Each one in plain English, with the numbers worked through for a shareholder.
28 July 2022production update▼ BadMajor
Valaris's July 28, 2022 fleet status report says the DS-11 contract, previously counted as about $428 million of backlog (and moved from TotalEnergies to Equinor in March 2022), was terminated effective end of June. The filing does not state a reason. New work includes a 540-day Equinor contract for DS-17 offshore Brazil worth about $327 million (including about $86 million upfront), starting mid-2023, and a four-year Brunei Shell contract for jackup 115 worth about $159 million from April 2023. Rig 36 was sold for $9 million. Total backlog is $2,349.3 million, down from $2,453.4 million in May, plus $467.5 million as Valaris's 50% share of ARO Drilling's owned rigs (adjusted total $2,816.8 million).
Valaris filed its routine fleet status report as of May 2, 2022. It lists a two-well Angola/Congo contract for DS-12 worth $26.2 million, extensions for DS-15 and others, and two-year BP extensions for the managed rigs Mad Dog and Thunder Horse. The DS-11 eight-well US Gulf of Mexico contract was moved from TotalEnergies to Equinor in March 2022 with no material changes, and about $428 million of backlog relates to it. Rigs 113 and 114 were sold to ADES Saudi Limited for a total of $125 million, rig 67 was sold and retired, and Valaris says it will now disclose day rates for new contracts. Total backlog is $2,453.4 million, plus $496.8 million as Valaris's 50% share of ARO Drilling's owned rigs (adjusted total $2,950.2 million).
On December 9, 2021 Valaris signed a support agreement with Famatown Finance Limited under which it will let Famatown appoint a board observer until the 2022 annual general meeting. If Famatown buys more shares and the board considers the amount sufficient, Famatown's nominee will be appointed a director. Famatown must keep at least 5% of the common shares or the rights end, and it accepts standstill and voting commitments. The filing does not say how many shares Famatown holds or what it paid.
Valaris filed its routine fleet status report as of October 27, 2021. New work includes a two-year ExxonMobil contract offshore Angola for DS-9 from June 2022, a Petrobras contract for DS-4 offshore Brazil (minimum 548 days) from early Q2 2022, and several short jackup and semisubmersible jobs. Total contract backlog is now $2,318.0 million, plus $378.7 million as Valaris's 50% share of ARO Drilling's owned-rig backlog (adjusted total $2,696.7 million), up from $2,223.7 million in the August report. Rigs 22 and 100 were sold and retired, and rig 142 was sold to an operator with use restricted to specific assets.
A routine fleet status report as of August 2, 2021 lists new contracts and extensions, including a three-year Chevron contract for DS-18 from Q1 2022, a two-year Occidental contract for DS-16 from May 2022, an eight-well TotalEnergies contract for DS-11 from mid-2024 subject to a final investment decision, and a three-year North Oil Company contract for JU-110 in Qatar. Total contract backlog was $2,223.7 million at August 2, 2021, up from $1,171.4 million at April 30, 2021, with a further $409.4 million as Valaris's 50% share of ARO Drilling's owned-rig backlog.
A routine fleet status report as of May 3, 2021, now filed by Valaris Limited (Bermuda), shows new and extended contracts: DS-15 with Total offshore Brazil (about 400 days from June 2021), DS-18 with Chevron extended to January 2022, and several jackup awards. DS-7's Senegal/Mauritania contract was terminated, and DPS-1's contract ended early in September 2020. Contract backlog was $1,171.4 million at April 30, 2021, versus $1,880.3 million at March 31, 2020 in the earlier report. DS-3, DS-5, DS-6, 5004, 8500-8502, 8504 and several jackups were sold and retired. The company now lists common shares and warrants on the NYSE, suggesting the reorganization has taken effect (inference).
On March 3, 2021 the bankruptcy court confirmed the Fourth Amended Joint Chapter 11 Plan, resolving the plan confirmation thread; the plan is not yet effective, with the company targeting early in the second quarter of 2021 and giving no assurance. Existing shareholders (Class 13, 199,613,642 shares outstanding at Feb 22, 2021) receive only their pro rata share of new warrants in the new holding company. Noteholders get shares of a distributable pool (and some cash), revolver lenders get cash and shares, and general unsecured claims are paid in full in cash.
