Valaris has reported fourth quarter 2024 results.
President and Chief Executive Officer Anton Dibowitz said, 'We continued to deliver solid operating and financial performance, achieving fleetwide revenue efficiency of 96% in the fourth quarter and 97% for the full year. We also had outstanding safety performance in 2024 and are proud to have been recognized with safety awards by both the IADC and the Center for Offshore Safety. I thank every member of the Valaris team around the world for their dedication, hard work and continued focus on operating safely and efficiently for our customers.'
Dibowitz added, 'The contracting outlook for 2026 and beyond remains strong for high-specification assets and we are focused on securing attractive, long-term programs for our active rigs. We will also continue to prudently manage our fleet as demonstrated by our recent actions to reduce costs for idle rigs and further focus our fleet on high-specification assets.'
Dibowitz concluded, 'We are steadfast in our belief that offshore oil and gas will play an important role in providing secure, reliable and affordable energy to the world. Valaris is well-positioned to help meet that need and drive sustainable, long-term value creation for our shareholders by virtue of our high-specification fleet and excellent safety and operational track record.'
Financial and Operational Highlights
- Delivered net income of $131 million and Adjusted EBITDA of $142 million;
- Achieved revenue efficiency of 96% during the quarter and 97% for the year;
- Generated $125 million of cash from operating activities and $13 million of Free Cash Flow;
- Repurchased $25 million of shares;
- Recognized by the International Association of Drilling Contractors ("IADC") Brazil Chapter with its 2024 Safety Award;
- Secured approximately $120 million of contract backlog, including a multi-year contract for jackup VALARIS Stavanger in the North Sea; and
- Announced in the first quarter 2025 the planned retirement of semisubmersibles VALARIS DPS-3, DPS-5 and DPS-6 and the sale of jackup VALARIS 75 for $24 million.
Fourth Quarter Review
Net income increased to $131 million from $63 million in the third quarter 2024, including a tax benefit of $7 million compared to tax expense of $24 million in the third quarter. Adjusted EBITDA decreased to $142 million from $150 million in the third quarter primarily due to lower utilization for the floater fleet, partially offset by more operating days for the jackup fleet.
Revenues exclusive of reimbursable items decreased to $548 million from $600 million in the third quarter primarily due to lower utilization for the floater fleet and lower amortized mobilization revenue, partially offset by more operating days for the jackup fleet.
Exclusive of reimbursable items, contract drilling expenses decreased to $381 million from $423 million in the third quarter primarily due to lower amortized mobilization expense, lower costs associated with rigs that were idle during the quarter and lower repair costs.
Depreciation expense increased to $34 million from $32 million in the third quarter 2024. General and administrative expenses decreased to $27 million from $31 million in the third quarter 2024 primarily due to lower compensation costs and professional fees.
Other income of $5 million compared to other expense of $8 million in the third quarter 2024. This increase was primarily due to foreign currency exchange gains compared to losses in the third quarter.
Tax benefit of $7 million compared to tax expense of $24 million in the third quarter 2024. The fourth quarter tax provision included $16 million of discrete tax benefit, which was primarily attributable to changes in liabilities for unrecognized tax benefits associated with tax positions taken in prior years. Exclusive of discrete tax items, tax expense decreased to $9 million from $24 million in the third quarter.
Capital expenditures increased to $112 million from $82 million in the third quarter 2024 primarily due to higher rig upgrade expenditures related to contract preparations for VALARIS 144 and DS-4.
Cash and cash equivalents and restricted cash decreased to $381 million as of December 31, 2024, from $392 million as of September 30, 2024. The decrease was primarily due to capital expenditures and share repurchases, partially offset by cash flow from operations.
Fourth Quarter Segment Review
Floaters
Revenues exclusive of reimbursable items decreased to $328 million from $375 million in the third quarter. The decrease was primarily due to lower utilization for the floater fleet associated with out of service time for VALARIS DS-15 and DS-17 to meet regulatory requirements in Brazil and for VALARIS DS-4 to complete upgrade work prior to the start of its contract as well as idle time for VALARIS DS-10 and DPS-5, which completed contracts during the third quarter.
Exclusive of reimbursable items, contract drilling expenses decreased to $211 million from $235 million in the third quarter primarily due to capitalization of costs for VALARIS DS-4 during its shipyard upgrade project, lower costs for VALARIS DPS-5 and DS-10 while the rigs were warm stacked during the fourth quarter and lower mobilization expense.
Jackups
Revenues exclusive of reimbursable items decreased to $188 million from $193 million in the third quarter primarily due to lower amortized mobilization revenue associated with VALARIS 247. This was partially offset by more operating days for the jackup fleet primarily due to VALARIS 249 returning to work after completing leg repairs and a full quarter of operations for VALARIS 247 and 122.
Exclusive of reimbursable items, contract drilling expenses decreased to $114 million from $137 million in the third quarter primarily due to lower amortized mobilization expense associated with VALARIS 247 and lower repair costs for VALARIS 249.
ARO Drilling
Revenues increased to $136 million from $114 million in the third quarter 2024 primarily due to a full quarter of operations for Kingdom 2, which commenced its maiden contract in the third quarter, and more operating days for Kingdom 1 due to out of service time in the prior quarter. Contract drilling expenses decreased to $82 million from $94 million in the third quarter primarily due to lower bareboat charter expense.
Other
Revenues exclusive of reimbursable items increased to $33 million from $32 million in the third quarter 2024. Exclusive of reimbursable items, contract drilling expenses increased to $18 million from $15 million in the third quarter due to higher survey costs for rigs leased to ARO.
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Source: Valaris
