As previously disclosed, an arbitration tribunal awarded the Company $180 million in damages, in addition to the right to claim interest and costs, in relation to proceedings the Company brought against Samsung Heavy Industries (SHI) for losses incurred in connection with the DS-5 drilling services agreement with Petrobras. The English High Court recently denied the parties' applications for leave to appeal the tribunal's $180 million damages award. Following this decision, the parties reached an agreement and SHI has paid Valaris $200 million in cash. This payment, along with the previously disclosed settlement and normalization of its business relationship with Petrobras, concludes the Company's dispute surrounding the DS-5 drillship.
New Contracts and Extensions
Valaris has also continued winning new work for its high-quality rig fleet, as new contracts and contract extensions with associated revenue backlog of approximately $100 million have been awarded to the Company since its last contracting update press release on November 25, 2019:
- VALARIS DS-10 contract extended due to the exercise of a one-year priced option with Shell offshore Nigeria from March 2020 to March 2021;
- VALARIS JU-107 contract extended due to the exercise of a one-well priced option with Chevron offshore Australia, with an estimated duration of 30 days from late February 2020 to late March 2020; the rig has also been awarded a two-well contract with Jadestone Energy offshore Australia, with an estimated duration of 115 days from June 2020 to September 2020;
- VALARIS JU-101 awarded a three-well contract with Ithaca Energy in the North Sea that is expected to commence in March 2020, with an estimated duration of 45 days; and
- VALARIS JU-75 awarded a one-well contract with Walter Oil & Gas in the U.S. Gulf of Mexico, which commenced in late December 2019, with an estimated duration of 40 days.