Hamilton, Bermuda, February 19, 2025… Valaris Limited (NYSE: VAL) ("Valaris" or the "Company") today reported fourth quarter 2024 results.

President and Chief Executive Officer Anton Dibowitz said, “We continued to deliver solid operating and financial performance, achieving fleetwide revenue efficiency of 96% in the fourth quarter and 97% for the full year. We also had outstanding safety performance in 2024 and are proud to have been recognized with safety awards by both the IADC and the Center for Offshore Safety. I thank every member of the Valaris team around the world for their dedication, hard work and continued focus on operating safely and efficiently for our customers.”

Dibowitz added, “The contracting outlook for 2026 and beyond remains strong for high-specification assets and we are focused on securing attractive, long-term programs for our active rigs. We will also continue to prudently manage our fleet as demonstrated by our recent actions to reduce costs for idle rigs and further focus our fleet on high-specification assets.”

Dibowitz concluded, “We are steadfast in our belief that offshore oil and gas will play an important role in providing secure, reliable and affordable energy to the world. Valaris is well-positioned to help meet that need and drive sustainable, long-term value creation for our shareholders by virtue of our high-specification fleet and excellent safety and operational track record.”

•Delivered net income of $131 million and Adjusted EBITDA of $142 million;

•Achieved revenue efficiency of 96% during the quarter and 97% for the year;

•Generated $125 million of cash from operating activities and $13 million of Free Cash Flow;

•Repurchased $25 million of shares;

•Recognized by the International Association of Drilling Contractors ("IADC") Brazil Chapter with its 2024 Safety Award;

•Secured approximately $120 million of contract backlog, including a multi-year contract for jackup VALARIS Stavanger in the North Sea; and

•Announced in the first quarter 2025 the planned retirement of semisubmersibles VALARIS DPS-3, DPS-5 and DPS-6 and the sale of jackup VALARIS 75 for $24 million.

Net income increased to $131 million from $63 million in the third quarter 2024, including a tax benefit of $7 million compared to tax expense of $24 million in the third quarter. Adjusted EBITDA decreased to $142 million from $150 million in the third quarter primarily due to lower utilization for the floater fleet, partially offset by more operating days for the jackup fleet.

Revenues exclusive of reimbursable items decreased to $548 million from $600 million in the third quarter primarily due to lower utilization for the floater fleet and lower amortized mobilization revenue, partially offset by more operating days for the jackup fleet.

Exclusive of reimbursable items, contract drilling expenses decreased to $381 million from $423 million in the third quarter primarily due to lower amortized mobilization expense, lower costs associated with rigs that were idle during the quarter and lower repair costs.

Depreciation expense increased to $34 million from $32 million in the third quarter 2024. General and administrative expenses decreased to $27 million from $31 million in the third quarter 2024 primarily due to lower compensation costs and professional fees.

Other income of $5 million compared to other expense of $8 million in the third quarter 2024. This increase was primarily due to foreign currency exchange gains compared to losses in the third quarter.

Tax benefit of $7 million compared to tax expense of $24 million in the third quarter 2024. The fourth quarter tax provision included $16 million of discrete tax benefit, which was primarily attributable to changes in liabilities for unrecognized tax benefits associated with tax positions taken in prior years. Exclusive of discrete tax items, tax expense decreased to $9 million from $24 million in the third quarter.

Capital expenditures increased to $112 million from $82 million in the third quarter 2024 primarily due to higher rig upgrade expenditures related to contract preparations for VALARIS 144 and DS-4.

Cash and cash equivalents and restricted cash decreased to $381 million as of December 31, 2024, from $392 million as of September 30, 2024. The decrease was primarily due to capital expenditures and share repurchases, partially offset by cash flow from operations.

Floaters

Revenues exclusive of reimbursable items decreased to $328 million from $375 million in the third quarter. The decrease was primarily due to lower utilization for the floater fleet associated with out of service time for VALARIS DS-15 and DS-17 to meet regulatory requirements in Brazil and for VALARIS DS-4 to complete upgrade work prior to the start of its contract as well as idle time for VALARIS DS-10 and DPS-5, which completed contracts during the third quarter.

Exclusive of reimbursable items, contract drilling expenses decreased to $211 million from $235 million in the third quarter primarily due to capitalization of costs for VALARIS DS-4 during its shipyard upgrade project, lower costs for VALARIS DPS-5 and DS-10 while the rigs were warm stacked during the fourth quarter and lower mobilization expense.

