Valaris Limited Q2 FY2025 earnings call

• Valaris delivered 96% revenue efficiency, contributing to adjusted EBITDA of $201 million and adjusted free cash flow of $63 million in the second quarter. • Secured over $1 billion in new contract backlog since first quarter, increasing total backlog to approximately $4.7 billion. • The offshore drilling market's long-term fundamentals remain strong, with offshore production, especially deepwater, playing a vital role. Seventh-generation drillships have higher day rates and better utilization than sixth-generation units. • Shallow water jackup demand is resilient with 90% global utilization, and the jackup fleet has robust contract coverage.

In the second quarter, Valaris achieved strong operational and financial performance. For floaters, since the first quarter call, over $860 million in drillship backlog has been added with average day rates above $400,000. Three out of four drillships with near-term availability are now contracted. For jackups, shallow water demand remains resilient with global utilization of 90%. More than 70% of available days for active jackup rigs in 2026 are already contracted, and 60% in 2027.

• Expected total revenues for third quarter in range of $555 million to $575 million. • Adjusted EBITDA for full year 2025 expected in range of $565 million to $605 million, up from prior guidance. • Third quarter contract drilling expense expected $400 million to $415 million, G&A expense ~$28 million, adjusted EBITDA $120 million to $140 million.

• Market volatility could impact floater day rates. • Potential delays in contract awards or program execution.

Q: Fredrik Stene asked about shorter-term work opportunities for drillships in the first half of 2026 and the length of such contracts.

A: Matthew Lyne said average duration varies, location is scattered, and Valaris is well-positioned due to fleet spec. Anton Dibowitz mentioned strategy of securing long-term programs first then gap fill work.

Q: Greg Lewis inquired about the 30 planned potential floater opportunities.

A: Anton Dibowitz said the pipeline remains ~30 as awards are happening and new work is coming in. Matthew Lyne added delays are less and shifting is timing related.

Q: Eddie Kim asked about day rates of upcoming contract announcements and reactivation of cold-stacked drillships.

A: Anton Dibowitz and Matthew Lyne discussed supply-demand economics, seventh-gen rigs leading recovery, and focus on near-term contracts for active rigs.

Q: Douglas Lee Becker asked about Petrobras tender timings and dual activity arbitration.

A: Matthew Lyne noted Petrobras likely to keep rig count flat and Anton Dibowitz said arbitration outcome is favorable with a high bar for appeal.

Q: Joshua Jayne asked about customer mindset and Saudi rig count progression.

A: Anton Dibowitz said customers are positive about offshore programs and Valaris is well-positioned in Saudi with contracted rigs.

Q: Joshua Jayne also asked about buyback.

A: Christopher Weber and Anton Dibowitz said committed to returning capital, with flexibility based on year progress and rig sale proceeds.