Valaris Limited Q2 2025: Exploring Contradictions in Seventh-Gen Drillship Demand and Offshore Market Sentiment

Significance of seventh-gen drillships, customer mindset regarding offshore drilling, Saudi Arabia's rig count and market stability, customer confidence in offshore resource demand, and market demand and rig utilization are the key contradictions discussed in Valaris Limited's latest 2025Q2 earnings call.



Operational and Financial Performance:
- Valaris achieved fleet-wide revenue efficiency of 96% in Q2 2025, contributing to meaningful adjusted EBITDA of $201 million and adjusted free cash flow of $63 million.
- This performance was driven by safe and efficient operations, which are at the core of Valaris' strategy.

Contract Success and Backlog Increase:
- The company added more than $1 billion in new contract backlog since Q1, increasing the total backlog to approximately $4.7 billion.
- This success was due to securing attractive long-term contracts for their high-specification fleet, aligning with their commercial strategy.

Floater Market and Opportunities:
- Valaris tracked over 30 floater opportunities with planned start dates in 2026 or 2027, contributing to a healthy pipeline for future demand.
- The company anticipates additional awards across the industry in the coming months, driven by customers prioritizing long-cycle offshore projects.

Jackup Fleet Utilization:
- Global jackup marketed utilization ended Q2 at 90%, with Valaris maintaining robust contract coverage on their jackups, particularly in regions like Saudi Arabia and the North Sea.
- This high utilization is due to national oil companies prioritizing energy security and infrastructure funding, driving demand for shallow water rigs.