Valaris Announces Financing for Kingdom 1 and 2 Newbuild Jackups
October 26 2023 - 8:46AM
Business Wire
Valaris Limited (NYSE: VAL) (“Valaris” or the “Company”)
announced today that ARO Drilling (“ARO”), its 50/50 joint venture
with Aramco, has secured attractive financing for its first two
newbuild jackups, Kingdom 1 and 2.
ARO has entered into a $359 million term loan with a syndicate
of local Saudi Arabian banks to finance the deliveries. The
proceeds will be used to pay the remaining shipyard purchase price
for Kingdom 1 and 2, and for general corporate purposes. The loan
matures in eight years and has a 16-year amortization profile with
a 50% balloon payment due at maturity.
Kingdom 1 is expected to be delivered and commence its contract
with Aramco in fourth quarter 2023, and Kingdom 2 is expected to be
delivered and commence its contract with Aramco in first quarter
2024. Day rates for the initial eight-year contracts will be
determined using a pricing mechanism that targets a six-year
payback for construction costs on an EBITDA basis. These initial
contracts will be followed by a minimum additional eight-year term,
re-priced every three years, based on a market pricing
mechanism.
ARO Drilling Chief Executive Officer Mohamed Hegazi said, “The
delivery and startup of the first two newbuilds will mark an
important milestone in the growth story of ARO. I am delighted that
we have been able to secure financing for these rigs at attractive
terms, demonstrating both the strength of our business and
relationship with local lenders in Saudi Arabia.”
About Valaris Limited
Valaris Limited (NYSE: VAL) is the industry leader in offshore
drilling services across all water depths and geographies.
Operating a high-quality rig fleet of ultra-deepwater drillships,
versatile semisubmersibles and modern shallow-water jackups,
Valaris has experience operating in nearly every major offshore
basin. Valaris maintains an unwavering commitment to safety,
operational excellence, and customer satisfaction, with a focus on
technology and innovation. Valaris Limited is a Bermuda exempted
company (Bermuda No. 56245). To learn more, visit our website at
www.valaris.com.
Cautionary Statements
Statements contained in this press release that are not
historical facts are forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements include words or phrases such as
"anticipate," "believe," "estimate," "expect," "intend," "likely,"
"plan," "project," "could," "may," "might," "should," "will" and
similar words and specifically include statements regarding
expected financial performance; expected utilization, day rates,
revenues, operating expenses, cash flows, contract status, terms
and duration, contract backlog, capital expenditures, insurance,
financing and funding; the offshore drilling market, including
supply and demand, customer drilling programs, stacking of rigs,
effects of new rigs on the market and effect of the volatility of
commodity prices; expected work commitments, awards, contracts and
letters of intent; scheduled delivery dates for rigs; performance
of our joint ventures, including our joint venture with Saudi
Aramco; timing of the delivery of the Saudi Aramco Rowan Offshore
Drilling Company ("ARO") newbuild rigs and the timing of additional
ARO newbuild orders; the availability, delivery, mobilization,
contract commencement, availability, relocation or other movement
of rigs and the timing thereof; rig reactivations; suitability of
rigs for future contracts; divestitures of assets; general
economic, market, business and industry conditions, including
inflation and recessions, trends and outlook; general political
conditions, including political tensions, conflicts and war (such
as the ongoing conflict in Ukraine); cybersecurity attacks and
threats; impacts and effects of public health crises, pandemics and
epidemics, such as the COVID-19 pandemic; future operations; any
exercise of our options for delivery of the VALARIS DS-13 and
VALARIS DS-14; increasing regulatory complexity; targets, progress,
plans and goals related to environmental, social and governance
(“ESG”) matters; the outcome of tax disputes; assessments and
settlements; and expense management. The forward-looking statements
contained in this press release are subject to numerous risks,
uncertainties and assumptions that may cause actual results to vary
materially from those indicated, including cancellation,
suspension, renegotiation or termination of drilling contracts and
programs; our ability to obtain financing, service our debt, fund
capital expenditures and pursue other business opportunities;
adequacy of sources of liquidity for us and our customers; future
share repurchases; actions by regulatory authorities, or other
third parties; actions by our security holders; internal control
risk; commodity price fluctuations and volatility, customer demand,
loss of a significant customer or customer contract, downtime and
other risks associated with offshore rig operations; adverse
weather, including hurricanes; changes in worldwide rig supply,
including as a result of reactivations and newbuilds; and demand,
competition and technology; supply chain and logistics challenges;
consumer preferences for alternative fuels and forecasts or
expectations regarding the global energy transition; increased
scrutiny of our ESG targets, including our Scope 1 emissions
intensity reduction target, initiatives and reporting and our
ability to achieve such targets or initiatives; changes in customer
strategy; future levels of offshore drilling activity; governmental
action, civil unrest and political and economic uncertainties,
including recessions, volatility affecting the banking system and
financial markets, inflation and adverse changes in the level of
international trade activity; terrorism, piracy and military
action; risks inherent to shipyard rig reactivation, upgrade,
repair, maintenance or enhancement; our ability to enter into, and
the terms of, future drilling contracts; suitability of rigs for
future contracts; the cancellation of letters of intent or letters
of award or any failure to execute definitive contracts following
announcements of letters of intent, letters of award or other
expected work commitments; the outcome of litigation, legal
proceedings, investigations or other claims or contract disputes;
governmental regulatory, legislative and permitting requirements
affecting drilling operations; our ability to attract and retain
skilled personnel on commercially reasonable terms; environmental
or other liabilities, risks or losses; compliance with our debt
agreements and debt restrictions that may limit our liquidity and
flexibility; cybersecurity risks and threats; and changes in
foreign currency exchange rates. In addition to the numerous
factors described above, you should also carefully read and
consider "Item 1A. Risk Factors" in Part I and "Item 7.
Management's Discussion and Analysis of Financial Condition and
Results of Operations" in Part II of our most recent annual report
on Form 10-K, which is available on the Securities and Exchange
Commission's website at www.sec.gov or on the Investor Relations
section of our website at www.valaris.com. Each forward-looking
statement speaks only as of the date of the particular statement,
and we undertake no obligation to update or revise any
forward-looking statements, except as required by law.
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Investor & Media Contacts:
Darin Gibbins Vice President - Investor Relations and Treasurer
+1-713-979-4623
Tim Richardson Director - Investor Relations +1-713-979-4619
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