Valaris : 2024 Annual Report

Published: 2025-04-21 09:51:04 ET VAL

Shareholder

Information

Annual General Meeting

The annual general meeting of shareholders will be held in the Juneland Room, Hamilton Princess, 76 Pitts Bay Road, Pembroke, Hamilton, HM 08, Bermuda, at 8:00 a.m., Bermuda time and 6:00 a.m. Houston time, on June 12, 2025.

Transfer Agent

Registered holders of our shares may direct their questions to: Computershare Trust Company, N.A. 150 Royall St., Ste 101

Canton, MA 02021 1-800-736-3001

Email: [email protected]

Hours: Monday through Friday, 8:30 a.m. to 6 p.m. (ET)

Corporate Governance, Board and Board Committees Our website, www.valaris.com, contains information regarding (i) the composition of our Board of Directors and board committees, (ii) corporate governance in general, (iii) shareholder communications with the Board, (iv) the Valaris Code of Business Conduct, (v) the Valaris Corporate Governance Policy, (vi) Ethics Hotline reporting provisions, and (vii) the charters of the board committees. A direct link to the company's SEC filings, including reports required under Section 16 of the Securities Exchange Act of 1934, is located in the Investors section of our website. Copies of these documents may be obtained without charge by contacting Valaris Investor Relations. Reasonable expenses will be charged for copies of exhibits listed in the back of SEC Forms 10-Kand 10-Q.Please list the exhibits you would like to receive and submit your request in writing to Valaris Investor Relations at the address below. We will notify you of the cost and furnish the requested exhibits upon receipt

of payment.

Valaris Investor Relations

5847 San Felipe, Suite 3300

Houston, Texas 77057-3008

Table of Contents

Forward-Looking Statements

Contract Drilling Fleet

Market for Registrant's Common Equity,

Related Shareholder Matters and Issuer

Purchases of Equity Securities

Management's Discussion and Analysis of

Financial Condition and Results of Operations

Business Environment

Results of Operations

Liquidity and Capital Resources

Critical Accounting Policies and Estimates

New Accounting Pronouncements

Financial Statements and Supplementary Data

Management's Report on Internal Control Over

Financial Reporting

Reports of Independent Registered Public

Accounting Firm

Consolidated Statements of Operations

Consolidated Statements of

Comprehensive Income

Consolidated Balance Sheets

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Board of Directors and Executive Management

Committee Members

FORWARD-LOOKING STATEMENTS

Statements contained in this report 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 (the "Exchange Act"). Forward-looking statements include words or phrases such as "anticipate," "believe," "estimate," "expect," "intend," "likely," "outlook," "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; the availability, delivery, mobilization, contract commencement or relocation or other movement of rigs and the timing thereof; rig reactivations, enhancement, upgrade or repair and timing and cost thereof; the suitability of rigs for future contracts; performance and expected benefits of our joint ventures, including our joint venture with Saudi Arabian Oil Company ("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; divestitures of assets; general market, business and industry conditions, trends and outlook; general political conditions, including political tensions, conflicts and war; the impacts and effects of public health crises, pandemics and epidemics; future operations; the effectiveness of our cybersecurity programs; uncertainty around the use and impacts of artificial intelligence ("AI") applications; expectations regarding our sustainability targets and strategy; the impact of increasing regulatory complexity; the outcome of tax disputes, assessments and settlements; expense management; and the likely outcome of litigation, legal proceedings, investigations or insurance or other claims or contract disputes and the timing thereof.

Such statements are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from those indicated, including:

In addition to the numerous risks, uncertainties and assumptions 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 Annual Report on Form 10-K for the year ended December 31, 2024. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to publicly update or revise any forward-looking statements, except as required by law.

Contract Drilling Fleet

The following table provides certain information about the rigs in our drilling fleet as of February 18, 2025:

Year

Maximum

Rig Name

Rig Type

Design

Water Depth/

Location

Status

Delivered

Drilling Depth

Floaters

VALARIS DS-4

Drillship

2010

Dynamically Positioned

12,000'/40,000'

Brazil

Under contract

VALARIS DS-7

Drillship

2013

Dynamically Positioned

10,000'/40,000'

Angola

Under contract

VALARIS DS-8

Drillship

2015

Dynamically Positioned

12,000'/40,000'

Brazil

Under contract

VALARIS DS-9

Drillship

2015

Dynamically Positioned

12,000'/40,000'

Cyprus

Under contract

VALARIS DS-10

Drillship

2017

Dynamically Positioned

12,000'/40,000'

Spain

Available

VALARIS DS-11

Drillship

2013

Dynamically Positioned

12,000'/40,000'

Spain

Preservation

stacked(1)

VALARIS DS-12

Drillship

2013

Dynamically Positioned

12,000'/40,000'

Egypt

Under contract

VALARIS DS-13

Drillship

2023

Dynamically Positioned

12,000'/40,000'

Spain

Preservation

stacked(1)

VALARIS DS-14

Drillship

2023

Dynamically Positioned

12,000'/40,000'

Spain

Preservation

stacked(1)

VALARIS DS-15

Drillship

2014

Dynamically Positioned

12,000'/40,000'

Brazil

Under contract

VALARIS DS-16

Drillship

2014

Dynamically Positioned

12,000'/40,000'

Gulf of Mexico

Under contract

VALARIS DS-17

Drillship

2014

Dynamically Positioned

12,000'/40,000'

Brazil

Under contract

VALARIS DS-18

Drillship

2015

Dynamically Positioned

12,000'/40,000'

Gulf of Mexico

Under contract

VALARIS DPS-1

Semisubmersible

2012

Dynamically Positioned

10,000'/35,000'

Australia

Under contract

VALARIS DPS-3

Semisubmersible

2010

Dynamically Positioned

8,500'/37,500'

Gulf of Mexico

Preservation

stacked(1)(2)

VALARIS DPS-5

Semisubmersible

2012

Dynamically Positioned

8,500'/35,000'

Gulf of Mexico

Available(2)

VALARIS DPS-6

Semisubmersible

2012

Dynamically Positioned

8,500'/35,000'

Gulf of Mexico

Preservation

stacked(1)(2)

VALARIS MS-1

Semisubmersible

2011

F&G ExD Millennium, Moored

8,200'/40,000

Australia

Under contract

Jackups

VALARIS 72

Jackup

1981

Hitachi K1025N

225'/25,000'

United Kingdom

Under contract

VALARIS 76

Jackup

2000

MLT Super 116-C

350'/30,000'

Saudi Arabia

Leased to ARO

drilling

VALARIS 92

Jackup

1982

MLT 116-C

210'/25,000'

United Kingdom

Under contract

VALARIS 102

Jackup

2002

KFELS MOD V-A

400'/30,000'

Gulf of Mexico

Preservation

stacked(1)

VALARIS 104

Jackup

2002

KFELS MOD V-B

400'/30,000'

UAE

Preservation

stacked(1)

VALARIS 106

Jackup

2005

KFELS MOD V-B

400'/30,000'

Indonesia

Under contract

VALARIS 107

Jackup

2006

KFELS MOD V-B

400'/30,000'

Australia

Under contract

VALARIS 108

Jackup

2007

KFELS MOD V-B

400'/30,000'

Saudi Arabia

Leased to ARO

drilling

VALARIS 109

Jackup

2008

KFELS MOD V-Super B

350'/35,000'

Namibia

Preservation

stacked(1)

VALARIS 110

Jackup

2015

KFELS MOD V-B

400'/35,000'

Qatar

Under contract

VALARIS 111

Jackup

2003

KFELS MOD V Enhanced B-

400'/36,000'

Croatia

Preservation

Class

stacked(1)

VALARIS 115

Jackup

2013

Baker Marine Pacific Class 400

400'/30,000'

Brunei

Under contract

VALARIS 116

Jackup

2008

LT 240- C

375'/35,000'

Saudi Arabia

Leased to ARO

drilling

VALARIS 117

Jackup

2009

LT 240- C

350'/35,000'

Mexico

Under contract

VALARIS 118

Jackup

2012

LT 240- C

350'/35,000

Trinidad

Under contract

VALARIS 120

Jackup

2013

KFELS Super A

400'/40,000'

United Kingdom

Under contract

VALARIS 121

Jackup

2013

KFELS Super A

400'/40,000'

United Kingdom

Under contract

VALARIS 122

Jackup

2013

KFELS Super A

400'/40,000'

