some that accelerate example. Are line, the side assets updated You currently XX But warm you interested is it, for less there facing have the of more updated and stacking the any the the you those the utilization you've now potential few quite thinking floaters guess the capable a already an warm you that on of stacking call the DS-XX, sideline? and given time that I DS-XX XX. XX and is, what on DS-XX, activation the assets. of of and But as reactivated that most dip matter the or to on on side also scrapping jack-ups already are retiring market for discussed the for some high-quality And are some able assets And the assets line? already I'm if also view

Anton Dibowitz

Sure.

have the seventh 'XX-'XX your spec with You're missed highest absolutely we one I of the didn't growth on XX, bought And XX on built XX our see X assets, on and the into the question organic previous I things was right. XX, fleet and -- opportunities XX X on. at sitting time prices. And that very sidelines. the of pipeline and We gen BOP the assets those line, we given attractive sitting the answering

be there those We will be for continue to purchases that rigs place the market. those in our accretive believe will shareholders a for that

right. absolutely You're

as bring back as there some next and have XX, and bring first, active don't whitespace right to for market. can opportunities And those to think back when priority headwinds highly some market our to answer XX fleet back year. keeping will market. to question the come coming far the They We are timing XX I our is, to utilized. I

I answer think question? your did that's -- I the

Fredrik Stene

will warm pinpoint slightly prioritizing Yes. previously to fair is But fleet? I that guess, guess, this. it's because I now to difficult you're was than exactly -- assume come later I they your it anticipated

Anton Dibowitz

Absolutely, absolutely.

put think didn't Our it's management is cash in first rigs And XX, an around preservation there I management stack, a time Warm those and bring XX would highly ago. answer fair the is XX relatively of we months a versus priority I of the is interim. and which your will to question. to back X it is keeping delayed sorry, be what frame, say a year. of X time part the or fleet for from reactivation can stacking utilized. accelerated I'm on the fleet active on opportunity kind to expected But slightly days we kind other prudent line have XX. But

And market, out may some the spec in think come assets protracted potentially won't general for I'm keep to the a capable for make stacked stack see to of preservation lower be or market opportunity. an it line. because time sense I speaking less overall assets this sixth-generation

we coming the We overall depending the year see, from how additional next on an market or some so may perspective. think may of out market I capacity develops. see So

Fredrik Stene

a that Thank and such helpful, you for a Anton. have That's very day. good Super. thorough at answer. I'll leave it

Anton Dibowitz

Absolutely.

Operator

Hallead Benchmark. The next Kurt from comes from question

Kurt Hallead

always I color the insights. and appreciate the

going of as a we're kind right, I'm have bit that curious, you through. indicated, a little of So here lull Anton,

-- on about these one idle an to with assets, about strategy is you've commentary right? XXXX. think the I would think a from So you some respect very the earlier or how also as competitors it of There pipeline robust priority your call was indicated post

you So a you in late other assets a Are little are little you 'XX. these and people getting a of a get rate the lower bit bit sit take maybe into back 'XX better of let interested willing tight for can kind into in to and more market? rate early

curious kind So of you guys how on are strategizing.

Anton Dibowitz

No.

we a I right. From feel into the 'XX pipeline fundamentals think and market market overall perspective, opportunities, about are the of beyond. especially good comments

reasons business opportunities, right a where fleet be opportunity. in the minimize scale your to the stack headwinds, have maintenance warm spend operating the them, you given for period as some management take this of manage and fleet people is to able the One need lower prudent interim there costs, manage during is costs, the off portfolio. And rigs, wait

If to work. opportunities bridge the flow the add what we can end over looking to is it working, do support for make the day, bridge operating find That's at right we're of you the for earnings cash those, our few growth we one programs, long-term and spending for to cost chasing going going our years. sense costs, meaningful well, programs low-value, your up will and be rigs next assets you're put full operating at business view shareholders. do. What to on to at doesn't not we periods Our are full the is are the we opportunities plus the that not accretive what when our

with for aren't rigs do -- the we that fleet. that. long-term those contract. if of stack a And a bridge we sidelines because will number a the opportunities rigs there, to manage So we're we have we're willing at accordingly. to put And warm then have on And on the right costs can scaled opportunity long-term we

