Key Highlights

● Second-quarter net income was $47.0 million, against a first-quarter net loss of $18.0 million.

● Total fleet utilisation rose to 61 per cent, up from 58 per cent sequentially.

● Contracted backlog fell to $4,585.2 million from $4,929.1 million three months earlier.

● Transocean and Valaris shareholder meetings are scheduled for 24 November 2026.

Valaris Limited (NYSE:VAL), the offshore drilling contractor whose common shares trade on the New York Stock Exchange under the symbol VAL, reported second-quarter 2026 results covering the period to 30 June 2026. Total operating revenues were $539.2 million, up from $465.4 million in the first quarter. The company recorded net income of $47.0 million, or $0.72 per diluted share, against a first-quarter net loss of $18.0 million. Adjusted EBITDA was $96.5 million, compared with $66.7 million in the prior quarter. The company stated that conflict in the Middle East reduced that figure by roughly $30 million. These are reported facts taken from the results release; the characterisation of the quarter as a recovery is editorial interpretation.

Utilisation, backlog and rig activity

Fleet statistics help explain the sequential improvement. Total fleet utilisation was 61 per cent, up from 58 per cent, while active fleet utilisation reached 79 per cent. Jackups ran at 90 per cent active utilisation, whereas drillships managed 68 per cent. Revenue efficiency was 98 per cent. Contracted backlog, however, declined. It stood at $4,585.2 million on 5 August 2026, compared with $4,929.1 million on 4 May 2026. Drillships accounted for $3,016.3 million and jackups for $1,133.4 million. During the period Valaris added more than $160 million of North Sea jackup backlog, and drillships DS-12 and DS-10 began new contracts, with two further drillships expected to start before year-end. Falling backlog, even with new awards, shows that work is being consumed faster than it is being replaced, which investors may wish to monitor. Cash and cash equivalents were $541.2 million at quarter-end, with long-term debt of $1,087.6 million. Operating cash flow was only $13.1 million against capital expenditure of $105.5 million. The company reported no share repurchases in the first half of 2026, and sold two older rigs for total proceeds of $74 million.

The pending Transocean combination

The most important development is not operational. On 9 February 2026 Transocean announced an all-stock acquisition of Valaris, valued at about $5.8 billion, at a fixed exchange ratio of 15.235 Transocean shares for each Valaris share. Transocean holders would own about 53 per cent of the enlarged group and Valaris holders about 47 per cent. The transaction is structured as a Bermuda scheme of arrangement. According to a joint proxy statement dated 13 October 2026, shareholder meetings for both companies are scheduled for 24 November 2026. The parties still expect completion in the second half of 2026 but caution that timing and satisfaction of conditions cannot be assured. Regulatory approvals and Bermudan court sanction remain required.

No Earnings Calls While the Merger Is Pending

Valaris's sequential improvement came even as Middle East conflict reduced adjusted EBITDA by roughly $30 million, and the company has stopped providing numerical guidance or holding earnings calls while its all-stock combination with Transocean proceeds toward a Bermuda scheme of arrangement. Falling backlog despite new North Sea jackup awards shows work being consumed faster than replaced, but with each Valaris share set to convert into 15.235 Transocean shares if the deal closes, the standalone operating trend matters less to shareholders than the combined group's prospects.