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Constructive outlook for offshore drilling industry

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Valaris Limited, the Bermudian-based offshore drilling services company, has announced new contracts and contract extensions with associated contract backlog of $466 million.

Contract backlog excludes lump-sum payments such as mobilisation fees and capital reimbursements.

Among the deals is a 540-day contract with Equinor offshore Brazil for drill ship Valaris DS-17.

The rig will be reactivated for this contract, which is expected to commence in mid-2023.

The total contract value is approximately $327 million, including an upfront payment totalling approximately $86 million for mobilisation costs, a contribution towards reactivation costs and capital upgrades.

The remaining contract value relates to the operating day rate and additional services, including managed pressure drilling, remote operating vehicle, casing running, slop treatment and cuttings handling.

The Equinor contract is among nine new agreements or extensions of existing contracts, including a four-year contract with Brunei Shell Petroleum Sdn Bhd offshore Brunei for heavy duty modern jack-up Valaris 115.

The Brunei contract is expected to commence in April 2023 and has a total value of approximately $159 million.

The contracted work covers a wide geographic area, including offshore Brazil, Brunei, Australia, UK North Sea and US Gulf of Mexico.

The company said Valaris 36 was sold to another drilling contractor with restricted use provisions for $9 million.

President and chief executive officer Anton Dibowitz said: “We continue to see a constructive outlook for the offshore drilling industry as evidenced by these recent contract awards for both floaters and jack-ups across several geographies.

“We are particularly pleased to have been awarded another contract for one of our preservation stacked drill ships, Valaris DS-17, and look forward to partnering with Equinor on their flagship Bacalhau project in Brazil.

“We expect Brazil to be a significant growth market for high-specification floaters over the next several years and we are well positioned to benefit by now adding a third rig to this strategic basin.”

Valaris Limited is a Bermuda exempted company.

Triton CFO to retire

Bermudian-based Triton International Limited, the world’s largest lessor of intermodal freight containers, has announced that John Burns, senior vice-president and chief financial officer, intends to retire at the end of the year after more than 25 years with the company.

Mr Burns will remain in his role until a successor is in place and after his retirement will serve in an advisory role to ensure a smooth transition.

The company has begun a search for a successor, which will include both internal and external candidates. Triton has engaged Korn Ferry to assist in its CFO search process.

Brian Sondey, chairman and CEO, said: “On behalf of Triton’s board and the entire Triton team, I would like to thank John for his leadership, dedication and significant contributions over his career with the company.

“John has been an exceptional CFO for the past 13 years and has helped guide Triton through a period of strong growth and superior shareholder returns while building a talented and experienced finance team.

“We appreciate that John will remain in his position as we transition to a new CFO and that he has offered to continue as an adviser after our new CFO is in place.”

Mr Burns said: “It has been an honour and privilege to be a part of Triton’s long history of success.

“This is a great company with a world-class team and I am deeply grateful to the many colleagues who have helped make my career so memorable and fulfilling.

“I’m very proud of what we have accomplished together and I’m excited for the bright future that lies ahead for Triton.”

With a container fleet of more than seven million 20ft-equivalent units, Triton’s global operations include acquisition, leasing, re-leasing and subsequent sale of multiple types of intermodal containers and chassis.

Borr selling three rigs

Borr Drilling Limited, the oilfield services company based in Bermuda, has signed a binding letter of intent with an undisclosed third party for the sale of three high-specification units under construction with Keppel FELS shipyard in Singapore — the Tivar, Huldra and Heidrun.

The sale transaction is subject to customary closing conditions and procedures and is expected to conclude before the end of July.

The company said the transaction rigs are expected to be employed by the prospective owner in a captive market and represent limited competition to Borr Drilling's fleet.

The total consideration for the transaction is $320 million, which will be used to pay the delivery instalments of the three rigs and eliminates the associated activation costs that would have applied in the future.

Borr said this transaction forms an integral part of the refinancing and optimisation of the capital structure of the company which it is working to complete as it significantly reduces its capital commitments.

Upon conclusion of the sale of the transaction rigs, the company's fleet will be composed of 23 delivered rigs — of which 20 are currently contracted — and two rigs under construction with Keppel FELS.

A company spokesman said: “We confirm our ambition of having all 23 delivered rigs contracted by the end of 2022, benefiting from the fast-improving jack-up market.”

Valaris DS-17: 540-day contract with Equinor offshore Brazil for the drill ship
Valaris president and chief executive officer Anton Dibowitz (File photograph)
John Burns: to retire at the end of the year
Brian Sondey, chairman and CEO of Triton (File photograph)

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Published July 11, 2022 at 7:52 am (Updated July 11, 2022 at 7:52 am)

Constructive outlook for offshore drilling industry

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