On February 5, 2021, Valaris and some noteholders amended the restructuring support agreement to bring in lenders under the revolving credit facility, and the backstop agreement was amended to include them. The rights offering would be offered 97.6% to senior noteholders and 2.4% to certain revolver lenders. New Valaris would issue about 39% of its equity to noteholders (before dilution by a 0.5% newbuild pool), 28.3% to revolver lenders and 2.7% to backstop parties, and 30% of the new shares go to rights offering participants. 72% of noteholders and 88.72% of lenders had signed. The filing says nothing about existing shareholders' treatment, so the earlier open question on their recovery is not answered here.
On September 25, 2020, with court approval, Valaris and its Chapter 11 subsidiaries signed a debtor-in-possession credit agreement for up to $500.0 million with Wilmington Savings Fund Society as agent, maturing no later than August 17, 2021. It funds general needs and bankruptcy costs during the case and is secured on substantially all the debtors' property; it is the DIP Facility the plan was already expected to repay in cash. The filing states no change to shareholder terms.
On September 10, 2020 Valaris and the required noteholders amended the restructuring support and backstop agreements to extend the period for more holders to join as backstop parties to September 14, 2020. The company says over 70% of its noteholders have signed the agreements. The filing also notes the NYSE filed Form 25 on September 4, with delisting effective September 14, 2020. No change to shareholder terms is stated.
Following the Chapter 11 filing, the NYSE notified Valaris on August 19, 2020 that it will delist the shares, and trading was suspended; the company does not intend to appeal. The shares now trade on the OTC Pink market as VALPQ, a more limited and likely less liquid market. A court order also sets notice and approval procedures for transfers by holders of 4.5% or more of the shares, to protect tax attributes. This continues the NYSE listing thread, but delisting here follows the bankruptcy filing.
On August 18, 2020 Valaris signed a Restructuring Support Agreement with certain noteholders, to be carried out through Chapter 11 (the company and 89 subsidiaries filed August 19 per the next filing). This resolves the open question of restructuring terms. Proposed terms: revolver lenders get 32.5% of new stock, senior noteholders get 34.8% plus rights to buy $500M of new secured notes (backstopped by Consenting Noteholders), and existing shareholders get up to 0.01% of new stock plus 7-year warrants for up to 7% only if their class votes in support. Existing shareholders would be heavily diluted if the plan goes ahead, though the plan is not yet confirmed.
On August 3, 2020 Valaris extended the bank waiver and the noteholder forbearance again, now to the earliest of August 15, 2020 or other listed events. It chose not to pay about $12.7M interest on the 3.00% exchangeable notes, about $11.7M on the 8.00% 2024 notes (both due July 31) and about $38.8M on the 7.75% 2026 notes (due August 1), using 30-day grace periods. The waiver also covers a subsidiary's interest and principal due August 15 on its 2020 and 2040 notes. Restructuring talks continue with no terms stated for shareholders.
On July 15, 2020 Valaris again extended its bank waiver and the noteholder forbearance, now to the earliest of August 3, 2020 or other listed events (including a US bankruptcy filing). It also chose not to pay about $7.6M interest on the 4.75% 2024 notes and about $11.7M on the 5.85% 2044 notes due that day, using the 30-day grace period to August 15, 2020. The waiver also covers later interest due July 31 and August 1 and a vendor payment. The company reports about $215M cash at July 14 and says restructuring talks continue, with no terms or shareholder outcome stated.
On June 30, 2020 Valaris extended its bank waiver and, with certain noteholders, signed a forbearance agreement on the former Rowan notes, both lasting until the earliest of July 15, 2020 or other listed events (including acceleration, a termination of the other agreement, or a US bankruptcy filing). The waiver now also covers cross-defaults from the missed June interest, which continues the earlier grace-period approach. The filing says restructuring talks continue, but it states no restructuring terms and no outcome for shareholders.
Valaris chose not to pay about $15.1 million of interest due June 1, 2020 on its 4.875% 2022 notes and about $10.8 million on its 5.40% 2042 notes, using the 30-day grace period to July 1, 2020. Its bank lenders (Citibank as agent) signed a waiver of any default under the revolving credit facility for these and the June 15 interest on the 7.375% 2025 notes. The company had about $238 million cash at May 29, 2020 and says it is in talks with lenders and bondholders on a possible comprehensive restructuring of its debt.