Jackups

Revenues exclusive of reimbursable items decreased to $188 million from $193 million in the third quarter primarily due to lower amortized mobilization revenue associated with VALARIS 247. This was partially offset by more operating days for the jackup fleet primarily due to VALARIS 249 returning to work after completing leg repairs and a full quarter of operations for VALARIS 247 and 122.

Exclusive of reimbursable items, contract drilling expenses decreased to $114 million from $137 million in the third quarter primarily due to lower amortized mobilization expense associated with VALARIS 247 and lower repair costs for VALARIS 249.

ARO Drilling

Revenues increased to $136 million from $114 million in the third quarter 2024 primarily due to a full quarter of operations for Kingdom 2, which commenced its maiden contract in the third quarter, and more operating days for Kingdom 1 due to out of service time in the prior quarter. Contract drilling expenses decreased to $82 million from $94 million in the third quarter primarily due to lower bareboat charter expense.

Other

Revenues exclusive of reimbursable items increased to $33 million from $32 million in the third quarter 2024. Exclusive of reimbursable items, contract drilling expenses increased to $18 million from $15 million in the third quarter due to higher survey costs for rigs leased to ARO.

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(1) The full operating results included above for ARO are not included within our consolidated results and thus deducted under "Reconciling Items" and replaced with our equity in earnings of ARO.

(2) Our onshore support costs included within contract drilling expenses are not allocated to our operating segments for purposes of measuring segment operating income (loss) and as such, these costs are included in "Reconciling Items." Further, general and administrative expense and depreciation expense incurred by our corporate office are not allocated to our operating segments for purposes of measuring segment operating income (loss) and are included in "Reconciling Items."

(3) Certain previously reported line items presented in the table above (Total operating revenues and Total contract drilling expenses (exclusive of depreciation)) were further disaggregated to separately disclose Reimbursable revenues and Reimbursable expenses, respectively, to align with the updated presentation of our segment tables upon the adoption of ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("Update 2023-07"). The disaggregation of these line items was presentational only and was retrospectively applied to the prior periods presented. There were no impacts to the overall Total operating revenues or Total contract drilling expense (exclusive of depreciation) line items.

As previously announced, Valaris will hold its fourth quarter 2024 earnings conference call at 9:00 a.m. CT (10:00 a.m. ET) on Thursday, February 20, 2025.

Valaris Limited (NYSE: VAL) is the industry leader in offshore drilling services across all water depths and geographies. Operating a high-quality rig fleet of ultra-deepwater drillships, versatile semisubmersibles, and modern shallow-water jackups, Valaris has experience operating in nearly every major offshore basin. Valaris maintains an unwavering commitment to safety, operational excellence, and customer satisfaction, with a focus on technology and innovation. Valaris Limited is a Bermuda exempted company. To learn more, visit the Valaris website at www.valaris.com.

