Offshore drillers Noble Corp. and Valaris have removed a raft of floating rigs from the market via retirements, planned sales, and reassignments. For Noble, part of the exercise came from the company’s full review of assets from its 2024 acquisition of Diamond Offshore, which recently passed the 150-day integration mark. According to Valaris, the move to retire a trio of older units came as the driller could no longer justify the cost of returning them to work.
Noble has scrapped semisubmersibles Ocean Onyx and Ocean Valiant, permanently retired cold-stacked drillships Pacific Meltem and Pacific Scirocco, and reassigned drillships Globetrotter I and II to pursue intervention work. According to management, Noble is halfway to achieving the previously stated integration synergies of $100 million.
“Given the oversupply of rigs in today’s market, we strongly believe that the rational course is to scrap stacked rigs or sell them into alternative use, rather than selling them as drilling units to secondary competitors,” Noble Chief Executive Robert Eifler told investors this week. “Nonetheless, these retirements will be cash flow accretive, regardless of disposal proceeds, as we expect to shed upwards of $20 million in annualized stacking costs.”
Noble said that the Globetrotters could be open to marketed work in specialty areas such as the Black Sea, but the current plan is to use the rigs to chase opportunities in the intervention market.
“We continue to believe those rigs are well suited for that market and we also believe that that market will be a strong and growing market going forward,” said Noble Chief Financial Officer Richard Barker. “So, in the near term, we’ve got several open, I'd say, conversations for multiyear work that actually could use both of the Globetrotters that's in the intervention market. If for some reason we're having trouble contracting into that market, then later in the year we'll make a decision about whether to further reduce costs on one of those units.”
The planned divestment of the Pacific Meltem, a seventh-generation rig built in 2014, did catch a few onlookers in the financial community off guard. The relatively young rig is cold stacked at Las Palmas, Canary Islands. Noble’s Eifler told investors that when they weighed options, and with the diminished call in the near term for stacked capacity, they do not see a scenario where it would be activated in the next 2 to 3 years. That fact, plus the cost of cold stacking, drove the decision to divest the unit.
“We failed to see a likely scenario where it would make sense for us to bid that rig, especially considering that the contract durations that we see today and that we think we'll continue to see for a little bit now, given the softness, are short enough, where in effectively any situation where we would bid that rig, we would be bidding it against available active fleet within our own fleet,” said Eifler. “So, we took the decision, which we think is the right decision to go ahead and move on.”
Valaris has retired semisubmersible VALARIS DPS-5, which has been idle since last working in third quarter 2024, as well as sister units VALARIS DPS-3 and VALARIS DPS-6, which have been stacked for several years. The company expects that these rigs will be removed from the global drilling supply and repurposed for alternative uses or scrapped.
“We are committed to prudently managing our fleet and will retire or divest rigs when the expected future economic benefit for an asset does not justify its costs,” said Valaris Chief Executive Anton Dibowitz. “Consistent with this approach, we have decided to high-grade our fleet by retiring three semisubmersibles: VALARIS DPS-3, DPS-5, and DPS-6, for which we see limited attractive, long-term contract opportunities. These actions reduce costs for idle rigs, benefit our cash flow, and further focus our fleet on high-specification assets.”
In addition, the company sold jackup VALARIS 75 for $24 million. VALARIS 75 is a 25-year-old jackup that has been stacked in the US Gulf for 5 years. As part of the purchase and sale agreement, future operations are restricted to the US Gulf.
