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Valaris Streamlines Drilling Fleet & Sells Jack-Up Rig for $24M
VALValaris(VAL) ZACKS·2025-02-20 19:30

Core Viewpoint - Valaris Limited is streamlining its drilling fleet by permanently retiring three semi-submersible rigs and selling a jack-up rig for 24million,aimingtooptimizeitsoperationsandimprovecashflow[1][4][5].Group1:FleetOptimization−Thecompanywillretirethreesemi−submersiblerigs:VALARISDPS−5,VALARISDPS−3,andVALARISDPS−6,withthefirstbeinginactivesinceQ32024andthelattertwocold−stackedforseveralyears[2].−Theretiredrigsmaybeupcycledforalternativeusesorscrappedentirely,reflectingthecompany′sstrategytofocusonhigh−specificationvessels[2][4].−Bydivestingidleassets,Valarisaimstocutcostsassociatedwithmaintainingcold−stackedrigsandenhanceitsfleet′soverallperformance[4][5].Group2:RecentTransactions−ValarisannouncedthesaleoftheValaris75jack−uprigfor24 million, aiming to optimize its operations and improve cash flow [1][4][5]. Group 1: Fleet Optimization - The company will retire three semi-submersible rigs: VALARIS DPS-5, VALARIS DPS-3, and VALARIS DPS-6, with the first being inactive since Q3 2024 and the latter two cold-stacked for several years [2]. - The retired rigs may be upcycled for alternative uses or scrapped entirely, reflecting the company's strategy to focus on high-specification vessels [2][4]. - By divesting idle assets, Valaris aims to cut costs associated with maintaining cold-stacked rigs and enhance its fleet's overall performance [4][5]. Group 2: Recent Transactions - Valaris announced the sale of the Valaris 75 jack-up rig for 24 million, which has been out of service for five years, to an undisclosed operator, with future operations limited to the U.S. Gulf of Mexico [3][1]. - The sale is part of the company's broader strategy to divest rigs that do not provide adequate returns, thereby benefiting cash flow and upgrading the rig fleet [4][5].