Offshore driller Valaris has received termination notices for one of its drillships and a jackup rig, and anticipates more contract cancellations in light of increased market uncertainties.
Total has terminated the contract for drillship Valaris DS-8, currently operating off Angola. Valaris said the operating day rate for the ship is approximately $620,000 per day and 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. The company is in discussions with Total regarding the notice and will seek to recover losses incurred in accordance with the terms of the insurance policy.
Valaris also received a notice of contract termination from Chevron for jackup rig Valaris JU-109, which was scheduled to operate offshore Angola until July 2021. As a result of the termination, the rig’s contract is now expected to end in mid-April and contracted revenue backlog will be reduced by approximately $50m.
Valaris expects to receive additional notices of contract terminations and requests to renegotiate contract day rates and terms in light of increased market uncertainty.
Valaris has executed new contracts and extension with associated revenue backlog of around $100m since beginning of March.