The April 22, 2020 fleet report shows contract losses: DS-8's Total contract (to Nov 2020) ended early in late March, JU-109's contract (to July 2021) ended early in mid April, and the DS-7 Ghana job and 5004 contract were terminated. Several rigs will work at reduced day rates, and DS-4, DS-11, DS-17 and 8504 are being preservation stacked. Backlog at March 31, 2020 is $1,880.3 million, down from $2,452.6 million at December 31, 2019 (the periods are not like-for-like, since the earlier figure included all of 2020). New work includes MS-1 with Santos and JU-118 with Fieldwood in Mexico.
On April 15, 2020 the NYSE told Valaris its shares averaged below $1.00 over 30 trading days, so the stock is now flagged "below compliance" (.BC) but still trades. It has until about October 15, 2020 to cure it, and the company says it intends to do so. If the shares were delisted from the NYSE and not concurrently listed on Nasdaq, holders of the 3.00% exchangeable notes due 2024 could require repurchase at par plus interest.
The February 13, 2020 fleet report lists new work since October 2019, e.g. DS-7 a five-well BP Senegal/Mauritania job from September 2020, DS-10 extended with Shell Nigeria to March 2021, JU-144 a 12-well Eni Mexico job from September 2020, and JU-87 a 21-well Exxon job. Rigs 6002, 5006, JU-96 and JU-68 are now sold and retired (JU-68 and 5006 had been held for sale), and JU-70 is held for sale. Total backlog at December 31, 2019 (adjusted for later contracts) is $2,452.6 million, up from $2,332.4 million at September 30, 2019. DS-13 (3Q21) and DS-14 (2Q22) delivery dates are unchanged.
On February 3, 2020 Valaris completed its previously announced internal reorganization and signed a Tenth Supplemental Indenture under which Valaris plc becomes the issuer of the former Rowan US notes (4.875% 2022, 4.75% 2024, 7.375% 2025, 5.4% 2042, 5.85% 2044). Rowan US and Rowan UK are released from their obligations. The notes now rank equally with Valaris's other senior unsecured debt, are structurally subordinated to subsidiary debt and effectively subordinated to any secured debt. This resolves the reorganization step flagged in the June 2019 consent solicitation; Valaris intends to apply for NYSE listing of the notes but has no obligation to maintain it.
The October 25, 2019 fleet report is the first under the name Valaris plc (ticker VAL), with rigs renamed VALARIS. It adds new and extended work (e.g. DPS-1 with Woodside extended to September 2021, DS-12 a four-well BP Angola job from April 2020, DS-7 extended to March 2020). It also shows DS-13 delivery pushed from 3Q19 to 3Q21 and DS-14 from 2Q20 to 2Q22, so the earlier near-term newbuild payments are deferred. Rig 5006 and JU-68 are cold stacked and held for sale and JU-42 (California) is sold and retired. Backlog as of September 30, 2019 is $2,332.4 million, down from $2,576.6 million in the April report.
The July 25, 2019 fleet report adds new work: ENSCO 120's ConocoPhillips contract extended two years (now to July 2022), a 40-well Eni plugging-and-abandonment contract for ENSCO 72 from November 2019, Rowan Relentless a one-well EnVen job from October 2019, and extensions for ENSCO 109 (Chevron, two years), Rowan Gorilla V, ENSCO 104 and ENSCO 96. ENSCO 4 (DS-4) is to be mobilized to Spain for hire after its Chevron Nigeria contract and Rowan Gorilla IV is reported sold; the report also lists rig year-of-delivery instead of water depth.
12 July 2019security holder rights change● NeutralMajor
On July 12, 2019 Ensco Rowan bought about $951.8 million of its senior notes in tender offers (including the 4.50% 2024 and 5.20% 2025 notes) for about $724.1 million, excluding accrued interest, so it paid less than face value. Holders also consented to a Sixth Supplemental Indenture that removes substantially all restrictive covenants and certain events of default from the remaining notes of those series. This follows the June 25 launch of the offers; the filing does not say which series were bought in what amounts or how the purchase was funded.
11 June 2019security holder rights change● Neutral
Following the Rowan deal, Ensco Rowan got the required consents from holders of five series of Rowan US notes (due 2022, 2024, 2025, 2042, 2044) and signed a Ninth Supplemental Indenture on June 7, 2019. It rewrites several covenants (reports, mergers, liens, sale-leasebacks) to match those in Ensco Rowan's own notes and apply to the parent instead of Rowan US. The changes take effect once consent fees are paid and the planned internal reorganization is completed or the company otherwise becomes an obligor; this continues the post-merger integration of Rowan's debt.
