Valaris swings to $47M profit as $5.8B Transocean merger nears close
What's the deal? ValarisDealroom has a profile for this one. Try Dealroom → returned to profit in the second quarter of 2026 as it prepared to complete its $5.8 billion merger with TransoceanDealroom has a profile for this one. Try Dealroom → by Q4 2026. The Bermudian-domiciled offshore drilling firm reported net income of $47 million for the three months to June 30, reversing an $18 million loss in Q1 2026.
The numbers: Revenue totalled $539 million and adjusted earnings before interest, taxes, depreciation and amortisation rose to $97 million from $67 million. But the profit included US$24.6M gain from selling two stacked jackup rigs for combined proceeds of $74 million, alongside $11 million in merger and integration costs.
What's the endgame? The merger, announced in February 2026, will create an offshore drilling business with a fleet of more than 60 rigs. Chief executive Anton Dibowitz said the combination is "on track to close in Q4 2026."
He said it is "expected to deliver meaningful value to our shareholders through anticipated synergies and the enhanced capabilities of the combined company." Valaris said it would not hold further earnings calls or update guidance while the deal is pending.
What could go wrong? Conflicts in the Middle East cut adjusted earnings by about $30 million during Q2 2026, up from an $8 million impact in Q1 2026. The hit came from higher war-risk insurance premiums for jackup rigs in the region and project delays at two rigs in Middle Eastern shipyards.
Valaris expects those costs to ease in H2 2026 after securing longer-term insurance coverage and selling one affected rig. Q2 2026 results were helped by two drillships returning to work, with revenue efficiency at 98%, and it expects two more drillships to start new contracts by December 2026.
The company held $541 million in cash at the end of June 2026, down from $578 million three months earlier. Its contract backlog stood at about $4.59 billion as of July 30, 2026.
The signal: The pending tie-up signals further consolidation in offshore drilling as operators chase scale and synergies. Dibowitz said the pipeline of deepwater contract opportunities is strong on demand for high-specification assets — a bet that a larger combined fleet is better placed to capture.
Read more: The Royal Gazette
Image credit: Ronnie Macdonald