Statements contained in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include words or phrases such as "anticipate," "believe," "estimate," "expect," "intend," "likely," "outlook," "plan," "project," "could," "may," "might," "should," "will" and similar words and specifically include statements regarding expected financial performance; expected utilization, day rates, revenues, operating expenses, cash flows, contract status, terms and duration, contract backlog, capital expenditures, insurance, financing and funding; the offshore drilling market, including supply and demand, customer drilling programs and the attainment of requisite permits for such programs, stacking of rigs, effects of new rigs on the market and effect of the volatility of commodity prices; expected work commitments, awards, contracts and letters of intent; scheduled delivery dates for rigs; performance and expected benefits of our joint ventures, including our joint venture with Saudi Aramco; timing of the delivery of the Saudi Aramco Rowan Offshore Drilling Company ("ARO") newbuild rigs and the timing of additional ARO newbuild orders; the availability, delivery, mobilization, contract commencement, availability, relocation or other movement of rigs and the timing thereof; rig reactivations; suitability of rigs for future contracts; divestitures of assets; general economic, market, business and industry conditions, including inflation and recessions, trends and outlook; general political conditions, including political tensions, conflicts and war; cybersecurity attacks and threats; uncertainty around the use and impacts of artificial intelligence applications; impacts and effects of public health crises, pandemics and epidemics; future operations; ability to renew expiring contracts or obtain new contracts, including for VALARIS DS-13 and VALARIS DS-14; increasing regulatory complexity; targets, progress, plans and goals related to sustainability matters; the outcome of tax disputes; assessments and settlements; and expense management. The forward-looking statements contained in this press release are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from those indicated, including cancellation, suspension, renegotiation or termination of drilling contracts and programs; our ability to obtain financing, service our debt, fund capital expenditures and pursue other business opportunities; adequacy of sources of liquidity for us and our customers; future share repurchases; actions by regulatory authorities, or other third parties; actions by our security holders; internal control risk; commodity price fluctuations and volatility, customer demand, loss of a significant customer or customer contract, downtime and other risks associated with offshore rig operations; adverse weather, including hurricanes; changes in worldwide rig supply, including as a result of reactivations and newbuilds; and demand, competition and technology; supply chain and logistics challenges; consumer preferences for alternative fuels and forecasts or expectations regarding the global energy transition; increased scrutiny of our sustainability targets, initiatives and reporting and our ability to achieve such targets or initiatives; changes in customer strategy; future levels of offshore drilling activity; governmental action, civil unrest and political and economic uncertainties, including recessions, volatility affecting the banking system and financial markets, inflation, tariffs and adverse changes in the level of international trade activity; terrorism, piracy and military action; risks inherent to shipyard rig reactivation, upgrade, repair, maintenance or enhancement; our ability to enter into, and the terms of, future drilling contracts; suitability of rigs for future contracts; the cancellation of letters of intent or letters of award or any failure to execute definitive contracts following announcements of letters of intent, letters of award or other expected work commitments; the outcome of litigation, legal proceedings, investigations or other claims or contract disputes; governmental regulatory, legislative and permitting requirements affecting drilling operations; the use of artificial intelligence by us, third-party service providers or our competitors; our ability to attract and retain skilled personnel on commercially reasonable terms; environmental or other liabilities, risks or losses; compliance with our debt agreements and debt restrictions that may limit our liquidity and flexibility, including in any return of capital plans; cybersecurity risks and threats; and changes in foreign currency exchange rates. In addition to the numerous factors described above, you should also carefully read and consider "Item 1A. Risk Factors" in Part I and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II of our most recent annual report on Form 10-K, which is available on the Securities and Exchange Commission's website at www.sec.gov or on the Investor Relations section of our website at www.valaris.com. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to update or revise any forward-looking statements, except as required by law.

(1) Certain previously reported line items presented in the Consolidated Statements of Operations (Total operating revenues and Total contract drilling expenses (exclusive of depreciation)) were further disaggregated to separately disclose Reimbursable revenues and Reimbursable expenses, respectively, to align with the updated presentation of our segment tables upon the adoption of Update 2023-07. The disaggregation of these line items was presentational only and was retrospectively applied to the prior periods presented. There were no impacts to the overall Total operating revenues or Total contract drilling expense (exclusive of depreciation) line items.

VALARIS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

			Years Ended December 31,
			2024						2023
OPERATING ACTIVITIES
Net income			$	369.8					$	866.8
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense			122.1						101.1
Accretion of discount on notes receivable from ARO			(40.0)						(28.3)
Share-based compensation expense			27.7						27.3
Equity in losses (earnings) of ARO			11.0						(13.3)
Deferred income tax expense (benefit)			5.8						(786.4)
Net periodic pension and retiree medical income			(2.4)						(0.9)
Net (gain) loss on sale of property			0.2						(28.6)
Loss on extinguishment of debt			—						29.2
Changes in deferred costs			39.3						(26.1)
Changes in contract liabilities			(31.7)						4.9
Other			9.3						6.7
Changes in operating assets and liabilities			(134.2)						121.8
Contributions to pension plans and other post-retirement benefits			(21.5)						(6.7)
Net cash provided by operating activities			$	355.4					$	267.5
INVESTING ACTIVITIES
Additions to property and equipment			$	(455.1)					$	(696.1)
Net proceeds from disposition of assets			2.8						30.3
Net cash used in investing activities			$	(452.3)					$	(665.8)
FINANCING ACTIVITIES
Payments for share repurchases			$	(126.4)					$	(198.6)
Payments for tax withholdings for share-based awards			(29.9)						(5.4)
Debt issuance costs			(0.8)						(38.6)
Issuance of Second Lien Notes			—						1,103.0
Redemption of First Lien Notes			—						(571.8)
Other			(1.2)						(3.1)
Net cash provided by (used in) financing activities			$	(158.3)					$	285.5
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH			$	(255.2)					$	(112.8)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD			635.7						748.5
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD			$	380.5					$	635.7