United Kingdom

Under contract

Year

Maximum

Rig Name

Rig Type

Design

Water Depth/

Location

Status

Delivered

Drilling Depth

Jackups (Continued)

VALARIS 123

Jackup

2019

KFELS Super A

400'/40,000'

Netherlands

Under contract

VALARIS 140

Jackup

2016

LT Super 116E

340'/30,000'

Saudi Arabia

Leased to ARO

drilling

VALARIS 141

Jackup

2016

LT Super 116E

340'/30,000'

Saudi Arabia

Leased to ARO

drilling

VALARIS 143

Jackup

2010

LT EXL Super 116-E

350'/35,000'

UAE

Preservation

stacked(1)

VALARIS 144

Jackup

2010

LT Super 116-E

350'/35,000'

Angola

Under contract

VALARIS 145

Jackup

2010

LT Super 116-E

350'/35,000'

Gulf of Mexico

Preservation

stacked(1)

VALARIS 146

Jackup

2011

LT EXL Super 116-E

320'/35,000'

Saudi Arabia

Leased to ARO

drilling

VALARIS 147

Jackup

2013

LT Super 116-E

350'/30,000'

UAE

Preservation

stacked(1)

VALARIS 148

Jackup

2013

LT Super 116-E

350'/30,000'

UAE

Preservation

stacked(1)

VALARIS 247

Jackup

1998

LT Super Gorilla

400'/35,000'

Australia

Under contract

VALARIS 248

Jackup

2000

LT Super Gorilla

400'/35,000'

United Kingdom

Under contract

VALARIS 249

Jackup

2001

LT Super Gorilla

400'/35,000'

Trinidad

Under contract

VALARIS 250

Jackup

2003

LT Super Gorilla XL

550'/35,000'

Saudi Arabia

Leased to ARO

drilling

VALARIS Viking

Jackup

2010

KEFLS N Class

435'/35,000'

United Kingdom

Preservation

stacked(1)

VALARIS Stavanger

Jackup

2011

KEFLS N Class

400'/35,000'

United Kingdom

Under contract

VALARIS Norway

Jackup

2011

KEFLS N Class

400'/35,000'

United Kingdom

Under contract

The equipment on our drilling rigs includes engines, draw works, derricks, pumps to circulate drilling fluid, well control systems, drill string and related equipment. The engines power a top-drive mechanism that turns the drill string and drill bit so that the hole is drilled by grinding subsurface materials, which are then returned to the rig by the drilling fluid. The intended water depth, well depth and geological conditions are the principal factors that determine the size and type of rig most suitable for a particular drilling project.

Floater rigs consist of drillships and semisubmersibles. Drillships are purpose-built maritime vessels outfitted with drilling apparatus. Drillships are self-propelled and can be positioned over a drill site through the use of computer-controlled propellers or "thruster" dynamic positioning systems. Our drillships are capable of drilling in water depths of up to 12,000 feet and are suitable for deepwater drilling in remote locations because of their superior mobility and large load-carrying capacity. Although drillships are most often used for deepwater drilling and exploratory well drilling, drillships can also be used as a platform to carry out well maintenance or completion work such as casing and tubing installation or subsea tree installations.

Semisubmersibles are drilling rigs with pontoons and columns that are partially submerged at the drilling location to provide added stability during drilling operations. Semisubmersibles are held in a fixed location over the ocean floor either by being anchored to the sea bottom with mooring chains or dynamically positioned by computer- controlled propellers or "thrusters" similar to that used by our drillships. Moored semisubmersibles are most commonly used for drilling in water depths of 4,499 feet or less. However, VALARIS MS-1, which is a moored semisubmersible, is capable of deepwater drilling in water depths greater than 5,000 feet. Dynamically positioned semisubmersibles generally are outfitted for drilling in deeper water depths and are well-suited for deepwater development and exploratory well drilling. Further, we have two hybrid semisubmersibles, VALARIS DPS-3 and VALARIS DPS-5, which leverage both moored and dynamically positioned configurations. This hybrid design provides multi-faceted drilling solutions to customers with both shallow water and deepwater requirements.

