Valaris has announced that ARO Drilling, its 50/50 joint venture with Saudi Aramco, has ordered two newbuild jackup rigs from International Maritime Industries. Upon delivery, each rig is expected to commence an eight-year contract with Saudi Aramco and operate at a day rate determined by a six-year EBITDA payback.
Following its initial eight-year contract, and subject to certain conditions, each rig will receive an additional eight-year contract, with the daily operating rate repriced every three years, and a preference for new contracts working for Saudi Aramco thereafter.
The total cost of each newbuild, with full compliance to the latest Saudi Aramco specifications, is approx. $175 million, of which 25% will be paid as an initial down payment by ARO Drilling from cash on hand and the balance will be provided by ARO Drilling on delivery of each rig. The first and second newbuild rigs are expected to be delivered in first quarter 2022 and second quarter 2022, respectively.