Kurt Hallead

that. Okay, I appreciate

given tank. has that you been high trading cut utilization is you in has going maybe customer one over and the base rates how past these But Again, be would of like for day it think what in are half So comfort to year, for are a stock follow-up the about then. your economics seems programs. or degree into all conviction that indications again, their the

shed is that the light guys maybe it some stock guys that of right? know what I'm on know that looks as and to trading market or the know kind like do So cycle you the teach again, can doesn't curious can prospects we your is don't Because, us you the like that over. customers that here, it

Anton Dibowitz

fickle. need demand in be that Offshore reserves and our increase. look part at for is on increasing And replace of global for for agree. economics and based in think Markets programs, find to that a demand secure affordable compelling to are these we new depletion. what to the of set I customers deepwater But the need I energy. order and is production to continues solid hydrocarbons particular,

to manage about So into feel good cycle. of and the job we strength up duration is And our and the really through cycle. this

with solid for that the fundamentals the future. macro to that speculate We and we see good will tend why about back And we agree as a So forth, want don't I on stock moves but driven market you. to by is business. to I feel our manage

Operator

from Josh Energy The next Partners. Daniel comes question from Jayne

Joshua Jayne

Anton, point follow-up on bit. little just that to a

region talked deepwater. I going level. I vary dig offshore, being profitable a about price noted still not bit would think projects that a there in at in then maybe which your are $XX it's a price of not oil and the move and operator. on contemplated this correct; that of was to helpful. deepwater additional to And would color just projects offshore But I insights for That barrel opening you by there. remarks, specifically of all XX% forward? are just wanted maybe some any be know And

Anton Dibowitz

number is mean offshore. all for that I No, absolutely.

the are if chasing price at $XX. customers a amount are about of significant where the are. you that there significant $XX, production our range. look have most where our $XX, the that band clear slide think -- $XX $XX at of the a that in I I'd level most lot go large these production developments in the of each where well range, costs is we say deck, barrel And the a $XX, in investor

these So compelling even is where is programs that are beyond level. current justifies. long-term price are compelling. economics plenty at clear and space They The of Brent there for spot that

Joshua Jayne

at And be you to talked bit. rigs drillers wanted follow-up in equipment -- may not on you sort who quarter, to and of of be in to XXXX. Could have as it the some rig, a might call capital that a cycle I certain of taking confidence upgrades some warm 'XX rigs And your to be rigs the helpful. speak been looking then sort other stacking do given softness progressive that rig So about to this maybe while beyond, pushed of utilization address just some may the these all? potentially of addition stacking working potentially advantage On had a course noted in of would just pockets over to you right things little was some be projects to that.

Anton Dibowitz

I mean, cost ramp I you as minimize think, spend. absolutely. look your cash Yes, your you and minimize down, to

work. opportunity maybe order XX-day to take get stuff. that the And in would about to a you to have rig period some do ramp-up You back

operate that don't ready in stop to hard line later down piping put to have mode. you rig the example, for system, the for you're MPD on, to So an MPD so

engines the pursuing of so and lower can run the upgrade are rig. EHS-E less the on emissions we that We

to on the as take you serve up you rig will and that get prudent working while opportunity ramping to a you're do So back things work. you

that a X focus mind. EHS-E we something on. upgrades think and be is need I come fair that would MPD and that assumption to

Operator

the like remarks. concludes Nick turn would closing to for Georgas question-and-answer any over I to session. back This our conference

Nick Georgas

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

Operator

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

You may now disconnect.

Valaris Limited (VAL) 31 Oct 242024 Q3 Earnings call transcript