VAL

• The Valaris team delivered safe and efficient operations, contributing to strong financial results with meaningful EBITDA and free cash flow generation.
• Executed commercial strategy, securing an attractive contract for VALARIS DS-12 with BP Offshore Egypt, and all 4 near-term available drillships are now contracted for next year.
• Fleet-wide revenue efficiency was 95% in Q3. Repurchased $75 million of shares during the quarter.
• Jack-up segment EBITDA increased year-over-year due to more operating days and higher average day rates. Strategic focus on markets like North Sea, Saudi Arabia, Trinidad, and Australia.
• Implemented fleet management strategy: sold 27-year-old jack-up VALARIS 247 for $108 million, and plans to warm stack VALARIS MS-1 and DPS-1 in Malaysia to reduce costs while evaluating future opportunities.

• Fourth quarter total revenues expected in the range of $495 million to $515 million, down from Q3 due to fewer operating days across the fleet.
• Fourth quarter adjusted EBITDA expected to be $70 million to $90 million.
• Full year adjusted EBITDA expected to be approximately $625 million, ~$40 million above midpoint of Q2 guidance, driven by Q3 outperformance and improved Q4 outlook for jack-up fleet.
• Full year CapEx expected to be approximately $390 million, roughly in line with prior guidance.
• Committed to returning capital to shareholders, having repurchased $75 million of shares in Q3 at an average price of $49 per share.

In the third quarter, Valaris achieved solid financial results with adjusted EBITDA of $163 million and adjusted free cash flow of $237 million. For the drillship segment, 12 out of 13 ships are seventh-generation units, highly spec'd, and they continue to be strategically positioned. The jack-up segment saw shallow water demand remain robust with global utilization around 90%, driven by national oil companies. EBITDA from the jack-up segment increased year-over-year due to more operating days and higher average day rates. Revenue contribution from drillships and jack-ups is part of the overall financial performance, with the drillship fleet having added approximately $1.4 billion of backlog year-to-date, and the jack-up fleet adding over $2.2 billion in contracted revenue backlog year-to-date.

Q: Scott Gruber asks about appetite to use cash to buy back additional shares ahead of potential recovery in late '26 and '27.

A: Chris Weber says they remain committed to returning capital, executed $75 million repurchases in the quarter, and will be opportunistic with share repurchases moving forward.

Q: Greg Lewis asks about asset sales as a mechanism to drive cash return to shareholders.

A: Anton Dibowitz says capital return is driven by operational delivery of operations and sustained earnings, and asset sales are opportunistic over and above that.

Q: Eddie Kim asks about day rates below $400,000 and impact on activity inflection higher in back part of next year.

A: Anton Dibowitz says day rates for high-spec ships have largely troughed in the high 300s to low to mid-400 range, and utilization will trough late this year/early next year then improve, with seventh-gen drillships expected to exit 2026 with ~90% utilization.

Q: Doug Becker asks about focus of recent discussions with Petrobras in Brazil to reduce costs.

A: Matt Lyne says Petrobras is looking across its value supply chain for potential savings in 2026, and discussions are constructive though early days.

Q: Unknown Analyst asks about geographically where rig counts will hold/increase and potential risk regions.

A: Matt Lyne says South America (Brazil) holding flat, Africa with incremental demand, and some rigs shifting locations, with Africa being a big driver of incremental demand