Valaris has reported third quarter 2025 results.
President and Chief Executive Officer Anton Dibowitz said, 'The Valaris team continues to deliver safe and efficient operations, which led to another quarter of strong financial results. We also continue to execute our commercial strategy having recently secured an attractive contract for VALARIS DS-12 with bp offshore Egypt. With this award, all four of our active drillships with near-term availability are now contracted for work beginning next year.'
Dibowitz added, 'Despite near-term commodity price uncertainty, demand for offshore drilling services is developing as we expected, with customers increasingly looking to offshore projects to meet future energy needs. Against this backdrop, we continue to see a solid pipeline of deepwater opportunities for our high-specification fleet, and we are in advanced customer discussions for our drillships scheduled to complete contracts in the second half of 2026.'
Dibowitz concluded, 'We are focused on delivering outstanding operational performance, executing our commercial strategy, and prudently managing our fleet and costs, positioning Valaris to deliver long-term value for shareholders.'
Financial and Operational Highlights
- Total operating revenues of $596 million, with revenue efficiency of 95%
- Net income of $187 million
- Adjusted EBITDA of $163 million
- Cash from operating activities of $198 million and Adjusted Free Cash Flow of $237 million
- Repurchased $75 million of shares
- Recognized by the Center for Offshore Safety with its 2025 Safety Leadership Award – the third consecutive year the Company has received this recognition
- Secured a contract for VALARIS DS-12 with an estimated duration of 350 days - all four active drillships with near-term availability now contracted
- Completed the sale of jackup VALARIS 247 for cash proceeds of $108 million
Third Quarter Review
Net income of $187 million compared to $114 million in the second quarter 2025. Net income included a gain on sale of assets of $90 million compared to $1 million in the second quarter. Adjusted EBITDA of $163 million compared to $201 million in the second quarter.
Revenues exclusive of reimbursable items decreased to $556 million from $572 million in the second quarter 2025 primarily due to fewer operating days for the floater fleet, partially offset by more operating days for the jackup fleet and higher bareboat charter revenue from rigs leased to ARO Drilling.
Exclusive of reimbursable items, contract drilling expense increased to $368 million from $355 million in the second quarter 2025. The second quarter included a $17 million accrual reversal due to the favorable arbitration outcome related to previously disclosed patent license litigation. Excluding this item, contract drilling expense decreased from the prior quarter.
General and administrative expense increased to $27 million from $19 million in the second quarter 2025 due to a $7 million benefit in the second quarter from the above-mentioned favorable arbitration outcome that resulted in the recovery of legal costs incurred in prior quarters. Excluding this item, general and administrative expense increased slightly from the prior quarter.
Other income of $85 million compared to other expense of $18 million in the second quarter 2025 primarily due to a gain on the sale of jackup VALARIS 247, higher interest income and a decrease in net foreign currency exchange losses.
Tax expense decreased to $29 million from $32 million in the second quarter 2025.
Capital expenditures increased to $70 million from $67 million in the second quarter 2025.
Cash and cash equivalents and restricted cash increased to $676 million as of September 30, 2025, from $516 million as of June 30, 2025. The increase was due to cash flow from operations and proceeds from the sale of VALARIS 247, partially offset by share repurchases and capital expenditures.
Third Quarter Segment Review
Floaters
Revenues exclusive of reimbursable items decreased to $293 million from $320 million in the second quarter 2025 primarily due to VALARIS DS-15 and DS-18 completing contracts mid-third quarter without follow-on work. Both rigs are scheduled to start their next contracts in the second half of 2026.
Exclusive of reimbursable items, contract drilling expense increased to $188 million from $176 million in the second quarter 2025. The increase was primarily due to the favorable arbitration outcome, which led to a $17 million accrual reversal in the second quarter. Excluding this item, contract drilling expense decreased from the prior quarter.
Jackups
Revenues exclusive of reimbursable items increased to $217 million from $212 million in the second quarter 2025 primarily due to more operating days for several rigs, partially offset by the contract completion and subsequent sale of VALARIS 247 during the third quarter.
Exclusive of reimbursable items, contract drilling expense increased slightly to $125 million from $124 million in the second quarter 2025.
ARO Drilling
Revenues increased to $157 million from $140 million in the second quarter 2025 primarily due to more operating days for the fleet and higher day rates for four rigs that began new contract extensions during the prior quarter. Contract drilling expense decreased to $92 million from $96 million in the second quarter primarily due to lower repair and maintenance costs.
Other
Revenues exclusive of reimbursable items increased to $46 million from $41 million in the second quarter 2025 primarily due to higher bareboat charter revenue from rigs leased to ARO, resulting from the above-mentioned contract extensions. Exclusive of reimbursable items, contract drilling expense decreased to $16 million from $17 million in the second quarter.
Source: Valaris
