Key Highlights

  • VAL reported third quarter 2026 total operating revenues of $594 million and Net Income of $47 million, or $0.66 per diluted share.
  • Adjusted EBITDA rose to $151 million from $97 million in the second quarter, a 56% sequential increase.
  • Contract Backlog grew to approximately $4.8 billion after about $600 million of new commitments since the second quarter report.
  • Revenue efficiency was 97% for the quarter and 98% year to date, with all ten active drillships now on contract.
  • Middle East conflicts trimmed adjusted EBITDA by about $24 million, down from roughly $30 million in the second quarter.

Drillships Returning to Work Lift Adjusted EBITDA by 56%

Valaris (NYSE:VAL) announced third quarter 2026 results on Nov 2, 2026, for the quarter ended Sep 30, 2026. Total operating revenues were $594 million, up from $539 million in the second quarter, while net income was $47 million, in line with the prior quarter.

Adjusted EBITDA climbed to $151 million from $97 million. Revenues excluding reimbursable items rose to $556 million from $502 million, mainly because three drillships started new contracts during the second and third quarters after idle periods, and another began work at a higher day rate.

Valaris is an offshore drilling contractor that operates ultra-deepwater drillships and shallow-water jackups in major basins worldwide. Diluted Earnings per Share were $0.66, compared with $0.72 in the second quarter.

Floater Segment Revenue Jumps to $346 Million as Jackups Slip

The floater fleet generated revenues of $346 million, up from $279 million, helped by a full quarter of work for two drillships that began contracts in April and June. A third drillship started a new contract in September after a shipyard project, and a fourth moved to a higher day rate.

Jackup revenues eased to $171 million from $183 million because one rig spent most of the quarter in a shipyard for planned maintenance before its next contract. Jackup contract drilling expenses fell to $129 million from $144 million on lower mobilization and war-risk insurance costs.

ARO Drilling, the company's joint venture with Saudi Aramco, saw revenues rise to $145 million from $127 million as two jackups resumed bareboat charters in July and September. Even so, Valaris recorded an Equity loss from ARO of $3.5 million, against earnings of $10.6 million in the second quarter.

Tax Charge, Cash Position and $4.8 Billion Backlog Frame the Balance Sheet

Tax expense rose to $55 million from $34 million, including a $23 million discrete charge, largely non-cash, tied to rig sales. Excluding discrete items, tax expense declined to $32 million from $40 million. Other income fell to $20 million from $30 million on lower gains from asset sales.

Capital expenditures increased to $122 million from $106 million. Cash and cash equivalents ended the quarter at $525 million, down from $541 million, as spending outpaced Operating Cash Flow of $67 million and asset sale proceeds. Long-term Debt stood at about $1.09 billion, and total equity was $3.27 billion.

Backlog rose to approximately $4.8 billion. The company also sold a semisubmersible for recycling and a long-stacked jackup for conversion to a mobile offshore production unit.

Pending Transocean Combination Targets a Dec 1, 2026 Close

Management said the pending Business combination with Transocean has received the required regulatory approvals and is expected to close on or about Dec 1, 2026. Merger and integration expenses were $16 million in the quarter, compared with $11 million in the second quarter. Because of the transaction, Valaris does not plan future earnings calls or updates to guidance, so the closing date and the next set of reported figures are the key items to follow.