Valaris DS-15 Contract Signals Strategic Resurgence in West Africa’s Deepwater Drilling Market

Valaris Limited (VRDS) has secured a pivotal contract for its high-specification drillship VALARIS DS-15, marking a strategic move to expand its presence in West Africa’s deepwater drilling market. The $135 million deal, announced in May 2025, underscores the company’s focus on leveraging advanced technology to meet rising demand for complex offshore projects. This contract, which includes priced options for additional wells, positions Valaris as a key player in a region critical to global oil and gas production.

The Contract Details: A Strategic Win for Valaris

The VALARIS DS-15, a 2014-built GustoMSC P10,000-class drillship, will conduct a five-well program offshore West Africa starting in Q3 2026. The base contract spans 250 days, with priced options for up to five additional wells, extending potential work to 100 days. The total value of $135 million includes upfront payments for rig upgrades—a critical detail, as the drillship will install an enhanced managed pressure drilling (MPD) system to handle complex reservoirs. This technology is increasingly vital for safe, efficient drilling in West Africa’s deepwater environments, where geological challenges are common.

While the client’s identity remains undisclosed, the contract’s financial terms and strategic location suggest it involves a major oil and gas operator targeting high-value reserves. Valaris CEO Anton Dibowitz emphasized the deal reflects market demand for “seventh-generation” drillships capable of advanced solutions, a clear competitive advantage for Valaris’ modern fleet.

Why West Africa Matters

West Africa’s offshore basins hold significant untapped resources, particularly in Nigeria, Angola, and Ghana, where deepwater fields are a focus for production growth. The region’s complex geology requires rigs like the DS-15, which can drill to 40,000 feet in 12,000 feet of water. Valaris’ presence here aligns with its broader strategy to capitalize on high-margin, technically demanding projects.

The contract also bolsters Valaris’ backlog, which reached $4.2 billion by early 2025—up from $3.6 billion a year earlier. This growth signals improving industry confidence after years of low oil prices constrained drilling activity.

Financial and Operational Implications

The DS-15 contract’s $135 million value includes mobilization costs, suggesting the rig may relocate from its current Brazil-based assignment. While this incurs upfront expenses, the long-term benefits are substantial: steady revenue for over 10 months and a foothold in a region with high growth potential.

Valaris’ stock, which has risen 40% since late 2023 amid a rebound in drilling activity, may gain further momentum as this contract solidifies its backlog and revenue streams. The deal also highlights the company’s focus on asset optimization: earlier this year, Valaris sold its 27-year-old Valaris 247 jackup rig to BW Energy for $108 million, redirecting capital toward its high-spec fleet.

Risks and Considerations

The contract includes standard risks, such as delays or termination due to market volatility or geopolitical factors. West Africa’s political instability and fluctuating oil prices could impact execution. However, the inclusion of priced options suggests the client is committed to expanding the project, mitigating some uncertainty.

Conclusion: A Pivotal Moment for Valaris

The VALARIS DS-15 contract is a landmark achievement for Valaris, demonstrating its ability to secure premium projects in a recovering market. With a backlog now exceeding $4 billion—a 17% year-on-year increase—the company is well-positioned to capitalize on the deepwater drilling boom. The $135 million deal, paired with the rig’s MPD upgrades, reinforces Valaris’ differentiation in a sector where technology and specialization are becoming decisive factors.

While risks remain, the strategic focus on high-spec assets, coupled with a growing backlog, suggests Valaris is on a path to outperform peers in an industry increasingly favoring operators with advanced capabilities. For investors, this contract is a clear signal of the company’s resilience and growth potential in a region central to global energy supply. As West Africa’s deepwater potential continues to unfold, Valaris’ DS-15 may just be the start of a new chapter.