Valaris Just Landed $1B in Backlog. I Still See $250/Share.

Portfolio Update #12 | Q1 earnings confirmed what the fundamentals have been building toward. Rising dayrates, $1B in new backlog, and more cash flow. Though there are still very real risks.

👋 Hey All 👋

Welcome to 📉 DeepValue Capital 📈

I will always be open and honest about my returns. Good, bad, or ugly. It just so happens things have been better than good.

• 2024: +85.23%

• Cumulative (1/1/24 to 4/30/25): +129.23%

• YTD (through 5/6/2025): +63.10%

TWR of portfolio vs major indexes from 1/1/24 to 4/30/24.

All earned with businesses hiding in plain sight, broken charts, improving cash flows, and turnarounds the market hasn’t priced in yet.

If you want to learn more about what exactly I hold keep reading until the end where I break down my portfolio holdings, with weights, returns, and costs basis.

This week’s portfolio update covers Valaris ($VAL). A holding that just reported earnings.

If you’re new here, don’t worry. I’ll walk through what they do, what changed, and how I’m thinking about valuation today.

By the end of this, you’ll know:

✅ What changed in Q1

✅ The outlook for day rates and backlogs

✅ Why I still see $200+ per share

Let’s get into it.

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What Valaris Does

Valaris is an offshore drilling contractor. Their business model is simple:

They don’t explore for oil themselves. Instead, they own drilling rigs. Large, complex machines that oil companies rent to drill wells deep beneath the ocean floor.

Their customers include companies like Exxon, Chevron, and BP. As well as national oil companies like Saudi Aramco. These customers don’t want to own the rigs. They just want to lease them and Valaris provides the assets and crews.

The company’s fleet includes:

• Drillships and semisubmersibles: used for ultra-deepwater drilling (up to 12,000 ft below sea level)

• Jackup rigs: used in shallow water environments (up to ~400 ft)

• Managed rigs: third-party rigs operated by Valaris, often for governments or JVs

In total they operate 49 rigs across the globe. Most are modern, high-spec assets. Which matters because customers pay more for equipment that’s reliable, safe, and efficient.

• Drillships: 13

• Semisubmersibles: 2

• Jackups: 34

Their revenue model is day rate-based. That means they get paid per day, per rig whether or not the customer strikes oil. The more rigs they have working, and the higher the day rate, the better the margins.

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Why I Bought the Stock

I added Valaris in because I saw a setup the market was ignoring: