Valaris Limited · NYSE:VAL
Valaris — Barclays CEO Energy/Power Conference 2024
19 slides from Valaris's conference presentation, Sep 3, 2024
Slide 1: Investor Presentation
Investor Presentation SEPTEMBER 2024 FOCUSED VALUE DRIVEN RESPONSIBLE
Slide 2: Forward-Looking Statements
Forward-Looking Statements Statements contained in this investor presentation 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
Slide 3: Valaris Overview (NYSE: VAL)
Valaris Overview (NYSE: VAL) 53 Rigs 96+% $4.3 Billion Largest offshore driller by fleet size with Revenue efficiency for each of the past Contract backlog as of July 29, 2024 18 high-spec floaters and 35 jackups three years 42% increase vs. a year ago 92% #1 $480-540M 7th generation assets within V
Slide 4: High-specification floater fleet focused on key strategic basins
High-specification floater fleet focused on key strategic basins Critical mass in the Golden Triangle, which is expected to account ~$2.6B of backlog & strong relationships for 70% of benign environment floater demand through 2027 with ultra-deepwater customers in key basins Floater Backlog by Custo
Slide 5: Technical specifications of 7th generation drillships deliver efficiencies for customers’ well programs
Technical specifications of 7th generation drillships deliver efficiencies for customers’ well programs Dual Derricks w/ High Hookload Capacity Dual derricks facilitate certain simultaneous • The combination of the technical activities, reducing customers’ project time and costs; 2.5M lb hookload ca
Slide 6: Jackup fleet primarily positioned in the North Sea, Middle East & attractive niche markets
Jackup fleet primarily positioned in the North Sea, Middle East & attractive niche markets Strong presence in key shallow-water regions in the North Sea and Middle East ~$1.5B of backlog with leading IOCs, as well as attractive niche markets like Australia & Trinidad NOCs and independent operators J
Slide 7: Offshore production expected to play an increasingly important role in meeting global hydrocarbon demand
Offshore production expected to play an increasingly important role in meeting global hydrocarbon demand Global Liquid Fuels Supply by Source (Million Barrels Per Day) Offshore Breakeven Oil Prices for Undeveloped Reserves 36 113 100% 25 100 93% 95% 102 91% 25 86% 90 82% 20% 77% 25 20 80 6 70% 4 >90
Slide 8: Benign environment floater demand is expected to increase over the next few years
Benign environment floater demand is expected to increase over the next few years Benign Environment Floater Demand by Region (Rig Years) South America Gulf of Mexico West Africa Rest of World • Benign environment floater demand is expected to increase at a compound 150 +6% annual growth rate of 6%
Slide 9: Drillship day rates currently well below prior cycle peak
Drillship day rates currently well below prior cycle peak 6th & 7th Generation Drillship Day Rates (Inflation Adjusted)1 • Leading-edge day rates are ≥ $500K $900K • To reach 99% marketed utilization we Marketed utilization Marketed utilization need to see 11 incremental rigs $800K averaged 99% in t
Slide 10: Jackup demand expected to remain stable over the next few years
Jackup demand expected to remain stable over the next few years Middle East Gulf of Mexico Northwest Europe Jackup Demand by Region (Rig Years) China Southeast Asia India/Rest of World • Demand across each of the major jackup regions is expected to remain 400 365 365 369 359 relatively stable throug
Slide 11: Utilization and day rates for modern benign environment jackups approaching prior cycle peak
Utilization and day rates for modern benign environment jackups approaching prior cycle peak, while North Sea jackup market is at an earlier stage in its recovery Modern Benign Environment Jackup Day Rates (Inflation Adjusted)1,2 North Sea (ex Norway) Jackup Day Rates (Inflation Adjusted) 1,3 $350K
Slide 12: Improved market backdrop and Valaris' commercial execution has led to increasing backlog at higher day rates
Improved market backdrop and Valaris' commercial execution has led to increasing backlog at higher day rates Strong contracting environment with improving contract backlog reaching $4.3 billion1,2 Valaris Contract Backlog ($ Billions) Valaris Contract Backlog by Year ($ Millions) 5.0 2,000 4.3 1,725
Slide 13: Significant earnings potential and cash flow from Valaris fleet
Significant earnings potential and cash flow from Valaris fleet Total Rigs Under Contract or Illustrative Annual Earnings and Cash Flow from Valaris Fleet1 Rigs with Future Contract Illustrative Scenario A B C 13 9 Drillship Day Rates $400K $450K $500K 5 2 Benign Semisubmersible Day Rates $300K $350
Slide 14: Value-driven approach to capital allocation
Value-driven approach to capital allocation Pursue Accretive Investments Maintain a Strong in our Fleet and/or Strategic Return Free Cash Flow to Balance Sheet Growth Opportunities Shareholders v Intend to return all future free cash flow to Committed to maintaining a conservative Six drillship reac
Slide 15: Key Takeaways
Key Takeaways Offshore drilling industry is in a structural upcycle Valaris is well positioned to benefit from this upcycle by virtue of a high-specification fleet and a strong operational and safety track record Positive market backdrop for securing new contracts at higher day rates that support ex
Slide 16: Appendix
Appendix 16
Slide 17: Global Fleet Utilization – August 2024
Global Fleet Utilization – August 2024 6/7G 6/7G Harsh Benign Drillships1 Benign Semis1,2 Jackups2 Jackups2 Time Stacked – Available And Cold Stacked Rigs Contracted 73 25 28 382 6/7G DRILLSHIPS1 6/7G BENIGN SEMIS1,2 1 Available3 12 8 3 29 3 2 7 3 5 6 Marketed Fleet 85 33 31 411 11 2 11 1 2 Cold Sta
Slide 18: Contract Backlog – July 29, 2024
Contract Backlog – July 29, 2024 Contract Backlog Contract Backlog by Customer Type 7% 41% 52% IOC NOC Independent (1) Contract backlog, contracted days and average day rates as of July 29, 2024. (2) Contract backlog and average day rates exclude certain types of non-recurring revenues such as lump
Slide 19: FOCUSED VALUE DRIVEN RESPONSIBLE
FOCUSED VALUE DRIVEN RESPONSIBLE