VAL - Earnings call transcript Q4 2024

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Operator

Good day, and welcome to the Valaris Fourth Quarter 2024 Results Conference Call. [Operator Instructions]

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

Valaris XXXX the Call. to everyone, Fourth Conference Quarter Welcome, Matt Anton President Vice Senior With members CEO, are management CEO, our Vice and Dibowitz, executive of and Weber, me today Chris and Senior team. other CFO, President President Lyne; and

our refer our press release risk Please and website no is available that Also, SEC from press that factors other undertakes to risks uncertainties. list company are results. could duty valaris.com. subject and and and website on please expectations about update our to the could statements. which filings make note results impact future expectations. Many materially define we to our on forward-looking factors comments today that release, events to cause statements are issued forward-looking our at We Any forward-looking differ actual statements and

to week, will fleet, website on non-GAAP During which this Earlier including information refer measures. call, on and management additional recent most contract provides release actions. for GAAP this press details see fleet rig our Status our Fleet Please we our and Report issued reconciliations. the required awards we financial and

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

Anton Dibowitz

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

drive results on before detail Chris contracting to finish that, Matt and provide provide outlook. then call will over the financial value today's will call, to color comments. some our jack-up the the performance creation during closing I discuss in deliver I hand overview During I for discuss shareholders. an our drilling and long-term our guidance will an with fleet outline strategy and and management the of market quarter. our Flowtron offshore markets some on update our contracting additional to more After

want to highlight points. To begin, a key few I

XXXX solid First, another we that and financial our execute with quarter benefited results. we finished to operationally, continue

and are long-term focused for our strong assets, on beyond fleet. the for for active contracts Second, is high-specification attractive securing outlook XXXX contracting and we

to patient for find be rigs. to willing are our jobs the we Third, right

we lower hesitate so. the idle remove it from will and rigs rigs not will do costs available, sense when is We to until to economic fleet actively and makes right job our

with efficiency improvement and XX% last of XX%. fourth year. revenue consecutive the and This the of over the quarter for efficiency delivered an delivered fourth least XXXX have full year's at operations. Starting XX% marks year was We fleet-wide during revenue results we

with We XXXX in both also achieving Safety. from in safety and recognized had Brazil performance involved. the XXXX for safety We and all receiving safety IADC key rigs, with chapter DS-X, Award improvements IADC achievement recently great metrics DS-XX, completing Center each Offshore DS-X awards outstanding the were its incidents, with X Safety no to and the attributable year by recordable a the

celebrated incident, long-standing In focus and outstanding on with recently is which recordable addition to fantastic building operating rigs Brazil, working customer Bruni, performance, is years VALARIS accomplishment. a delivering Shell safety results relationships. essential These another without which our XXX, to offshore X demonstrate our and

world for and of thank the dedication, work focus customers. Valaris As that their always, focused on on operating can things we I team efficiently the continued every for safely we hard and member the and control our around are

below resulting guidance expense the to legal range solid midpoint EBITDA higher matter. to guidance drilling quarter. quarter, $XXX from of for our and due our of down the slightly fourth contract our million EBITDA in end million the upper to $XXX performance. was financial operating a the a third accrual Moving were noncash in Adjusted from towards due range performance slightly Revenues was

the free fourth we $XXX the of half share the quarter, year. shareholders repurchases returned million in to to $XX we in this flow And during third all in the free During generated through flow second addition cash cash quarter. million

little later. a on details more provide will Chris financial XXXX guidance our and results

offshore Turning market. to the now drilling broader

providing E&P In for a demand affordable an the increasingly gas the production, CapEx particularly role towards companies their hydrocarbons terms increase, deepwater, we and on a are oil energy in offshore to continues to of them projects of number recently share of Many energy years, plans greater expect have energy new important to play traditional of reliable focused fundamentals, coming the announced growing secure, allocating world's versus production needs. budgets and global largest for sources. and meet

