Aug 5, 2026, 5:00 PM ETEnergy

Valaris Limited — Second Quarter 2026 Earnings Summary

VALVALARIS LTD

Financial Performance

Total operating revenues were $539 million, an increase from $465 million in the first quarter 2026.
Net income was $47 million, compared to a net loss of $18 million in the first quarter 2026.
Adjusted EBITDA was $97 million, compared to $67 million in the first quarter 2026; this figure includes approximately $30 million of negative impacts from Middle East conflicts.
Revenues exclusive of reimbursable items increased to $502 million from $430 million in the first quarter.
Contract drilling expenses exclusive of reimbursable items increased to $380 million from $340 million in the first quarter.
General and administrative expenses increased to $27 million from $25 million in the first quarter.
Merger and integration expenses decreased to $11 million from $14 million in the first quarter.
Other income was $30 million compared to other expense of $10 million in the first quarter, primarily due to a gain on the sale of jackup VALARIS 104.
Tax expense increased to $34 million from $28 million in the first quarter.
Capital expenditures increased to $106 million from $101 million in the first quarter.
Cash and cash equivalents decreased to $541 million as of June 30, 2026, from $578 million as of March 31, 2026.
Revenue efficiency was 98% for the quarter and year-to-date.

Management expects the adverse impacts of Middle East conflicts to moderate in the second half of 2026 as VALARIS 250 recommenced its bareboat charter in July and VALARIS 116 is expected to recommence in the third quarter.
Insurance costs for war-related coverage are expected to be lower in the second half of 2026 due to the sale of VALARIS 104 and securing longer-term coverage.
Two additional drillships are set to commence new contracts before year-end, expected to drive further improvement in financial performance.
The pipeline of deepwater contract opportunities remains robust, with expectations of further awards across the industry supported by favorable market fundamentals.
Valaris does not intend to hold future earnings conference calls or provide updates to forward-looking guidance due to the pending business combination with Transocean.

Floaters: Revenues exclusive of reimbursable items increased to $279 million from $193 million in the first quarter, driven by more operating days for VALARIS DS-17, DS-12, and DS-10.
Jackups: Revenues exclusive of reimbursable items decreased to $183 million from $196 million in the first quarter, primarily due to fewer operating days for VALARIS 117 and lower average daily revenues in the North Sea.
ARO Drilling: Revenues were $127 million, in line with the first quarter. Contract drilling expenses decreased to $72 million from $75 million in the first quarter.
Other: Revenues exclusive of reimbursable items decreased to $40 million from $42 million in the first quarter.
Valaris added more than $160 million of backlog for the North Sea jackup fleet, enhancing contract coverage for 2026 and 2027.
The fleet was high-graded through the sale of long-term stacked jackups VALARIS 104 and 109 in June and July 2026, respectively, for total cash proceeds of $74 million.
VALARIS DS-12 and DS-10 were successfully returned to work on schedule and on budget during the second quarter.

The offshore drilling market outlook is positive, with strong customer demand for high-specification assets.
Contract drilling backlog as of August 5, 2026, was $4,585.2 million, down from $4,929.1 million as of May 4, 2026.
Total operating days for the quarter were 2,647, compared to 2,515 in the first quarter.
Utilization for the total fleet was 61% in the second quarter, compared to 58% in the first quarter.
Average daily revenue for the total fleet was $189,000 in the second quarter, up from $171,000 in the first quarter.

Ongoing conflicts in the Middle East negatively impacted Adjusted EBITDA by approximately $30 million in the second quarter, primarily due to higher insurance costs and project delays for VALARIS 250 and 116.
Risks include potential disruptions from the pending transaction with Transocean, cancellation or termination of drilling contracts, and volatility in commodity prices.
War-related risks continue to affect insurance costs and operational timelines for jackups in the Middle East region.

President and CEO Anton Dibowitz expressed confidence in the team's commitment to safe, reliable, and efficient operations.
Management highlighted the successful startup of two drillships and the addition of backlog as key achievements despite Middle East conflicts.
Dibowitz stated the company remains positive on the offshore drilling outlook and expects the pending business combination with Transocean to close in the fourth quarter of 2026, delivering meaningful value through synergies.

Valaris is pending a business combination with Transocean Ltd., announced on February 9, 2026, expected to close in the fourth quarter of 2026.
The company received a $38 million gain on the sale of assets in the second quarter, compared to a $2 million loss in the first quarter.
A reversal of a previously recognized bad debt expense occurred following the collection of long-outstanding customer invoices.
The consolidated backlog includes commitments represented by signed drilling contracts, calculated by multiplying contracted day rates by contract periods.
Valaris maintains a 50% ownership interest in ARO Drilling, with results presented on a 100% basis in segment reviews but equity earnings included in consolidated results.