VALARIS LIMITED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

			Three Months Ended
			Dec 31, 2024			Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023
OPERATING ACTIVITIES
Net income			$	130.6		$	62.9		$	150.8		$	25.5		$	828.5
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense			33.9			31.7			29.7			26.8			27.5
Deferred income tax expense (benefit)			(13.5)			3.8			13.5			2.0			(788.7)
Equity in losses (earnings) of ARO			(10.7)			23.8			0.3			(2.4)			(8.3)
Accretion of discount on notes receivable from ARO			(6.2)			(6.2)			(20.6)			(7.0)			(7.1)
Share-based compensation expense			5.3			7.0			7.4			8.0			7.8
Net (gain) loss on sale of property			(0.1)			0.2			—			0.1			(0.7)
Changes in contract liabilities			(18.2)			11.3			(17.8)			(7.0)			8.8
Changes in deferred costs			6.7			33.4			(3.0)			2.2			3.2
Other			1.9			0.8			2.4			1.8			0.6
Changes in operating assets and liabilities			(3.2)			37.8			(147.5)			(21.3)			27.3
Contributions to pension plans and other post-retirement benefits			(1.9)			(13.5)			(3.7)			(2.4)			(2.2)
Net cash provided by operating activities			$	124.6		$	193.0		$	11.5		$	26.3		$	96.7
INVESTING ACTIVITIES
Additions to property and equipment			$	(111.7)		$	(81.9)		$	(110.2)		$	(151.3)		$	(463.0)
Net proceeds from disposition of assets			2.6			0.1			0.1			—			1.1
Net cash used in investing activities			$	(109.1)		$	(81.8)		$	(110.1)		$	(151.3)		$	(461.9)
FINANCING ACTIVITIES
Payments for share repurchases			$	(25.0)		$	(100.0)		$	—		$	(1.4)		$	(51.2)
Payments for tax withholdings for share-based awards			(0.2)			(29.3)			(0.2)			(0.2)			(0.2)
Other			(2.0)			—			—			—			(5.0)
Net cash used in financing activities			$	(27.2)		$	(129.3)		$	(0.2)		$	(1.6)		$	(56.4)
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH			$	(11.7)		$	(18.1)		$	(98.8)		$	(126.6)		$	(421.6)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD			392.2			410.3			509.1			635.7			1,057.3
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD			$	380.5		$	392.2		$	410.3		$	509.1		$	635.7

(1)Reimbursable revenues represent reimbursements from our customers for purchases of supplies, equipment and incremental services provided at their request.

(2)In connection with our adoption of Update 2023-07 during the fourth quarter of 2024, we updated the presentation of Reimbursable Revenues in this table to align with our presentation on the Consolidated Statements of Operations. This change is presentational only and was applied retrospectively for all periods presented. There were no changes to total segment revenues or total operating revenues as a result of this update.

(3)HD = Heavy Duty; SD = Standard Duty. Heavy duty jackups are well-suited for operations in tropical revolving storm areas.

(1)Adjusted EBITDA is earnings before interest, tax, depreciation and amortization. Adjusted EBITDA for asset category also excludes onshore support costs and general and administrative expense.

(1)Adjusted EBITDAR is earnings before interest, tax, depreciation, amortization and reactivation costs. Adjusted EBITDAR for active fleet, leased and managed rigs and stacked fleet also excludes onshore support costs and general and administrative expense.

(2)Active fleet represents rigs that are not preservation stacked, including rigs that are in the process of being reactivated.

(3)Stacked fleet represents the combined total of all preservation and stacking costs.

(4)Reactivation costs, all of which are attributed to Valaris' active fleet, are excluded from adjusted EBITDAR.

(1)Adjusted EBITDAR is earnings before interest, tax, depreciation, amortization and reactivation costs. Adjusted EBITDAR for asset category also excludes onshore support costs and general and administrative expense.

(1)Our contract drilling backlog reflects commitments, represented by signed drilling contracts, and is calculated by multiplying the contracted day rate by the contract period. Contract drilling backlog may include drilling contracts subject to final investment decision ("FID") and drilling contracts which grant the customer termination rights if FID is not received with respect to projects for which the drilling rig is contracted. The contracted day rate excludes certain types of lump sum fees for rig mobilization, demobilization, contract preparation, as well as customer reimbursables and bonus opportunities.

(1)Average daily revenue is derived by dividing Revenues (exclusive of reimbursable revenues) by the aggregate number of operating days.

(1)Rig utilization is derived by dividing the number of operating days by the number of available days in the period for the total fleet.

(2)Includes all Valaris jackups including those leased to ARO Drilling.

(1)Rig utilization is derived by dividing the number of operating days by the number of available days in the period for the active fleet.

(2)Active fleet represents rigs that are not preservation stacked, including rigs that are in the process of being reactivated.

(3)Includes all Valaris jackups including those leased to ARO Drilling.