fields, lower well XXXX projects in highest attractive project project to XXXX at emissions for sanctioning, more expected intensity for carbon the approvals project make We anticipated to compelling as see than offshore and of approvals XXXX. deepwater and a relative decade other and This be are especially more bodes programs robust of pipeline the than production. size of these economics, and a XXXX their which deepwater in level doubled sources

began although in increase in of up spur longevity in term, the end In slowed contracting the through and is the the continues pace increase, floater this rig offshore This in which growth rig demand in XXXX. decline project to resulted expected that trend the of the in of of to sanctioning XXXX. has and growth global in utilization CapEx deepwater in nearer expected support pace cycle is the modest decade continue XXXX, XXXX, slowed and to a

quarter costs. X an rigs we to for active DPS-X, justify the VALARIS asset retire retire third economic benefit and our including prudently response to not worked with when one XXXX. announced approach, our will semisubmersibles We our for continue in managing from of or divest rigs last market we fleet plans Consistent which recently its does this fleet conditions in the expected

we rig near-term we And would sufficient we to preservation do support future into as the retire contract decided limited not warm the that cost We DPS-X stacking of reactivation. the see are rig with the keeping that stacked. would work not since a justify have opportunities visibility have duration

to rig DPS-X same stacked the also years. and decided have have we DPS-X been sister For reason, retire several for which

drilling costs, our reduce flow cash and global from focus be further on expect and repurpose assets. high-specification the for our scrapped. actions or retired uses supply We benefit these our fleet alternative will These rigs

floaters total X than driller. the past any more significantly other years, XX retiring high-graded our Over we offshore fleet have of a

Our go-forward fleet drillships these floater to high utilization seventh-generation have for contracting seventh-generation in jobs technically for than and longer-term preference success. the rest us assets, of fleet for includes meaningfully XX modern, higher clear the XX of global $XXX,XXXs. with day environment drillships shown that a capable for have remained Customers rates floaters benign mid- the position

assets strong fleet. high-specification are beyond with We contracting in dual focused on technical future remains offer work. preventers or and those years with and derricks for where The customers expect high-capacity longer-term outlook programs. contracts assets. capacity, long-term these have for as X XXXX our active developments hook are such over high environment, block multi-well of such of we the to thrusters as continue specifications load customers their combination for for will we favor amplified efficiencies that visibility several opportunities Particularly attractive these basins And a into constructive securing with

tracking its new currently a at than least this are at tenders we opportunities floater of X launches expect when to and more recontracting duration aimed with near-term number Petrobras rollovers. expected year XX nearly grow We XX will

their awarded general, scheduled we to approximately X of contracts long-term In ahead months be will start expect dates. XX

begin. around middle pick contract up So this for will we pace year anticipate of the that awards the flow programs expectations when given of will these

we we units. rigs harsh have operate day and to shallow water. contracts remained for Average require environment that and secure where key for North offshore high Australia, in the markets to continue spec firm Trinidad rates the working relatively Moving solid our Sea or

our in the Valaris example Stavanger is for contract multiyear coverage contract of region. million $XX North further the contract enhances our recent and in One added which Sea, backlog

declined for largest premium rates. its oil In addition, signed peak where the and Trinidad, is the XXX increasing we market its the more us in a gas gas X/X and which Caribbean a country producer offshore production, than for by XXXX. are Trinidad we focused contract on the is achieving day from in has strong

energy was sold high-grade to has growth VALARIS future look XX-year-old country an for we fleet. the The playing want of jackup economic took to our which another a X step that I role and to had also played in been years, our note integral part that we development. XX, forward the stacked its we recently sector in long-term

financial than our Our for the and jackups this contributor over more to remain contract we XX% backlog segment grown by performance, have overall an past important X years.

XXXX, rates. have in contract across segment in and to We expect see both our day year-over-year growth we average jackup good coverage days and operating

operational providing summary, shareholders In offshore important track our well gas Volaris are affordable drive long-term fleet positioned value by belief energy and creation and and need the oil high-specification our and of help that safety reliable production we secure, play and that steadfast and to for record. meet world will in excellent the role is to virtue in an our

Now to I'll over the hand call Matt.

Matt Lyne

commentary finish with I'm jack-up and afternoon, update and provide good and morning days have regions in and Anton, on floater the everyone. Thanks, available to for operate where major outlook XXXX. we going rigs our that on an

for this, wanted backlog contracts and locations, for contract we've and contract offshore and third a which to million call, and with day XXX,XXX. of These the busy respectively, backlog multiple XXX XXXX secured rig Stavanger the I new will extensions in including recent mid- at Trinidad North earnings for keep XXX included the Before awards Australia. the $XXX the quarter U.K., in I high awards. Since Australia multiyear start by to do highlighting contract jackups associated our and Trinidad, Sea, approximately additional across rates the into

Ivory number and starting which work we Mozambique. we more we dates Nigeria, continue with Egypt, are late greatest and the with the for to Africa prior long-term commencement Coast terms of than to offshore XX regions where including jack-up floater major programs XXXX see floater opportunities In opportunities XXXX, quarters, in offshore consistent of from operate, tracking

multiyear these IOCs X being see Nigeria its at XXXX There XXXX. a for has drillships award of we is and expect with recent with contract to deepwater count up for exploration X activity expected tendered, exploration to tenders projects present following X climate major later from IOCs. increase also or soon opportunities are this future to late by lead as to programs and improved rig an Valaris Egypt X drilled success production X is expected outlook early on the other investment to with The picked for activities and year. offshore by currently

including the Valaris out we longer-term promising and operations driver over that be As offshore activity plays, in around see we offshore a demand in developments of incremental Mozambique, years, a track anticipate years. the the successful Namibia. development record activity we next of to long will Africa, has floater frontier look growth continent few and expect also increased and few main

recent on Based long-term rigs many longevity occupied programs keep Brazil, call into has tender. for customer program will that their anticipate demand in commentary, remain issued and XXXX in of Offshore foreseeable across Brazil. expect to to these and XXXX. demonstrating and programs and awarded rig its recontract future, for existing Cepia count will further XXXX recently Petrobras' the to we the year we see its capacity Petrobras contracts rig tenders X XXXX, And stable complete this due

with largest floaters, expect IOC demand to do We for to Shell's potential continue FID project, be such this environment expected for market as reach Gato incremental Brazil to Mato which benign the programs later is year.p from

U.S. Moving Gulf. to the

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

public As in the predominantly opposed direct Gulf to compared to is negotiations tenders. regions, contracting other done U.S. as through

Golden on while the customer Triangle, less demand. satisfy will interest we continue see Indonesia outside world drillships are the to programs this for new visibility to So to of here, offshore demand levels there require high-specification there Outside drillships. high that Malaysia is and of customer

In in benign Saudi. environment rigs certain regions as XXXX increasingly competitive terms left the jackup of market, became

these Key such this. where these displaced regions. to continued units we've markets solid and North now work Trinidad have secured operate, the as secure rates of have insulated in day from most Sea contracts we in Although been Australia, And other regions.

rigs and market North or are mostly are as tracking plug abandonment gas XX we remain for health and The these as starting expected mid-XXXX. few still available with are energy that for market. our more of expected a campaigns to an work of are conditions floaters. and average, duration on rigs for this years update X.X region. going is which firm is new operators opportunities In independent programs IOCs to with continued outlook balanced, provide Sea, XXXX, than good now our before well suited the oil on a sign and well I'm projects in days that the in These our with the around opportunities start for

contracted and offshore which current DS-XX, We and have program with is time this drillships Egypt stacked, VALARIS complete its X DS-XX, warm uncontracted high-specification, into expected year, to believe is March, third development DS-XX, long-term assets in and that respectively. are DS-XX for are which currently are well programs. which Each the these seventh-generation quarter U.S. the positioned we Gulf, of Brazil in drillships

of are X We for several and these advanced in are with in XXXX commencing we for rigs, and X units. discussions discussing the XXXX customers opportunities other

given the warm drillships competitive in XX starting the And the the will current number and anticipate in of XXXX after any remain time idle likely stacked that said, year. commencing other through months, their That work to limited of nature programs DS-XX end X we programs. the the of have completing are expected next

focused for these are assets to the rigs. willing right high-spec patient are attractive find we We on to for and contracts programs securing long-term the be

current finish in XXXX and are country offshore our suit over muted a the to XX the would rig work like moored in the the commencing Moving its quarter, discussions second relatively to see MS-X X half in semisubmersibles in that demand next second continued of we months. for MS-X. Australia, due contract is we

could Our or in on the Australia, third the customer option. other quarter this into floater year, whether its fourth of DPS-X work exercises depending

opportunities DPS-X is for to in start XXXX. positioned a of to be that, today are And the see the expected After expected second in rig warm DPS-X like meantime, half we stacked. dynamically

have we good Anton As jack-ups mentioned, XXXX. in our coverage contract across

We availability in environments with during East benign in have outside the Middle in operating just the the meaningful VALARIS-XXX XXX Australia year, X Indonesia. and jackups

good new exercise additional for have work these We through options. or rigs the into expected either programs of visibility

X for are to that due with Middle terms advanced existing the this discussions extensions are in regarding complete year. their rigs In lease Aramco we East,

across and additional to the XXX. in the which related remain for limited of X active in these Lastly, Sea, our well North VALARIS-XXX, work the And in we fleet availability quarter have of rigs positioned most rigs region. is and XXX fourth

filling by see attractive can shorter-term and that meaningful a focused work continue programs. bridge contracting long-term a provide longer-term In securing our and available, short, gaps and to backlog active schedules environment fleet with on for are we positive building where these to jobs

Chris I take to to the you will now hand the through over call financials.

Christopher Weber

afternoon, begin first an Thanks, through I and will as you then Matt, of as outlook overview quarter full year In XXXX. XXXX of the and prepared results guidance the morning my well with and fourth good walk quarter remarks, everyone. for our for

from out million DS-XX in Adjusted requirements $XXX due for and to service was in lower were utilization the DS-XX prior Starting $XXX million, with complete decreased EBITDA from floater the to fleet of our VALARIS for time meet $XXX regulatory its adjusted Total prior results. quarter, primarily upgrade million project down quarter. the fourth start in in and fourth and revenues the quarter the EBITDA to $XXX of to contract. an to related prior million down Brazil for DS-X quarter,

VALARIS-XXX mobilizing DS-XX more quarter. due and well of fleet of quarter for off full a As repairs, by for time the third its operations leg idle DPS-X, third the offset quarter operations as in returning primarily completion for for XXX completing a for partially quarter, of to came of and following jackup the survey. items operating after full work which part to contract were the days These XXX after

remains was fourth million. as was $XXX total cash credit roughly million which associated Our together guidance which million the below of approximately fully Fourth cash $XX contract We by legal provides midpoint the negatively revolving $XXX of into us of ended and matter. our with primarily our midpoint equivalents liquidity $XXX with quarter range million, a guidance million below quarter available shifted of quarter CapEx impacted CapEx and of to XXXX. due with accrual facility range, was $XX drilling slightly EBITDA the expense which our noncash the was higher-than-expected

from of shares total, million $XXX $XX we $XXX shares quarter, free was of This average million following repurchased $XX at generated $XXX cash partially quarter of by XXXX expenditures, repurchased offset flow share the we in of During repurchases million of share. In cash capital million per operations. the price fourth in million providing We XXXX. an $XX during of flow.

our Moving quarter first now to outlook. XXXX

$XXX to in be total by as largely to days fourth expected DS-XX. for million operating fewer $XXX compared of quarter. higher the are are expect in We first flat $XXX to to more the for Revenues million days VALARIS offset for quarter million range revenues DS-X the operating slightly

accrual to expense project million quarter We the mentioned expense $XXX is quarter a on we during basis the higher upgrade lower anticipate last fourth contract to offset drilling capitalizing cost in its largely flat be Contract compared million drilling on as $XXX of $XXX to shipyard earlier sequential million fourth as quarter. is quarter. expected were I expenses DS-X slightly by to

is and contract $XX million, is with be which approximately the million include $XXX Our which revenue items, of approximately are flat includes $XX quarter fourth prior the is related of in reimbursable primarily $XXX expected the $XXX VALARIS-XXX of is quarter. the in surveys to million fourth to We long-term fourth upgrade $XXX This Total project offshore quarter. XX-year expense and both the anticipate this quarter. million expense to related their the for million its EBITDA to upgrade be CapEx drilling to to million with with start compared some the DS-X contract line CapEx associated in VALARIS-XXX G&A quarter in Golar, $XXX Adjusted expected the expected million. first and to XXX carryover to fourth from project later to spend quarter.

$X.XX $X.X drilling revenues for $X.X We of full total year to going billion of now currently $X.XX XXXX. billion I'm to contract billion financial billion. expense to provide forecast guidance and

Within items. contract $XXX expense of million is and drilling approximately ranges these revenue reimbursable expected

million. $XXX expected G&A to approximately expense is be

to as offset idle have rigs XXXX A and by to compared are XXXX, or as revenues for Sea $XXX year be discussed are primarily expected North rigs rates fleet, our Total primarily is expected lower operations floater rate expected and DS-X. increased driven to commenced floater new completing more of by is in and XXX VALARIS-XXX, due $XXX EBITDA time day year fleet. million adjusted higher several in after decline days to utilization operating DS-X, a million. average several to earlier. December a for this contracts utilization Matt day Lower partially our for last, together, full average Taken and to expected be to jackup higher the contract utilization for which

anticipate expense. that we year. Moving to idle will to be to during We drilling year-on-year no contract drilling have for expense $XX last lower expense million expected year. also have are these time as reactivation cost rigs decline as actively that planned compared we this year expenses lower the as Contract

CapEx. the with capital spend expected CapEx million VALARIS-XXX, to $XXX associated periodic maintenance to year Approximately is and are XXX. primarily upgrades leased to special Full million DS-X Turning of CapEx surveys certain expenditures from CapEx for XXXX million. work, for $XXX aero. $XXX range to upgrade and DS-XX, XX-year relates to remaining including rigs for and VALARIS-XXX The contract-specific potential for this

of to during by note offset and to that will includes also XXXX. contract-specific million expected payments meaning upfront impact we capital be approximately partially from be carryover would of $XXX expenditures upgrades the $XX million are these million that $XXX million XXXX. expect approximately cash $XX It XXXX I of net from in customers

XX% In we $XX our interest year. of we this to anticipate of cash be million, approximately taxes addition, and cash approximately EBITDA expect

now remarks. closing of to results I'll financial my call review guidance. some the Anton concludes for and hand This back

Anton Dibowitz

want reiterate some the I we covered we points open line Thanks, before the to key today questions. of for Chris.

quarter our XXXX and another First, to operationally, we benefited financial execute we solid results. finished continue that with

our Second, assets, for XXXX securing contracts on attractive active is and we outlook are focused long-term beyond fleet. contracting for strong high-specification for the and

jobs and fleet when right our patient We are and right job makes the sense so. find costs the from lowering until to for be idling rigs rigs, rigs is available removing willing economic actively to it to do our

virtue long-term that secure, and are offshore and operational affordable important and value creation help production meet our of role we our closing, for and high-specification drive positioned In shareholders record. by belief will an well VALARIS and our in to reliable that the energy excellent fleet providing steadfast that need gas and to oil world is safety track play in

our thank open investors and We remarks. reached employees, Operator, now the customers the their end our for We've line questions. please for prepared of support.

Operator

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

Eddie Kim

that of Just your Maybe question guidance. a versus booked would on today How this versus you to later contracting moment of the of EBITDA Just an XXXX just number? you of to hit year-end? at much expectation range $XXX sense guidance expectation new much say between year in the that full a taking you million. that secure more get work how awards of is midpoint guidance hand of year of have the that for to now and trying need

Christopher Weber

Yes, we're the Chris. XX% about at Eddie, we the for this revenue, contracted on When year. is look midpoint the

a of is that contracted. the but year, about the X% So XX% yes, majority in later remaining

Eddie Kim

Got -- And Okay. that it. midpoint that that of the was to tied range?

Christopher Weber

Midpoint, yes.

Eddie Kim

Okay. saw Understood. And of then a is follow-up of just Gen recent Seventh by the announcement your retirement on we cold-stacked my peers. one drillship

the DS-XX, have drillships in X cold-stacked XG XX and You XX.

on and based today you fact the to year-end. warm DS-XX you're seeing expect remain what market that through stacked Just the the in

that X what is one cold Does rigs likelihood this let's for say another being X of XXXX, expectation Or the your stacked reactivated say. versus say, year-end working would by X drillships maybe those put to push you ago? way, months out those is

Anton Dibowitz

focus Look, putting Anton. is on to this Eddie, our active is clearly, work. fleet our

on of all of pipeline Xth a those. based next But the have assets we of that rolling high opportunities rigs We see gen year. long-term see coming, spec good and for all number activity we these are

forward. be patient putting the this seventh-gen question number the a to is will XX the on When the near Demand absolutely There of highest the will them, going There place for drilling. back, huge ready a sideline is into for assets putting is to on sitting assets part a the XX in be capacity, those market. assets calendar. spec for going to the we off-shore term. XX ready high market going a put to BOPs, play continues to come those be work The a the increase and that of back are is not come market are thrust to those production back. but to are to the in but But in assets no we rush in lot those to

Operator

The question Securities. Fredrick from Clarkson next comes Stena with

Fredrik Stene

to of you question asked do kind the one as your pipeline has earlier I demand to and ask a like going I'd similar of this peers with week think I forward. it

much I seems consensus contracted be that think through think, it clearly left really that already. not equity be XXXX, work to there's to for acknowledge as a to kind that and of the markets, I degree, prices large

be a around there beyond. to industry, there lot slip of what's to to optimism been But things right seems right. for and is to quite of a right and and slip always the the in unfortunately, this slip to XXXX But tendency kind the happening

you confidence being giving time the materialize you're line? this the in are perceived you're discussions programs what that will having, So seeing that tendered or that for

Anton Dibowitz

at and customers our we Obviously, question. models at the what major they tell good and them are can back especially half do their everybody share looks spending go with We the look you year. saying with what really time deliver of way the looking the have at with macro our that same go books they And our programs they're last you CapEx plans the look how the in and that on I as them, really, them. increase, can I a of I customers them, visited are way look them, at. customers, of planning for It's talking are Absolutely. the one spend a those say publicly, as what they're who to those CEO they continuing will offices. and But visit programs for partners things I is is developing into is I for the are 'XX. I most I've in 'XX about

the on on are books very programs that move there and about the coming about to good development leaves they macro our rigs right in direct The based discussions discussions to that reasons we left things other Yes, efforts pipeline we're of 'XX which chain comfortable those, and planning delivered. with and the and on number and needs a 'XX. engaged that me demand that customers lot programs move about we're around. why status their of the in play. now, demand of They to posture commercial and coming our that long-term have right, need a confident having for But have to they with the feel supply really move of be

Fredrik Stene

good very call but I'm to I quickly not turning you can That's follow-up, And hear. guess to let's jackups. then a -- sure turn it even if

going forward? what the you development is advanced to jackups, had a call Aramco of planning You owned your special X jointly you extensions last But to partially I also position Obviously, which bit good year. do for that given there Aramco. a said in Arrow, by as we think, do discussions have is with any with intel it through position is insights Aramco, or

think rolling as we you recontract rig XXXX? again color super to with rigs think add off in through count even right that you they that will they Any would done do can general actually they're most the are of Do front Do the Or you suspensions? helpful. on walk now? be think

Anton Dibowitz

points. of couple A

expect conclude our rigs constructive being and feel to is First, advanced with additional good general, continue They continue anybody a I'm of short-term seen extensions but about in and we've discussions. those Saudi in needs are in the aware we rig you correct as any And are discussions rolling advanced on a we discussions we facilitate are need to well, to rigs of where relationship if those additional couple order roll the did really in get providing rolling, is Kingdom. not talk tell were we'll can those in in kind characterization What year last of I discussions, their we -- end rigs to about else's can't and that the fleet. the rigs continue at discussion about our discussion in short-term of Arrow order suspensions fulfill I beyond Saudi. able and to on in of us that, extensions I'd

Operator

next the Hallead from Kurt Benchmark. comes And with question

Kurt Hallead

Based so some have little it there like what today, what you've your and said is below. after some said on contract momentum look bit a on far activity building here peers does of

always that's to So good hear.

explicit pricing So some about question from sits particular. the peers I have then there's would been in I where your for ultra-deepwater guess rigs commentary pretty is

as that that, worthy. guys As and It rigs, price X gen be to you you can't stack is well get willing you like think patient said, as if rigs. sounds you are the

So ranges. just want to see if you confirm can the

somewhere somewhere high heard to in market? for ultra-deepwater seeing rigs the Is I Xs mid-Xs how you're think gen. that for mid- the between sixth we've and

Anton Dibowitz

mean I'll we XG. Look, the say, rigs XX I fleet contracted DS-X this. what, have I'll out have only That's our quarter. ship until is to fourth that X in and only that our of fortunate say

that that development So their long-term for for the really XG us, rigs market, prefer programs. it's talk the customers we to

think customers for but that's -- mid- you've if be high-spec high continued recently, the work. and haven't gets that to tried you've on the seen you're right. our fixtures operationally assets, where I XXXs the articulate in clearly because seen fixtures to a been to lot of delivering there that have will we've we And us for more focus market I what our is. absolutely that's -- strategy is

-- while work. And long-term it for put We we're have going high-spec minimize right. and to find have exactly costs that super not spec fleet fleet rigs think we're high I opportunities those the to you to right a going to that working, on they're

Kurt Hallead

to And sure so -- misinterpretation. no make there's just then Chris, Great. Okay.

well, the your revenue is assume misinterpreting be again, want You referenced have EBITDA as don't contracted. but that to anything. of I guide would to translates I that the basically to XX% midpoint line

Operator

with David Energy Pickering from Partners. comes question next Smith the And

David Smith

And availability on for outlook year. you this detailed discussion the your the thank for rig

for or be potential you the floaters, costs extended the SME it's getting how stopped can variance for downtime a and of much costs remind please some drillship. months. rig operating on warm if is if to given depending us idle maybe those pace down the think how rigs the expected go about Just location you about there's if the several when versus And to think on

Unknown Executive

the last this talked on We Yes. about quarter.

about we've for to because talking going down now ship manning. about much you're the XX not XX at down on equipment. running not the spending gotten those X. maintenance day about to and a the Obviously, minimum be were we to recall So getting a the like when right that's costs XX, as you're for But

want You burning get do fuel. side, not key you you're so to

take. pretty So day. for, X, of day had the we kind of XX a relative to these ship Previously to XXX average say, are a getting about those on to actions significant semi. reductions But OpEx are the on around down you for a closer the let's talked

levels. those -- take the -- those get actions but So costs that to we so those to are

David Smith

And from working the stacked, from warm transitioning going XXX XX roughly. it's it's to in about when when

Unknown Executive

side, then X-month a down. ramp If look X-month about back ramping up. a ramp the about on up And you back you're when

Operator

question JPMorgan. next from Jayaram comes The with Arun

Arun Jayaram

the confirm On discussions have mentioned that you're you start Can those X rigs in advanced floaters. opportunities the that that you on high-spec XXXX dates.

