Valaris Streamlines Drilling Fleet & Sells Jack-Up Rig for $24M

Valaris Limited VAL, an offshore drilling services provider, has announced that it will permanently retire three semi-submersible rigs as part of its efforts to streamline its drilling fleet. Additionally, the offshore driller has announced the sale of a jack-up rig for $24 million. The three semi-submersible rigs are expected to be out of service and permanently removed from the global drilling supply.The company will retire the three semi-submersibles — VALARIS DPS-5, VALARIS DPS-3 and VALARIS DPS-6. VALARIS DPS-5 has remained inactive since the completion of its last assignment in the third quarter of 2024,while VALARIS DPS-3 and VALARIS DPS-6 have been cold-stacked in the U.S. Gulf of Mexico for the past several years. The retired drilling rigs might be upcycled to be used for alternative purposes or scrapped entirely.The offshore driller announced the sale of the Valaris 75 jack-up rig, which has been out of service for the past five years in the Gulf of Mexico. The jack-up rig was sold to an undisclosed operator. The purchase and sale agreement (SPA) for this rig included a clause stating that any future operation undertaken by the rig shall be confined to the U.S. Gulf of Mexico.Valaris stated that it plans to continuously optimize its fleet by divesting the rigs that do not provide adequate returns to justify the cost of maintaining them. By retiring its idle assets, the company plans to focus on high-specification vessels within its fleet and cut costs associated with the cold-stacked rigs.VAL mentioned that the three semi-submersibles show limited potential for lucrative opportunities in the long term and divesting these assets should benefit its cash flow and upgrade its rig fleet.VAL’s Zacks Rank and Key PicksVAL currently carries a Zacks Rank #4 (Sell).Some better-ranked stocks from the energy sector are SM Energy SM, Equinor ASA EQNR and Archrock Inc. AROC. SM Energy currently sports a Zacks Rank #1 (Strong Buy), while Equinor and Archrock carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.SM Energy is set to expand its oil-centered operations in the coming years, with an increasing focus on crude oil, especially in the Permian Basin and Eagle Ford regions. The increased production, combined with the favorable oil price environment, is expected to positively contribute to its bottom line.Equinor ASA is one of the leading integrated energy companies globally and the second-largest supplier of natural gas in Europe. The company’s expansion in the renewable energy space positions it for long-term growth as more and more countries transition toward cleaner energy solutions to meet their climate goals. Its strategic pivot toward low-carbon energy solutions unlocks new revenue streams in the growing market for clean energy and carbon management solutions.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. 5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Valaris Limited (VAL): Free Stock Analysis Report SM Energy Company (SM): Free Stock Analysis Report Archrock, Inc. (AROC): Free Stock Analysis Report Equinor ASA (EQNR): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks