Valaris Market Overview and Strategic Positioning
Offshore Project Approvals Expected to Lead to Higher Levels of
Capital Expenditures
Number of New Major Offshore Project Approvals
91
88
81
74
IL
58
50
42
40
50
50
2012
2013
2014
2015
2016
2017
2018
2019E
328
E&P Offshore Capital Expenditures
7%
CAGR
206
147
2014 2015 2016 2017 2018
■Shallow Water
2019E 2020E 2021E 2022E 2023E
■Deepwater
VALARIS
Source: Rystad Energy ServiceDemandCube as of July 2019, major projects
defined as projects with >$250 million of associated capital expenditures
•
With lower project costs
relative to prior years and
increasing cash flows from
higher commodity prices, the
number of final investment
decision approvals for large
offshore projects has
increased recently
- Drilling rigs required between
approval and first production,
which averages ~4 years for
deepwater projects and ~1.5
years for shallow-water projects,
and for periodic maintenance
over the life of an offshore well
• As a result, capital
expenditures are expected to
increase at a gradual rate
over the next several years,
with the majority of this
growth coming from projects
in deepwater
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