v3.26.3
Property and Equipment
 9 Months Ended
Sep. 30, 2026
Property, Plant, and Equipment [Abstract]  
Property and Equipment Property and Equipment
Property and equipment consisted of the following (in millions):

September 30, 2026December 31, 2025
Drilling rigs and equipment$2,239.7 $1,958.8 
Work-in-progress600.0 590.3 
Other49.8 49.2 
Total property and equipment, at cost
$2,889.5 $2,598.3 

While taking into account certain restrictions on the sales of assets under our Indenture dated as of April 19, 2023 and within the Business Combination Agreement, as part of our strategy, we may act opportunistically from time to time to sell assets to enhance shareholder value. Gains and losses recognized on sale of assets are recognized in Other, net on the Condensed Consolidated Statements of Operations. Additionally, we may consider retiring assets that no longer meet our standards for economic returns. Non-cash losses on impairment and any gains on remeasurement of assets held for sale are recognized within Other operating (income) loss on the Condensed Consolidated Statements of Operations.

Sale of VALARIS 111

In September 2026, we entered into an agreement to sell VALARIS 111, a rig within our Jackups segment, for recycling for $1.7 million. Under the terms of the agreement, we retained the right to terminate the purchase and sale agreement within 30 days following receipt of the proceeds. On September 30, 2026, we completed the sale and received $1.7 million of cash proceeds. As of September 30, 2026, the net book value of the rig was classified as held for sale due to the cancellation option.

In October 2026, we entered into an agreement to sell the rig to another buyer for conversion to a mobile offshore production unit for cash proceeds of $10.5 million. As such, we rescinded the purchase and sale agreement with the initial buyer and made a payment of approximately $3.0 million in accordance with the termination provisions within the agreement. The sale to the new buyer was completed in October and we recognized a pre-tax gain of approximately $8.0 million in the fourth quarter.
Sale of VALARIS MS-1

In September 2026, we entered into an agreement to sell VALARIS MS-1, our only remaining semisubmersible rig within our Floaters segment, for recycling for total cash proceeds of $11.0 million. In connection with this sale, we recognized a non-cash loss on impairment of $3.0 million during the three months ended September 30, 2026 and the rig was removed from service.

Sale of VALARIS 109

In July 2026, we sold VALARIS 109, a rig within our Jackups segment. The rig was sold for cash proceeds of $34.0 million, resulting in the recognition of a pre-tax gain of $31.3 million in the third quarter of 2026.

Sale of VALARIS 104

In June 2026, we sold VALARIS 104, a rig within our Jackups segment, for alternative use. The rig was sold for cash proceeds of $40.0 million, resulting in the recognition of a pre-tax gain of $36.6 million in the second quarter of 2026.

Sale of VALARIS DPS-1

In the fourth quarter of 2025, we approved a plan to retire VALARIS DPS-1, a semisubmersible rig within our Floaters segment. VALARIS DPS-1 was reclassified from Property and equipment, net to Assets held for sale on our Consolidated Balance Sheets during the fourth quarter of 2025.

In connection with the held-for-sale classification of VALARIS DPS-1, we recognized a non-cash loss on impairment of $15.8 million during 2025, resulting in a $6.4 million carrying value as of December 31, 2025, which was determined using a probability-weighted market approach based on transactions involving comparable assets, non-binding independent broker quotes and management assumptions, all of which were considered Level 3 inputs due to the level of estimation involved.

Assets held for sale are remeasured at each reporting period for changes in estimated fair value less costs to sell, however, any related gains recognized cannot exceed the previous impairment losses taken for the specified disposal group. As such, we reassessed the fair value of VALARIS DPS-1 during the first quarter of 2026 utilizing a market approach based on a preliminary sale agreement, which was considered a Level 3 input due to the level of estimation involved since the sale had not yet been completed at the time of our analysis. In connection with this, we recognized a $2.8 million gain on remeasurement of our asset held for sale during the first quarter of 2026.

In the second quarter of 2026, VALARIS DPS-1 was sold for recycling and removed from service for total cash proceeds of $10.1 million. No additional gain or loss was recognized upon completion of this sale.

Sale of VALARIS 247

In the third quarter of 2025, we sold VALARIS 247, a rig within our Jackups segment, and collected cash proceeds of approximately $108.0 million. We recognized a pre-tax gain of $88.4 million in connection with the sale.
Sale of Other Retired Semis

In the first quarter of 2025, we approved a plan to retire three semisubmersible rigs within our Floaters segment, VALARIS DPS-3, VALARIS DPS-5, and VALARIS DPS-6 (collectively, the “Retired Semis”). In April 2025, the Retired Semis were sold for recycling and permanently removed from service for total cash proceeds of $10.0 million.

In connection with the retirement of the Retired Semis, during the first quarter of 2025, we recognized a non-cash loss on impairment of $7.8 million, which represented the amount of carrying value that exceeded the disposal group's aggregate fair value less costs to sell. We estimated the fair value using a market approach based on the preliminary sale agreement for the Retired Semis, which is considered a Level 3 input due to the level of estimation involved since the sale had not yet been completed at the time of our analysis.

Sale of VALARIS 75

In the first quarter of 2025, VALARIS 75, a rig within our Jackups segment which had an immaterial net book value, was sold resulting in a pre-tax gain on sale of $23.0 million. Of the proceeds, $14.0 million was collected upon closing, $5.0 million was collected in January 2026 and the remaining $5.0 million is expected to be received on the second anniversary of the closing.

Sale of Angola Office Building

In the first quarter of 2025, we sold an office building in Angola for cash proceeds of $5.2 million, resulting in a pre-tax gain on sale of $4.0 million. Of the proceeds, approximately $2.5 million was collected during the fourth quarter of 2024 and $2.7 million was collected during the first quarter of 2025.