Unknown Executive

[indiscernible] of first half likely opportunities be those will for 'XX in The for the more

Arun Jayaram

it. Got

it. Got Okay.

Unknown Executive

let 'XX few think there's even is you've mean start-up I are and of heard I this there me Anton, very and calls, ours there. -- mean, a between. lot competitors' work, not far our in jump I

for Our securing long-term focus, attractive is get we work potentially assets. as follow-on to and that's that us years going said, these contract

that's first. way we So focus the

costs ramp-down that. rig mode. talking want doing a Chris to operating up the short-term when and ramping advanced to add on we and something secured, then say, warm -- once In to and there's we that ramping end can work that? on stack a the okay, we chasing that be leads down. assertions an talk option rig front short-term then work from the have of of some What into about work just was is So about don't you always ramp-up

a long-term know say, So that an on something there have basis. book to okay, into can how a to development will I think up for lead on you're start program. that program, that that when contracting it get if you go generally market commercial attractive kind and to that, And add then we think of in the we out that's you to opportunity is about

Arun Jayaram

funding Vale? to of able to light give announced some Drilling build new Kingdom be was you could wondering ton some I if sense. require gears. strategic expect to -- build? jackup Arrow us if shed from Great. build recently X some JV in the you on it self-fund shifting makes a a would Maybe KSA. the plans Or that new

Anton Dibowitz

in of building which intend built market backed build from XXXX, X-year Saudi X-year Arrow being those cash new is We at neither contract contract. over costs. X, They years expect Absolutely. Aramco any fund Those and by flow to payback IMI attractive those that be long-term at on this contracts us we're funding are as of plus first a EBITDA IMI by are program. build not an capital programs to we is contract part years new to order a is that available readily construction inject by backlog, rigs in nor XX do a based the Vision backed to for programs, funded that need of Arrow that the into operations in

in So the highly market. attractive contracts and financeable imminently

Unknown Executive

Yes.

at twos happened look Kingdom payment down kind Ones Arrow is payment financed. delivery the from So of was was then cash if and paid what Kingdom X the you Kingdom and on out and the of

So largely financed.

VALARIS as yes, highly So additional financeable from structure, said, and needs capital I mean, fund are Aramco do anticipate contract to the not contracts anything. or these Anton

Operator

Partners. question next the David with comes Smith And Pickering Energy from

David Smith

issue of greenfield Just I'm to pushed tieback these getting multi-well where projects and stay bigger be back programs, happen getting programs, programs projects. smaller exploration? the overlapped is Is the on larger also? the development a to ongoing discussions there exploration timing this been but tend and the what especially of for operator just schedules right, emphasis picture, seen of those are flow back theme pushed Or you've together. more to a lot on curious there's the

Anton Dibowitz

that I It's of those less. are on is to of And what's capacity the in say the big first. the have good the focused or I customers, Do left? say of discipline, capital build, do to year? programs you they current gap have They're program. don't into fit good right? our It's it more from to a that it? the a back those a the focus do have -- smaller wouldn't their question. portion lot does of they budget kind being do How pushed tiebacks Do the is any kind

second part a order of after kind order capital second they on it's think a the to decision their they've of I the made allocation So large-scale projects that have.

Operator

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

Nick Georgas

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

Operator

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

You may now disconnect.

Valaris Limited (VAL) 20 Feb 252024 Q4 Earnings call transcript