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    1. Drilling & Completion

    Total, Chevron terminate Valaris drilling contracts offshore Angola

    March 27, 2020
    Valaris plc has issued an update on its offshore drilling rig fleet.
    (Courtesy Valaris)
    The company received a termination notice from Total for the drilling contract for the VALARIS DS-8 offshore Angola.
    The company received a termination notice from Total for the drilling contract for the VALARIS DS-8 offshore Angola.

    Offshore staff

    LONDON – Valaris plc has issued an update on its offshore drilling rig fleet.

    The company is working to recover or replace the BOP stack on the VALARIS DS-8 following a non-drilling incident earlier this month.

    On March 19, 2020, the company received a termination notice from Total for the drilling contract for the VALARIS DS-8 offshore Angola. The operating day rate for the drillship is about $620,000. The company has loss of hire insurance for $602,500 per day after the expiration of a 45-day deductible waiting period through the end of the contract in November 2020. If the contract is terminated, the company said it will seek to recover losses incurred in accordance with the terms of this insurance policy.

    The company has received a notice of contract termination from Chevron for the VALARIS JU-109, which was scheduled to operate offshore Angola until July 2021. As a result of this termination, the rig’s contract is now expected to end in mid-April 2020 and contracted revenue backlog will be reduced by about $50 million.

    The company said it expects to receive additional notices of contract terminations and requests to renegotiate contract day rates and terms in light of increased market uncertainty.

    Since the beginning of March, the VALARIS JU-87 was awarded a one-well contract with Cox in the US Gulf of Mexico that began in mid-March, with an estimated duration of 30 days that added about $1 million of contracted revenue backlog.

    The VALARIS DS-4’s contract with Amni offshore Ghana has been transferred to the VALARIS DS-7 and is expected to start next month. Also, the VALARIS JU-144’s (EXL II) contract with Eni offshore Mexico has been transferred to the VALARIS JU-102 and is expected to start in September 2020.

    Between Feb. 13, 2020 and the beginning of March the company executed the following new contracts and extensions with associated revenue backlog of about $100 million.

    Santos has awarded the semisubmersible VALARIS MS-1 a three-well contract offshore Australia that is expected to start in 1Q 2021, with an estimated duration of 155 days.

    Lukoil Upstream Mexico has awarded the semi VALARIS 8505 a one-well contract that is expected to start in mid-November, with an estimated duration of 80 days.

    Fieldwood has awarded the VALARIS JU-118 (Joe Douglas) a three-well contract offshore Mexico that started in mid-March, with an estimated duration of 425 days.

    Fieldwood also awarded the VALARIS JU-144 (EXL II) a two-well contract offshore Mexico that is expected to start next month, with an estimated duration of 200 days.

    03/27/2020