Key Highlights

  • Revenues were USD 594 million, Net Income USD 47 million, and adjusted EBITDA rose to USD 151 million.
  • Adjusted EBITDA absorbed about USD 24 million of negative effects from Middle East conflicts, down from USD 30 million.
  • Revenue efficiency was 97% for the quarter and 98% year to date, and all ten active drillships are on contract.
  • New Backlog of about USD 600 million lifted total backlog to approximately USD 4.8 billion.

Quarter in Numbers

Valaris Limited (NYSE:VAL), an offshore drilling contractor, reported third-quarter 2026 total operating revenues of USD 594 million and net income of USD 47 million, in line with the second quarter. Adjusted EBITDA was USD 151 million versus USD 97 million in the second quarter. Revenues excluding reimbursable items rose to USD 556 million from USD 502 million, on more operating days and higher average daily revenues in the floater fleet, as three drillships started contracts in the second and third quarters after idle periods and another started a contract at a higher day rate. Contract drilling expenses excluding reimbursables were USD 380 million, in line with the prior quarter.

General and administrative expenses were USD 26 million, Merger and integration expenses rose to USD 16 million from USD 11 million, and other income fell to USD 20 million from USD 30 million on lower asset sale gains. Tax expense was USD 55 million versus USD 34 million, including a USD 23 million discrete, mostly non-cash charge tied to rig sales; adjusted for such items it was USD 32 million versus USD 40 million.

Segments

Floaters Revenue rose to USD 346 million from USD 279 million, with expenses of USD 189 million versus USD 168 million, reflecting full quarters for two drillships, a September start for DS-15 after a shipyard project and a higher day rate for DS-9. Jackups revenue fell to USD 171 million from USD 183 million because one rig spent most of the quarter in a shipyard, and expenses fell to USD 129 million from USD 144 million. ARO Drilling revenue rose to USD 145 million from USD 127 million as two jackups recommenced bareboat charters after maintenance, with expenses of USD 92 million versus USD 72 million.

Middle East Effects and Fleet Actions

The Middle East conflicts reduced adjusted EBITDA by about USD 24 million compared with USD 30 million in the second quarter. The company said the impact began to moderate as it negotiated longer-term war-risk insurance at lower rates. Capital expenditures were USD 122 million versus USD 106 million, and cash fell to USD 525 million from USD 541 million. The company sold a semisubmersible for recycling and a long-stacked jackup for conversion to a mobile offshore production unit, and received the Center for Offshore Safety's 2026 Safety Leadership Award for a fourth consecutive year.

Contract Coverage and Merger Indicators

President and chief executive Anton Dibowitz said four drillships returned to work this year after idle periods, all ten active drillships are on contract, the pipeline of deepwater opportunities remains robust and day rates are moving higher on Demand for high-specification drillships. He said the pending Business combination with Transocean has all required regulatory approvals and is anticipated to close on or about December 1, 2026.

Backlog stands at approximately USD 4.8 billion after about USD 600 million of additions since second-quarter results. Items to track include utilization of the floater fleet, the continuing cost of regional conflicts, jackup shipyard timing and the closing of the Transocean combination.