Valaris Ltd. VAL has announced several contract awards and extensions, including in Suriname, Australia and the North Sea. These awards add about $220 million to its contract backlog. The company reported that PETRONAS Suriname Exploration & Production awarded an exploration contract for the VALARIS DS-18 drillship. The contract covers two exploration wells in Suriname, following an earlier Letter of Award. The work associated with this award is expected to start in the fourth quarter of this year and last for up to seven months.
The jack-up rig VALARIS 107 has secured a contract for work offshore Australia. The contract has an estimated term of 300 days and adds approximately $50 million to VAL’s contract backlog. The value excludes mobilization and demobilization fees. Valaris stated that the work under the contract is expected to start after the jack-up rig completes its existing contractual obligations. The agreement includes priced options that could extend the rig’s work if exercised.
Valaris has bagged a plug and abandonment contract in the Southern North Sea. The multi-well contract involves sealing wells that are no longer producing. The company highlighted that this is a fleet award and can be undertaken by any available rig in its North Sea fleet that is suitable for the assignment. The campaign is expected to last 341 days. It has a commencement window through December 2030, meaning operations can begin within the agreed window up to that date. The contract is expected to add $41.5 million to the backlog, with an annual cost escalation provision and an option for an additional well.
Among the extensions, INEOS has extended its agreement for the VALARIS 122 rig for a project in the North Sea. The extension is expected to begin in February 2027 in continuation of its current program. The agreement includes a day rate of $115,000 for the work and is expected to run for approximately 126 days. The contract also includes options to extend the rig’s work with INEOS for a combined 699 days.
The offshore driller had secured another contract extension in the U.K. North Sea with Seatrium for the VALARIS 248 rig, which started in October 2026. Per the agreement, the VALARIS 248 rig offers accommodation support services for an offshore wind project. The assignment began in direct continuation of the rig’s prior assignment. The extension adds approximately $2.5 million to Valaris' contracted revenue backlog.
In addition, a previous contract between VAL and Eni has been amended. The change relates to Eni’s campaign in the East Irish Sea. Under the revised agreement, about eight and a half months of the program originally allocated to the VALARIS 72 rig will now be reassigned to VALARIS 121. The change will add approximately $17 million to Valaris’ contract backlog.
The new contracts and extensions are expected to keep several rigs in Valaris’ fleet employed, supporting fleet utilization. Growth in the company’s contract backlog adds future revenue visibility and supports the company’s earnings and cash flows.
VAL’s Zacks Rank & Key Picks
Valaris currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the energy sector are PBF Energy PBF, Valero Energy VLO and Galp Energia SGPS SA GLPEY. While PBF Energy and Valero sport a Zacks Rank #1 (Strong Buy) each, Galp Energia carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks Rank #1 stocks here.
PBF Energy has a geographically diverse refining network with large-scale processing capacity and a highly complex refining system. It operates six refineries, including Delaware City Refinery, Paulsboro Refinery, Toledo Refinery, Chalmette Refinery, Torrance Refinery and Martinez Refinery, with a combined throughput capacity of 1 million barrels per day and the ability to process a wide range of feedstocks. The diversified refining footprint provides the company exposure to several regional refining markets, supporting higher margins.
Valero is a leading refining player with a robust network of 14 refineries and a combined high-complexity throughput capacity of 3 million barrels per day, which distinguishes it from other independent refiners. VLO’s refineries have a combined Nelson Complexity Index of 11.5, which implies that the refineries can process a wide variety of feedstocks, convert them into higher-value products and shift product yields according to market conditions.
Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly with the Mopane discovery in the Orange Basin, offshore Namibia. This discovery allows Galp Energia to diversify its global presence with the potential to become a significant oil producer in the region. It refines and markets oil products and gas, as well as engages in marketing and sales activities.
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