Jackup rigs stand on the ocean floor with their hull and drilling equipment elevated above the water on connected leg supports. Jackups are generally preferred over other rig types in shallow water depths of 400 feet or less, primarily because jackups provide a more stable drilling platform with above water well-control equipment. Our jackups are of the independent leg design where each leg can be fixed into the ocean floor at varying depths and equipped with a cantilever that allows the drilling equipment to extend outward from the hull over fixed platforms enabling safer drilling of both exploratory and development wells. The jackup hull supports the drilling equipment, jacking system, crew quarters, storage and loading facilities, helicopter landing pad and related equipment and supplies.

We own all rigs in our fleet and we manage the drilling operations for two platform rigs owned by a third-

party.

We lease various office, warehouse and storage facilities worldwide, including our corporate offices in Houston, Texas and other offices and facilities located in various countries in North America, South America, Europe, Africa and the Asia Pacific region. We own offices and other facilities in the U.S. (Louisiana) and Brazil.

Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

Market Information

On April 30, 2021, the Company issued an aggregate of approximately 75.0 million Common Shares and Warrants are traded on the NYSE under the symbols "VAL" and "VAL WS", respectively.

Many of our shareholders hold shares electronically, all of which are owned by a nominee of the Depository Trust Company. We had 66 shareholders of record on February 3, 2025.

Dividends

We have not paid or declared any dividends on our Common Shares. Our Indenture and the Credit Agreement include provisions that limit our ability to pay dividends.

Bermuda Tax

We have been designated by the Bermuda Monetary Authority as a non-resident for Bermuda exchange control purposes. This designation allows us to engage in transactions in currencies other than the Bermudian dollar, and there are no restrictions on our ability to transfer funds (other than funds denominated in Bermudian dollars) in and out of Bermuda or to pay dividends to U.S. residents who are holders of our Common Shares.

For years ended December 31, 2024 and prior, there is no Bermuda income or profits tax, withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax payable by us or by our shareholders in respect of our shares. Bermuda enacted the Corporate Income Tax Act 2023 on December 27, 2023 (the "CIT Act") which stipulates a tax on 15% of the net income of certain Bermuda constituent entities (as determined in accordance with

the CIT Act, including after adjusting for any relevant foreign tax credits applicable to the Bermuda constituent entities). No tax is chargeable under the CIT Act until tax years starting on or after January 1, 2025.

Issuer Repurchases of Equity Securities

Our board of directors has authorized a share repurchase program (the "Share Repurchase Program") under which we may purchase up to $600.0 million of our outstanding Common Shares. The Share Repurchase Program does not have a fixed expiration, may be modified, suspended or discontinued at any time and any repurchases made pursuant to the Share Repurchase Program are subject to compliance with applicable covenants and restrictions under our financing agreements.

The following table provides a summary of our repurchases of our equity securities during the quarter ended December 31, 2024:

Issuer Purchases of Equity Securities

Total Number

Approximate

of Securities

Dollar Value of

Purchased as

Securities that

Part of

May Yet Be

Total Number

Average Price

Publicly

Purchased Under

Announced

Plans or

Period

of Securities

Paid per

Plans or

Programs

Purchased

Security

Programs

(in millions)

October 1 - October 31

424,538

53.10

424,538

277.5

November 1 - November 30

48,174

49.63

48,174

275.1

December 1 - December 31

1,474

45.39

1,474

275.0

Total

474,186

52.72

474,186

275.0

Cumulative Total Shareholder Return

The chart below presents a comparison of the cumulative total shareholder return, assuming $100 invested on May 3, 2021 (first trading date after our emergence from bankruptcy) for Valaris Limited, the Standard & Poor's MidCap 400 Index and Dow Jones US Select Oil Equipment & Services Index (the "Industry Index").

COMPARISON OF CUMULATIVE TOTAL RETURN(1)

Among Valaris Limited, the S&P MidCap 400 Index and Industry Index

May 3, 2021

Fiscal Years Ended December 31,

Relisting

2021

2022

2023

2024

Valaris Limited

100.0

151.9

285.3

289.3

186.7

S&P MidCap 400

100.0

104.6

91.0

105.9

120.7

Industry Index

100.0

96.5

160.7

168.4

155.1

Disclaimer

Valaris Ltd. published this content on April 21, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 21, 2025 at 13:50 UTC.