Valaris Limited VAL, an offshore drilling contractor, has secured a new contract for the VALARIS DS-10 drillship with an undisclosed client. The ultra-deepwater drillship will begin its new assignment offshore West Africa. The total contract value is estimated to be $352 million. The contract also includes the provision of two one-year options.

The VALARIS DS-10 ultra-deepwater drillship completed its last assignment in Nigeria in August 2024. Per VAL’s fleet status report, the drillship remained in Spain since the last contract ended. According to the terms of the new contract, the drillship will commence work offshore West Africa in the second or third quarter of 2026.

VAL believes that the new contract award demonstrates the drillship’s successful record of completing projects in West Africa and highlights the rig’s safety standards and operational efficiency. The new contract adds to the company’s project backlog that should support its future cashflows. The company aims to keep securing long-term contracts for its advanced rig fleet. 

VAL’s Zacks Rank and Key Picks

VAL currently carries a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks from the energy sector are Archrock Inc. AROC, Nine Energy Service NINE and NextDecade Corporation NEXT. While Archrock currently sports a Zacks Rank #1 (Strong Buy), Nine Energy Service and NextDecade carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

Archrock is an energy infrastructure company based in the United States with a focus on midstream natural gas compression. It provides natural gas contract compression services and generates stable fee-based revenues.

Nine Energy Service provides onshore completion and production services for unconventional oil and gas resource development. The company operates across key prolific basins in the United States, including the Permian, Eagle Ford, MidCon, Barnett, Bakken, Rockies, Marcellus and Utica, as well as throughout Canada. With a sustained demand for oil and gas in the future, the need for NINE’s services is anticipated to increase, which should position the company for growth in the long run.

NextDecade is an emerging player in the LNG space with its Rio Grande LNG project in Texas. The demand for LNG as a clean-burning fuel continues to grow, and the commodity is expected to play a crucial role in the energy transition process. The company’s focus on expanding its liquefaction capacity is expected to enhance its position in the rapidly growing global LNG market, enabling it to meet the rising demand for natural gas.

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